1 COMPANY INFORMATION
DEEM ROLL-TECH LIMITED was incorporated as a private limited under the provisions of the Companies Act, 1956, pursuant to a certificate of
incorporation dated 01/05/2003 issued by the Registrar of Companies, Gujarat, Dadra and Nagar Haveli. Thereafter, the Company was converted
from private limited to public limited vide fresh certificate of incorporation dated 04/03/2008 issued by the Registrar of Companies, Ahmedabad,
Gujarat
The company is in business of roll manufacturing. The company comprises three fully integrated factories with machine shops, foundries and heat
treatment plants.
2 SIGNIFICANT ACCOUNTING POLICIES
a Basis of Preparation
The Financial Statements of the Company are prepared under the historical cost convention on accrual basis of accounting and in accordance with
the mandatory accounting standards issued by the Institute of Chartered Accountants of India and referred to in Section 133 of the Companies Act,
2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and generally accepted accounting principles in India. The accounting policies not
referred to otherwise have been consistently applied by the Company during the year.
b Use of Estimates
The preparation of financial statements in accordance with the GAAP requires management to make estimates and assumptions that may affect the
reported amount of assets and liabilities, classification of assets and liabilities into non-current and current and disclosures relating to contingent
liabilities as at the date of financial statements and the reported amounts of income and expenses during the reporting period. Although the
financial statements have been prepared based on the management’s best knowledge of current events and procedures/actions, the actual results
may differ on the final outcome of the matter/transaction to which the estimates relates.
c Property, Plant and Equipment
Tangible Assets are stated at cost of acquisition/construction (less Accumulated Depreciation, if any). The cost of Property, Plant, and Equipment
comprises of their purchase price, including freight, duties, taxes or levies and directly attributable cost of bringing the assets to their working
conditions for their intended use. Subsequent expenditures on Fixed Assets have been capitalized only if such expenditures increase the future
benefits from the existing assets beyond their previously assessed standard of performance.
d Intangible assets
There is No Intangible Asset as defined under Accounting Standard 26 “Intangible Assets”.
e Depreciation and amortization
Depreciation of Plant, Plant and Equipment’s is provided on original cost of the asset on written down value method and in the manner prescribed
in Schedule II of the Companies Act, 2013.Accordingly the unamortized carrying value is being depreciated over remaining useful life by Written
down value method.
f Impairment of assets
At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash generating unit to determine
whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of impairment. Recoverable amount is the higher of an asset’s net selling price and value in use. In assessing value in
use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using
a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Reversal of
impairment loss is recognised as income in the statement of profit and loss.
g Investment
Long-term investments and current maturities of long-term investments are stated at cost, less provision for other than temporary diminution in
value. Current investments, except for current maturities of long-term investments, comprising investments in mutual funds, government securities
and bonds are stated at the lower of cost and fair value.
h Inventories
Raw materials are carried at the lower of cost and net realisable value. Cost is determined on a weighted average basis. Purchased goods-in-transit
are carried at cost. Work-in-progress is carried at the lower of cost and net realisable value. Stores and spare parts are carried at lower of cost and
net realisable value. Finished goods produced or purchased by the Company are carried at lower of cost and net realisable value. Cost includes
direct material and labour cost and a proportion of manufacturing overheads.
i 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.
j Revenue recognition
All income and expenses are accounted on accrual basis. The Company recognised Sale of Goods when it had transferred the property in Goods to
the buyer for a price or all significant risks and rewards of ownership had been transferred to the buyer and no significant uncertainty existed as to
the amount of consideration that would be derived from such sale. The recognition event is usually the dispatch of goods to the buyer such that the
Company retains no effective control over the goods dispatched.
Income from investments, where appropriate, is taken into revenue in full on declaration or accrual and tax deducted at source thereon is treated
as advance tax.
k Employee Benefits
Post-employment benefit plans
Contributions to defined contribution retirement benefit schemes are recognised as expense when employees have rendered services entitling them
to such benefits.
For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being
carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the statement of profit and loss for the period in which
they occur. Past service cost is recognised immediately to the extent that the benefits are already vested, or amortised on a straight-line basis over
the average period until the benefits become vested.
The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for
unrecognised past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to the present
value of available refunds and reductions in future contributions to the scheme.
Other employee benefits
A: Short Term Employee Benefits : Short-term employee benefits are recognized as expense in the Statement of Profit & Loss of the year in which
the related service is rendered at the undiscounted amount as and when it accrues.
B: Defined Contribution Plan : The company is covered under employee’s provident fund and miscellaneous provision Act, 1952 which are defined
contribution schemes, liability in respect thereof is determined on the basis of the basis of contribution required to be made under the
statues/Rules. Company’s contribution to provident fund is charged to Profit & loss Account.
C: Defined Benefit Plan : The Company Provides for gratuity, a defined benefit retirement plan (the “Gratuity Plan”) covering eligible employees.
In accordance with the payment of gratuity Act, 1972 the gratuity plan provides a lump sum payment to vested employees at retirement, death,
incapacitation or
termination of employment, of an amount based on the respective employee’s Salary and the tenure of employment. Liabilities with regard to the
gratuity plan are determined by Management Certification as of the balance sheet date, Based upon which, the company contributes all the
ascertained liabilities to fund. Trustees administer contributions made to the trust and contributions are invested in specific investment as
permitted by Law.
l Borrowing Cost
Borrowing cost attributable to acquisition of qualifying assets for the period such asset is put to its commercial use, is capitalized as part of the cost
of such assets. A qualifying asset is one that takes substantial period of time to get ready for intended use. All other borrowing costs are charged to
profit and loss account.
m 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.
n Taxation
Current income tax expense comprises taxes on income from operations in India and in foreign jurisdictions. Income taxpayable 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 income 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.
Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax
provision arising in the same tax jurisdiction for relevant tax paying units and where the Company is able to and intends to settle the asset and
liability on a net basis.
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.
o Earnings Per Shares
Basic earning per share is computed by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period. Diluted earning per share is computed by taking into account the weighted average number
of equity shares outstanding during the period and the weighted average number of equity shares which would be issued on conversion of all
dilutive potential equity shares into equity shares.
p Operating Cycle
Based on the activities of the company and normal time between incurring of liabilities and their settlement in cash or cash equivalents and
acquisition/right to assets and their realization in cash or cash equivalents, the company has considered its operating cycle as 12 months for the
purpose of classification of its liabilities and assets as current and non-current
|