Mar 31, 2018
1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PREPARATION OF FINANCIAL STATEMENTS
(i) Statement of Compliance with Indian Accounting Standards (IND AS)
The financial statements have been prepared in accordance with Indian Accounting Standards (hereafter referred to as the âInd ASâ) as notified under Section 133 of the Companies Act, 2013(âthe Actâ), read together with the Companies (Indian Accounting Standards) Rules, 2015.
For all periods up to and including the year ended 31st March, 2017, the Company had prepared its financial statements in accordance with Accounting Standards notified under the Section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (âPrevious GAAPâ). Detailed explanation on how the transition from previous GAAP to Ind AS has affected the Companyâs Balance Sheet, financial performance and cash flows is given under Note 49.
The date transition to Ind AS is April 01, 2016. The financial statements as at and for the year ended 31st March 2018 (including Comparatives) were approved and authorised by the Companyâs Board of Directors as on 18th May 2018.
These financial statements for the year ended 31st March 2018 are the first financial year with comparatives, prepared under Ind AS. The adoption was carried out in accordance with Ind AS 101, First Time adoption of Indian Accounting Standards.
(ii) Historical Cost Convention
These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1st April 2016 being the date of transition.
(iii) Rounding of Amounts
All the amounts disclosed in the financial statements and notes are presented in Indian Rupees have rounded off to the nearest thousands as per requirement of Schedule III, unless otherwise states. The amount â0â denotes amount less than '' Ten.
(iv) Current and Non-Current Classification
All assets and liabilities have been classified as current and non-current as per the Companyâs normal operating cycle and other criteria set out in the Division II of Schedule III to the Act. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.
(b) USE OF ESTIMATES
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and reported amount of revenue and expenses for the year. Actual results could differ from these estimates. Difference between the actual result and estimates are recognised in the year in which results are known /materialised. Any revision to an accounting estimate is recognised prospectively in the year of revision.
(c) REVENUE RECOGNITION
Revenue is recognised when it is probable that economic benefits associated with a transaction flows to the Company in the ordinary course of its activities and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates allowed by the Company. Revenue includes only the gross inflows of economic benefits, including excise duty, received and receivable by the Company, on its own account. Amounts collected on behalf of third parties such as sales tax and value added tax are excluded from revenue.
Sale of products:
Revenue from sale of products is recognised when the Company transfers all significant risks and rewards of ownership to the buyer, while the Company retains neither continuing managerial involvement nor effective control over the products sold.
Rendering of services:
Revenue from services is recognised when the stage of completion can be measured reliably. Stage of completion is measured by the services performed till Balance Sheet date as a percentage of total services contracted.
Interest income:
Interest income is recognised using effective interest method. Interest refund on loan under âTUFâ scheme is accounted on accrual basis.
Dividend income:
Dividend income is recognised when the right to receive payment is established.
(d) PROPERTY, PLANT AND EQUIPMENT
Measurement at recognition:
An item of property, plant and equipment that qualifies as an asset is measured on initial recognition at cost. Following initial recognition, items of property, plant and equipment are carried at its cost less accumulated depreciation and accumulated impairment losses.
The Company identifies and determines cost of each part of an item of property, plant and equipment separately, if the part has a cost which is significant to the total cost of that item of property, plant and equipment and has useful life that is materially different from that of the remaining item.
The cost of an item of property, plant and equipment comprises of its purchase price including import duties and other nonrefundable purchase taxes or levies, directly attributable cost of bringing the asset to its working condition for its intended use and the initial estimate of decommissioning, restoration and similar liabilities, if any.
Any trade discounts and rebates are deducted in arriving at the purchase price. Cost includes cost of replacing a part of a plant and equipment if the recognition criteria are met. Expenses directly attributable to new manufacturing facility during its construction period are capitalized if the recognition criteria are met. Expenditure related to plans, designs and drawings of buildings or plant and machinery is capitalized under relevant heads of property, plant and equipment if the recognition criteria are met. Items such as spare parts, stand-by equipment and servicing equipment that meet the definition of property, plant and equipment are capitalized at cost and depreciated over their useful life. Costs in nature of repairs and maintenance are recognized in the Statement of Profit and Loss as and when incurred.
Capital work in progress and Capital advances:
Cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work in progress.
Advances given towards acquisition of fixed assets outstanding at each Balance Sheet date are disclosed as Other Non-Current Assets.
Depreciation:
Depreciation on each part of an item of property, plant and equipment is provided using the Straight Line Method based on the useful life of the asset as estimated by the management and is charged to the Statement of Profit and Loss as per the requirement of Schedule II of the Companies Act, 2013. The estimate of the useful life of the assets has been assessed based on technical advice which considers the nature of the asset, the usage of the asset, expected physical wear and tear, the operating conditions of the asset, anticipated technological changes, manufacturers warranties and maintenance support, etc.
The estimated useful life of items of property, plant and equipment is mentioned below:
Freehold land is not depreciated. Leasehold land and Leasehold improvements are amortized over the period of the lease.
The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of property plant and equipment (as mentioned below) over estimated useful lives which are different from the useful lives prescribed under Schedule II to the Companies Act, 2013 (Schedule III). The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
- Mobile Phones are depreciated over the estimated useful life of 3 years, which is lower than the life prescribed in Schedule II.
The useful lives, residual values of each part of an item of property, plant and equipment and the depreciation methods are reviewed at the end of each financial year. If any of these expectations differ from previous estimates, such change is accounted for as a change in an accounting estimate.
Derecognition:
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the Derecognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss when the item is derecognized.
(e) INTANGIBLE ASSETS
Measurement at recognition:
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any.
Amortization:
Intangible Assets with finite lives are amortized on a Straight Line basis over the estimated useful economic life. The amortization expense on intangible assets with finite lives is recognized in the Statement of Profit and Loss.
The estimated useful life of intangible assets is mentioned below:
Category of Asset : Years
Computer Software : 5
The amortization period and the amortization method for an intangible asset with finite useful life is reviewed at the end of each financial year. If any of these expectations differ from previous estimates, such change is accounted for as a change in an accounting estimate.
Derecognition:
The carrying amount of an intangible asset is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an intangible asset is measured as the difference between the net disposal proceeds and the carrying amount of the intangible asset and is recognized in the Statement of Profit and Loss when the asset is derecognized.
(f) IMPAIRMENT
Assets that are subject to depreciation and amortization are reviewed for impairment, whenever events or changes in circumstances indicate that carrying amount may not be recoverable. Such circumstances include, though are not limited to, significant or sustained decline in revenues or earnings and material adverse changes in the economic environment.
An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit (CGU) exceeds its recoverable amount. The recoverable amount of an asset is the greater of its fair value less cost to sell and value in use. To calculate value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market rates and the risk specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the CGU to which the asset belongs. Fair value less cost to sell is the best estimate of the amount obtainable from the sale of an asset in an armâs length transaction between knowledgeable, willing parties, less the cost of disposal.
Impairment losses, if any, are recognized in the Statement of Profit and Loss and included in depreciation and amortization expense. Impairment losses are reversed in the Statement of Profit and Loss only to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had previously been recognized.
(g) INVENTORY
Raw materials, work-in-progress, finished goods, packing materials, stores, spares, components, consumables and stock-in trade are carried at the lower of cost and net realizable value. However, materials and other items held for use in production of inventories are not written down below cost if the finished goods in which they will be incorporated are expected to be sold at or above cost. The comparison of cost and net realizable value is made on an item-by item basis.
In determining the cost of raw materials, packing materials, stock-in-trade, stores, spares, components and consumables, FIFO method is used.
Cost of inventory comprises all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.
Cost of finished goods and work-in-progress includes the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads, excise duty as applicable and other costs incurred in bringing the inventories to their present location and condition.
Fixed production overheads are allocated on the basis of normal capacity of production facilities.
(h) FOREIGN CURRENCY TRANSLATION
Initial Recognition:
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. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss.
Measurement of foreign currency items at reporting date:
Foreign currency monetary items of the Company are translated at the closing exchange rates. Non-monetary items that are measured at historical cost in a foreign currency, are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency, are translated using the exchange rates at the date when the fair value is measured.â
Exchange differences arising out of these translations are recognized in the Statement of Profit and Loss.
(i) INCOME TAXES
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.
Current tax:
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Taxable profit differs from âprofit before taxâ as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates that have been enacted by the end of reporting period for the amounts expected to be recovered from or paid to the taxation authorities.
Deferred tax:
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit under Income Tax Act, 1961.
Deferred tax liabilities are generally recognized for all taxable temporary differences. However, in case of temporary differences that arise from initial recognition of assets or liabilities in a transaction (other than business combination) that affect neither the taxable profit nor the accounting profit, deferred tax liabilities are not recognized. Also, for temporary differences if any that may arise from initial recognition of goodwill, deferred tax liabilities are not recognized.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent it is probable that taxable profits will be available against which those deductible temporary difference can be utilized. In case of temporary differences that arise from initial recognition of assets or liabilities in a transaction (other than business combination) that affect neither the taxable profit nor the accounting profit, deferred tax assets are not recognized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefits of part or all of such deferred tax assets to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Presentation of current and deferred tax:
Current and deferred tax are recognized as income or an expense in the Statement of Profit and Loss, except when they relate to items that are recognized in Other Comprehensive Income, in which case, the current and deferred tax income/expense are recognized in Other Comprehensive Income.
The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. In case of deferred tax assets and deferred tax liabilities, the same are offset if the Company has a legally enforceable right to set off corresponding current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the Company.
(j) PROVISIONS AND CONTINGENCIES
The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated.
If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made.
(k) LEASE ACCOUNTING
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
In respect of assets taken on operating lease, lease rentals are recognized as an expense in the Statement of Profit and Loss on straight line basis over the lease term unless
(i) another systematic basis is more representative of the time pattern in which the benefit is derived from the leased asset; or
(ii) the payments to the lessor are structured to increase in the line with expected general inflation to compensate for the lessorâs expected inflationary cost increases.
(l) BORROWING COST
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized, if any. All other borrowing costs are expensed in the period in which they occur.
(m) EVENTS AFTER REPORTING DATE
Where events occurring 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 within the financial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.
(n) FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial Assets
Initial recognition and measurement:
The Company recognizes a financial asset in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial assets are recognized initially at fair value, plus in the case of financial assets not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial asset.
Where the fair value of a financial asset at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from observable markets (i.e. level 2 input).
In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction price is deferred appropriately and recognized as a gain or loss in the Statement of Profit and Loss only to the extent that such gain or loss arises due to a change in factor that market participants take into account when pricing the financial asset.
However, trade receivables that do not contain a significant financing component are measured at transaction price.
Subsequent measurement:
For subsequent measurement, the Company classifies a financial asset in accordance with the below criteria:
i. The Companyâs business model for managing the financial asset and
ii. The contractual cash flow characteristics of the financial asset.
Based on the above criteria, the Company classifies its financial assets into the following categories:
(i) Financial assets measured at amortized cost
(ii) Financial assets measured at fair value through other comprehensive income (FVTOCI)
(iii) Financial assets measured at fair value through profit or loss (FVTPL)
i. Financial assets measured at amortized cost:
A financial asset is measured at the amortized cost if both the following conditions are met:
a) The Companyâs business model objective for managing the financial asset is to hold financial assets in order to collect contractual cash flows, and
b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
This category applies to cash and bank balances, trade receivables, loans and other financial assets of the Company (Refer Note 48 for further details). Such financial assets are subsequently measured at amortized cost using the effective interest method.
Under the effective interest method, the future cash receipts are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial asset over the relevant period of the financial asset to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest income over the relevant period of the financial asset. The same is included under other income in the Statement of Profit and Loss.
The amortized cost of a financial asset is also adjusted for loss allowance, if any.
ii. Financial assets measured at FVTOCI:
A financial asset is measured at FVTOCI if both of the following conditions are met:
a) The Companyâs business model objective for managing the financial asset is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
This category applies to certain investments in debt instruments. Such financial assets are subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Other Comprehensive Income (OCI). However, the Company recognizes interest income and impairment losses and its reversals in the Statement of Profit and Loss.
On Derecognition of such financial assets, cumulative gain or loss previously recognized in OCI is reclassified from equity to Statement of Profit and Loss.
iii. Financial assets measured at FVTPL:
A financial asset is measured at FVTPL unless it is measured at amortized cost or at FVTOCI as explained above. This is a residual category applied to all other investments of the Company excluding investments in subsidiary and associate companies, if any (Refer Note 48 for further details). Such financial assets are subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Statement of Profit and Loss.
Derecognition:
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the Companyâs Balance Sheet) when any of the following occurs:
i. The contractual rights to cash flows from the financial asset expires;
ii. The Company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;
iii. The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a âpass-throughâ arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);
iv. The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.
In cases where Company has neither transferred nor retained substantially all of the risks and rewards of the financial asset, but retains control of the financial asset, the Company continues to recognize such financial asset to the extent of its continuing involvement in the financial asset. In that case, the Company also recognizes an associated liability. The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
On Derecognition of a financial asset, (except as mentioned in ii above for financial assets measured at FVTOCI), the difference between the carrying amount and the consideration received is recognized in the Statement of Profit and Loss.
Impairment of financial assets:
The Company applies expected credit losses (ECL) model for measurement and recognition of loss allowance on the following:
i. Trade receivables and lease receivables
ii. Financial assets measured at amortized cost (other than trade receivables and lease receivables)
iii. Financial assets measured at fair value through other comprehensive income (FVTOCI)
In case of trade receivables and lease receivables, the Company follows a simplified approach wherein an amount equal to lifetime ECL is measured and recognized as loss allowance.
In case of other assets (listed as ii and iii above), the Company determines if there has been a significant increase in credit risk of the financial asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month ECL is measured and recognized as loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime ECL is measured and recognized as loss allowance.
Subsequently, if the credit quality of the financial asset improves such that there is no longer a significant increase in credit risk since initial recognition, the Company reverts to recognizing impairment loss allowance based on 12-month ECL.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original effective interest rate.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial asset. 12-month ECL are a portion of the lifetime ECL which result from default events that are possible within 12 months from the reporting date. ECL are measured in a manner that they reflect unbiased and probability weighted amounts determined by a range of outcomes, taking into account the time value of money and other reasonable information available as a result of past events, current conditions and forecasts of future economic conditions.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the Statement of Profit and Loss under the head âOther expensesâ.
Financial Liabilities
Initial recognition and measurement:
The Company recognizes a financial liability in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial liabilities are recognized initially at fair value minus, in the case of financial liabilities not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial liability.
Where the fair value of a financial liability at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from observable markets (i.e. level 2 input).
In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction price is deferred appropriately and recognized as a gain or loss in the Statement of Profit and Loss only to the extent that such gain or loss arises due to a change in factor that market participants take into account when pricing the financial liability.
Subsequent measurement:
All financial liabilities of the Company are subsequently measured at amortized cost using the effective interest method (Refer Note 48 for further details).
Under the effective interest method, the future cash payments are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial liability over the relevant period of the financial liability to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest expense over the relevant period of the financial liability. The same is included under finance cost in the Statement of Profit and Loss.
Derecognition:
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the Derecognition of the original liability and the recognition of a new liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid is recognized in the Statement of Profit and Loss.
(o) FAIR VALUE
The Company measures financial instruments at fair value in accordance with the accounting policies mentioned above. 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy that categorizes into three levels, described as follows, the inputs to valuation techniques used to measure value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).
Level 1 - quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3 - inputs that are unobservable for the asset or liability
For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period and discloses the same.
(p) EMPLOYEE BENEFITS
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.
Post-Employment Benefits:
I. Defined Contribution Plans:
Contributions to defined contribution schemes such as employeesâ state insurance, labour welfare fund etc. Recognition and measurement of defined contribution plans:
The Company recognizes contribution payable to a defined contribution plan as an expense in the Statement of Profit and Loss when the employees render services to the Company during the reporting period. If the contributions payable for services received from employees before the reporting date exceeds the contributions already paid, the deficit payable is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the reporting date, the excess is recognized as an asset to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions.
II. Defined Benefit Plans:
The Company also provides for retirement/post-retirement benefits in the form of gratuity.
Recognition and measurement of Defined Benefit plans:
The cost of providing defined benefits is determined using the Projected Unit Credit method with actuarial valuations being carried out at each reporting date. The defined benefit obligations recognized in the Balance Sheet represent the present value of the defined benefit obligations as reduced by the fair value of plan assets, if applicable. Any defined benefit asset (negative defined benefit obligations resulting from this calculation) is recognized representing the present value of available refunds and reductions in future contributions to the plan.
All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability / (asset) are recognized in the Statement of Profit and Loss. Remeasurements of the net defined benefit liability / (asset) comprising actuarial gains and losses and the return on the plan assets (excluding amounts included in net interest on the net defined benefit liability/asset), are recognized in Other Comprehensive Income. Such remeasurements are not reclassified to the Statement of Profit and Loss in the subsequent periods.
The entire liability towards gratuity is considered as current as the Company will contribute this amount to the gratuity fund within the next twelve months.
Other Long Term Employee Benefits:
Entitlements to annual leave are recognized when they accrue to employees. The Company determines the liability for such accumulated leaves using the Projected Unit Credit Method with actuarial valuations being carried out at each Balance Sheet date.
(q) EARNINGS PER SHARE
Basic Earnings Per Share
Basic earnings per share is calculated by dividing the profit attributable to owners of the company by the weighted average number of equity shares outstanding during the financial year. Earnings considered in ascertaining the Companyâs earnings per share is the net profit for the period.
Diluted Earnings per Share
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
(r) GOVERNMENT GRANTS AND SUBSIDIES
Recognition and Measurement:
The Company is entitled to subsidies from government in respect of manufacturing units located in specified regions. Such subsidies are measured at amounts receivable from the government which are non-refundable and are recognized as income when there is a reasonable assurance that the Company will comply with all necessary conditions attached to them. Income from subsidies is recognized on a systematic basis over the periods in which the related costs that are intended to be compensated by such subsidies are recognized.
(s) Recent Accounting Pronouncements
Standards issued but not yet effective
In March 2018, the Ministry of Corporate Affairs (MCA) issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115, Revenue from Contract with Customers, Appendix B to Ind AS 21, Foreign currency transactions and advance consideration and amendments to certain other standards. These amendments are in line with recent amendments made by International Accounting Standards Board(IASB). These amendments are applicable to the Company from 1st April, 2018. The Company will be adopting the amendments from their effective date.
a. Ind AS 115, Revenue from Contract with Customers:
Ind AS 115 supersedes Ind AS 11, Construction Contracts and Ind AS 18, Revenue. Ind AS 115 requires an entity to report information regarding nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with customers. The principle of Ind AS 115 is that an entity should recognize revenue that demonstrates the transfer of promised goods and services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standards can be applied either retrospectively to each prior reporting period presented or can be applied retrospectively with recognition of cumulative effect of contracts that are not completed contracts at the date of initial application of the standard.
Based on the preliminary assessment performed by the Company, the impact of application of the Standard is not expected to be material.
b. Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:
The appendix clarifies that the date of transaction for the purpose of determining the exchange rate to use on initial recognition of the asset, expense or income (or part of it) is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the payment of receipt of advance consideration towards such assets, expenses or income. If there are multiple payments or receipts in advance, then an entity must determine transaction date for each payment or receipts of advance consideration.
The impact of the Appendix on the financial statements, as assessed by the Company, is expected to be not material.
Mar 31, 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost convention, on accrual basis and in accordance with the generally accepted accounting principles in India (âGAAPâ) and comply with the accounting standards as specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and The relevant Provision of The Companies Act,2013.The Financial statements are presented in Indian Rupees rounded off to the nearest thousand.
(b) Use of Estimates
The preparation of financial statements, In conformity with India GAAP requires Judgment, estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.
(c) Revenue Recognition
i. Income from sale of product / goods is recognized when significant risks and rewards of ownership of products / goods are passed on to customers or when the full / complete services have been provided. Sales are stated at contractual realizable value and net of goods returned.
ii. Full provision is made for any loss in the year in which when it is first foreseen.
iii. Interest income is generally recognized on a time proportion method.
iv. Claims for price variation/exchange rate variation in case of contracts are accounted for on acceptance.
v. Interest refund on loan under âTUFâ scheme is accounted on receipt basis.
vi. Dividend Income is recognized when the right to receive dividend is established.
(d) Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Finance cost relating to acquisition of fixed assets is included to the extent they relate to the period till such assets are ready to be put to intended use.
Intangible Assets:
Intangible assets are stated at cost of acquisition less accumulated depreciation/amortization.
Capital Work-In-Progress
Expenses incurred for acquisition of Capital Assets outstanding at each Balance Sheet date are disclosed under Capital work-in-Progress. Advances given towards the acquisition of Fixed Assets are shown separately as Capital Advances under heading Long Term Loans & Advances.
(e) Depreciation Tangible Assets:
Depreciation is provided on Straight Line Method (SLM). Depreciation is provided from the date of acquisition till the date of sale / disposal of assets. The management of the Company has reviewed / determined / re assessed the remaining useful lives of the tangible fixed assets. Accordingly, the depreciation on tangible fixed assets is provided in accordance with the provisions of Schedule II of the Companies Act, 2013.
Intangible Assets:
Intangible Asset are depreciated in accordance with Accounting standard (AS) 26 ââIntangible Assetsâ as specified under section 133 of the companies Act,2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.
(f) Inventories
Inventories are valued as follows:
1) Raw Materials Cost on FIFO basis.
2) Components, Stores and Spares, Cost on FIFO basis.
Packing Materials
3) Work-in-Progress Cost on FIFO basis. Cost includes direct materials and labour cost and proportionate manufacturing overheads based on normal operating capacity.
4) Finished goods Cost or net realizable value whichever is lower. The cost comprises of cost of purchase, cost of conversion and other cost including manufacturing overheads incurred in bringing them to present location and condition, as the case may be.
In accordance with Accounting Standard - 2, issued by Institute of Chartered Accountants of India, provision is made of excise duty on closing stock of finished goods.
(g) Investments
Investments that are readily realizable and intended to be held but not more than a year are classified as Current Investments. All other investments are classified as Long-Term Investments. Carrying amount of the individual investment is determined on the basis of the average carrying amount of the total holding of the investments.
Long-Term Investments are stated at cost less provision for other than temporary diminution in value. Current Investments are carried at lower of cost or fair value.
(h) Employee Benefits
(i) Defined contribution plan: The Companyâs contributions paid or payable during the year to the provident fund for the employees is recognized as an expense in the Statement of Profit and Loss.
(ii) Defined Benefit Plan: The Companyâs liabilities towards Defined Benefit Schemes viz. Gratuity benefits and compensated absences are determined using the Projected Unit Credit Method. Actuarial valuations under the Projected Unit Credit Method are carried out at the Balance Sheet date. Actuarial gains and losses are recognized in the statement of Profit and Loss in the period of occurrence of such gains and losses. Sick leaves and casual leaves are not encashable. However, as the same are eligible for carry forward, provision has been made based on Actuarial Valuation report.
(i) Foreign Currency Transactions
(i) Foreign exchange transactions are recorded at the closing rate prevailing on the dates of the respective transactions. Exchange difference arising on foreign exchange transactions settled during the year is recognized in the statement of the Profit and Loss Account.
(ii) Monetary assets and liabilities denominated in foreign currencies are converted at the closing rate as on Balance Sheet date. The resultant exchange difference is recognized in the statement of the Profit and Loss Account..
(iii) Non-monetary assets and liabilities denominated in foreign currencies are carried at the exchange rate prevalent on the date of the transaction.
(j) Borrowing Costs
Borrowing costs that are directly attributable to and incurred on acquiring qualifying assets (assets that necessarily takes a substantial period of time for its intended use) are capitalized. Other borrowing costs are recognized as expenses in the period in which the same are incurred. Incidental cost for the borrowings is deferred over the period of loan where such other cost are structured for the total cost of borrowings.
(k) Taxation
Tax expenses are the aggregate of current tax and deferred tax charged or credited in the statement of Profit & Loss for the period.
Current Tax
The charge of income tax is calculated in accordance with the relevant tax regulations applicable to the Company.
Deferred Tax
Deferred Tax charge or credit reflects the tax effects of timing difference between accounting income and taxable income for the period. The Deferred Tax charge or credit 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 if there is reasonable certainty that the asset can be realized in future, however, where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only of there is virtual certainty of realization of such assets. Deferred tax assets are reviewed at each Balance Sheet date.
Minimum Alternate Tax (MAT)
In case the Company is liable to pay income tax under Minimum Alternate Tax u/s 115JB of Income Tax Act,1961, the amount of tax paid in excess of normal income tax liability is recognized as an asset only if there is convincing evidence for realization of such asset during the specified period. MAT Credit Entitlement is recognized in accordance with the Guidance Note on accounting treatment in respect of Minimum Alternate Tax (MAT) issued by The Institute of Chartered Accountants of India.
(l) Impairment of Assets
The Company evaluates all its assets for assessing any impairment and accordingly recognizes the impairment, wherever applicable, as provided in Accounting Standard 28, âImpairment of Assetsâ.
The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable value.
(m) Operating Lease
Rental applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against Statement of Profit & Loss as per the terms of lease agreement over the period of lease.
(n) Contingent Assets, Contingent Liabilities and Provisions
(i) Provisions involving 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 and the amount of which can be reliably estimated.
(ii) Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future event not wholly within the control of the Company.
(iii) Contingent Assets are neither recognized nor disclosed in the financial statements.
(iv) Provisions of Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.
(o) Earnings Per Share (EPS)
Basic Earnings per share is calculated 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 .The weighted average numbers of equity shares outstanding during the period are adjusted for events including a bonus issue, bonus element in right issue to existing shareholders, share split, and reverse share split. (Consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. The period during which, number of dilutive potential equity shares change frequently, weighted average number of shares are computed based on a mean date in the quarter, as impact is immaterial on earning per share.
(p) Miscellaneous Expenses
Miscellaneous Expenses are written off in the year in which they are incurred.
Mar 31, 2015
(a) Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost
convention, on accrual basis and in accordance with the generally
accepted accounting principles in India ("GAAP") and comply with the
accounting standards as specified under section 133 of the Companies
Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. The
Financial statements are presented in Indian Rupees rounded off to the
nearest thousand.
(b) Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that effect the reported amount of assets and
liabilities on the date of financial statements and reported amount of
revenues and expenses during the reporting period. Difference between
the actual results and estimates are recognized in the period in which
the results are known / materialized.
(c) Revenue Recognition
i. Income from sale of product / goods is recognized when significant
risks and rewards of ownership of products / goods are passed on to
customers or when the full / complete services have been provided.
Sales are stated at contractual realizable value and net of goods
returned.
ii. Full provision is made for any loss in the year in which when it
is first foreseen.
iii. Interest income is generally recognized on a time proportion
method.
iv. Claims for price variation/exchange rate variation in case of
contracts are accounted for on acceptance.
v. Interest refund on loan under 'TUF' scheme is accounted on receipt
basis.
vi. Dividend Income is recognized when the right to receive dividend
is established.
(d) Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation. Cost
comprises the purchase price and any, attributable cost of bringing the
asset to its working condition for its intended use. Finance cost
relating to acquisition of fixed assets is included to the extent they
relate to the period till such assets are ready to be put to intended
use.
Capital Work-In-Progress
Expenses incurred for acquisition of Capital Assets outstanding at each
Balance Sheet date are disclosed under Capital work-in-Progress.
Advances given towards the acquisition of Fixed Assets are shown
separately as Capital Advances under heading Long Term Loans &
Advances.
(e) Depreciation Tangible Assets:
Depreciation is provided on Straight Line Method (SLM). Depreciation is
provided from the date of acquisition till the date of sale / disposal
of assets. The management of the Company has reviewed / determined / re
assessed the remaining useful lives of the tangible fixed assets.
Accordingly, the depreciation on tangible fixed assets is provided in
accordance with the provisions of Schedule II of the Companies Act,
2013.
Intangible Assets:
Intangible Asset are depreciated in accordance with Accounting standard
(AS) 26 "Intangible Assets" as specified under section 133 of the
companies Act,2013 read with Rule 7 of the Companies (Accounts) Rules,
2014.
(f) inventories
Inventories are valued as follows:
1) Raw Materials Cost on FIFO basis.
2) Components, Stores and Spares, Cost on FIFO basis.
Packing Materials
3) Work-in-Progress Cost on FIFO basis. Cost includes
direct materials and labour
cost and proportionate
manufacturing overheads based on
normal operating capacity.
4) Finished goods Cost or net realizable value
whichever is lower. The cost
comprises of cost of purchase,
cost of conversion and other cost
including manufacturing overheads
incurred in bringing them to present
location and condition, as the
case may be.
In accordance withAccounting Standard - 2, issued by Institute of
Chartered Accountants of India, provision is made of excise duty on
closing stock of finished goods.
(g) investments
Investments that are readily realizable and intended to be held but not
more than a year are classified as Current Investments. All other
investments are classified as Long-Term Investments. Carrying amount of
the individual investment is determined on the basis of the average
carrying amount of the total holding of the investments.
Long-Term Investments are stated at cost less provision for other than
temporary diminution in value. Current Investments are carried at lower
of cost or fair value.
(h) Employee Benefits
Liability is provided for retirement benefits for Provident Fund,
Gratuity and Leave Encashment in respect of all eligible employees. The
Company has Gratuity Scheme with Life Insurance Corporation of India.
Premium thereof is paid in terms of policy and charged to Profit & Loss
Account. The liability in respect of defined benefit schemes like
gratuity and leave encashment is provided in the accounts on the basis
of actuarial valuations as at year end. Contributions under the defined
contribution schemes are charged to revenue.
(i) Foreign Currency Transactions
(i) Foreign exchange transactions are recorded at the closing rate
prevailing on the dates of the respective transactions. Exchange
difference arising on foreign exchange transactions settled during the
year is recognized in the statement of the Profit and Loss Account.
(ii) Monetary assets and liabilities denominated in foreign currencies
are converted at the closing rate as on Balance Sheet date. The
resultant exchange difference is recognized in the statement of the
Profit and Loss Account.
(iii) Non-monetary assets and liabilities denominated in foreign
currencies are carried at the exchange rate prevalent on the date of
the transaction.
(J) Borrowing Costs
Borrowing costs that are directly attributable to and incurred on
acquiring qualifying assets (assets that necessarily takes a
substantial period of time for its intended use) are capitalized. Other
borrowing costs are recognized as expenses in the period in which the
same are incurred.
(k) Taxation
Tax expenses are the aggregate of current tax and deferred tax charged
or credited in the statement of Profit & Loss for the period.
Current Tax
The charge of income tax is calculated in accordance with the relevant
tax regulations applicable to the Company.
Deferred Tax
Deferred Tax charge or credit reflects the tax effects of timing
difference between accounting income and taxable income for the period.
The Deferred Tax charge or credit 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 if there is reasonable
certainty that the asset can be realized in future, however, where
there is unabsorbed depreciation or carry forward losses, deferred tax
assets are recognized only of there is virtual certainty of realization
of such assets. Deferred tax assets are reviewed at each Balance Sheet
date.
Minimum Alternate Tax (MAT)
In case the Company is liable to pay income tax under Minimum Alternate
Tax u/s 115JB of Income Tax Act,1961, the amount of tax paid in excess
of normal income tax liability is recognized as an asset only if there
is convincing evidence for realization of such asset during the
specified period. MAT Credit Entitlement is recognized in accordance
with the Guidance Note on accounting treatment in respect of Minimum
Alternate Tax (MAT) issued by The Institute of Chartered Accountants of
India.
(l) Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to Profit
& Loss Account 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 value.
(m) Contingent Assets, Contingent Liabilities and Provisions
Provisions involving 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
and the amount of which can be reliably estimated.
Contingent Liabilities are not recognized but are disclosed in the
Notes. Contingent Liabilities are disclosed in respect of possible
obligations that arise from past events but their existence is
confirmed by the occurrence or non-occurrence of one or more uncertain
future event not wholly within the control of the Company. Contingent
Assets are neither recognized nor disclosed in the financial
statements. Provisions of Contingent Liabilities and Contingent Assets
are reviewed at each Balance Sheet date.
(n) Earning Per Share (EPS)
The earning considered in ascertaining the company's EPS comprises of
the net profit after tax. Basic earnings per share is computed and
disclosed using the weighted average number of common shares
outstanding during the year. Diluted Earnings Per Share is computed and
disclosed using the weighted average number of common and dilutive
common equivalent shares outstanding during the year, except when the
results would be anti-dilutive.
(o) Miscellaneous Expenses
Miscellaneous Expenses are written off in the year in which they are
incurred.
c) Terms & Rights attached to Equity Shares
The Company has only one class of equity shares having a par value of
Rs. 10/- per share. Each holder of equity shares is entitled to one
vote per share. In the event of liquidation of the Company, the holders
of equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. This
distribution will be in proportion to the number of equity shares held
by the shareholders.
Mar 31, 2014
(a) Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that effect the reported amount of assets and
liabilities on the date of financial statements and reported amount of
revenues and expenses during the reporting period. Difference between
the actual results and estimates are recognized in the period in which
the results are known / materialized.
(b) Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost
convention, on accrual basis and in accordance with the generally
accepted accounting principles in India ("GAAP") and comply with the
accounting standards referred to in Section 211 (3C) of the Companies
Act, 1956 ("The Act") read with the General circular 15/2013 dated
September 13, 2013 of the Ministry of Corporate Affairs in respect of
section 133 of the Companies Act, 2013. The Financial statements are
presented in Indian Rupees rounded off to the nearest thousand.
(c) Revenue Recognition
i. Income from sale of product / goods is recognized when significant
risks and rewards of ownership of products / goods are passed on to
customers or when the full / complete services have been provided.
Sales are stated at contractual realizable value and net of goods
returned.
ii. Full provision is made for any loss in the year in which when it
is first foreseen.
iii. Interest income is generally recognized on a time proportion
method.
iv. Claims for price variation/exchange rate variation in case of
contracts are accounted for on acceptance.
v. Interest refund on loan under ''TUF'' scheme is accounted on receipt
basis.
vi. Dividend Income is recognized when the right to receive dividend
is established.
(d) Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation. Cost
comprises the purchase price and any, attributable cost of bringing the
asset to its working condition for its intended use. Finance cost
relating to acquisition of fixed assets is included to the extent they
relate to the period till such assets are ready to be put to intended
use.
(e) Capital Work-In-Progress
Expenses incurred for acquisition of Capital Assets outstanding at each
Balance Sheet date are disclosed under Capital work-in-Progress.
Advances given towards the acquisition of Fixed Assets are shown
separately as Capital Advances under heading Long Term Loans &
Advances.
(f) Depreciation
Depreciation on fixed assets is provided as per the Straight Line
Method at the rates and in the manner as specified in Schedule XIV of
the Companies Act, 1956. Depreciation on additions / deletions of
assets during the year is provided on pro-rata basis.
(g) Inventories
Inventories are valued as follows:
1) Raw Materials Valued at Cost on FIFO basis.
2) Components, Stores and Spares, Valued at Cost on FIFO basis.
Packing Materials
3) Work-in-Progress Valued at Cost on FIFO basis. Cost includes direct
materials and labour cost and proportionate manufacturing overheads
based on normal operating capacity.
4) Finished goods Valued at Cost or net realizable value whichever is
lower. The cost comprises of cost of purchase, cost of conversion and
other cost including manufacturing overheads incurred in bringing them
to present location and condition, as the case may be.
In accordance with Accounting Standard - 2, issued by Institute of
Chartered Accountants of India, provision is made of excise duty on
closing stock of finished goods.
(h) Investments
Investments that are readily realizable and intended to be held but not
more than a year are classified as Current Investments. All other
investments are classified as Long Term Investments. Carrying amount of
the individual investment is determined on the basis of the average
carrying amount of the total holding of the investments. Long-Term
Investments are stated at cost less provision for other than temporary
diminution in value. Current Investments are carried at lower of cost
and fair value.
(i) Employee Benefits
Liability is provided for retirement benefits for Provident Fund,
Gratuity and Leave Encashment in respect of all eligible employees. The
Company has Gratuity Scheme with Life Insurance Corporation of India.
Premium thereof is paid in terms of policy and charged to Profit & Loss
Account. The liability in respect of defined benefit schemes like
gratuity and leave encashment is provided in the accounts on the basis
of actuarial valuations as at year end. Contributions under the
defined contribution schemes are charged to revenue.
(j) Foreign Currency Transactions
Foreign exchange transactions are recorded at the closing rate
prevailing on the dates of the respective transactions. Exchange
difference arising on foreign exchange transactions settled during the
year is recognized in the Profit and Loss Account.
Monetary assets and liabilities denominated in foreign currencies are
converted at the closing rate as on Balance Sheet date. The resultant
exchange difference is recognized in the Profit and Loss Account.
Exchange rate differences arising on a monetary item that, in
substance, forms part of the company''s net investment in a non-integral
foreign operation are accumulated in foreign currency transaction
reserve in the company''s financial statements until the disposal of net
investment.
Non monetary assets and liabilities denominated in foreign currencies
are carried at the exchange rate prevalent on the date of the
transaction.
(k) Borrowing Costs
Borrowing costs that are directly attributable to and incurred on
acquiring qualifying assets (assets that necessarily takes a
substantial period of time for its intended use) are capitalized. Other
borrowing costs are recognized as expenses in the period in which the
same are incurred.
(l) Taxation
Ta x expenses are the aggregate of current tax and deferred tax charged
or credited in the statement of Profit & Loss Account for the period.
Current Tax
The charge of income tax is calculated in accordance with the relevant
tax regulations applicable to the Company.
Deferred Tax
Deferred Ta x charge or credit reflects the tax effects of timing
difference between accounting income and taxable income for the period.
The Deferred Tax charge or credit 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
Ta x Assets are recognized only to the extent if there is reasonable
certainty that the asset can be realized in future, however, where
there is unabsorbed depreciation or carry forward losses, deferred tax
assets are recognized only of there is virtual certainty of realization
of such assets. Deferred tax assets are reviewed at each Balance Sheet
date.
Minimum Alternate Tax (MAT)
In case the Company is liable to pay income tax under Minimum Alternate
Tax u/s 115JB of Income Tax Act,1961, the amount of tax paid in excess
of normal income tax liability is recognized as an asset only if. There
is convincing evidence for realization of such asset during the
specified period. MAT Credit Entitlement is recognized in accordance
with the Guidance Note on accounting treatment in respect Minimum
Alternate Tax (MAT) issued by The Institute of Chartered Accountants of
India.
(m) Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to Profit
& Loss Account in the year in which an asset is identified as impaired.
The impairment loss is recognized in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount.
(n) Contingent Assets, Contingent Liabilities and Provisions
Provisions involving substantial degree of estimation in measurement
are recoznized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources
and the amount of which can be reliably estimated.
Contingent Liabilities are not recognized but are disclosed in the
Notes. Contingent Liablities are disclosed in respect of possible
obligations that arise from past events but their existence is
confirmed by the occurrence or non-occurrence of one or more uncertain
future event not wholly within the control of the Company.
Contingent Assets are neither recognized nor disclosed in the financial
statements. Provisions Contingent Liabilities and Contingent Assets are
reviewed at each Balance Sheet Date.
(o) Earning Per Share (EPS)
The earning considered in ascertaining the company''s EPS comprises of
the net profit after tax. Basic earnings per share is computed and
disclosed using the weighted average number of common shares
outstanding during the year. Diluted Earnings Per Share is computed and
disclosed using the weighted average number of common and dilutive
common equivalent shares outstanding during the year, except when the
results would be anti-dilutive.
(p) Miscellaneous Expenses
Miscellaneous Expenses are written off in the year in which they are
incurred.
Note:
*Aryanish Finance and Investments Pvt. Ltd., Bayside Property
Developers Pvt. Ltd., Delta Real Estate consultancy Pvt. Ltd. are
holding Equity Shares in the capacity of trustees for Aarti J Mody
Trust, Aditi J Mody Trust and Anjali J Mody Trust, respectively.
c) Terms & Rights attached to Equity Shares
The Company has only one class of equity shares having a par value of Rs.
10/- per share. Each holder of equity shares is entitled to one vote
per share. In the event of liquidation of the Company, the holders of
equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. This
distribution will be in proportion to the number of equity shares held
by the shareholders.
Mar 31, 2013
(a) use of estimates
The preparation of financial statements requires estimates and
assumptions to be made that effect the reported amount of assets and
liabilities on the date of financial statements and reported amount of
revenues and expenses during the reporting period. Difference between
the actual results and estimates are recognized in the period in which
the results are known / materialized.
(b) Basis of preparation of financial statements
The financial statements are prepared under the historical cost
convention, on accrual basis and in accordance with the generally
accepted accounting principles in India ("GAAP"), as specified in
Companies (Accounting Standard - "AS") Rules, 2006 issued by Central
Government and the applicable relevant provisions of the Companies Act,
1956. The Financial statements are presented in Indian Rupees rounded
off to the nearest thousand.
(c) revenue recognition
i. Income from sale of product / goods is recognized when significant
risks and rewards of ownership of products / goods are passed on to
customers or when the full / complete services have been provided.
Sales are stated at contractual realizable value and net of goods
returned.
ii. Full provision is made for any loss in the year in which when it
is first foreseen.
iii. Interest income is generally recognized on a time proportion
method.
iv. Claims for price variation/exchange rate variation in case of
contracts are accounted for on acceptance.
v. Interest refund on loan under ''TUF'' scheme is accounted on receipt
basis.
vi. Dividend Income is recognized when the right to receive dividend
is established.
(d) goodwill
On the acquisition of an undertaking, the difference between the
purchase consideration and the value of the net assets acquired is
considered as Goodwill. Value of Goodwill is amortized over a period of
five years on straight line basis from the year of creation.
(e) fixed assets
Fixed Assets are stated at cost less accumulated depreciation. Cost
comprises the purchase price and any, attributable cost of bringing the
asset to its working condition for its intended use. Finance cost
relates to acquisition of fixed assets are included to the extent they
relate to the period till such assets are ready to be put to intended
use.
(f) capital Work-in-progress
Expenses incurred for acquisition of Capital Assets outstanding at each
Balance Sheet date are disclosed under Capital work-in-Progress.
Advances given towards the acquisition of Fixed Assets are shown
separately as Capital Advances under heading Long Term Loans &
Advances.
(g) depreciation
Depreciation on fixed assets is provided as per the Straight Line
Method at the rates and in the manner as specified in Schedule XIV of
the Companies Act, 1956. Depreciation on additions / deletions of
assets during the year is provided on pro-rata basis.
(h) inventories
Inventories are valued as follows:
Raw Materials Valued at Cost on FIFO basis.
Components, Stores and Spares, Packing Materials
Valued at Cost on FIFO basis.
Work-in-Progress Valued at Cost on FIFO basis. Cost includes direct
materials and labour cost and proportionate manufacturing overheads
based on normal operating capacity. Finished goods Valued at Cost or
net realizable value whichever is lower. The cost comprises of cost of
purchase, cost of conversion and other cost including manufacturing
overheads incurred in bringing them to present location and condition,
as the case may be.
In accordance with Accounting Standard - 2, issued by Institute of
Chartered Accountants of India, provision is made of excise duty on
closing stock of finished goods.
(i) investments
Investments that are readily realizable and intended to be held but not
more than a year are classified as Current Investments. All other
investments are classified as Long Term Investments. Carrying amount of
the individual investment is determined on the basis of the average
carrying amount of the total holding of the investments.
Long-Term Investments are stated at cost less provision for other than
temporary diminution in value. Current Investments are carried at lower
of cost and fair value.
(j) Employee Benefts
Liability is provided for retirement benefits for Provident Fund,
Gratuity and Leave Encashment in respect of all eligible employees. The
Company has Gratuity Scheme with Life Insurance Corporation of India.
Premium thereof is paid in terms of policy and charged to Profit & Loss
Account. The liability in respect of defined benefit schemes like
gratuity and leave encashment is provided in the accounts on the basis
of actuarial valuations as at year end. Contributions under the defined
contribution schemes are charged to revenue.
(k) foreign currency Transactions
Foreign exchange transactions are recorded at the closing rate
prevailing on the dates of the respective transactions. Exchange
difference arising on foreign exchange transactions settled during the
year is recognized in the Profit and Loss Account.
Monetary assets and liabilities denominated in foreign currencies are
converted at the closing rate as on Balance Sheet date. The resultant
exchange difference is recognized in the Profit and Loss Account.
Exchange rate differences arising on a monetary item that, in
substance, forms part of the company''s net investment in a non-integral
foreign operation are accumulated in foreign currency transaction
reserve in the company''s financial statements until the disposal of net
investment.
Non monetary assets and liabilities denominated in foreign currencies
are carried at the exchange rate prevalent on the date of the
transaction.
(l) Borrowing costs
Borrowing costs that are directly attributable to and incurred on
acquiring qualifying assets (assets that necessarily takes a
substantial period of time for its intended use) are capitalized. Other
borrowing costs are recognized as expenses in the period in which the
same are incurred.
(m) Taxation
Tax expenses are the aggregate of current tax and deferred tax charged
or credited in the statement of Profit & Loss Account for the period.
current Tax
The charge of income tax is calculated in accordance with the relevant
tax regulations applicable to the Company.
deferred Tax
Deferred Tax charge or credit reflects the tax effects of timing
difference between accounting income and taxable income for the period.
The Deferred Tax charge or credit 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 if there is reasonable
certainty that the asset can be realized in future, however, where
there is unabsorbed depreciation or carry forward losses, deferred tax
assets are recognized only of there is virtual certainty of realization
of such assets. Deferred tax assets are reviewed at each Balance Sheet
date.
minimum alternate Tax (maT)
In case the Company is liable to pay income tax under Minimum Alternate
Tax u/s 115JB of Income Tax Act,1961, the amount of tax paid in excess
of normal income tax liability is recognized as an asset only if.
There is convincing evidence for realization of such asset during the
specified period. MAT Credit Entitlement is recognized in accordance
with the Guidance Note on accounting treatment in respect Minimum
Alternate Tax (MAT) issued by The Institute of Chartered Accountants of
India.
(n) impairment of assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to Profit
& Loss Account in the year in which an asset is identified as impaired.
The impairment loss is recognized in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount.
(o) contingent assets, contingent liabilities and provisions
Provisions involving 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 resource and
the amount of which can be reliably estimated.
Contingent Liabilities are not recognized but are disclosed in the
Notes. Contingent Liabilities are disclosed in respect of possible
obligations that arise from past events but their existence is
confirmed by the occurrence or non-occurrence of one or more uncertain
future event not wholly within the control of the Company.
Contingent Assets are neither recognized nor disclosed in the financial
statements. Provisions of Contingent Liabilities and Contingent Assets
are reviewed at each Balance Sheet date.
(p) earning per share (eps)
The earning considered in ascertaining the company''s EPS comprises of
the net profit after tax. Basic earnings per share is computed and
disclosed using the weighted average number of common shares
outstanding during the year. Diluted Earnings Per Share is computed and
disclosed using the weighted average number of common and dilutive
common equivalent shares outstanding during the year, except when the
results would be anti-dilutive.
(q) miscellaneous expenses
Miscellaneous Expenses are written off in the year in which they are
incurred.
Mar 31, 2012
A) Basis of preparation of Financial Statements
The financial statements are prepared under the historical cost
convention, on accrual basis and in accordance with the generally
accepted accounting principles in india ("GAAP"), as specified in
Companies (Accounting Standard) Rules, 2006 issued by Central Govt. and
the applicable relevant provisions of the Companies Act, 1956. The
Financial statements are presented in Indian Rupees rounded off to the
nearest thousand.
b) Revenue Recognition
- Income from sale of goods is recognized when significant risks and
rewards of ownership of goods is passed on to customers or when the
full / complete services have been provided. Sales are stated at
contractual realizable value and net of goods returned. Sales are
stated at contractual realizable value and net of goods returned.
- Full provision is made for any loss in the year in which it is
first foreseen.
- Interest income is generally recognized on a time proportion
method.
- Claims for price variation/exchange rate variation in case of
contracts are accounted for on acceptance.
- Interest refund on loan under 'TUF' scheme is accounted on
receipt basis.
- Dividend Income is recognized when the right to receive dividend is
established.
c) Goodwill
On the acquisition of an undertaking, the difference between the
purchase consideration and the fair value of the net assets acquired is
considered as Goodwill. Value of Goodwill is amortized over a period of
five years on straight line basis from the year of creation.
d) Fixed Assets
All fixed assets are stated at cost of acquisition less accumulated
depreciation and impairment loss, if any. In case fixed assets are
acquired for new projects/expansion, finance cost on borrowings and
other related expenses incurred up to the date asset is ready to use,
incurred towards acquiring fixed assets are capitalized.
e. capital Work-in-progress
Expenses incurred for acquisition of Capital Assets outstanding at each
balance sheet date are disclosed under Capital Work-in-Progress. From
Current year onwards advances given towards the acquisition of Fixed
Assets are shown separately as Capital Advances under heading Long Term
Loans & Advances.
f. Depreciation
Depreciation on fixed assets is provided as per the straight line
method at the rates and in the manner specified in Schedule XIV of
Companies Act, 1956. Depreciation on additions / deletions of assets
during the year is provided on a pro-rata basis.
g. inventories
Inventories are valued as follows:
1 Raw materials Cost of Raw Materials is determined on cost basis.
2 Components, Stores and Spares Packing Materials At cost basis
3 Work-in-Progress Material at cost basis. Cost includes direct
materials and labour and a proportion of manufacturing overheads based
on normal operating capacity.
4 Finished goods Material at cost basis, includes cost of conversion
and other cost incurred.
The cost comprises of cost of purchase, cost of conversion and other
cost including manufacturing overheads incurred in bringing them to
present location and condition, as the case may be. In accordance with
Accounting Standard -2, issued by Institute of Chartered Accountants of
India, provision is made of excise duty on closing stock of finished
goods.
h. investments
Investments that are readily realizable and intended to be held for not
more than a year are classified as Current Investments. All other
investments are classified as Non Current Investment. Carrying amount
of the individual investment is determined on the basis of the average
carrying amount of the total holding of the investments.
i. Retirement Benefits
Retirement benefit in the form of contribution to Provident Fund is
charged to the Profit & Loss Account of the year when the contributions
to the respective funds are due. The Company has Gratuity Scheme with
Life Insurance Corporation of India. Premium thereof is paid in terms
of policy and charged to Profit & Loss Account. Liabilities with
regard to Gratuity plan and Leave Encashment are determined by
actuarial valuation at each Balance Sheet Date. Short term and Long
term employee benefits are recognized as expenses in the Profit and
Loss Account.
j. Foreign currency Transactions
Transctions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of transaction. Monetary items
denominated in foreign currencies, if any at year end are restated at
the year end rate. Non monetary foreign currency items are carried at
cost.Any gain or loss on account of exchange difference either on
settlement or on translation is recognized in the Profit & Loss
Account.
k. Borrowing costs
Borrowing costs that are directly attributable to and incurred on
acquiring qualifying assets (assets that necessarily takes a
substantial period of time for its intended use) are capitalized. Other
borrowing costs are recognized as expenses in the period in which the
same are incurred.
l. Accounting for Taxes on income
Tax expenses are the aggregate of current tax and deferred tax charged
or credited in the Statement of Profit & Loss Account for the year.
current Tax
The current charge of income tax is calculated in accordance with the
relevant tax regulations applicable to the Company.
Deferred Tax
Deferred Tax charge or credit reflects the tax effects of timing
difference between accounting income and taxable income for the period.
The Deferred Tax charge or credit and the corresponding Deferred Tax
Liabilities or Assets are reconized using the tax rates that have been
enacted or substantialy enacted by the Balance Sheet date. Where there
isunabsorbed depreciation or carry forward losses, Deferred Tax Assets
are recognized only if there is virtual certainity of realization of
such assets in future. Deferred Tax is reviewed at each Balance Sheet.
m. Impairment of Assets
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the Profit &
Loss Account 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.
n. contingent Assets, contingent Liabilities and provisions.
Provisions involving substantial degree of estimation in measurement
are recoznized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources
and the amount of which can be reliably estimated.
Contingent Liabilities are not recognized but are disclosed in the
Notes. Contingent Liablities are disclosed in respect of possible
obligations that arise from past events but their existence is
confirmed by the occurrence or non-occurrence of one or more uncertain
future event not wholly within the control of the Company.
Contingent Assets are neither recognized nor disclosed in the financial
statements. Provisions Contingent Liabilities and Contingent Assets are
reviewed at each Balance Sheet Date.
o. Earning per share (Eps)
The earning considered in ascertaining the Company's EPS comprises of
the net profit after tax. Basic Earnings Per Share is computed and
disclosed using the weighted average number of common shares
outstanding during the year. Diluted Earnings Per Share is computed and
disclosed using the weighted average number of common and dilutive
common equivalent shares outstanding during the year, except when the
results would be anti-dilutive.
Mar 31, 2010
(a) Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost
convention, on accrual basis and in accordance with the generally
accepted accounting principles in India ("GAAP"), the Accounting
Standards ("AS") issued by the Institute of Chartered Accountants of
India and the applicable relevant provisions of the Companies Act,
1956.
(b) Revenue Recognition
i. Sale of Product and material are recognized when significant risks
and rewards of ownership of products are passed on to customers or when
the full / complete services have been provided. Sales are stated at
contractual realizable value and net of goods returned.
ii. Full provision ismade for any lossin the year inwhich whenit is
first foreseen. iii. Interest income is generally recognized on a time
proportion method.
iv. Claims for price variation/exchange rate variation in case of
contracts are accounted for on acceptance.
v. Interest refund on loan under ÃTUFÃ scheme is accounted on receipt
basis.
(c) Goodwill
On the acquisition of an undertaking, the difference between the
purchase consideration and the value of the net assets acquired is
considered as Goodwill. Value of Goodwill is amortized over a period of
five years onstraight line basis from the yearofcreation.
(d) FixedAssets
Fixed Assets are stated at cost less accumulated depreciation. Cost
comprises the purchase price and any attributable cost including
borrowing cost of bringing the asset to its working condition for its
intended use.
Capital Work-In-Progress
In respect of supply-cum-erection contracts, the value of supplies
received at site and accepted and not installedis treatedasCapital
Work-in-Progress.
Expenditure during construction period are included under "Capital Work
in Progress". Capital Work in Progressisstated at the amount expendedup
to the date of Balance Sheet.
(e) Depreciation
Depreciation on assets is provided on Straight Line Method at the rates
and in the manner as prescribed in Schedule XIV of the Companies Act,
1956. Depreciation is provided from the date of acquisition and put to
use till the dateof sale of assets orlast day of the period.
(f) Inventories
Inventories are valued as follows:
- Raw materials Cost of Raw Materials is determined on
FIFO basis.
- Components, stores
and spares, Atcost/Purchase price.
packing materials
- Work in Progress Raw Material cost at FIFO basis.
Cost includes direct
materials and labour and a proportion
of manufacturing
overheads based on normal operating
capacity.
- Finished goods Raw Material cost at FIFO basis,
includes cost of conversion
and other cost incurred in bringing
the inventories to their
present location and conditions.
(g) Foreign Currency Transactions
The reporting currency of the company is the Indian rupee.
Exchange differences arising on foreign currency transactions settled
during the year are recognized in the profit and loss account for the
year.
All outstanding foreign currency denomination monetary assets and
liabilities are translated at the exchange rates prevailing on the
Balance Sheet date.
(h) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of qualifying assets are capitalized as part
of the cost of asset till such time as the asset is ready for its
intended use or sale. Other borrowing costs are recognized as an
expense in the period in which they are incurred.
(i) Accounting for Taxes on Income
Provision for current tax and fringe benefit tax is made, at the
current rate of tax, based on assessable income computed on the basis
of relevant tax rates and tax laws. Deferred tax resulting from timing
differences between the book profits and the tax profits is accounted
to the extent that the timing differences are expected to crystallize.
Deferred tax assets are not recognized unless there is sufficient
assurance with respect to reversal of the same in the future.
(j) Impairment of Assets
Asset that are subject to amortization are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognized for the
amount by which the assets carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of the assets net selling
price and its value in use for the purpose of opening impairment assets
are grouped at the lowest levels for which there are separately
identifiable cash flows (cash generating units).
(k) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving 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. Provisions, Contingent Liabilities and Contingent
Assets are reviewed at each balance sheet date.
(l) Segment Accounting
There is only one Segment so separate disclosure not applicable.
(m) Employee Benefits
Retirement benefit in the form of contribution to Provident Fund is
charged to the Profit and Loss Account of the period when the
contributions to the respective funds are due.
The company has gratuity scheme with Life Insurance Corporation of
India. The premium thereof is paid in terms of the policy and charged
to Profit and Loss Account. Leave encashment and other benefit are
provided on the basis of actuarial valuation at the year end.
(n) Earning Per Share (EPS)
The earning considered in ascertaining the companyÃs EPS comprises of
the net profit aftertax. Basic earnings per share is computed and
disclosed using the weighted average number of common shares
outstanding during the year. Diluted earnings per share is computed and
disclosed using the weighted average number of common and dilutive
common equivalent shares outstanding during the year, except when the
results would be anti-dilutive.
(O) Miscellaneous Expenses
From current year onward, the Company has changed its accounting policy
for preliminary expenditure and now preliminary expenditure are fully
amortized in the year which it is incurred.
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