1) COMPANY INFORMATION
Aztec Fluids & Machinery Limited (formerly known as Aztec Fluids & Machinery Private Limited) ('Aztec' or 'the Company') was incorporated on April 28, 2010 under erstwhile Companies Act, 1956 with the Registrar of Companies, Ahmedabad. The Company's registered office is situated at Part H Plinth, 4th Floor, Takshashila Square, Nr. Krishnabag Four Rd, Maninagar, Ahmedabad, Gujarat, India, 380028. During the year ended March 31, 2025, the Company has completed its Initial Public Offer ("IPO”) and its equity shares were listed on the BSE Limited ("BSE”) on May 17, 2024.
Aztec is primarily engaged in the manufacturing of Printers, Makeup & Wash and trading of inks used therein, its related consumables and providing services like AMC and repairs. The company sells its products in India and in international markets. The Company has its manufacturing facilities located at Kheda, Gujarat.
2) MATERIAL ACCOUNTING POLICIES2.1 Basis of preparation of Financial Statements:
The financial statements have been prepared in accordance with Accounting Standard (AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Accounting Standards) Rules, 2021 and other relevant provisions of the Act and presented in accordance with the requirements of Regulation 33 of the listing Regulation in this regard.
These financial statements are prepared in accordance with Accounting Standards (AS) under the historical cost convention on accrual basis. All assets and liabilities have been classified as current or non-current based on normal operating cycle of business activities of the Company, which is 12 months.
Use of Estimates:
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date.
2.2 Revenue recognition:
Revenue is recognized only when all the significant risks and rewards incident to ownership to the customer, it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operation includes Sales of Goods net of Goods and Services Tax, adjusted for discounts (net) and gain / Loss on corresponding hedged contracts.
Revenue / Loss from bargain settlement of goods is recognized at the time of settlement of transactions.
Dividend income is recognized when the right to receive payment is established.
Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the interest rate applicable.
All other income are recognized and accounted for on accrual basis.
2.3 Valuation of Inventories:
Inventories which comprise raw materials, work-inprogress, finished goods, stock-in-trade, packing material are carried at the lower of cost and net realisable value. Cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
In determining the cost, moving weighted average cost method is used. In the case of manufactured inventories and work in progress, fixed production overheads are allocated on the basis of normal capacity of production facilities.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. The net realisable value of work-in-progress is determined with reference to the selling prices of related finished products. Raw materials and other supplies held for use in the production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realisable value. The comparison of cost and net realisable value is made on an item-by-item basis.
2.4 Property Plant and Equipment
Freehold land is carried at historical cost. All other tems of property, plant and equipment are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation, less accumulated depreciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
Subsequent expenditures related to an item of Tangible Asset are added to its book value. Only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.
Assets which are not ready for their intended use are disclosed under Capital Work-in- Progress/ Intangible assets under development and all the cost relating to such assets are shown under work-in-progress/Intangible assets under development.
2.5 Depreciation/Amortization and Impairment:
Depreciation on tangible fixed assets is provided on the written down value Method over the useful lives of assets as prescribed in the schedule II of the Companies Act, 2013. Depreciation for assets purchased sold during a period is proportionately charged. Intangible assets are amortized over their respective individual estimated useful lives on a written down value, commencing from the date the asset is available to the Company for its use.
Depreciation and Amortization methods, useful lives and residual values are reviewed periodically, at each financial year end.
Pursuant to the enactment of Companies Act 2013, the Company has applied the estimated useful lives as specified in Schedule II. If an item of property, plant and equipment have different useful lives, then they are accounted for as separate items of property, plant and equipment and that decided useful lives of assets are taken for the calculation.
The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset's net selling price and value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An impairment loss for an asset is reversed if, and only if, the reversal can be related objectively to an event occurring after the impairment loss was recognized. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
2.6 Leases
Assets taken on lease by the Company in its capacity as lessee, where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such a lease is capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is recognized for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the statement of profit and loss on a straight-line basis.
2.7 Taxation
Current income tax expense comprises taxes on income from operations in India and in foreign jurisdictions. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expense relating to foreign operations is determined in accordance with tax laws applicable in countries where such operations are domiciled.
Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, 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 after the tax holiday period. Accordingly, MAT is recognised as an asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with it will fructify.
Deferred tax expense or benefit is recognised on timing differences being the difference between taxable incomes and accounting income that originate in one period and is likely to reverse in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.
The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.
2.8 Government Grants
The Company recognizes government grants when there is reasonable assurance that the conditions attached to them will be complied with and the grants will be received.
Government Grants Related to Assets: These grants are recognized as deferred income in the balance sheet and amortized over the useful life of the related asset.
Government Grants Related to Income: These grants are recognized in the profit and loss Statement over the periods in which the related expenses are incurred.
2.9 Employee BenefitsShort-term Employee Benefits:
Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus, ex-gratia and performance linked rewards falling due wholly within twelve months of rendering the service are classified as short term employee benefits and are expensed in the period in which the employee renders the related service.
Long-term Employee Benefits:
Defined Contribution plans:
Contributions to the employee's provident fund, Employee's Pension Scheme and Employee's State Insurance are recognised as defined contribution plan and charged as expenses during the period in which the employees perform the services.
Defined Benefit plans:
Retirement benefits in the form of Gratuity is considered as defined benefit plan and determined on actuarial valuation using the Projected Unit Credit Method at the balance sheet date.
Interest Cost, Current Service Cost and Past Service Cost are recognised in profit and loss account immediately.
Other Long -term Employee Benefit:
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as a liability at the present value of the defined benefit obligation at the balance sheet date. Annual leaves can either be availed or encashed subject to restriction on the maximum accumulation of leaves.
Termination Benefits:
Termination benefits are recognised as an expense in the period in which they are incurred.
The employee benefit with regards to both Leave encashment and Gratuity are unfunded.
2.10 Exceptional Items
An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of the performance of the Company is treated as an exceptional item and the same is disclosed in the notes to accounts, if any.
2.11 Segment Reporting
The group operates in a single segment i.e. "Manufacturing of Printers, trading of inks used therein and consumables thereof” and hence does not have any additional disclosures to be made under AS - 17 Segment Reporting.
2.12 Functional and presentation currency
Items included in the consolidated Financial Statements are presented in INR which is our Company's functional currency. All amounts have been rounded-off to the nearest lakhs and decimals thereof, unless otherwise mentioned.
2.13 Events after reporting date
Where events occur after the balance sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted with the Standalone Financial Statements. Otherwise, events after the balance sheet date of material size or nature are only disclosed.
2.14 Borrowing Costs
Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost of that asset till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. Costs incurred in raising funds are amortized equally over the period for which the funds are acquired. All other borrowing costs are charged to profit and loss account.
2.15 Foreign currency transactions
Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities other than net investments in non-integral foreign operations are translated at the exchange rate prevailing on the balance sheet date and exchange gains and losses are recognised in the statement of profit and loss. Exchange difference arising on a monetary item that, in substance, forms part of an enterprise's net investments in a non-integral foreign operation are accumulated in a foreign currency translation reserve.
2.16 Provisions, Contingent liabilities and Contingent assets
A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits and compensated absences) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may, but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions but are disclosed as the possibility of outflow of resources is remote.
A contingent asset is neither recognised nor disclosed in the financial statements.
2.17 Earnings per Share
Basic earnings per share is calculated by dividing the net profit or loss after tax for the period attributable to the equity shareholders by the weighted average number of Equity Shares outstanding during the year adjusted for bonus elements in equity shares issued during the year.
For the purpose of calculating diluted earnings per share, the net profit or loss after tax for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period, are adjusted for the effects of all dilutive potential equity shares.
2.18 Dividends
Final dividend on shares is recorded as a liability on the date of approval by the shareholders at the annual general meeting and interim dividend are recorded as a liability on the date of declaration by the Company's Board of Directors.
2.19 Cash and cash equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.
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