| Disclosure of accounting policies, change in accounting policies and changes in estimates explanatory MTAR Technologies Private Limited Corporate information and Summary of significant accounting policies CIN: U72200TG1999PTC032836 (All amounts in Indian rupees lakhs, except share data and unless otherwise stated) 1. Corporate Information MTAR Technologies Private Limited (“MTAR” or “the Company”) was formed as a partnership firm in the year ended March 31, 1970. The partnership firm was converted into a private limited company in the year ended March 31, 1999 with its registered office in Hyderabad. The Company is engaged in the business of manufacturing high brcision and heavy equipments, components, machines for sectors including nuclear, aerospace, defence, etc. Basis of brparation of financial statements The financial statements are brpared with generally accepted accounting principles in India under the historical cost convention and on an accrual basis of accounting. The Company has brpared these financial statements to comply in all material respects with the accounting standards notified under Section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014, and with the relevant provisions of the Act, pronouncements of The Institute of Chartered Accountants of India (‘ICAI’). The accounting policies adopted in the brparation of financial statements are consistent with those of brvious year. 2. Significant Accounting Policies All assets and liabilities are classified into current and non-current. a) Assets An asset is classified as current when it satisfies any of the following criteria: i. It is expected to be realized in, or is intended for sale or consumption in, the Company’s normal operating cycle; ii. It is held primarily for the purpose of being traded; iii. It is expected to be realized within 12 months after the reporting date; or iv. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date. Current assets include the current portion of non-current financial assets. All other assets are classified as non-current.
MTAR Technologies Private Limited Corporate information and Summary of significant accounting policies CIN: U72200TG1999PTC032836 (All amounts in Indian rupees lakhs, except share data and unless otherwise stated) b) Liabilities A liability is classified as current when it satisfies any of the following criteria: i. it is expected to be settled in the Company’s normal operating cycle; ii. it is held primarily for the purpose of being traded; iii. it is due to be settled within 12 months after the reporting date; or iv. The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current. c) Operating cycle The Company has ascertained its operating cycle as twelve months that is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. d) Use of estimates The brparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenue and expense for the year. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods. e) Fixed assets and debrciation Fixed assets are carried at the cost of acquisition or construction less accumulated debrciation. The cost of fixed assets includes non-refundable taxes, duties, freight, and other incidental expenses related to the acquisition and installation of respective assets. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalized. Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date are disclosed as capital advances and the cost of fixed assets acquired but not ready for their intended use before such date are disclosed as capital work-in-progress.
MTAR Technologies Private Limited Corporate information and Summary of significant accounting policies CIN: U72200TG1999PTC032836 (All amounts in Indian rupees lakhs, except share data and unless otherwise stated) f) Debrciation / amortization Debrciation on fixed assets is provided using the straight line method (‘SLM’) on the basis of useful life specified in Schedule II of the Companies Act, 2013 except for assets mentioned below, for which debrciation is provided on the basis of technically estimated useful life which are lower than that envisaged as per schedule II of the Companies Act, 2013 to depict a more true and fair rate of debrciation: (i) Factory buildings – 40 to 70 years. (ii) Plant and Machinery – 40 years. Freehold land is not amortized. Debrciation is calculated on a pro-rata basis from the date of installation till the date the assets are sold or disposed. Individual assets costing Rs.5, 000or less are debrciated in full in the year of acquisition. g) Intangibles Intangible assets are amortized in the statement of profit and loss over their estimated useful lives, from the date that they are available for use based on the expected pattern of consumption of economic benefits of the asset. Accordingly, at brsent, these are being amortized on straight line basis. In accordance with the applicable Accounting Standard, the Company follows a rebuttable brsumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use. However, if there is persuasive evidence that the useful life of an intangible asset is longer than ten years, it is amortized over the best estimate of its useful life. Such intangible assets and intangible assets that are not yet available for use are tested annually for impairment. Software is amortized over the period of ten years. Amortization method and useful lives are reviewed at each reporting date. If the useful life of an asset is estimated to be significantly different from brvious estimates, the amortization period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortization method is changed to reflect the changed pattern.
MTAR Technologies Private Limited Corporate information and Summary of significant accounting policies CIN: U72200TG1999PTC032836 (All amounts in Indian rupees lakhs, except share data and unless otherwise stated) h) Inventories Inventories are valued at the lower of cost and net realizable value. Cost of inventories comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition.Net realizable 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 methods of valuation of various categories of inventories are as follows: Raw materials | Lower of cost and net realizable value. Cost is determined on first-in, first-out basis. | Stores and consumables | Inventory of stores and spares is valued at cost. Cost is determined on first-in, first-out basis | Work-in-progress | Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of production overheads based on normal operating capacity. |
i) Investments Investments are classified as current investments, if the management does not intend to hold the investments for more than one year. Investments other than current investments are classified as long term investments. Current investments are carried at the lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments. In case of investment in mutual funds, the net asset value of units declared by the mutual fund is considered as fair value. Long term investments are carried at cost less diminution in value, other than temporary, determined separately for each individual investment. j) Revenue recognition i. Revenue is recognized the extent that it is probable that the economic benefits will flow to the Company and revenue can be reliably measured. ii. Revenue from manufacturing contracts having long term production cycles is recognized on the percentage of completion method as mentioned in Accounting Standard (AS) 7 “Construction contracts” notified by the Companies Accounting Standards Rules, 2006. The stage of completion of contracts is measured by reference to the proportion that contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs for that contract. However, profit is not recognized unless there is reasonable progress on the contract. Where the probable total cost of a contract is expected to exceed the corresponding contract revenue, such expected loss is provided for. Such revenue until it is billed is recognized in the balance sheet under the head “unbilled revenue”. MTAR Technologies Private Limited Corporate information and Summary of significant accounting policies CIN: U72200TG1999PTC032836 (All amounts in Indian rupees lakhs, except share data and unless otherwise stated) iii. Revenue from sale of products manufactured under other manufacturing contracts is recognized when substantial risks and rewards of ownership are transferred to the buyer under terms of the contract, which generally coincides with the dispatch of the goods. iv. Manufacturing works revenue is recognized when the related services are performed and the goods are dispatched as per the terms of contracts with customers. v. Revenue from product sales is stated inclusive of excise duty but exclusive of returns, sales tax and applicable trade discounts and allowances. vi. Income from interest on deposits and interest bearing securities is recognized on the time proportion basis using the underlying interest rate. vii. Dividend income is recognized when the unconditional right to receive the income is established. k) Foreign currency transactions Foreign currency transactions are recorded using the exchange rates brvailing on the dates of the respective transactions. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of profit and loss. Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at yearend rates. The resultant exchange differences are recognized in the Statement of Profit and Loss. Non-monetary assets are recorded at the rates brvailing on the date of the transaction. l) Employee benefits Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts. The Company contributes to the recognized provident fund which is a defined contribution plan. Contributions are charged to the Statement of profit and loss in the year when the contributions to the fund are due. Short-term employee benefits Employee benefits payable wholly within twelve months of receiving employee services are classified as short-term employee benefits. These benefits include salaries and wages, bonus and ex-gratia. The undiscounted amount of short-term employee benefits to be paid in exchange for employee services is recognized as an expense as the related service is rendered by employees.
MTAR Technologies Private Limited Corporate information and Summary of significant accounting policies CIN: U72200TG1999PTC032836 (All amounts in Indian rupees lakhs, except share data and unless otherwise stated) Defined benefit plans The Company’s gratuity benefit scheme is a defined benefit plan. The Company’s net obligation in respect of a defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its brsent value. Any unrecognized past service costs and the fair value of any plan assets are deducted. The calculation of the Company’s obligation under each plan is performed annually by a qualified actuary using the projected unit credit method. The Company recognizes all actuarial gains and losses arising from defined benefit plans immediately in the Statement of profit and loss. All expenses related to defined benefit plans are recognized in employee benefits expense in the Statement of profit and loss. Compensated absences Compensated absences, which is a long term employee benefit, is accrued based on the actuarial valuation done as per projected unit credit method as at the balance sheet date, carried out by an independent actuary m) Taxes on income Income tax expense comprises current tax, deferred tax charge or credit and minimum alternate tax. Current tax The current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the Company. Deferred tax Deferred tax charge or benefit reflects the tax effects of timing differences between accounting income and taxable income for the year. The deferred tax charge or benefit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantially enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed debrciation or carry forward of losses, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed at each balance sheet date and written-down or written-up to reflect the amount that is reasonably/virtually certain to be realized. The break-up of the major components of the deferred tax assets and liabilities as at the balance sheet date has been arrived at after setting-off deferred tax assets and liabilities where the Company has legally enforceable right and an intention to set-off assets against liabilities and where such assets and liabilities relate to taxes on income levied by the same governing taxation laws. MTAR Technologies Private Limited Corporate information and Summary of significant accounting policies CIN: U72200TG1999PTC032836 (All amounts in Indian rupees lakhs, except share data and unless otherwise stated) Minimum alternative tax (MAT) MAT credit entitlement rebrsents amounts paid in a year under Section 115 JA of the Income -tax Act 1961 (‘IT Act’), in excess of the tax payable, computed on the basis of normal provisions of the IT Act. Such excess amount can be carried forward for set off against future tax payments for ten succeeding years in accordance with the relevant provisions of the IT Act. Since such credit rebrsents a resource controlled by the Company as a result of past events and there is evidence as at the reporting date that the Company will pay normal income tax during the specified period, when such credit would be adjusted, the same has been disclosed as “MAT credit entitlement”, under “Long term loans and advances” in balance sheet with a corresponding credit to the Statement of profit and loss, as a separate line item. Such assets are reviewed as at each balance sheet date and written down to reflect the amount that will not be available as a credit to be set off in future, based on the applicable taxation law then in force. n) Earnings per share The basic earnings/ (loss) per share is calculated by dividing the net profit after tax or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit/ loss after tax for the year 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. The dilutive potential equity shares are deemed converted as of the beginning of the period, unless they have been issued at a later date. o) Leases Assets taken on lease where the company acquires substantially the entire risks and rewards incidental to ownership are classified as finance leases. The amount recorded is the lesser of the brsent value of minimum lease rental and other incidental expenses incurred during the lease term or the fair value of the assets taken on lease. The rental obligations, net of interest charges, are reflected as secured loans. Leases that do not transfer substantially all the risks and rewards of ownership are classified as operating leases and recorded as expense on a straight line basis over the lease term.
MTAR Technologies Private Limited Corporate information and Summary of significant accounting policies CIN: U72200TG1999PTC032836 (All amounts in Indian rupees lakhs, except share data and unless otherwise stated) p) Provisions and contingent liabilities The Company creates a provision when there is a brsent obligation as a result of an obligating event that probably requires an outflow of resources and a reliable estimate can be made of the amount for the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a brsent obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a brsent obligation that the likelihood of outflow of resource is remote, no provision or disclosure is made. Provision for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligation under the contract exceed the economic benefits expected to be received under it, are recognized when it is probable that an outflow of resources embodying economic benefits will be required to settle a brsent obligation as a result of an obligating event, based on a reliable estimate of such obligation. q) Cash flow statement Cash flows are reported using the indirect method, whereby net profit/ (loss) before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated. r) Cash and cash equivalents Cash and cash equivalents in the cash flow statement comprise cash in hand and balance in bank in current accounts, cash pool balance, deposit accounts and in margin money deposits.
Disclosure of employee benefits explanatorya) Employee benefits Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts. The Company contributes to the recognized provident fund which is a defined contribution plan. Contributions are charged to the Statement of profit and loss in the year when the contributions to the fund are due. Short-term employee benefits Employee benefits payable wholly within twelve months of receiving employee services are classified as short-term employee benefits. These benefits include salaries and wages, bonus and ex-gratia. The undiscounted amount of short-term employee benefits to be paid in exchange for employee services is recognized as an expense as the related service is rendered by employees.
MTAR Technologies Private Limited Corporate information and Summary of significant accounting policies CIN: U72200TG1999PTC032836 (All amounts in Indian rupees lakhs, except share data and unless otherwise stated) Defined benefit plans The Company’s gratuity benefit scheme is a defined benefit plan. The Company’s net obligation in respect of a defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its brsent value. Any unrecognized past service costs and the fair value of any plan assets are deducted. The calculation of the Company’s obligation under each plan is performed annually by a qualified actuary using the projected unit credit method. The Company recognizes all actuarial gains and losses arising from defined benefit plans immediately in the Statement of profit and loss. All expenses related to defined benefit plans are recognized in employee benefits expense in the Statement of profit and loss. Compensated absences Compensated absences, which is a long term employee benefit, is accrued based on the actuarial valuation done as per projected unit credit method as at the balance sheet date, carried out by an independent actuary Disclosure of enterprise's reportable segments explanatory28. Segment information The primary and secondary reportable segments are business and geographical segments respectively. The Company is engaged in the business of manufacturing and selling of high brcision engineering items in India and outside India and pursuant to explanation to AS 17 ‘Segment Reporting’, the Company is considered to operate only in one business segment. The Company’s business is organized into two geographical segments, namely in India and outside India. Revenues are attributable to individual geographical segments based on the location of the customer. Segment assets and segment capital expenditure are attributable to individual segments based on the location of the customer.
Secondary segment disclosures | For the year ended March 31, 2017 | | | For the year ended March 31, 2016 | | | India | Outside India | Total | India | Outside India | Total | Segment revenue | 4,364.12 | 4,498.81 | 8,862.93 | 7,095.43 | 1,052.70 | 8,148.13 | Segment assets | 15,657.03 | 6,713.39 | 22,370.42 | 30,119.24 | 301.13 | 30,420.94 | Capital expenditure | 712.02 | 34.74 | 746.76 | 568.33 | - | 568.33 |
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