Accounting Policies of Modern Malleables Ltd. Company

Mar 31, 2025

NOTE: 1 SIGNIFICANT ACCOUNTING POLICIES

1.1 CORPORATE IINFORMATION

MODERN MALLEABLES LIMITED is a public company limited by shares and incorporated on 16/10/1982 under
the provisions of Indian Companies Act. The equity shares of the Company are listed on the CSE,BSE Limited.
The registered office of the Company is located at 53B,Mirza Ghalib Street, Kolkata-700016 IN.

2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES :

2.1.1 Compliance with Ind AS

These standalone financial statements comply in all material respects with the Indian Accounting Standards
(Ind AS) notified under Section 133 of the Companies Act, 2013 (the ‘Act’) [Companies (Indian Accounting
Standards) Rules, 2015] and other relevant provisions of the Act. These standards and policies have been
consistently applied to all the years presented. The standalone financial statements are presented in Indian
Rupee (Rs), which is the Company’s functional and presentation currency.

2.1.2 Historical cost convention

These standalone financial statements have been prepared on a historical cost basis.

2.2 Current versus Non-current Classification

The Company presents assets and liabilities in the Balance Sheet based on current/non-current classification.
An asset is classified as current when it is:

a. expected to be realised or intended to be sold or consumed in the normal operating cycle.

b. held primarily for the purpose of trading.

c. expected to be realised within twelve months after the reporting period, or

d. cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

a. it is expected to be settled in the normal operating cycle,

b. it is held primarily for the purpose of trading,

c. it is due to be settled within twelve months after the reporting period, or

d. there is no unconditional right to defer settlement of the liability for at least twelve months after the
reporting period.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash
and cash equivalents. The Company has identified twelve months as its operating cycle.

2.3 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue from sale of
products are recognised on despatch of goods to customers and are net of GST. Revenues from services
are recognised when such services are rendered as per contract terms.

All other income are accounted for on accrual basis.

2.4 Impairment of non-financial assets

Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount of the assets may not be recoverable. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s
fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that reflects current market assessment
of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal,
recent market transactions are taken into account. For the purpose of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of assets (cash-generating units).

2.5 Inventories

Inventories are valued at lower of cost or market price / fair value. Cost is determined on first-in- first-out
(FIFO) basis.

Cost of finished goods and work-in-progress include all costs of purchases, conversion costs and other
costs incurred in bringing the inventories to their present location and condition. The net realisable value is
the estimated selling price in the ordinary course of business less the estimated costs of completion and
estimated costs necessary.

2.6 Investment and other financial assets

2.6.1 Classification

The Company classifies its financial assets in the following measurement categories:

a) those to be measured subsequently at fair value and

b) those measured at amortised cost.

The classification depends on the Company’s business model for managing the financial assets and
the contractual terms of cash flows.

2.6.2Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of
financial asset not at fair value through profit or loss, transaction costs that are directly attributable to
the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are
expensed in the statement of profit and loss.

2.6.3Impairment of financial assets

The Company assesses on a forward looking basis, the expected credit losses associated with its
assets carried at amortized cost. The impairment methodology applied depends on whether there has
been a significant increase in credit risk.

2.6.4Derecognition of financial assets

A financial asset is derecognised only when

• The rights to receive cash flows from the asset have expired.

• The Company has transferred the rights to receive cash flows from the financial asset or

• Retains the contractual rights to receive the cash flows of the financial asset, but assumes a
contractual obligation to pay the cash flows to one or more recipients.

Where the Company has transferred an asset, the Company evaluates whether it has transferred
substantially all risks and rewards of ownership of the financial asset. In such cases, the financial
asset is derecognised. Where the Company has not transferred substantially all risks and rewards of
ownership of the financial asset, the financial asset is not derecognised. The financial asset is
derecognised if the Company has not retained control of the financial asset. Where the Company
retains control of the financial asset, the asset is continued to be recognised to the extent of continuing
involvement in the financial asset.

2.6.5Income Recognition

a. Interest Income

Interest Income from debt instruments is recognised using the effective interest rate method. The
effective interest rate is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to the gross carrying amount of a financial asset. When
calculating the effective interest rate, the Company estimates the expected cash flows by
considering all the contractual terms of the financial instrument but does not consider the expected
credit losses. Interest income is included in finance income in the statement of profit and loss.

b. Dividends

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

2.6.6Fair value of Financial Instruments

In determining the fair value of financial instruments, the Company uses a variety of methods and
assumptions that are based on market conditions and risks existing at each reporting date. All
methods of assessing fair values result in general approximation of fair values and such value
may never actually be realised.

2.7 Trade Receivables

Trade receivables are amounts receivable from customers for goods sold in the ordinary course of business.
Trade receivable are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less provision for impairment.

2.8 Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on
hand, deposits held at call with financial institutions, other short-term highly liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.

2.9 Trade Payables

Trade payables represent liabilities for goods and services provided to the Company prior to the end of
financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment
is not due within 12 months after the reporting period. They are recognised initially at their fair value and
subsequently measured at amortised cost using the effective interest method.

2.10 Borrowings

Borrowings are initially recognized at fair value, net of transaction costs incurred. Any difference between
the proceeds (net of transaction costs) and the redemption amount is recognised in the statement of profit
and loss over the period of the borrowings using the effective interest method.

Borrowings are classified as current and non-current liabilities based on repayment schedule agreed with
banks.

2.11 Employee benefits

2.11.1 Short term employee benefits

(i) Short-term employee benefits are recognised as an expense at the undiscounted amount in the
Statement of Profit and Loss for the year in which the related service is rendered.

(ii) Post employment and other long-term employee benefits are recognised as an expense in the
Statement of Profit and Loss for the year in which the employee has rendered services. The
expense is recognised at the present value of the amount payable determined using actuarial
valuations. Actuarial gains and losses in respect of post employment and other long-term employee
benefits are recognised in the Statement of Profit and Loss.

2.11.2 Long term employee benefits

(i) Contribution towards Provident Funds are recognised as expense in the Statement of Profit &
Loss in the period in which the related employee services are rendered. The Provident Fund
contributions are made to Government administered Provident Fund towards which the Company
has no further obligations beyond its monthly contribution.

(ii) Provision for gratuity is provided on the basis of Payment of Gratuity Act,1972 during the current
financial year.

2.12 Income Tax

(i) Current tax is the amount of tax payable on the taxable income for the year determined in accordance
with the provisions of the Income Tax Act,1961.

(ii) Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the
difference between taxable income and accounting income that originate in one period and are capable
of reversal in one or more subsequent periods, measured using the tax rates and tax laws that have
been enacted by the balance sheet date. Deferred tax assets are recognised and carried forward only
to the extent that there is virtual certainty that sufficient future taxable income will be available against
which such deferred tax assets can be realised. In a situation where the Company has unabsorbed
depreciation or carry forward tax losses, deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised against future taxable profits.

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Mar 31, 2014

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention except for categories of fixed assets acquired before 1 April, 1988, that are carried at revalued amounts. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except for change in the accounting policy for absorption of statutory account of excise duty and sales tax.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 Inventories

Inventories are valued at the lower of cost (on FIFO / weighted average basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

1.4 Cash and cash equivalents (for purposes of Cash Flow Statement) Cash comprises cash on hand and demand deposits with banks.

1.5 Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.6 Depreciation and amortisation

Depreciation has been provided on the written down value method as per the rates prescribed in Schedule XIV to the Companies Act, 1956:

1.7 Revenue recognition Sale of goods

Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales exclude excise duty and exclude sales tax and value added tax(previous year figures for purchase and sales are regrouped to exclude excise duty, sales tax and VAT).

1.8 Other income

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

1.9 Tangible fixed assets

Fixed assets, are carried at cost except those revalued less accumulated depreciation and impairment losses, if any. However there was no revaluation of fixed asset during the year.

The Company revalued its assets that existed on 1 April, 1988. The revalued assets are carried at the revalued amounts less accumulated depreciation and impairment losses, if any. Increase in the net book value on such revaluation is credited to "Revaluation reserve account" except to the extent such increase is related to and not greater than a decrease arising from a revaluation / impairment that was previously recognised in the Statement of Profit and Loss, in which case such amount is credited to the Statement of Profit and Loss. Decrease in book value on revaluation is charged to the Statement of Profit and Loss except where such decrease relates to a previously recognised increase that was credited to the Revaluation reserve, in which case the decrease is charged to the Revaluation reserve to the extent the reserve has not been subsequently reversed / utilised.

1.10 Intangible assets

There are no intangible assets with the company

1.11 Foreign currency transactions and translations

Are related only upto the extent of membership fees.

1.12 Government grants, subsidies and export incentives

No Government grants, subsidies and export incentives are received by the company during the current financial year.

1.13 Investments

Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties. Investment properties are carried individually at cost less accumulated depreciation and impairment, if any. Investment properties are capitalised and depreciated (where applicable) in accordance with the policy stated for Tangible Fixed Assets. Impairment of investment property is determined in accordance with the policy stated for Impairment of Assets.

1.14 Employee benefits

Employee benefits includes providend fund and gratuity fund

1.15 Employee share based payments

The Company has not formulated any such scheme

1.16 Borrowing costs

The company is not having any borrowing cost

1.17 Segment reporting

There is no such segment reporting

1.18 Leases

Rent received and paid on rental agreements are recognised in the Statement of Profit and Loss.

1.19 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extraordinary items, if any). The company is running in loss, therefore calculative EPS is negative

1.20 Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

1.21 Research and development expenses

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product''s technological feasibility has been established, in which case such expenditure is capitalised. The amount capitalised comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Fixed assets utilised for research and development are capitalised and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets.

1.22 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

1.23 Provisions and contingencies

Contingent liabilities are disclosed in the Notes.

1.24 Provision for warranty

No such provisions is recorded and estimated by the company

1.25 Hedge accounting

The Company is not involved in any hedging transaction

1.26 Derivative contracts

The Company has not entered into any derivative contracts in the nature of foreign currency swaps, currency options, forward contracts with an intention to hedge its existing assets and liabilities, firm commitments and highly probable transactions.

1.27 Share issues expenses

No share issue expenses is incurred

1.28 Insurance claims

Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.

1.29 Service tax input credit

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing / utilising the credits.

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Mar 31, 2011

1 Basis of preparation of financial Statement:

The company follows accrual basis of accounting and keeps books of account according to the double entry system, except in certain cases or as otherwise stated. Following due principles of doctrine of conservatism in accounts, the Company has provided for disputed liabilities of financial nature in the accounts. The Company, however shall account for disputed incomes only upon determination of issues.

2 Sales:

Sales comprise sale of manufactured and bought out goods, license sale, scraps sale, redundant sale and other sales, freight, Sales Tax, excise duty and other export receivables.

3 Research & Development:

Research and Development costs (other than cost of fixed assets acquired) are charged as an expense in the year in which they are incurred. However depreciation has been charged to Profit & Loss Account.

4 Fixed Assets :

Fixed Assets are stated at cost except those revalued, less depreciation. However there was no revaluation of any Fixed Assets during the year.

5 Depreciation :

Depreciation on Fixed Assets is provided on the written down value basis at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956

6 Inventories:

Raw Materials, Stores and Spare Parts are valued at lower of cost/net realisable value, Finished Goods and work in process are Valued at estimated realisable value and certified by the Management.

7 Retirement Benefits:

Company's contributions to Provident Funds are made to the recognised funds and charged to the Profit and Loss Account on Accrual basis. Gratuity is accounted for on the basis of amount determined by actuarial valuation done at the end of the year.

8 Investments:

Long term investments are stated at cost. However there is no investment as on 31.03.2011

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Mar 31, 2010

1. Basis of preparation of financial Statement:

The company follows accrual basis of accounting and keeps books of accounts according to the double entry system, except in certain cases or as otherwise stated. Following due principles of doctrine of conservatism in accounts, the Company has provided for disputed liabilities of financial nature in the accounts. The Company however shall accounts for disputed incomes only upon determintion of issues.

2. Capital Restructure :-

As per directions of the Hon'ble Bench of BIFR the Company has already completed the capital restructuring and the requisite funds has been brought in by the Promoters for the working capital of the Company by the way of the fresh equity capital on preferential basis.

3. Sales :

Sales comprise sale of manufactured and boughtout goods, license sale, scraps sale, redundant sale and other sales, freight, Sales Tax, excise duty and other export receivables.

4. Research & Development:

Related revenue expenditure is charged to Profit and Loss Account during the year in which they were incurred. However, capital expenditure amounting to Rs. 49,275/- (Testing Equipments) but Depreciation has been charged to Profit & Loss A/c.

5. Fixed Assets:

Fixed Assets are stated at cost except those revalued, less depreciation. However there was no revaluation of any Fixed Assets during the year.

6. Depreciation:

Depriciation on Fixed Assets is provided on the written down value basis at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956

7. Inventories:

Raw Materials, Stores and Spare Parts are valued at lower of cost/net realisable value, Finished Goods and work in process Are Valued at estimated realisable value and certified by the Management.

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Mar 31, 2009

1 Basis of preparation of Financial Statement:

The company follows accrual basis of accounting and keeps books of accounts according to the double entry system, except In Certain cases or as otherwise stated

2 Sales :

Sales comprise sale of manufactured and boughtout goods, license sale, scraps sale, redundant sale and other sales, freight, Sales Tax, excise duty and other export receivables.

3 Research & Development:

Related revenue expenditure is charged to Profit and Loss Account during the period in which they were incurred. However, No Capital expenditure has been incurred during the year.

4. Fixed Assets :

Fixed Assets are stated at cost except those revalued, less depreciation. However there was no revaluation of any Fixed Assets during the year.

5. Depreciation

Depriciation on Fixed Assets is provided on the written down value basis at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

6. Inventories

Raw Materials, Stores and Spare Parts are valued at lower of cost/net realisable value, Finished Goods and work in process are Valued at estimated realisable value and certified by the Management.

7. Retirement Benefits :

Companys contributions to Provident Funds are made to the recognised funds and charged to the Profit and Loss Account on Accrual basis. Gratuity is accounted for on the basis of amount determined by actuarial valuation done at the end of the year.

8. Investments :

Long term investments are stated at cost. However there is no investment as on 31.03.2009.

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Mar 31, 1996

1. Accounting Policies:

Basis of Accounting:

(i) The Company prepares its accounts on accrual basis except otherwise stated in accordance with the normally accepted accounting principles. (ii) Gratuity and Bonus are accounted for on cash basis.

Sales : Sales comprise sale of manufactured and boughtout goods, Turnkey Project Sub-construction Sales and other sales, cash assistance receipts under international price reimbursement scheme, freight realisation, sales tax, central excise duty, price variation claim and realised exchange fluctuation on export receivable.

Research & Development : Research & Development cost (other than cost of fixed assets acquired) are charged as expenses in the year in which they are incurred.

Fixed Assets: All Fixed Assets are valued at cost less depreciation, (except those revalued and being depreciated and written off on straight line method every year).

Depreciation : Depreciation is provided under the written down value method at rates provided by Schedule XIV to the Companies Act, 1956.

Inventories : Raw Materials, Stores and Spare Parts are valued at cost/last procurement price and Finished Goods & WIP are valued at estimated cost and certified by the Management.

Foreign Exchange Transactions: Realised gains and losses on foreign exchange transactions are recognised in the Profit & Loss Account.

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Mar 31, 1995

Basis of Accounting:

(i) The Company prepares its accounts on accrual basis except otherwise stated in accordance with the normally accepted accounting principles.

(ii) Gratuity and Bonus are accounted for on cash basis.

Sales: Sales comprise sale of manufactured and boughtout goods, other sales, cash assistance receipts under international price reimbursement scheme, freight realisation, sales tax, central excise duty, price variation claim and realised exchange fluctuations on export receivable.

Research & Development: Research & Development cost (other than cost of fixed assets acquired) are charged as expenses in the year in which they are incurred.

Fixed Assets: All Fixed Assets are valued at cost less depreciation, (except those revalued and being depreciated and written off on straight line method every year).

Depreciation: Depreciation is provided under the written down value method at rates provided by Schedule XIV to the Companies Act, 1956.

Inventories: Raw Materials, Stores and Spare Parts are valued at cost/last procurement price and Finished Goods & WIP are valued at estimated cost.

Foreign Exchange Transactions: Realised gains and losses on foreign exchange transactions are recognised in the Profit & Loss Account.

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Mar 31, 1994

Basis of Accounting:

i) The Company prepares its accounts on accrual basis except otherwise stated in accordance with the normally accepted accounting principles.

ii) Gratuity, Bonus and Leave payments to employees are accounted for on cash basis.

Sales:

Sales comprise sale of manufactured goods, Trading goods, other sales, cash assistance receipts under international price reimbursement scheme, freight realisation, sales tax, central excise duty, price variation claim and realised exchange fluctuations on export receivables.

Research & Development:

Research & Development cost (other than cost of fixed assets acquired) are charged as expenses in the year in which they are incurred.

Fixed Assets:

All Fixed Assets are valued at cost less depreciation. (except those revalued and being depreciated and written off on straight line method every year).

Depreciation:

Depreciation as provided under the written down value method at rates provided by Schedule XIV to the Companies Act, 1956. Land and development to land are not depreciated (It does not include the depreciation on revalued Assets being provided on straight line method).

Inventories:

Finished products are carried over at cost value. Work in process is carried over at cost value. Raw materials and components are carried over at cost value. Stores & Spare Parts are carried over at cost value.

Foreign Exchange Transactions:

Realised gains and losses on foreign exchange transactions are recognised in the Profit & Loss Account.