1) Material accounting Policies

This note provides a list of the significant accounting
policies adopted in the preparation of Standalone
financial statements. These policies have been
consistently applied to all the years presented, unless
otherwise stated.

a) Property, plant and equipment¦ Recognition and measurement

Freehold land is carried at historical cost.
All other items of property, plant and
equipment are stated at cost less accumulated
depreciation and accumulated impairment
loss, if any. Cost comprises of purchase
price, non-refundable taxes and any directly
attributable costs 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.

Borrowing costs attributable to construction
or acquisition of a qualifying asset for the
period up to the date, the asset is ready for
its intended use are included in the cost of the
asset to which they relate.

Capital work-in-progress comprises of the cost
of property, plant and equipment that are not
yet completely ready for their intended use as
at the balance sheet date.

Advances paid towards the acquisition of
property, plant and equipment outstanding at
each reporting date are disclosed under "Other
non-current assets".

¦ Subsequent costs

The cost of replacing a part of an item of
property, plant and equipment is recognised in
the carrying amount of the item if it is probable
that the future economic benefits embodied
within the part will flow to the company and
its cost can be measured reliably. The carrying
amount of the replaced part is derecognised.
The costs of the day-to-day servicing of
property, plant and equipment are recognized
in the statement of profit and loss as incurred.

¦ Derecognition

An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected from its use
or disposal. Gains and losses on disposal of
an item of property, plant and equipment are
determined by comparing the proceeds from
disposal with the carrying amount of property,
plant and equipment, and are recognised net
and disclosed within other income or expenses
in the statement of profit and loss.

¦ Depreciation methods, estimated useful lives
and residual value

Depreciation on Property, Plant and Equipment
is provided on the straight-line method over
the estimated useful lives of the assets as
determined bythe management.The estimated
useful lives are in accordance with Schedule
II to the Companies Act, 2013, except where
technical evaluation supports different useful
lives. The residual values, useful lives and
methods of depreciation are reviewed at each
financial year-end and adjusted prospectively,
if appropriate except leasehold land which is
amortized equally over the lease period.

Freehold land is not depreciated.

b) Intangible assets

¦ Recognition and measurement

Intangible assets are recognised when the
asset is identifiable, is within the control of

the company, it is probable that the future
economic benefits that are attributable to the
asset will flow to the company and cost of the
asset can be reliably measured.

Intangible assets acquired by the company
that have finite useful lives are measured at
cost less accumulated amortisation and any
accumulated impairment losses.

¦ Derecognition

An item of intangible asset is derecognised
upon disposal or when no future economic
benefits are expected from its use or disposal.
Gains and losses on disposal of intangible asset
are determined by comparing the proceeds
from disposal with the carrying amount of
intangible asset and are recognised net and
disclosed within other income or expenses in
the statement of profit and loss.

¦ Amortisation

Amortisation is calculated over the cost of the
asset, or other amount substituted for cost.
Amortisation is recognised in statement of
profit and loss on a straight-line basis over the
estimated useful lives of intangible assets from
the date that they are available for use, since
this most closely reflects the expected pattern
of consumption of the future economic benefits
embodied in the asset.

The estimated useful lives, residual values and
amortisation method are reviewed at the end of
each reporting period and revised prospectively
where appropriate.

c) Inventories

Raw Material, Components and Work in progress
are valued on weighted average basis. Finished
goods are valued at the lower of cost and net
realizable value.

Cost includes cost of conversion and other costs
incurred in bringing the inventories at their present
location and condition. Cost of conversion for the
purpose of valuation of WIP and finished goods
includes fixed and variable production overheads
incurred in converting the material into their
present condition and location.

Net realizable value is the estimated selling price
in the ordinary course of business, less estimated
costs of completion and the estimated costs
necessary to make the sale.

d) Cash and cash equivalents

Cash and cash equivalents in the balance sheet
comprise cash at banks and cash on hand and
short-term deposits with an original maturity
of three months or less, which are subject to an
insignificant risk of changes in value.

e) Revenue recognition

Revenue from sale of goods and services is
recognised when all significant risks and rewards
of ownership of the goods are passed on to the
buyer, recovery of the consideration is probable, the
associated costs can be estimated reliably, there is
no continuing effective control over, or managerial
involvement with, the goods, and the amount of
revenue can be measured reliably. It excludes
Goods and Service tax (GST) wherever applicable.
Sales are stated net of discounts, rebates and
returns.

Export sales are recognised when control of the
goods is transferred to the customer in accordance
with the agreed shipping terms (such as FOB,
CIF etc.) and it is probable that the economic
transactions with the company will flow to the
company.

f) Other income

¦ Interest income

Interest income from a financial asset is
recognised when it is probable that the
economic benefits will flow to the Group
and the amount of income can be measured
reliably. Interest income is accrued on a time
basis, by reference to the principal outstanding
and at the effective interest rate applicable

¦ Dividend

Dividends are recognised in the statement of
profit and loss only when the right to receive
the payment is established, it is probable that
the economic benefits associated with the
dividend will flow to the company, and the
amount can be measured reliably.

¦ Export Incentive

Export incentives are recognised when the right
to receive credit as per the terms of incentives
is established in respect of the exports made
and when there is no significant uncertainty
regarding the ultimate collection of the relevant
export proceeds.

g) Borrowing costs

Borrowing costs consist of interest and other
costs that an entity incurs in connection with the
borrowing of funds. Borrowing cost also includes
exchange differences arising from foreign currency
borrowings to the extent they are regarded as an
adjustment to the interest cost.

Borrowing costs that are not directly attributable
to the acquisition, construction or production of
a qualifying asset, are expensed in the period in
which they are incurred.

h) Foreign currency transactions and balances

On initial recognition, transactions in foreign
currencies entered into by the Company are
recorded in the functional currency (i.e. Indian
Rupees), by applying to the foreign currency
amount, the spot exchange rate between the
functional currency and the foreign currency at the
date of the transaction.

Transactions in foreign currency are recorded
at exchange rates prevailing at the date of
transactions. Exchange differences arising on
foreign exchange transactions settled during the
year are recognised in the statement of profit and
loss of the year.

Monetary assets and liabilities denominated in
foreign currencies which are outstanding, as at
the reporting period are translated at the closing
exchange rates and the resultant exchange
differences are recognised in the statement of
profit and loss.

Non-monetary assets and liabilities denominated
in foreign currencies that are measured in terms of
historical cost are translated using the exchange
rate at the date of the transaction.

i) Employee Benefits

Short-term employee benefits

All employee benefits payable wholly within twelve
months of rendering the services are classified
as short-term employee benefits. Benefits such
as salaries, wages, expected cost of bonus and
short-term compensated absences, ex-gratia,
performance pay etc. are recognised in the period
in which the employee renders the related service.

Post-employment benefits Defined contribution
plans

The company''s approved superannuation scheme
and central provident fund scheme are a defined
contribution plan. The company has no further

payment obligations once the contributions have
been paid. The contributions are recognised as
employee benefit expenses when they are due.

Defined benefit plans

The Company operates a defined benefit gratuity
plan, which requires contributions to be made
to a fund set up by Life Insurance Corporation of
India The present value of the obligation under
such defined benefit plans is determined based on
actuarial valuation using the projected unit credit
method, which recognises each period of service
as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to
build up the final obligation.

The obligation is measured at the present value
of the estimated future cash flows. The discount
rates used for determining the present value of the
obligation under defined benefit plans, is based
on the market yields on government securities
as at the reporting date, having maturity periods
approximating to the terms of related obligations.

Remeasurements, comprising of actuarial gains
and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined
benefit liability and the return on plan assets, are
recognised immediately in the balance sheet with
a corresponding debit or credit to retained earnings
through Other Comprehensive Income (OCI) in the
period in which they occur. Remeasurements are
not reclassified to the statement of profit and loss
in subsequent periods.

In case of funded plans, the fair value of the
plan''s assets is reduced from the gross obligation
under the defined benefit plans, to recognise the
obligation on net basis.

Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognised immediately in profit
or loss as past service cost.

Net interest is calculated by applying the discount
rate to the net defined benefit liability or the fair
value of the plan asset. The cost is included in
employee benefit expense in the statement of profit
and loss.

Other long-term employee benefits

The liabilities for earned leave which are not
expected to be settled within twelve months
after the end of the reporting period in which
the employee render the related service. They

are therefore measured as the present value of
expected future payments to be made in respect
of services provided by employee up to the end
of the reporting period using the projected unit
credit method. The benefits are discounted using
the market yields at the end of the reporting period
that have terms approximating the terms of the
related obligation. Remeasurements as a result of
experience adjustments and change in actuarial
assumptions are recognised in the statement of
profit and loss. The obligations are presented as
current liabilities in the balance sheet if the entity
does not have an unconditional right to defer
settlement for at least twelve months after the
reporting period, regardless of when the actual
settlement is expected to occur.

j) Income tax

Income tax expense comprises of current tax and
deferred tax. It is recognised in the statement of
profit and loss except to the extent that it relates to
the items recognised directly in OCI.

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 based
on the taxable profits computed for the current
accounting period. The tax rates and tax laws used
to compute the amount are those that are enacted
or substantively enacted, at the reporting date.

Deferred tax

Deferred tax is provided using the balance sheet
method on temporary differences between the tax
base of assets and liabilities and their carrying
amounts for financial reporting purposes at the
reporting date.

Deferred tax liabilities are recognised for all taxable
temporary differences, except when the deferred
tax liability arises from the initial recognition of
goodwill or an asset or liability in a transaction
that is not a business combination and, at the time
of the transaction, affects neither the accounting
profit nor taxable profit or loss.

Deferred tax assets are recognised for all
deductible temporary differences, the carry
forward 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
differences, and the carry forward of unused tax
credits and unused tax losses can be utilised,

except when the deferred tax asset relating to
the deductible temporary difference arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination and,
at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is
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 asset 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 profits will allow the deferred tax asset to
be recovered.

Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply in the year
when the

asset is realised or the liability is settled, based on
tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.

Deferred tax assets and deferred tax liabilities are
offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and
the deferred taxes relate to the same taxable entity
and the same taxation authority.

MAT

Minimum Alternate Tax credit is recognized as
deferred tax asset only when and to the extent
there is convincing evidence that the Company will
pay normal income tax during the specified period.
Such asset is viewed at each Balance Sheet date
and the carrying amount of the MAT credit asset
is written down to the extent there is no longer a
convincing evidence to the effect that the Company
will pay normal income tax during the specified
period.

k) Government Grant:

Grants from the Government are recognized
at their fair value where there is a reasonable
assurance that the grant will be received and the
Company will comply with all attached conditions.
Government grants relating to income are deferred
and recognized in the profit or loss over the period
necessary to match them with the costs that they
are intended to compensate and presented within
other income.

Significant accounting policies followed by the Company

(A) Basis of preparation of financial statements:

(i) Compliance with Ind AS:

The financial statements comply in all material
aspects with Indian Accounting Standards (Ind
AS) notified under Section 133 of the Companies
Act, 2013 and other relevant provisions of the Act.

The Standalone Financial Statements are
approved for issue by the Companies Board of
Directors dated May 23, 2025.

These standalone financial statements have
been prepared on historical cost basis except
for certain financial instruments and defined
benefit plans which are measured at fair value or
amortised cost at the end of each reporting period.
Historical cost is generally based on the fair value
of the consideration given in exchange for goods
and services.Fair value is the price that would
be received to sell an asset or paid to transfer a
liability in an orderly transaction between market
participants at the measurement date. All assets
and liabilities have been classified as current
and non-current as per the Companies normal
operating cycle. Based on the nature of services
rendered to customers and time elapsed between
deployment of resources and the realisation in
cash and cash equivalents of the consideration
for such services rendered, the Company has
considered an operating cycle of 12 months.

(B) Use of estimates:

The preparation of financial statements in conformity
with the generally accepted accounting principles
requires estimates and assumptions to be made by the
management that affect the reported amount of assets
and liabilities on the date of the financial statements
and the reported amount of revenues and expenses
during the reporting period. Differences between actual
results and estimates are recognised in the period in
which the results are crystallised.

Estimates and underlying assumptions are reviewed on

ongoing basis. Revisions to estimates are recognised

prospectively.

(C) Revenue recognition:

(a) Revenue from the sale of goods is recognised
upon the passage of title to the customers, which
generally coincides with delivery.

(b) Export sales are accounted based on the dates of
Bill of Lading.

(c) Interest Income is accrued on time proportion
basis over the period of loan / deposit / investment
except in case of significant uncertainties.

(D) Property, Plant and Equipment:

(a) All items of property, plant and equipment
are stated at historical cost less depreciation.
Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Cost
may also include hedges of foreign currency
purchases of property, plant and equipment.
Subsequent costs are included in the asset’s
carrying amount or recognised as a separate
asset, as appropriate, only when it is probable
that future economic benefits associates with
the item will flow to the Company and the cost
of the item can be measured reliably. All other
repairs and maintenance are charged to profit or
loss during the reporting period in which they are
incurred.

(b) Depreciation methods, estimated useful lives and
residual value:

(i) Depreciation: The Company has ascertained
the useful life of its various assets and
charged depreciation in accordance with
Schedule II of the Companies Act, 2013
except in case of Precision Components
division the useful life of shop toolings
fixtures has been determined as 2 years.

(ii) Leasehold Land is amortised over the period
of lease.

(iii) The useful lives have been determined
based on technical evaluation done by the
management’s expert in order to reflect the
actual usage of the assets. The residual
values are not more than 5% of the original
cost of the asset. The assets’ residual values
and useful lives are reviewed, and adjusted
if appropriate, at the end of each reporting
period.

(iv) An asset’s carrying amount is written down
immediately to its recoverable amount if the
asset’s carrying amount is greater than its
estimated recoverable amount.

(v) Gains and losses on disposals are determined
by comparing proceeds with carrying
amount. These are included in statement of
profit and loss.

(E) Intangible Assets:

Computer Software and Technical Know-How are
amortised over a period of 3 years from the date of
acquisition.

(F) Capital Work in Progress:

Expenditure during construction period including
development cost incurred on the projects under
implementation are treated as pre-operative expenses
pending allocation to the assets and are included
under "Capital Work in Progress". These expenses
are apportioned to fixed assets on commencement of
commercial production.

(G) Impairment of Assets:

An asset is treated as impaired when the carrying cost of
the asset exceeds its recoverable value. An impairment
loss, if any, is charged to statement of profit and loss in
the year in which an asset is identified as impaired. The
impairment loss recognised in prior accounting period
is reversed if there has been a change in the estimate of
recoverable amount.

(H) Valuation of Inventory:

(a) Raw Materials and components, semi-finished
goods, finished goods, stores and spares, goods
for trade are valued at cost or net realisable value
whichever is lower. Cost formula used is weighted
average cost. Cost comprises of cost of purchase,
cost of conversion and other cost incurred in
bringing the inventory to its present location and
condition.

(b) Goods / Materials in Transit are valued at cost to
date.

(c) Scrap is valued at its estimated realisable value.

(d) Adequate provisions are made for obsolete
inventory based on technical estimates made by
the Company.

(I) Foreign Currency Transactions:

Transactions arising in foreign currencies during the
year are converted at the rates closely approximating
the rates ruling on the transaction dates. Liabilities
and receivables in foreign currency are restated at the
year end exchange rates. All exchange rate differences
arising from conversion in terms of the above are
included in the statement of profit and loss.

In case of items which are covered by forward exchange
contracts, the difference between the year end rate and
rate on the date of contract is recognised as exchange
difference and the premium paid on forward contracts
is recognised over the life of the contract.

(J) Employee Benefits:

(i) Short-term obligations:

Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within 12 months after the end of the
period in which the employees render the related
service are recognised in respect of employees’
services up to the end of the reporting period and
are measured at the amounts expected to be paid
when the liabilities are settled. The Liabilities are
presented under current liabilities in the balance
sheet.

(ii) Other long-term employee benefit obligations:

The liabilities for earned leave are measured as
the present value of expected future payments
to be made in respect of services provided by
employees up to the end of the reporting period
using the projected unit credit method. The
benefits are discounted using the market yields
at the end of the reporting period that have
terms approximating to the terms of the related
obligation. Remeasurements as a result of
experience adjustments and changes in actuarial
assumptions are recognised in statement of profit
and loss.

(iii) Post-employment obligations:

(a) Defined contribution plans: Company’s
contribution to the provident fund scheme
is recognised during the year in which the
related service is rendered.

(b) Defined benefit plans: The liability or asset
recognised in the balance sheet in respect
of gratuity plans is the present value of
the defined benefit obligation at the end of
the reporting period less the fair value of
plan assets. The defined benefit obligation
is calculated annually by actuaries using
projected unit credit method.

(c) The net interest cost is calculated by
applying the discount rate to the net balance
of the defined benefit obligation and the fair
value of plan assets. This cost is included in
employee benefit expense in the statement
of profit and loss.

(d) Remeasurement gains and losses arising
from experience adjustments and changes in
actuarial assumptions are recognised in the
period in which they occur, directly in other
comprehensive income. They are included
in retained earnings in the statement of
changes in equity and in the balance sheet.

(e) Changes in present value of the defined
benefit obligation resulting from plan
amendments or curtailments are recognised
immediately in profit or loss as past service
cost.

(f) Long Term compensated absences are
provided on the basis of an actuarial
valuation.

(K) Research and Development Costs:

Revenue expenditure, including overheads on research
and development, is charged as an expense through the
natural heads of account in the year in which incurred.
Expenditure incurred at development phase, where it
is reasonably certain that outcome of research will be
commercially exploited to yield economic benefits to
the Company, is considered as an Intangible assets and
depreciation is provided on such assets as applicable.

(L) Investments:

Current investments are carried at lower of cost or fair
value. Long term investments are carried at cost less
provision for other than temporary decline in the value
of such investments. Investment in subsidiaries are
valued at cost.

(M) Borrowing Cost:

General and specific borrowing costs that are
directly attributable to the acquisition, construction

or production of a qualifying asset are capitalised
during the period of time that is required to complete
and prepare the assets for its intended use or sale.
Qualifying assets are assets that necessarily take a
substantial period of time to get ready for their intended
use or sale. Other borrowing costs are expensed in the
period in which they are incurred.

(N) Taxation:

Income tax expense comprises Current tax and
Deferred tax charge or credit. Provision for Current
tax is made on the assessable income at the tax rate
applicable to the relevant assessment year. Minimum
alternative tax (MAT) paid in accordance with the tax
laws, which gives rise to future economic benefits in
the form of adjustment of 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 the future
economic benefit associated with it will flow to the
Company and the asset can be measured reliably.
The deferred tax asset and/or deferred tax liability
is calculated by applying substantively enacted rate
as at balance sheet date. Deferred tax assets arising
mainly on account of brought forward losses and
unabsorbed depreciation is recognised if and only if
there is virtual certainty backed by convincing evidence
of its realisation. At each balance sheet date, carrying
amount of deferred tax assets is reviewed to reassure
realisation.

(O) Share Issue Expenses:

Issue expenses are adjusted against the Share
Premium.

(P) Government Grant/Loan:

Capital grants for project capital subsidy are credited to
capital reserves.

1. General Information:

Birla Precision Technologies Limited (the Company) is a Public Limited Company incorporated in India having its registered office at 23, Birla Mansion No.2, 1st Floor, D. D. Sathe Marg, Prarthana Samaj, Mumbai, Maharashtra, 400004, India. The Company is engaged in the manufacturing and selling of Machine Tool Accessories, Tools, Precision / Automotive Components and Castings.

Significant accounting policies followed by the Company(A) Basis of preparation of financial statements:

(i) Compliance with Ind AS:

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 and other relevant provisions of the Act.

The Standalone Financial Statements are approved for issue by the Companies Board of Directors dated May 22, 2024.

These standalone financial statements have been prepared on historical cost basis except for certain financial instruments and defined benefit plans which are measured at fair value or amortised cost at the end of each reporting period. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities have been classified as current and non-current as per the Group''s normal operating cycle. Based on the nature of services rendered to customers and time elapsed between deployment of resources and the realisation in cash and cash equivalents of the consideration for such services rendered, the Group has considered an operating cycle of 12 months.

(B) Use of estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made by the management that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are crystallised.

Estimates and underlying assumptions are reviewed on

ongoing basis. Revisions to estimates are recognised

prospectively.

(C) Revenue recognition:

(a) Revenue from the sale of goods is recognised upon the passage of title to the customers, which generally coincides with delivery.

(b) Export sales are accounted based on the dates of Bill of Lading.

(c) Interest Income is accrued on time proportion basis over the period of loan / deposit / investment except in case of significant uncertainties.

(D) Property, Plant and Equipment:

(a) All items of property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include hedges of foreign currency purchases of property, plant and equipment. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associates with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

(b) Depreciation methods, estimated useful lives and residual value:

(i) Depreciation: The Company has ascertained the useful life of its various assets and charged depreciation in accordance with Schedule II of the Companies Act, 2013 except in case of Precision Components division the useful life of shop toolings fixtures has been determined as 2 years.

(ii) Leasehold Land is amortised over the period of lease.

(iii) The useful lives have been determined based on technical evaluation done by the management''s expert in order to reflect the actual usage of the assets. The residual values are not more than 5% of the original cost of the asset. The assets'' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

(iv) An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.

(v) Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in statement of profit and loss.

(E) Intangible Assets:

Computer Software and Technical Know-How are amortised over a period of 3 years from the date of acquisition.

(F) Capital Work in Progress:

Expenditure during construction period including development cost incurred on the projects under implementation are treated as pre-operative expenses pending allocation to the assets and are included under "Capital Work in Progress". These expenses are apportioned to fixed assets on commencement of commercial production.

(G) Impairment of Assets:

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss, if any, is charged to statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(H) Valuation of Inventory:

(a) Raw Materials and components, semifinished goods, finished goods, stores and spares, goods for trade are valued at cost or net realisable value whichever is lower. Cost formula used is weighted average cost. Cost comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to its present location and condition.

(b) Goods / Materials in Transit are valued at cost to date.

(c) Scrap is valued at its estimated realisable value.

(d) Adequate provisions are made for obsolete inventory based on technical estimates made by the Company.

(I) Foreign Currency Transactions:

Transactions arising in foreign currencies during the year are converted at the rates closely approximating the rates ruling on the transaction dates. Liabilities and receivables in foreign currency are restated at the year end exchange rates. All exchange rate differences arising from conversion in terms of the above are included in the statement of profit and loss.

In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

(J) Employee Benefits:

(i) Short-term obligations:

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The Liabilities are presented under current liabilities in the balance sheet.

(ii) Other long-term employee benefit obligations:

The liabilities for earned leave are measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in statement of profit and loss.

I. General Information:

Birla Precision Technologies Limited (the Company) is a Public Limited Company incorporated in India having its registered office at 23, Birla Mansion No.2, 1st Floor D. D. Sathe Marg, Prarthana Samaj, Mumbai, Maharashtra, 400004, India. The Company is engaged in the manufacturing and selling of Machine Tool Accessories, Tools, Precision / Automotive Components and Castings.

Significant accounting policies followed by the Company

(A) Basis of preparation of financial statements:

(i) Compliance with Ind AS:

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 and other relevant provisions of the Act.

(ii) Basis of preparation:

These consolidated financial statements have been prepared on historical cost basis except for certain financial instruments and defined benefit plans which are measured at fair value or amortised cost at the end of each reporting period. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities have been classified as current and non-current as per the Group’s normal operating cycle. Based on the nature of services rendered to customers and time elapsed between deployment of resources and the realisation in cash and cash equivalents of the consideration for such services rendered, the Group has considered an operating cycle of I 2 months.

(B) Use of estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made by the management that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are crystallized.

(C) Revenue recognition:

(a) Revenue from the sale of goods is recognized upon the passage of title to the customers, which generally coincides with delivery.

(b) Export sales are accounted based on the dates of Bill of Lading.

(c) Interest Income is accrued on time proportion basis over the period of loan / deposit / investment except in case of significant uncertainties.

(D) Property, Plant and Equipment:

(a) All items of property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include hedges of foreign currency purchases of property, plant and equipment. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associates with the item will flow to the Company and the cost of the item can be measured reliably.All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

(b) Depreciation methods, estimated useful lives and residual value:

(i) DepreciatiomThe Company has ascertained the useful life of its various assets and charged depreciation in accordance with Schedule II of the Companies Act, 2013 except in case of Precision Components division the useful life of shop toolings fixtures has been determined as 2 years.

(ii) Leasehold Land is amortized over the period of lease.

(iii) The useful lives have been determined based on technical evaluation done by the management’s expert in order to reflect the actual usage of the assets. The residual values are not more than 5% of the original cost of the asset.The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

(iv) An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

(v) Gains and losses on disposals are determined by comparing proceeds with carrying amount.These are included in statement of profit and loss.

(E) Intangible Assets:

Computer Software and Technical Know-How are amortized over a period of 3 years from the date of acquisition.

(F) Capital Work in Progress:

Expenditure during construction period including development cost incurred on the projects under implementation are treated as pre-operative expenses pending allocation to the assets and are included under “Capital Work in Progress”. These expenses are apportioned to fixed assets on commencement of commercial production.

(G) Impairment of Assets:

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value.An impairment loss, if any, is charged to statement of profit and loss in the year in which an asset is identified as impaired.The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(H) Valuation of Inventory:

(a) Raw Materials and components, semi-finished goods, finished goods, stores and spares, goods for trade are valued at cost or net realizable value whichever is lower. Cost formula used is weighted average cost. Cost comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to its present location and condition.

(b) Goods / Materials in Transit are valued at cost to date.

(c) Scrap is valued at its estimated realizable value.

(d) Adequate provisions are made for obsolete inventory based on technical estimates made by the Company.

(I) Foreign CurrencyTransactions:

Transactions arising in foreign currencies during the year are converted at the rates closely approximating the rates ruling on the transaction dates. Liabilities and receivables in foreign currency are restated at the year end exchange rates.All exchange rate differences arising from conversion in terms of the above are included in the statement of profit and loss.

In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

(J) Employee Benefits:

(i) Short-term obligations:

Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within I 2 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The Liabilities are presented under current liabilities in the balance sheet.

(ii) Other long-term employee benefit obligations:

The liabilities for earned leave are measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method.The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in statement of profit and loss.

(iii) Post-employment obligations:

(a) Defined contribution plans: Company’s

contribution to the provident fund scheme is recognized during the year in which the related service is rendered.

(b) Defined benefit plans: The liability or asset recognised in the balance sheet in respect of gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using projected unit credit method.

(c) The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.

(d) Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occuq directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

(e) Changes in present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.

(f) Long Term compensated absences are provided on the basis of an actuarial valuation.

(K) Research and Development Costs:

Revenue expenditure, including overheads on research and development, is charged as an expense through the natural heads of account in the year in which incurred. Expenditure incurred at development phase, where it is reasonably certain that outcome of research will be commercially exploited to yield economic benefits to the Company, is considered as an Intangible assets and depreciation is provided on such assets as applicable.

(L) Investments:

Current investments are carried at lower of cost or fair value. Long term investments are carried at cost less provision for other than temporary decline in the value of such investments. Investment in subsidiaries are valued at cost.

(M) Borrowing Cost:

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the assets for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Other borrowing costs are expensed in the period in which they are incurred.

(N) Taxation:

Income tax expense comprises Current tax and Deferred tax charge or credit. Provision for Current tax is made on the assessable income at the tax rate applicable to the relevant

assessment year. Minimum alternative tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of 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 recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably. The deferred tax asset and/or deferred tax liability is calculated by applying substantively enacted rate as at balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation is recognized if and only if there is virtual certainty backed by convincing evidence of its realization. At each balance sheet date, carrying amount of deferred tax assets is reviewed to reassure realization.

(O) Share Issue Expenses:

Issue expenses are adjusted against the Share Premium.

(P) Government Grant/Loan:

Capital grants for project capital subsidy are credited to capital

reserves.

(Q) Provisions, Contingent Liabilities and Contingent

Assets:

Provisions involving a 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.

1. General Information:

Birla Precision Technologies Limited (the Company) is a Public Limited Company incorporated in India having its registered office at B-15/4, M.I.D.C. Industrial Area,Waluj,Aurangabad - 431 133, Maharashtra, India.The Company is engaged in the manufacturing and selling of Machine Tool Accessories,Tools, Precision Components and Castings.

Significant accounting policies followed by the Company

(A) Basis of preparation of financial statements:

(i) Compliance with Ind AS:

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 and other relevant provisions of the Act. The financial statements up to year ended 31st March, 2017 were prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act.The Company has adopted Ind-AS from 1st April, 2017.

(ii) Reconciliations between previous GAAP and Ind AS:

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

 

b) Transition to Ind AS:

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 1st April

2017 and use that carrying value as the deemed cost of the property, plant and equipment.

(c) Depreciation methods, estimated useful lives and residual value:

(i) Depreciation:The Company has ascertained the useful life of its various assets and charged depreciation in accordance with Schedule II of the Companies

Act, 2013 except in case of Precision Components division the useful life of shop toolings fixtures has been determined as 2 years.

(ii) Leasehold Land is amortized over the period of lease.

(iii) The useful lives have been determined based on technical evaluation done by the management's expert in order to reflect the actual usage of the assets.The residual values are not more than 5% of the original cost of the asset.The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

(iv) An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

(v) Gains and losses on disposals are determined by comparing proceeds with carrying amount.These are included in statement of profit and loss.

(E) Intangible Assets:

(i) Computer Software and Technical Know-How are amortized over a period of 3 years from the date of acquisition. (ii) Transition to Ind AS:

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognised as at 1st April 2017 and use that carrying value as the deemed cost of intangible assets.

(F) Capital Work in Progress:

Expenditure during construction period including development cost incurred on the projects under implementation are treated as pre-operative expenses pending allocation to the assets and are included under “Capital Work in Progress”.These expenses are apportioned to fixed assets on commencement of commercial production.

(G) Impairment of Assets:

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value.An impairment loss, if any, is charged to statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(H) Valuation of Inventory:

(a) Raw Materials and components, semi-finished goods, finished goods, stores and spares, goods for trade are valued at cost or net realizable value whichever is lower. Cost formula used is weighted average cost. Cost comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to its present location and condition.

(b) Goods / Materials in Transit are valued at cost to date. (c) Scrap is valued at its estimated realizable value.

(d) Adequate provisions are made for obsolete inventory based on technical estimates made by the Company.

(I) Foreign Currency Transactions:

Transactions arising in foreign currencies during the year are converted at the rates closely approximating the rates ruling on the transaction dates. Liabilities and receivables in foreign currency are restated at the year end exchange rates.All exchange rate differences arising from conversion in terms of the above are included in the statement of profit and loss.

In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

(J) Employee Benefits:

(i) Short-term obligations:

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.The Liabilities are presented under current liabilities in the balance sheet.

(ii) Other long-term employee benefit obligations:

The liabilities for earned leave are measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method.The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in statement of profit and loss.

(iii) Post-employment obligations:

(a) Defined contribution plans: Company's contribution to the provident fund scheme is recognized during the year in which the related service is

rendered.

(b) Defined benefit plans: The liability or asset recognised in the balance sheet in respect of gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.The defined benefit obligation is calculated annually by actuaries using projected unit credit method.

(c) The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets.

This cost is included in employee benefit expense in the statement of profit and loss.

(d) Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income.They are included in retained earnings in the statement of changes in equity and in the balance sheet.

(e) Changes in present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss

as past service cost.

(f) Long Term compensated absences are provided on the basis of an actuarial valuation.

(K) Research and Development Costs:

Revenue expenditure, including overheads on research and development, is charged as an expense through the natural heads of account in the year in which incurred. Expenditure incurred at development phase, where it is reasonably certain that outcome of research will be commercially exploited to yield economic benefits to the Company, is considered as an Intangible assets and depreciation is provided on such assets as applicable.

(L) Investments:

Current investments are carried at lower of cost or fair value. Long term investments are carried at cost less provision for other than temporary decline in the value of such investments.

(M) Borrowing Cost:

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the assets for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Other borrowing costs are expensed in the period in which they are incurred.

(N) Taxation:

Income tax expense comprises Current tax and Deferred tax charge or credit. Provision for Current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum alternative tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of 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 recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably.The deferred tax asset and/or deferred tax liability is calculated by applying substantively enacted rate as at balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation is recognized if and only if there is virtual certainty backed by convincing evidence of its realization.At each balance sheet date, carrying amount of deferred tax assets is reviewed to reassure realization.

(O) Share Issue Expenses:

Issue expenses are adjusted against the Share Premium.

(P) Government Grant/Loan:

Capital grants for project capital subsidy are credited to capital reserves.

The Company has availed mandatory exemption under Ind AS 101 and accordingly, there is no change in accounting treatment on the amount carried forward on the date of transition for sales tax deferral loan / incentive.

(Q) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving a 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.

(A) Basis of preparation of financial statements:

The financial statements have been prepared on accrual basis under historical cost convention and in compliance in all material aspects with the applicable Accounting Principles in India and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India and referred to in Section I29 and Section I33 of the Companies Act, 20I3 of India. The accounting policies applied by the Company are consistent with those used in the previous year.

(B) Use of estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made by the management that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are crystallized.

(C) Revenue recognition:

(a) Revenue from the sale of goods is recognized upon the passage of title to the customers, which generally coincides with delivery. Sales are inclusive of excise duty and net of adjustments for discounts and sales tax.

(b) Export sales are accounted based on the dates of Bill of Lading.

(c) Interest Income is accrued on time proportion basis over the period of loan / deposit / investment except in case of significant uncertainties.

(D) Fixed Assets and Depreciation / Amortization:

(a) Fixed assets are stated at cost, net of modvat / cenvat / value added tax and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing cost till commencement of commercial production, net charges of foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.

(b) Leasehold Land is amortized over the period of lease.

(c) Computer Software and Technical Know-How are amortized over a period of 3 years from the date of acquisition.

(d) Depreciation: The Company has ascertained the useful life of its various assets and charged depreciation in accordance with Schedule II of the Companies Act, 20I3 except in case of Precision Components division the useful life of shop tooling’s fixtures has been determined as 2 years.

(E) Capital Work in Progress:

Expenditure during construction period including development cost incurred on the projects under implementation are treated as pre-operative expenses pending allocation to the assets and are included under “Capital Work in Progress”. These expenses are apportioned to fixed assets on commencement of commercial production.

(F) Impairment of Fixed Assets:

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss, if any, is charged to statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(G) Valuation of Inventory:

(a) Raw Materials and components, semi-finished goods, finished goods, stores and spares, goods for trade are valued at cost or net realizable value whichever is lower. Finished goods at factory premises and branches are valued inclusive of excise duty. Cost formula used is weighted average cost. Cost comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to its present location and condition.

(b) Goods / Materials in Transit are valued at cost to date.

(c) Scrap is valued at its estimated realizable value.

(d) Adequate provisions are made for obsolete inventory based on technical estimates made by the Company.

(H) Foreign Currency Transactions:

Transactions arising in foreign currencies during the year are converted at the rates closely approximating the rates ruling on the transaction dates. Liabilities and receivables in foreign currency are restated at the yearend exchange rates. All exchange rate differences arising from conversion in terms of the above are included in the statement of profit and loss.

In case of items which are covered by forward exchange contracts, the difference between the yearend rate and rate on the date of contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.

(I) Employee Benefits:

Short term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

Post employment benefits:

(i) Defined contribution plans: Company’s contribution to the provident fund scheme is recognized during the year in which the related service is rendered.

(ii) Defined benefit plans: The present value of the obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains or losses on such valuation are recognized immediately in the statement of profit and loss. The fair value of the plan assets of the fund / trust administered by the Company, is reduced from the gross obligation under the defined benefit plan, to recognize the obligation on a net basis.

(iii) Long Term compensated absences are provided on the basis of an actuarial valuation.

(J) Research and Development Costs:

Revenue expenditure, including overheads on research and development, is charged as an expense through the natural heads of account in the year in which incurred. Expenditure, which results in the creation of capital assets, is capitalized and depreciation is provided on such assets as applicable.

(K) Investments:

Current investments are carried at lower of cost or quoted / fair value. Long term investments are stated at cost. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary.

(L) Borrowing Cost:

Borrowing costs attributable to the acquisition or construction of a qualifying asset 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 recognized as an expense in the period in which they are incurred.

(M) Taxation:

Income tax expense comprises Current tax and Deferred tax charge or credit. Provision for Current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum alternative tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of 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 recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably. The deferred tax asset and/or deferred tax liability is calculated by applying substantively enacted rate as at balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation is recognized if and only if there is virtual certainty backed by convincing evidence of its realization. At each balance sheet date, carrying amount of deferred tax assets is reviewed to reassure realization.

(N) Share Issue Expenses:

Issue expenses are adjusted against the Share Premium.

(O) Government Grants:

Capital grants for project capital subsidy are credited to capital reserves.

(P) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving a 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.

(A) Basis of preparation of financial statements:

The financial statements have been prepared on accrual basis under historical cost convention and in compliance in all material aspects with the applicable Accounting Principles in India and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India and referred to Section 129 and Section 133 of the Companies Act, 2013 of India. The accounting policies applied by the Company are consistent with those used in the previous year.

(B) Use of estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made by the management that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are crystallized.

(C) Revenue recognition:

(a) Revenue from the sale of goods is recognized upon the passage of title to the customers, which generally coincides with delivery. Sales are inclusive of excise duty and net of adjustments for discounts and sales tax.

(b) Export sales are accounted based on the dates of Bill of Lading.

(c) Interest Income is accrued on time proportion basis over the period of loan / deposit / investment except in case of significant uncertainties.

(D) Fixed Assets and Depreciation / Amortization:

(a) Fixed assets are stated at cost, net of modvat / cenvat / value added tax and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing cost till commencement of commercial production, net charges of foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

(b) Leasehold Land is amortized over the period of lease.

(c) Computer Software and Technical Know-How are amortized over a period of 3 years from the date of acquisition.

(d) Depreciation: The Company has ascertained the useful life of its various assets and charged depreciation in accordance with Schedule II of the Companies Act, 2013 except in case of Precision Components division where the useful life of shop toolings fixtures has been determined as 2 years.

(E) Capital Work in Progress:

Expenditure during construction period including development cost incurred on the projects under implementation are treated as pre-operative expenses pending allocation to the assets and are included under "Capital Work in Progress". These expenses are apportioned to fixed assets on commencement of commercial production.

(F) Impairment of Fixed Assets:

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss, if any, is charged to statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(G) Valuation of Inventory:

(a) Raw Materials and components, semi-finished goods, finished goods, stores and spares, goods for trade are valued at cost or net realizable value whichever is lower. Finished goods at factory premises and branches are valued inclusive of excise duty. Cost formula used is weighted average cost. Cost comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to its present location and condition.

(b) Goods / Materials in Transit are valued at cost to date.

(c) Scrap is valued at its estimated realizable value.

(d) Adequate provisions are made for obsolete inventory based on technical estimates made by the Company.

(H) Foreign Currency Transactions:

Transactions arising in foreign currencies during the year are converted at the rates closely approximating the rates ruling on the transaction dates. Liabilities and receivables in foreign currency are restated at the year end exchange rates. All exchange rate differences arising from conversion in terms of the above are included in the statement of profit and loss.

In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

(I) Employee Benefits:

Short term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

Post employment benefits:

(i) Defined contribution plans: Company's contribution to the provident fund scheme is recognized during the year in which the related service is rendered.

(ii) Defined benefit plans: The present value of the obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains or losses on such valuation are recognized immediately in the statement of profit and loss. The fair value of the plan assets of the fund / trust administered by the Company, is reduced from the gross obligation under the defined benefit plan, to recognize the obligation on a net basis.

(iii) Long Term compensated absences are provided on the basis of an actuarial valuation.

(J) Research and Development Costs:

Revenue expenditure, including overheads on research and development, is charged as an expense through the natural heads of account in the year in which incurred. Expenditure, which results in the creation of capital assets, is capitalized and depreciation is provided on such assets as applicable.

(K) Investments:

Current investments are carried at lower of cost or quoted / fair value. Long term investments are stated at cost. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary.

(L) Borrowing Cost:

Borrowing costs attributable to the acquisition or construction of a qualifying asset 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 recognized as an expense in the period in which they are incurred.

(M) Taxation:

Income tax expense comprises Current tax and Deferred tax charge or credit. Provision for Current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum alternative tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of 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 recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably. The deferred tax asset and/or deferred tax liability is calculated by applying substantively enacted rate as at balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation is recognized if and only if there is virtual certainty backed by convincing evidence of its realization. At each balance sheet date, carrying amount of deferred tax assets is reviewed to reassure realization.

(N) Share Issue Expenses:

Issue expenses are adjusted against the Share Premium.

(O) Government Grants:

Capital grants for project capital subsidy are credited to capital reserves.

(P) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving a 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.

(A) Basis of preparation of financial statements:

The financial statements have been prepared on accrual basis under historical cost convention and in compliance in all material aspects with the applicable Accounting Principles in India, the applicable Accounting Standards notified under Section 211 (3C) and/or Section 133 of the Companies Act, 2013 as notified on 12th September, 2013 by the Ministry of Corporate Affairs and the relevant provisions of the Companies Act, 1956 (to the relevant applicable), Companies Act, 2013 (to the extend notified).

(B) Use of estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made by the management that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are crystallized.

(C) Revenue recognition:

(a) Revenue from the sale of goods is recognized upon the passage of title to the customers, which generally coincides with delivery. Sales are inclusive of excise duty and net of adjustments for discounts and sales tax.

(b) Export sales are accounted based on the dates of Bill of Lading.

(c) Interest Income is accrued on time proportion basis over the period of loan / deposit / investment.

(D) Fixed Assets and Depreciation / Amortization:

(a) Fixed assets are stated at cost, net of modvat / cenvat / value added tax and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing cost till commencement of commercial production, net charges of foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

(b) Leasehold Land is amortized over the period of lease.

(c) Computer Software and Technical Know-How are amortized over a period of 3 years from the date of acquisition.

(d) Depreciation

I. Precision Components Division:

(i) Depreciation on fixed assets acquired prior to 01.04.2003 is provided on ''Straight Line Method'' at the rates prescribed in Schedule XIV to the Companies Act,1956 proportionately for the period for which the assets were in use.

(ii) Depreciation on additions to fixed assets on or after 01.04.2003 is provided on ''Straight Line Method'' at the rates worked out on the basis of useful life estimated by the management which is as follows:

(iii) Depreciation on impaired assets is provided by adjusting the depreciation charge in the remaining periods so as to allocate the asset''s revised carrying amount over its remaining useful life.

II. Tools and Casting and Machining Division:

The Company provides depreciation on all its assets on the Straight Line Method, at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

(E) Capital Work in Progress:

Expenditure during construction period including development cost incurred on the projects under implementation are treated as pre-operative expenses pending allocation to the assets and are included under "Capital Work in Progress". These expenses are apportioned to fixed assets on commencement of commercial production.

(F) Impairment of Fixed Assets:

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss, if any, is charged to statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(G) Valuation of Inventory:

(a) Raw Materials and components, semi-finished goods, finished goods, stores and spares, goods for trade are valued at cost or net realizable value whichever is lower. Finished goods at factory premises and branches are valued inclusive of excise duty. Cost formula used is weighted average cost. Cost comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to its present location and condition.

(b) Goods / Materials in Transit are valued at cost to date.

(c) Scrap is valued at its estimated realizable value.

(d) Adequate provisions are made for obsolete inventory based on technical estimates made by the Company.

(H) Foreign Currency Transactions:

Transactions arising in foreign currencies during the year are converted at the rates closely approximating the rates ruling on the transaction dates. Liabilities and receivables in foreign currency are restated at the year end exchange rates. All exchange rate differences arising from conversion in terms of the above are included in the statement of profit and loss.

In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

(I) Employee Benefits:

Short term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

Post employment benefits:

(i) Defined contribution plans: Company''s contribution to the provident fund scheme is recognized during the year in which the related service is rendered.

(ii) Defined benefit plans: The present value of the obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains or losses on such valuation are recognized immediately in the statement of profit and loss. The fair value of the plan assets of the fund / trust administered by the Company, is reduced from the gross obligation under the defined benefit plan, to recognize the obligation on a net basis.

(iii) Long Term compensated absences are provided on the basis of an actuarial valuation.

(J) Research and Development Costs:

Revenue expenditure, including overheads on research and development, is charged as an expense through the natural heads of account in the year in which incurred. Expenditure, which results in the creation of capital assets, is capitalized and depreciation is provided on such assets as applicable.

(K) Investments:

Current investments are carried at lower of cost or quoted / fair value. Long term investments are stated at cost. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary.

(L) Borrowing Cost:

Borrowing costs attributable to the acquisition or construction of a qualifying asset 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 recognized as an expense in the period in which they are incurred.

(M) Taxation:

Income tax expense comprises Current tax and Deferred tax charge or credit. Provision for Current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum alternative tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of 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 recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably. The deferred tax asset and/or deferred tax liability is calculated by applying substantively enacted rate as at balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation is recognized if and only if there is virtual certainty backed by convincing evidence of its realization. At each balance sheet date, carrying amount of deferred tax assets is reviewed to reassure realization.

(N) Share Issue Expenses:

Issue expenses are adjusted against the Share Premium.

(O) Government Grants:

Capital grants for project capital subsidy are credited to capital reserves.

(P) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving a 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.

(A) Basis of preparation of financial statements:

The financial statements have been prepared on accrual basis under historical cost convention and in compliance in all material aspects with the applicable Accounting Principles in India, the applicable Accounting Standards notified under Section 2II(3C) and the relevant provisions of the Companies Act, I956.

(B) Use of estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made by the management that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are crystallized.

(C) Revenue recognition:

(a) Revenue from the sale of goods is recognized upon the passage of title to the customers, which generally coincides with delivery. Sales are inclusive of excise duty and net of adjustments for discounts and sales tax.

(b) Export sales are accounted based on the dates of Bill of Lading.

(c) Interest Income is accrued on time proportion basis over the period of loan / deposit / investment.

(D) Fixed Assets and Depreciation / Amortization:

(a) Fixed assets are stated at cost, net of modvat / cenvat / value added tax and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing cost till commencement of commercial production, net charges of foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.

(b) Leasehold Land is amortized over the period of lease.

(c) Computer Software and Technical Know-How are amortized over a period of 3 years from the date of acquisition.

(d) Depreciation

I. Precision Components Division:

(i) Depreciation on fixed assets acquired prior to 0I.04.2003 is provided on ''Straight Line Method'' at the rates prescribed in Schedule XIV to the Companies Act,I956 proportionately for the period for which the assets were in use.

(iii) Depreciation on impaired assets is provided by adjusting the depreciation charge in the remaining periods so as to allocate the asset''s revised carrying amount over its remaining useful life.

II. Tools and Casting and Machining Division:

The Company provides depreciation on all its assets on the Straight Line Method, at the rates and in the manner specified in Schedule XIV to the Companies Act, I956.

(E) Capital Work in Progress:

Expenditure during construction period including development cost incurred on the projects under implementation are treated as pre-operative expenses pending allocation to the assets and are included under "Capital Work in Progress". These expenses are apportioned to fixed assets on commencement of commercial production.

(F) Impairment of Fixed Assets:

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss, if any, is charged to statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(G) Valuation of Inventory:

(a) Raw Materials and components, semi-finished goods, finished goods, stores and spares, goods for trade are valued at cost or net realizable value whichever is lower. Finished goods at factory premises and branches are valued inclusive of excise duty. Cost formula used is weighted average cost. Cost comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to its present location and condition.

(b) Goods / Materials in Transit are valued at cost to date.

(c) Scrap is valued at its estimated realizable value.

(d) Adequate provisions are made for obsolete inventory based on technical estimates made by the Company.

(I) Employee Benefits:

Short term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

Post employment benefits:

(i) Defined contribution plans: Company''s contribution to the provident fund scheme is recognized during the year in which the related service is rendered.

(ii) Defined benefit plans: The present value of the obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains or losses on such valuation are recognized immediately in the statement of profit and loss. The fair value of the plan assets of the fund / trust administered by the Company, is reduced from the gross obligation under the defined benefit plan, to recognize the obligation on a net basis.

(iii) Long Term compensated absences are provided on the basis of an actuarial valuation.

(J) Research and Development Costs:

Revenue expenditure, including overheads on research and development, is charged as an expense through the natural heads of account in the year in which incurred. Expenditure, which results in the creation of capital assets, is capitalized and depreciation is provided on such assets as applicable.

(K) Investments:

Current investments are carried at lower of cost or quoted / fair value. Long term investments are stated at cost. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary.

(L) Borrowing Cost:

Borrowing costs attributable to the acquisition or construction of a qualifying asset 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 recognized as an expense in the period in which they are incurred.

(M) Taxation:

Income tax expense comprises Current tax and Deferred tax charge or credit. Provision for Current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum alternative tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of 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 recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably. The deferred tax asset and/or deferred tax liability is calculated by applying substantively enacted rate as at balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation is recognized if and only if there is virtual certainty backed by convincing evidence of its realization. At each balance sheet date, carrying amount of deferred tax assets is reviewed to reassure realization.

(N) Share Issue Expenses:

Issue expenses are adjusted against the Share Premium.

(O) Government Grants:

Capital grants for project capital subsidy are credited to capital reserves.

(P) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving a 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.

(A) Basis of preparation of financial statements:

The financial statements have been prepared on accrual basis under historical cost convention and in compliance in all material aspects with the applicable Accounting Principles in India, the applicable Accounting Standards notified under Section 2ll(3C) and the relevant provisions of the Companies Act, 1956.

Financial statements for the year ended 31 March, 2012 have been prepared based on revised Schedule VI of the Companies Act, 1956 as it has become mandatory for the Company. The adoption of revised Schedule VI does not impact recognition and measurement principles of individual items within this financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has accordingly reclassified the previous year figures to meet the requirements applicable for the current year.

(B) Use of estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made by the management that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are crystallized.

(C) Revenue recognition:

(a) Revenue from the sale of goods is recognized upon the passage of title to the customers, which generally coincides with delivery. Sales are inclusive of excise duty and net of adjustments for discounts and sales tax.

(b) Export sales are accounted based on the dates of Bill of Lading.

(c) Interest Income is accrued on time proportion basis over the period of loan / deposit / investment.

(D) Fixed Assets and Depreciation / Amortization:

(a) Fixed assets are stated at cost, net of modvat / cenvat / value added tax and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing cost till commencement of commercial production, net charges of foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

(b) Leasehold Land is amortized over the period of lease.

(c) Computer Software and Technical Know-How are amortized over a period of 3 years from the date of acquisition.

(d) Depreciation

I. Tool holder Division:

(i) Depreciation on fixed assets acquired prior to 01.04.2003 is provided on 'Straight Line Method' at the rates prescribed in Schedule XIV to the Companies Act,l956 proportionately for the period for which the assets were in use.

(ii) Depreciation on additions to fixed assets on or after 01.04.2003 is provided on 'Straight Line Method' at the rates worked out on the basis of useful life estimated by the management which is as follows:

(iii) Depreciation on impaired assets is provided by adjusting the depreciation charge in the remaining periods so as to allocate the asset's revised carrying amount over its remaining useful life.

II. Tool and Machining and Casting Division:

The Company provides depreciation on all its assets on the Straight Line Method, at the rates and in the manner specified in Sched- ule XIV to the Companies Act, I956.

(E) Capital Work in Progress:

Expenditure during construction period including development cost incurred on the projects under implementation are treated as pre-operative expenses pending allocation to the assets and are included under "Capital Work in Progress". These expenses are apportioned to fixed assets on commencement of commercial production.

(F) Impairment of Fixed Assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss, if any, is charged to statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(G) Valuation of Inventory:

(a) Raw Materials and components, semi-finished goods, finished goods, stores and spares, goods for trade are valued at cost or net realizable value whichever is lower. Finished goods at factory premises and branches are valued inclusive of excise duty. Cost for- mula used is weighted average cost. Cost comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to its present location and condition.

(b) In case of Tool Division, cost of manufactured finished goods and semi-finished goods is determined by using the ''Retail Method' whereby the cost is computed by reducing from the sale value of inventories, the global gross margin.

(c) Goods / Materials in Transit are valued at cost to date.

(d) Scrap is valued at its estimated realizable value.

(e) Adequate provisions are made for obsolete inventory based on technical estimates made by the Company.

(H) Foreign Currency Transactions:

Transactions arising in foreign currencies during the year are converted at the rates closely approximating the rates ruling on the transaction dates. Liabilities and receivables in foreign currency are restated at the year end exchange rates. All exchange rate differences arising from conversion in terms of the above are included in the statement of profit and loss.

In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

(I) Employee Benefits:

Short term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

Post employment benefits:

(i) Defined contribution plans: Company's contribution to the provident fund scheme is recognized during the year in which the related service is rendered.

(ii) Defined benefit plans: The present value of the obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains or losses on such valuation are recognized immediately in the statement of profit and loss. The fair value of the plan assets of the fund / trust administered by the Company, is reduced from the gross obligation under the defined benefit plan, to recognize the obligation on a net basis.

(iii) Long Term compensated absences are provided on the basis of an actuarial valuation.

(J) Research and Development Costs:

Revenue expenditure, including overheads on research and development, is charged as an expense through the natural heads of account in the year in which incurred. Expenditure, which results in the creation of capital assets, is capitalized and depreciation is provided on such assets as applicable.

(K) Investments:

Current investments are carried at lower of cost or quoted / fair value. Long term investments are stated at cost. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary.

(L) Borrowing Cost:

Borrowing costs attributable to the acquisition or construction of a qualifying asset 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 recognized as an expense in the period in which they are incurred.

(M) Taxation

Income tax expense comprises Current tax and Deferred tax charge or credit. Provision for Current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum alternative tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of 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 recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably. The deferred tax asset and/or deferred tax liability is calculated by applying substantively enacted rate as at balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation is recognized if and only if there is virtual certainty backed by convincing evidence of its realization. At each balance sheet date, carrying amount of deferred tax assets is reviewed to reassure realization.

(N) Share Issue Expenses:

Issue expenses are adjusted against the Share Premium.

(O) Government Grants:

Capital grants for project capital subsidy are credited to capital reserves.

(P) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving a 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.

1 Basis of preparation of financial statements:

The Financial Statements have been prepared on accrual basis under historical cost convention and in compliance in all material aspects with the applicable Accounting Principles in India, the applicable Accounting Standards notified under Section 211(3C) and the relevant provisions of the Companies Act, 1956.

2 Revenue Recognition:

(a) Revenue from the sale of goods is recognized upon the passage of title to the customers, which generally coincides with delivery. Sales are inclusive of excise duty and net of adjustments for discounts and sales tax.

(b) Export sales are accounted based on the dates of Bill of Lading.

(c) Interest Income is accrued on time proportion basis over the period of loan / deposit / investment.

3 Use of Estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made by the management that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are crystallized.

4 Fixed Assets and Depreciation / Amortization:

(a) Fixed assets are accounted at cost of acquisition / construction, less accumulated depreciation and impairment loss, if any.

(b) Leasehold Land is amortized over the period of lease.

(c) Computer Software and Technical Know-How are amortized over a period of 3 years from the date of acquisition.

(d) Depreciation:

I Toolholder Division:

(i) Depreciation on fixed assets acquired prior to 01.04.2003 is provided on ‘Straight Line Method’ at the rates prescribed in Schedule XIV to the Companies Act,1956 proportionately for the period for which the assets were in use.

(iii) Depreciation on impaired assets is provided by adjusting the depreciation charge in the remaining periods so as to allocate the asset’s revised carrying amount over its remaining useful life.

II Tool Division:

The Company provides depreciation on all its assets on the Straight Line Method, at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

5 Capital Work in Progress:

Expenditure during construction period including development cost incurred on the projects under implementation are treated as pre- operative expenses pending allocation to the assets and are included under "Capital Work in Progress".

These expenses are apportioned to fixed assets on commencement of commercial production.

6 Impairment of Fixed Assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss, if any, is charged to Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

7 Valuation of Inventory:

(a) Raw Materials and Components, Semi-finished goods, Finished goods, Stores and Spares, Goods for Trade are valued at cost or net realizable value whichever is lower. Finished goods at factory premises and branches are valued inclusive of excise duty. Cost formula used is weighted average cost. Cost comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to its present location and condition.

(b) In case of Tool Division, Cost of Manufactured Finished Goods and Semi-finished goods is determined by using the ‘Retail Method’ whereby the cost is computed by reducing from the sale value of inventories, the global gross margin.

(c) Goods / Materials in Transit are valued at cost to date.

(d) Scrap is valued at its Estimated Realizable Value.

(e) Adequate provisions are made for obsolete inventory based on technical estimates made by the Company.

8 Foreign Currency Transactions:

Transactions arising in foreign currencies during the year are converted at the rates closely approximating the rates ruling on the transaction dates. Liabilities and receivables in foreign currency are restated at the year end exchange rates. All exchange rate differences arising from conversion in terms of the above are included in the profit and loss account.

9 Employee Benefits:

Short term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the related service is rendered.

Post employment benefits:

i) Defined contribution plans: Company’s contribution to the provident fund scheme is recognized during the year in which the related service is rendered.

ii) Defined benefit plans: The present value of the obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses on such valuation are recognized immediately in the Profit and Loss Account. The fair value of the plan assets of the fund / trust administered by the Company, is reduced from the gross obligation under the defined benefit plan, to recognize the obligation on a net basis.

iii) Long Term compensated absences are provided on the basis of an actuarial valuation.

10 Research and Development Costs:

Revenue expenditure, including overheads on research and development, is charged as an expense through the natural heads of account in the year in which incurred. Expenditure, which results in the creation of capital assets, is capitalized and depreciation is provided on such assets as applicable.

11 Borrowing Cost:

Borrowing costs attributable to the acquisition or construction of a qualifying asset 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 recognized as an expense in the period in which they are incurred.

12 Taxation:

Income tax expense comprises Current tax and Deferred tax charge or credit. Provision for Current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum alternative tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of 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 recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably. The deferred tax asset and/or deferred tax liability is calculated by applying substantively enacted rate as at balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation is recognized if and only if there is virtual certainty backed by convincing evidence of its realization. At each balance sheet date, carrying amount of deferred tax assets is reviewed to reassure realization.

13 Government Grants:

Capital grants for project capital subsidy are credited to Capital Reserves.

14 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving a 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.

1 Basis of preparation of financial statements:

The Financial Statements have been prepared on accrual basis under historical cost convention and in compliance in all material aspects with the applicable Accounting Principles in India, the applicable Accounting Standards notified under Section 211 (3C) and the relevant provisions of the Companies Act, 1956.

2 Revenue Recognition:

(a) Revenue from the sale of goods is recognized upon the passage of title to the customers, which generally coincides with delivery.

(b) Export sales are accounted based on the dates of Bill of Lading.

(c) Interest Income is accrued on time proportion basis over the period of loan / deposit / investment.

3 Use of Estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made by the management that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are crystallized.

4 Fixed Assets and Depreciation / Amortization:

(a) Fixed Assets are accounted at cost of acquisition / construction.

(b) Leasehold Land is amortized over the period of lease.

(c) Computer Software and Technical Know-How are amortized over a period of 3 years from the date of acquisition.

(d) Depreciation:

I Toolholder Division:

(i) Depreciation on fixed assets acquired prior to 01.04.2003 is provided on Straight Line Method at the rates prescribed in Schedule XIV to the Companies Act, 1956 proportionately for the period for which the assets were in use.

(iii) Depreciation on impaired assets is provided by adjusting the depreciation charge in the remaining periods so as to allocate the assets revised carrying amount over its remaining useful life.

II Tool Division:

The Company provides depreciation on all its assets on the Straight Line Method, at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

5 Capital Work in Progress:

Expenditure during construction period including development cost incurred on the projects under implementation are treated as pre-operative expenses pending allocation to the assets, and are included under "Capital Work in Progress". These expenses are apportioned to fixed assets on commencement of commercial production.

6 Impairment of Fixed Assets:

At each balance sheet date, the Company reviews the carrying amounts of its assets to determine whether there is any indication that those assets suffered any impairment loss based on internal / external factors. If such indication exists, the recoverable amount of the asset is estimated and impairment loss is provided for. Reversal of impairment loss is recognized immediately as income in the profit and loss account.

7 Valuation of Inventory:

(a) Raw Materials and Components, Semi-finished goods, Finished goods, Stores and Spares, Goods for Trade are valued at cost or net realizable value whichever is lower. Finished goods at factory premises and branches are valued inclusive of excise duty. Cost formula used is weighted average cost. Cost comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to its present location and condition.

(b) In case of Tool Division, Cost of Manufactured Finished Goods and Semi-finished goods is determined by using the Retail Method, whereby the cost is computed by reducing from the sale value of inventories, the global gross margin.

(c) Goods / Materials in Transit are valued at cost to date.

(d) Scrap is valued at its Estimated Realizable Value.

(e) Due allowances are made for obsolete inventory based on technical estimates made by the Company.

8 Foreign Currency Transactions:

Transactions arising in foreign currencies during the year are converted at the rates closely approximating the rates ruling on the transaction dates. Liabilities and receivables in foreign currency are restated at the year end exchange rates. All exchange rate differences arising from conversion in terms of the above are included in the profit and loss account.

9 Employee Benefits:

Short term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the related service is rendered.

Post employment benefits:

i) Defined contribution plans: Companys contribution to the provident fund scheme, superannuation, etc is recognized during the year in which the related service is rendered.

ii) Defined benefit plans: The present value of the obligation is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses on such valuation are recognized immediately in the Profit and Loss Account. The fair value of the plan assets of the fund / trust administered by the Company, is reduced from the gross obligation under the defined benefit plan, to recognize the obligation on a net basis.

iii) Long Term compensated absences are provided on the basis of an actuarial valuation.

iv) Termination Benefits are charged to Profit and Loss Account in the year in which they are incurred.

10 Research and Development Costs:

Revenue expenditure, including overheads on research and development, is charged as an expense through the natural heads of account in the year in which incurred. Expenditure, which results in the creation of capital assets, is capitalized and depreciation is provided on such assets as applicable.

11 Borrowing Cost:

Borrowing cost attributable to acquisitions / construction of qualifying assets are capitalized. Other borrowing cost are charged to Profit & Loss Account.

12 Taxation:

Income tax expense comprises Current tax and Deferred tax charge or credit. Provision for Current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum alternative tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of 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 recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably. The deferred tax asset and/ or deferred tax liability is calculated by applying substantively enacted rate as at balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation is recognized if and only if there is virtual certainty backed by convincing evidence of its realisation. At each balance sheet date, carrying amount of deferred tax assets is reviewed to reassure realization.

13 Government Grants:

Capital grants for project capital subsidy are credited to Capital Reserves.