Mar 31, 2018
1. Background
Bang Overseas Limited (BOL or the Company) incorporated in India is involved in business manufacturing and trading of Textile and Textile products.
2. Basis of preparation of Financial Statements
i) Compliance with Ind AS
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the âInd ASâ) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (âActâ) read with of the Companies (Indian Accounting Standards) Rules,2015 as amended and other relevant provisions of the Act.
These financial statements for the year ended 31st March, 2018 are the first financials with comparatives, prepared under Ind AS.For all previous periods including the year ended 31st March, 2017, the Company had prepared its financial statements in accordance with the accounting standards notified under companies (Accounting Standard) Rule, 2006 (as amended) and other relevant provisions of the Act (hereinafter referred to as âPrevious GAAPâ) used for its statutory reporting requirement in India.
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 to Ind AS.
ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following which have been measured at fair value:
1. certain financial assets and liabilities are measured at fair value;
2. defined benefit plans;
iii) Current & non current classification
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle (twelve months) and other criteria set out in the Schedule III to the Act.
iv) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest rupees as per the requirement of Schedule III, unless otherwise stated.
3. Use of Estimate
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates. Any revision to accounting estimates is recognised in accordance with the requirements of the respective accounting standard.
4. Property, plant and equipment Tangible assets
The Company has applied for the one time transition exemption of considering the carrying cost on the transition date i.e. 01st April 2016 as the deemed cost under IND AS. Hence regarded thereafter as historical cost.
All items of property, plant and equipment are stated at cost less depreciation and impairment, if any. Historical cost includes expenditure i.e. directly attributable to the acquisition of the items.
Subsequent costs are included in the assets carrying amount or recognised as separate assets, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.
Depreciation
Depreciation on the property, plant and equipment is provided on straight line method at the rates prescribed and in the manner specified in Schedule II to the Companies Act, 2013 for the manufacturing units. Other units fixed assets have been continued depreciated by following written down value method. The gain and loss on disposal are determined by comparing proceeds with carrying amount. These are included in the statement of profit and loss.
5. Intangible Assets Computer software
Computer software are stated at cost,less accumulated amortization and impairments, if any.
Amortization method and useful life
The company amortizes computer software using straight-line method over the period of 6 years.
Gain & Losses on disposal are determined by comparing proceeds with carrying amount. These are included in the statement of Profit and Loss.
6. Cash & Cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash and Cheque in hand, bank balances, demand deposits with banks and other short-term highly liquid investments with maturities of three months or less that are readily convertible to known amounts of cash & which are subject to an insignificant risk of changes in value.
7. Leases Operating lease As a lessee
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company, as lessee, are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the Companyâs expected inflationary cost increases.
As a lessor
Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.
8. Inventories
Inventories are valued at lower of cost or net realisable value. Cost is determined on following basis:
i) Raw material and manufactured finished goods are valued at cost. Cost is determined by using average cost method.
ii) Trade goods are valued at cost on FIFO basis.
9. Investment in subsidiaries
Investment in subsidiaries are recognised at cost as per Ind AS 27. Except where investments accounted for at cost shall be accounted for in accordance with Ind AS 105, Non-current Assets Held for Sale and Discounted Operations, when they are classified as held for sale.
10. Investment in other financial assets Classification
The Company classifies its financial assets in the following measurement categories:
1. those to be measured subsequently at fair value (either through other comprehensive income, or through the Statement of Profit and Loss), and
2. those measured at amortised cost.
The classification depends on the Companyâs business model for managing the financial assets and the contractual terms of the cash flows.
(ii) Measurement
At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of financial assets carried at fair value through the Profit and Loss are expensed in the Statement of Profit and Loss.
Debt instruments:
Subsequent measurement of debt instruments depends on the Companyâs business model for managing the asset and the cash flow characteristics of the asset. The Company classifies its debt instruments into following categories:
1. Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in other income using the effective interest rate method.
2. Fair value through profit and loss: Assets that do not meet the criteria for amortised cost are measured at fair value through Profit and Loss. Interest income from these financial assets is included in other income.
Equity instruments:
The Company measures its equity investment other than in subsidiaries, joint ventures and associates at fair value through profit and loss. However, where the Companyâs management makes an irrevocable choice on initial recognition to present fair value gains and losses on specific equity investments in other comprehensive income (Currently no such choice made), there is no subsequent reclassification, on sale or otherwise, of fair value gains and losses to the Statement of Profit and Loss.
(iii) Impairment of financial assets
The Company measures the expected credit loss associated with its assets based on historical trend, industry practices and the business environment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
(iv) Income recognition Interest income
Interest income from debt instruments is recognized using the effective interest rate method.
Dividends
Dividends are recognized in the Statement of Profit and Loss only when the right to receive payment is established.
11. Impairment of non- financial assets
The Company assesses at each reporting date whether there is any objective evidence that a non-financial asset or a group of non-financial assets are impaired. If any such indication exists, the Company estimates the amount of impairment loss. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of the individual asset/cash generating unit is made.
An impairment loss is calculated as the difference between an assetâs carrying amount and recoverable amount. Losses are recognised in profit or loss. When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, then the previously recognized impairment loss is reversed through profit or loss.
12. Derivative financial instruments
Derivative financial instruments such as forward foreign exchange contracts, to hedge its foreign currency risks are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value with changes in fair value recognised in the Statement of Profit and Loss in the period when they arise.
13. Borrowing Costs
Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred. Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
14. Provision & contingent liabilities
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.
15. Revenue recognition
Revenue from sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated cost can be estimated reliably, there is no continuing effective control or managerial involvement with the goods, and the amount of revenue can be measured reliably.
Revenue from rendering of services is recognised when the performance of agreed contractual task has been completed.
Revenue from sale of goods is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment.
Revenue from sale of goods is net of taxes and recovery of charges collected from customers like transport, packing etc. Provision is made for returns when appropriate. Revenue is measured at the fair value of consideration received or receivable and is net of price discounts, allowance for volume rebates, and similar items.
16. Employee benefits Short term employee benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
Post -employment Benefits The Company operates the following post-employment schemes:
a. defined benefit plans such as gratuity; and
b. defined contribution plans such as provident fund.
Defined Benefit Plans
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Defined Contribution plans
Under defined contribution plans, provident fund, the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. Defined Contribution plan comprise of contributions to the employeesâ provident fund with the government and certain state plans like Employeesâ State Insurance and Employeesâ Pension Scheme. The Companyâs payments to the defined contribution plans are charged to Statement of Profit and Loss as incurred.
Other employee benefits
The liabilities for earned leave is determined on the basis of accumulated leave to the credit of the employees as at the year-end charged to the statement of profit and loss as per the Companyâs rules being the short term benefits.
17. Foreign Currency translation
(i) Functional and presentation currency
The financial statements are presented in Indian rupee (INR), which is Companyâs functional and presentation currency.
(ii) Transactions and balances
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets.
18. Tax Expenses
The tax expense for the period comprises current and deferred tax. Tax is recognised in Statement of Profit and Loss, except to the extent that it relates to items recognised in the comprehensive income or in equity. In which case, the tax is also recognised in other comprehensive income or equity.
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date.
Deferred tax
Deferred tax is recognised 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.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period66
19. Earning 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,
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares
20. Cash Flow Statement
Cash flows are reported using the indirect method whereby the profit before tax is adjusted for the effect of the transactions of a non-cash nature, any deferrals or accruals of past and future operating cash receipts or payments and items of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated.
Mar 31, 2016
1. Basis of preparation of Financial Statements
The financial statements have been prepared in conformity with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of Companies Act, 2013 as applicable). The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company are consistent with those used in previous year.
2. Use of Estimate
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the period reported. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in accordance with the requirements of the respective accounting standard.
3. Fixed Assets
Fixed assets are stated at cost (or revalued amounts, as the case may be), less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use, net of VAT recoverable. Financing costs relating to construction of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use. Financing costs not relating to construction of fixed assets are charged to the income statement.
Depreciation
Depreciation on the fixed assets has been provided for on straight line method at the rates prescribed and in the manner specified in Schedule II to the Companies Act, 2013 for the manufacturing units. Other fixed assets have been continued depreciated by following written down value method.
Impairment
i. The carrying amounts of assets are reviewed at each balance sheet date if there are impairment indicators. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assetâs net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the WACC.
ii. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
iii. Previously recognized impairment loss is increased or decreased based on reassessment of recoverable amount, which is carried out if the change is significant. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.
4. Intangible Assets
Intangible assets include computer software and miscellaneous expenditures that are capitalized if specific criteria are met and are amortized over their useful life, generally not exceeding 5 years. The recoverable amount of an intangible asset that is not available for use or is being amortized over a period exceeding 5 years should be reviewed at least at each financial year end even if there is no indication that the asset is impaired.
5. Leases
Where the Company is the lessee
Finance leases, where substantially all the risks and benefits incidental to ownership of the leased item, are transferred to the company, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged to income. Lease management fees, legal charges and other initial direct costs are capitalized.
If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease item, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.
Leases where the less or effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight-line basis over the lease term.
Where the Company is the less or
Assets subject to operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the P&L Account.
6. Government grants and subsidies
Grants and subsidies from the government are recognized when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with.
When the grant or subsidy relates to an expense item, it is recognized as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset.
7. 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 long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost, less provision for diminution in value other than temporary.
8. Inventories
Inventories are valued at lower of cost or net realizable value. Cost is determined on the following basis:
i) Raw materials and manufactured finished goods are valued at cost. Cost is determined by using average cost method.
ii) Trade Goods are valued at cost on FIFO basis.
9. Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.
(i) Sale of goods
Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer.
(ii) Interest
Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
(iii) Dividends
Revenue is recognized when the shareholdersâ right to receive payment is established by the balance sheet date. Dividend from subsidiaries is recognized as income only when the right to receive dividends is established. Normally, the right to receive dividend is established only when the dividend is approved by the shareholders at the annual general meeting of the investee company.
10. Foreign Exchange Transaction
(a) Transaction denominated in foreign currencies is normally recorded at the exchange rate prevailing at the time of the transaction.
(b) Monetary items denominated in foreign currency as at the balance sheet date are translated at the yearend exchange rate.
(c) Premium on forward cover contracts in respect of import of raw material is charged to profit & loss account over the period of contracts except in respect of liability for acquiring fixed assets, in which case the difference are adjusted in carrying cost of the same.
11. Employee benefits
i. Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the statutory authority are due.
ii. Gratuity liability are defined benefit obligations and are provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.
12. Current Tax and Deferred Tax
(i) Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961 and provision has not been made for the completed assessment which are pending in Appeal.
(ii) Deferred tax resulting from timing difference between the book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date.
13. Earning per share
Basic EPS is computed using the weighted average number of equity shares outstanding during the year. Diluted EPS is computed using the weighted average number of equity and diluted equity equivalent shares outstanding during the year except where the results would be anti-dilutive.
14. Cash Flow Statement
Cash flow statement is reported using the indirect method as specified in the Accounting Standard (AS)-3, âCash Flow Statementâ issued by The Institute of Chartered Accountants of India.
15. Provision, Contingent Liabilities and Contingent Assets
Provision involving substantial degree of estimation in measurement is 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.
a) Nature of Security for Short term borrowings
Working Capital loans, Buyer''s Credit loans and Inland LC bill acceptance loans taken from bank''s are secured against hypothecation of inventories, receivables & equitable mortgage of immovable proerties being factory land and buildings/other structures and embedded plant & machinery, and personal guarantee of Mr. Venugopal Bang and Mr. Brijgopal Bang. Also secured by pledge of margin money by way of term deposit receipts of Rs, 6,88,36,409/- (P.Y. f 6,81,34,555/-). Also bank guarantee issued are secured by bank guarantee deposit of f 17,50,888/-(PYRs, 16,21,360/-).
Mar 31, 2015
1. Basis of preparation of Financial Statements
The financial statements have been prepared in conformity with the
Generally Accepted Accounting Principles in India (Indian GAAP) to
comply with the Accounting Standards specified under Section 133 of the
Companies Act, 2013 (read with Rule 7 of the Companies (Accounts)
Rules, 2014 and the relevant provisions of Companies Act, 2013 as
applicable). The financial statements have been prepared under the
historical cost convention on an accrual basis. The accounting policies
have been consistently applied by the Company are consistent with those
used in previous year.
2. Use of Estimate
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingent liabilities on the date
of the financial statements and the reported amounts of revenues and
expenses during the period reported. Actual results could differ from
those estimates. Any revision to accounting estimates is recognised in
accordance with the requirements of the respective accounting standard.
3. Fixed Assets
Fixed assets are stated at cost (or revalued amounts, as the case may
be), less accumulated depreciation and impairment losses. Cost
comprises the purchase price and any attributable cost of bringing the
asset to its working condition for its intended use, net of VAT
recoverable. Financing costs relating to construction of fixed assets
are also included to the extent they relate to the period till such
assets are ready to be put to use. Financing costs not relating to
construction of fixed assets are charged to the income statement.
Depreciation
Depreciation on the fixed assets has been provided for on straight line
method at the rates prescribed and in the manner specified in Schedule
II to the Companies Act, 2013 for the manufacturing units. Other fixed
assets have been continued depreciated by following written down value
method.
Impairment
i. The carrying amounts of assets are reviewed at each balance sheet
date if there are impairment indicators. An impairment loss is
recognized wherever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is the greater of the
asset's net selling price and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value
at the WACC.
ii. After impairment, depreciation is provided on the revised carrying
amount ofthe asset over its remaining useful life.
iii. A previously recognised impairment loss is increased or decreased
based on reassessment of recoverable amount, which is carried out if
the change is significant. However the carrying value after reversal is
not increased beyond the carrying value that would have prevailed by
charging usual depreciation if there was no impairment.
4. Intangible Assets
Intangible assets include computer software and miscellaneous
expenditures that are capitalized if specific criteria are met and are
amortised over their useful life, generally not exceeding 5 years. The
recoverable amount of an intangible asset that is not available for use
or is being amortized over a period exceeding 5 years should be
reviewed at least at each financial year end even if there is no
indication that the asset is impaired.
5. Leases
Where the Company is the lessee
Finance leases, where substantially all the risks and benefits
incidental to ownership ofthe leased item, are transferred to the
company, are capitalized at the lower of the fair value and present
value of the minimum lease payments at the inception of the lease term
and disclosed as leased assets. Lease payments are apportioned between
finance charges and reduction of the lease liability based on the
implicit rate of return. Finance charges are charged to income. Lease
management fees, legal charges and other initial direct costs are
capitalised.
If there is no reasonable certainty that the Company will obtain the
ownership by the end ofthe lease item, capitalized leased assets are
depreciated over the shorter ofthe estimated useful life of the asset
or the lease term.
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
term.
Where the Company is the lessor
Assets subject to operating leases are included in fixed assets. Lease
income is recognised in the Profit and Loss Account on a straight- line
basis over the lease term. Costs, including depreciation are recognised
as an expense in the Profit and Loss Account. Initial direct costs such
as legal costs, brokerage costs, etc. are recognised immediately in the
P&L Account.
6. Government grants and subsidies
Grants and subsidies from the government are recognized when there is
reasonable assurance that the grant/subsidy will be received and all
attaching conditions will be complied with.
When the grant or subsidy relates to an expense item, it is recognized
as income over the periods necessary to match them on a systematic
basis to the costs, which it is intended to compensate. Where the grant
or subsidy relates to an asset, its value is deducted in arriving at
the carrying amount of the related asset.
7. Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost, less provision for diminution in value other than temporary.
8. Inventories
Inventories are valued at lower of cost or net realisable value. Cost
is determined on the following basis:
i) Raw materials and manufactured finished goods are valued at cost.
Cost is determined by using average cost method.
ii) Trade Goods are valued at cost on FIFO basis.
9. Revenue Recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured.
(i) Sale of goods
Revenue is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer.
(ii) Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
(iii) Dividends
Revenue is recognised when the shareholders' right to receive payment
is established by the balance sheet date. Dividend from subsidiaries is
recognised as income only when the right to receive dividends is
established. Normally, the right to receive dividend is established
only when the dividend is approved by the shareholders at the annual
general meeting of the investee company.
10. Foreign Exchange Transaction
(a) Transaction denominated in foreign currencies is normally recorded
at the exchange rate prevailing at the time of the transaction.
(b) Monetary items denominated in foreign currency as at the balance
sheet date are translated at the year end exchange rate.
(c) Premium on forward cover contracts in respect of import of raw
material is charged to profit & loss account over the period of
contracts except in respect of liability for acquiring fixed assets, in
which case the difference are adjusted in carrying cost of the same.
11. Employee benefits
i. Retirement benefits in the form of Provident Fund is a defined
contribution scheme and the contributions are charged to the Profit and
Loss Account of the year when the contributions to the statutory
authority are due.
ii. Gratuity liability are defined benefit obligations and are
provided for on the basis of an actuarial valuation on projected unit
credit method made at the end of each financial year.
12. Current Tax and Deferred Tax
(i) Provision for current tax is made after taking into consideration
benefits admissible under the provision of the Income Tax Act, 1961 and
provision has not been made for the completed assessment which are
pending in Appeal.
(ii) Deferred tax resulting from timing difference between the book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the balance sheet date.
13. Earning per share
Basic EPS is computed using the weighted average number of equity
shares outstanding during the year. Diluted EPS is computed using the
weighted average number of equity and diluted equity equivalent shares
outstanding during the year except where the results would be
anti-dilutive.
14. Cash Flow Statement
Cash flow statement is reported using the indirect method as specified
in the Accounting Standard (AS)-3, 'Cash Flow Statement' issued by The
Institute of Chartered Accountants of India.
15. Provision, Contingent Liabilities and Contingent Assets
Provision involving substantial degree of estimation in measurement is
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.
Mar 31, 2014
1. Basis of preparation of Financial Statements
The financial statements have been prepared to comply in all material
respects in respects with the standards notified under the Companies
(Accounting Standards) Rules, 2006 and the relevant provisions of
Companies Act, 1956. The financial statements have been prepared under
the historical cost convention on an accrual basis except in case of
assets for which impairment is made and revaluation is carried out and
derivative instruments. The accounting policies have been consistently
applied by the Company and except for the changes in accounting policy
discussed more fully below, are consistent with those used in previous
year.
2. Use of Estimate
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingent liabilities on the date
of the financial statements and the reported amounts of revenues and
expenses during the period reported. Actual results could differ from
those estimates. Any revision to accounting estimates is recognised in
accordance with the requirements of the respective accounting standard.
3. Fixed Assets
Fixed assets are stated at cost (or revalued amounts, as the case may
be), less accumulated depreciation and impairment losses. Cost
comprises the purchase price and any attributable cost of bringing the
asset to its working condition for its intended use, net of VAT
recoverable. Financing costs relating to construction of fixed assets
are also included to the extent they relate to the period till such
assets are ready to be put to use. Financing costs not relating to
construction of fixed assets are charged to the income statement.
Depreciation
Depreciation on the fixed assets has been provided for on straight line
method at the rates prescribed and in the manner specified in Schedule
XIV to the Companies Act, 1956 for the manufacturing units. Other fixed
assets have been continued depreciated by following written down value
method.
Impairment
i. The carrying amounts of assets are reviewed at each balance sheet
date if there are impairment indicators. An impairment loss is
recognized wherever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is the greater of the
asset''s net selling price and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value
at the WACC.
ii. After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
iii. A previously recognised impairment loss is increased or decreased
based on reassessment of recoverable amount, which is carried out if
the change is significant. However the carrying value after reversal is
not increased beyond the carrying value that would have prevailed by
charging usual depreciation if there was no impairment.
4. Intangible Assets
Intangible assets include computer software and miscellaneous
expenditures that are capitalized if specific criteria are met and are
amortised over their useful life, generally not exceeding 5 years. The
recoverable amount of an intangible asset that is not available for use
or is being amortized over a period exceeding 5 years should be
reviewed at least at each financial year end even if there is no
indication that the asset is impaired.
5. Leases
Where the Company is the lessee
Finance leases, where substantially all the risks and benefits
incidental to ownership of the leased item, are transferred to the
company, are capitalized at the lower of the fair value and present
value of the minimum lease payments at the inception of the lease term
and disclosed as leased assets. Lease payments are apportioned between
finance charges and reduction of the lease liability based on the
implicit rate of return. Finance charges are charged to income. Lease
management fees, legal charges and other initial direct costs are
capitalised.
If there is no reasonable certainty that the Company will obtain the
ownership by the end of the lease item, capitalized leased assets are
depreciated over the shorter of the estimated useful life of the asset
or the lease term.
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
term.
Where the Company is the lessor
Assets subject to operating leases are included in fixed assets. Lease
income is recognised in the Profit and Loss Account on a straight-line
basis over the lease term. Costs, including depreciation are recognised
as an expense in the Profit and Loss Account. Initial direct costs
such as legal costs, brokerage costs, etc. are recognised immediately
in the P&L Account.
6. Government grants and subsidies
Grants and subsidies from the government are recognized when there is
reasonable assurance that the grant/subsidy will be received and all
attaching conditions will be complied with.
When the grant or subsidy relates to an expense item, it is recognized
as income over the periods necessary to match them on a systematic
basis to the costs, which it is intended to compensate. Where the grant
or subsidy relates to an asset, its value is deducted in arriving at
the carrying amount of the related asset.
7. Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost, less provision for diminution in value other than temporary.
8. Inventories
Inventories are valued at lower of cost or net realisable value. Cost
is determined on the following basis:
i) Raw materials and manufactured finished goods are valued at cost.
Cost is determined by using average cost method.
ii) Trade Goods are valued at cost on FIFO basis.
9. Revenue Recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured.
(i) Sale of goods
Revenue is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer. Sales revenue is net
of sales returns, discounts and rebates.
(ii) Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
(iii) Dividends
Revenue is recognised when the shareholders'' right to receive payment
is established by the balance sheet date. Dividend from subsidiaries is
recognised as income only when the right to receive dividends is
established. Normally, the right to receive dividend is established
only when the dividend is approved by the shareholders at the annual
general meeting of the investee company.
10. Foreign Exchange Transaction
(a) Transaction denominated in foreign currencies is normally recorded
at the exchange rate prevailing at the time of the transaction.
(b) Monetary items denominated in foreign currency as at the balance
sheet date are translated at the year end exchange rate.
(c) Premium on forward cover contracts in respect of import of raw
material is charged to profit & loss account over the period of
contracts except in respect of liability for acquiring fixed assets, in
which case the difference are adjusted in carrying cost of the same.
11. Employee benefits
i. Retirement benefits in the form of Provident Fund is a defined
contribution scheme and the contributions are charged to the Profit and
Loss Account of the year when the contributions to the statutory
authority are due.
ii. Gratuity liability are defined benefit obligations and are provided
for on the basis of an actuarial valuation on projected unit credit
method made at the end of each financial year.
12. Current Tax and Deferred Tax
(i) Provision for current tax is made after taking into consideration
benefits admissible under the provision of the Income Tax Act, 1961 and
provision has not been made for the completed assessment which are
pending in Appeal.
(ii) Deferred tax resulting from timing difference between the book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the balance sheet date.
13. Earning per share
Basic EPS is computed using the weighted average number of equity
shares outstanding during the year. Diluted EPS is computed using the
weighted average number of equity and diluted equity equivalent shares
outstanding during the year except where the results would be
anti-dilutive.
14. Cash Flow Statement
Cash flow statement is reported using the indirect method as specified
in the Accounting standard (AS)-3, ''Cash Flow Statement'' issued by The
Institute of Chartered Accountants of India.
15. Provision, Contingent Liabilities and Contingent Assets
Provision involving substantial degree of estimation in measurement is
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.
Mar 31, 2013
1. Basis of preparaton of Financial Statements
The fnancial statements have been prepared to comply in all material
respects in respects with the standards notfed under the Companies
(Accountng Standards) Rules, 2006 and the relevant provisions of
Companies Act, 1956. The fnancial statements have been prepared under
the historical cost conventon on an accrual basis except in case of
assets for which impairment is made and revaluaton is carried out and
derivatve instruments. The accountng policies have been consistently
applied by the Company and except for the changes in accountng policy
discussed more fully below, are consistent with those used in previous
year.
2. Use of Estmate
The preparaton of fnancial statements requires management to make
estmates and assumptons that afect the reported amounts of assets and
liabilites, the disclosure of contngent liabilites on the date of the
fnancial statements and the reported amounts of revenues and expenses
during the period reported. Actual results could difer from those
estmates. Any revision to accountng estmates is recognised in
accordance with the requirements of the respectve accountng standard.
3. Fixed Assets
Fixed assets are stated at cost (or revalued amounts, as the case may
be), less accumulated depreciaton and impairment losses. Cost comprises
the purchase price and any atributable cost of bringing the asset to
its working conditon for its intended use, net of VAT recoverable.
Financing costs relatng to constructon of fxed assets are also included
to the extent they relate to the period tll such assets are ready to be
put to use. Financing costs not relatng to constructon of fxed assets
are charged to the income statement.
Depreciaton
Depreciaton on the fxed assets has been provided for on straight line
method at the rates prescribed and in the manner specifed in Schedule
XIV to the Companies Act, 1956 for the manufacturing units. Other fxed
assets have been contnued depreciated by following writen down value
method.
Impairment
(i) The carrying amounts of assets are reviewed at each balance sheet
date if there are impairment indicators. An impairment loss is
recognized wherever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is the greater of the
asset''s net selling price and value in use. In assessing value in use,
the estmated future cash fows are discounted to their present value at
the WACC.
(ii) Afer impairment, depreciaton is provided on the revised carrying
amount of the asset over its remaining useful life.
(iii) A previously recognised impairment loss is increased or decreased
based on reassessment of recoverable amount, which is carried out if
the change is signifcant. However the carrying value afer reversal is
not increased beyond the carrying value that would have prevailed by
charging usual depreciaton if there was no impairment.
4. Intangible Assets
Intangible assets include computer sofware and miscellaneous
expenditures that are capitalized if specifc criteria are met and are
amortsed over their useful life, generally not exceeding 5 years. The
recoverable amount of an intangible asset that is not available for use
or is being amortzed over a period exceeding 5 years should be reviewed
at least at each fnancial year end even if there is no indicaton that
the asset is impaired.
5. Leases
Where the Company is the lessee
Finance leases, where substantally all the risks and benefts incidental
to ownership of the leased item, are transferred to the company, are
capitalized at the lower of the fair value and present value of the
minimum lease payments at the incepton of the lease term and disclosed
as leased assets. Lease payments are apportoned between fnance charges
and reducton of the lease liability based on the implicit rate of
return. Finance charges are charged to income. Lease management fees,
legal charges and other inital direct costs are capitalised.
If there is no reasonable certainty that the Company will obtain the
ownership by the end of the lease item, capitalized leased assets are
depreciated over the shorter of the estmated useful life of the asset
or the lease term.
Leases where the lessor efectvely retains substantally all the risks
and benefts of ownership of the leased term, are classifed as operatng
leases. Operatng lease payments are recognized as an expense in the
Proft and Loss account on a straight-line basis over the lease term.
Where the Company is the lessor
Assets subject to operatng leases are included in fxed assets. Lease
income is recognised in the Proft and Loss Account on a straight-line
basis over the lease term. Costs, including depreciaton are recognised
as an expense in the Proft and Loss Account. Inital direct costs such
as legal costs, brokerage costs, etc. are recognised immediately in the
P&L Account.
6. Government grants and subsidies
Grants and subsidies from the government are recognized when there is
reasonable assurance that the grant/subsidy will be received and all
ataching conditons will be complied with.
When the grant or subsidy relates to an expense item, it is recognized
as income over the periods necessary to match them on a systematc basis
to the costs, which it is intended to compensate. Where the grant or
subsidy relates to an asset, its value is deducted in arriving at the
carrying amount of the related asset.
7. Investments
Investments that are readily realisable and intended to be held for not
more than a year are classifed as current investments. All other
investments are classifed as long-term investments. Current investments
are carried at lower of cost and fair value determined on an individual
investment basis. Long-term investments are carried at cost, less
provision for diminuton in value other than temporary.
8. Inventories
Inventories are valued at lower of cost or net realisable value. Cost
is determined on the following basis:
(i) Raw materials and manufactured fnished goods are valued at cost.
Cost is determined by using average cost method.
(ii) Trade Goods are valued at cost on FIFO basis.
9. Revenue Recogniton
Revenue is recognised to the extent that it is probable that the
economic benefts will fow to the company and the revenue can be
reliably measured.
(i) Sale of goods
Revenue is recognised when the signifcant risks and rewards of
ownership of the goods have passed to the buyer. Sales revenue is net
of sales returns, discounts and rebates.
(ii) Interest
Revenue is recognised on a tme proporton basis taking into account the
amount outstanding and the rate applicable.
(iii) Dividends
Revenue is recognised when the shareholders'' right to receive payment
is established by the balance sheet date. Dividend from subsidiaries is
recognised as income only when the right to receive dividends is
established. Normally, the right to receive dividend is established
only when the dividend is approved by the shareholders at the annual
general meetng of the investee company.
10. Foreign Exchange Transacton
(i) Transacton denominated in foreign currencies is normally recorded
at the exchange rate prevailing at the tme of the transacton.
(ii) Monetary items denominated in foreign currency as at the balance
sheet date are translated at the year end exchange rate.
(iii) Premium on forward cover contracts in respect of import of raw
material is charged to proft & loss account over the period of
contracts except in respect of liability for acquiring fxed assets, in
which case the diference are adjusted in carrying cost of the same.
11. Employee benefts
(i) Retrement benefts in the form of Provident Fund is a defned
contributon scheme and the contributons are charged to the Proft and
Loss Account of the year when the contributons to the statutory
authority are due.
(ii) Gratuity liability are defned beneft obligatons and are provided
for on the basis of an actuarial valuaton on projected unit credit
method made at the end of each fnancial year.
12. Current Tax and Deferred Tax
(i) Provision for current tax is made afer taking into consideraton
benefts admissible under the provision of the Income Tax Act, 1961 and
provision has not been made for the completed assessment which are
pending in Appeal.
(ii) Deferred tax resultng from tming diference between the book and
taxable proft is accounted for using the tax rates and laws that have
been enacted or substantvely enacted as on the balance sheet date.
13. Earning per share
Basic EPS is computed using the weighted average number of equity
shares outstanding during the year. Diluted EPS is computed using the
weighted average number of equity and diluted equity equivalent shares
outstanding during the year except where the results would be
ant-dilutve.
14. Cash Flow Statement
Cash fow statement is reported using the indirect method as specifed in
the Accountng standard (AS)-3, ''Cash Flow Statement'' issued by The
Insttute of Chartered Accountants of India.
15. Provision, Contngent Liabilites and Contngent Assets
Provision involving substantal degree of estmaton in measurement is
recognized when there is a present obligaton as a result of past events
and it is probable that there will be an outlow of resources. Contngent
liabilites are not recognized but are disclosed in the notes. Contngent
assets are neither recognized nor disclosed in the fnancial statements.
a) Nature of Security for Short term borrowings
Working Capital loans and Buyer''s Credit loans taken from Bank of India
and Oreintal Bank of Commerce is secured against hypothecaton of
inventories, book debts and equitable mortage of immovable propertes
being factory land and buildings/other structures and embedded plant &
machinery, and personal guarantee of Directors Mr. Venugopal Bang and
Mr. Brijgopal Bang
Mar 31, 2012
1. Basis of preparation of Financial Statements
The financial statements have been prepared to comply in all material
respects in respects with the standards notified under the Companies
(Accounting Standards) Rules, 2006 and the relevant provisions of
Companies Act, 1956. The financial statements have been prepared under
the historical cost convention on an accrual basis except in case of
assets for which impairment is made and revaluation is carried out and
derivative instruments. The accounting policies have been consistently
applied by the Company and except for the changes in accounting policy
discussed more fully below, are consistent with those used in previous
year.
2. Use of Estimate
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingent liabilities on the date
of the financial statements and the reported amounts of revenues and
expenses during the period reported. Actual results could differ from
those estimates. Any revision to accounting estimates is recognised in
accordance with the requirements of the respective account noting
standard.
3. Fixed Assets
Fixed assets are slated at cost (or revalued amounts, as the case may
be), less accumulated depreciation and impairment losses. Cost
comprises the purchase price and any attributable cost of bringing the
asset to its working condition for its intended use, net of VAT
recoverable. Financing costs relating to construction of fixed assets
are also included to the extent they relate to the period till such
assets are ready to be put to use. Financing costs not relating to
construction of fixed assets are charged to the income statement.
Depreciation
Depreciation on the fixed assets has been provided for on straight line
method at the rates prescribed and in the manner specified in Schedule
XIV to the Companies Act, 1956 for the manufacturing units. Other fixed
assets have been continued depreciated by following written down value
method.
Impairment
i. The carrying amounts of assets are reviewed at each balance sheet
date if there are impairment indicators. An impairment loss is
recognized wherever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is the greater of the
asset's net selling price and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value
at the WACC.
ii. After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
iii. A previously recognised impairment loss is increased or decreased
based on reassessment of recoverable amount, which is carried out if
the change is significant. However the carrying value after reversal is
not increased beyond the carrying value that would have prevailed by
charging usual depreciation if there was no impairment.
4. Intangible Assets
Intangible assets include computer software and miscellaneous
expenditures that are capitalized if specific criteria are met and are
amortized over their useful life, generally not exceeding 5 years. The
recoverable amount of an intangible asset that is not available for use
or is being amortized over a period exceeding 5 years should be
reviewed at least at each financial year end even if there is no
indication that the asset is impaired.
5. Leases Where the Company is the lessee
Finance leases,where substantially all the risks and benefits incidental
to ownership of the leaseditem, are transferred to the company, are
capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. Lease payments are apportioned between finance
charges and reduction of the lease liability based on the implicit rate
of return. Finance charges are charged to income. Lease management
fees, legal charges and other initial direct costs are capitalized.
If there is no reasonable certainty that the Company will obtain the
ownership by the end of the leaseitem, capitalized leased assets are
depreciated over the shorter of the estimated useful life of the asset
or the lease term.
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
term.
Where the Company is the lessor
Assets subject to operating leases are included in fixed assets. Lease
income is recognized in the Profit and Loss Account on a straight-line
basis over the lease term. Costs, including depreciation are recognized
as an expense in the Profit and Loss Account. Initial direct costs such
as legal costs, brokerage costs, etc. are recognized immediately in the
P&L Account.
6. Government grants and subsidies
Grants and subsidies from the government are recognized when there is
reasonable assurance that the grant/subsidy
will be received and all attaching conditions will be complied with.
When the grant or subsidy relates to an expense item, it is recognized
as income over the periods necessary to match them on a systematic
basis to the costs, which it is intended to compensate. Where the grant
or subsidy relates to an asset, its value is deducted in arriving at
the carrying amount of the related asset.
7. Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost, less provision for diminution in value other than temporary.
8. Inventories
Inventories are valued at lower of cost or net realisable value. Cost
is determined on the following basis:
i) Raw materials and manufactured finished goods are valued at cost
inclusive of excise duty. Cost is etermined by using average cost
method.
ii) Trade Goods are valued at cost on FIFO basis.
9. Revenue Recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured.
(i) Sale of goods
Revenue is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer. Sales revenue is net
of sales returns, discounts and rebates.
(ii) Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
(iii) Dividends
Revenue is recognised when the shareholders' right to receive payment
is established by the balance sheet date. Dividend from subsidiaries
is recognised as income only when the right to receive dividends is
established. Normally, the right to receive dividend is established
only when the dividend is approved by the shareholders at the annual
general meeting of the investee company.
10. Foreign Exchange Transaction
(a) Transaction denominated in foreign currencies is normally recorded
at the exchange rate prevailing at the time of the transaction.
(b) Monetary items denominated in foreign currency as at the balance
sheet date are translated at the year end exchange rate.
(c) Premium on forward cover contracts in respect of import of raw
material is charged to profit & loss account over the period of
contracts except in respect of liability for acquiring fixed assets, in
which case the difference are adjusted in carrying cost of the same.
11. Employee benefits
(i) Retirement benefits in the form of Provident Fund is a defined
contribution scheme and the contributions are charged to the Profit and
Loss Account of the year when the contributions to the statutory
authority are due.
(ii) Gratuity liability are defined benefit obligations and are
provided for on the basis of an actuarial valuation on projected unit
credit method made at the end of each financial year.
12. Current Tax and Deferred Tax
(i) Provision for current tax is made after taking into consideration
benefits admissible under the provision of the Income Tax Act, 1961.
(ii) Deferred tax resulting from timing difference between the book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the balance sheet date.
13. Earning per share
Basic EPS is computed using the weighted average number of equity
shares outstanding during the year. Diluted EPS is computed using the
weighted average number of equity and diluted equity equivalent shares
outstanding during the year except where the results would be
anti-dilutive.
14. Cash Flow Statement
Cash flow statement is reported using the indirect method as specified
in the Accounting standard (AS)-3, 'Cash Flow Statement' issued by The
Institute of Chartered Accountants of India.
15. Provision, Contingent Liabilities and Contingent Assets
Provision involving substantial degree of estimation in measurement is
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.
Mar 31, 2010
1. Basis of preparation of Financial Statements
The financial statements have been prepared to comply in all material
respects with the standards notified under the Companies (Accountig
Standards) Rules, 2006 and the relevant provisions of Companies Act,
1956 statements have been prepared under the historical cost convention
on an accrual basis except in case if assets for which impairment
is made and revaluation is carried out and derivative instruments.
The accounting policies have been consistently applied by the Company
and except for the changes in accounting policy discussed more fully
below, are consistent with those used in previous year.
2. Use of Estimate
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingent liabilities on the date
of the financial statements and the reported amounts of revenues and
expenses during the period reported. Actual results could statements
and the reported amounts of revenues and expences during the period
reported. Actual results could differ from those estimates. Any
revision to accounting estimates is recognised in accordance with the
requirements in accordance with the requirements of the respective
accounting standard.
3.Fixed assests
Fixed assets are stated at cost less accumulated depreciation and imp
airment losses. Cost comprises the purchase price and any attributable
cost of bringing the asset to its working condition for its inteded use,
net of VAT recoverable. Financing costs ralating to construction of fixed
assets are also included to the extent they relate to the period till
such assets are ready to be put to use. Financing costs not relating
to construction of fixed as sets are charged to the income statement.
Depreciation
Depreciation on the fixed assets has been provided for on straight line
method at the rates prescribed and in the manner specified in Schedule
XIV to the Companies Act, 1956 for the manufacturing units situated in
Bangalore. Fixed assets in Mumbai have been continued depreciated by
following written down value method.
Impairment
i. The carrying amounts of assets are reviewed at each balance sheet
date if there are impairement indicators. An impairment loss is recogni
zed wherever the carrying amount of an asser exceeds its recoverable
amount is the greater of the assets net selling price and value in
use. In assessing value in use, the estimated future cash
flows are discounted to their present value at the WACC.
ii. After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining increased beyond the carrying
value that would have prevailed by charging usual depreciation if
there was no impairment.
4. Intangible Assets
Intangible assets include miscellaneous expenditures that are
capitalized if specific criteria are met and are amortised over their
useful life, generally not exceeding 5 years. The recoverable amount of
an intangible asset that is not available for use or is being amortized
over a period exceeding 5 years should be reviewed at least at each
financial year end even if there is no indication that the asset is
impaired.
5. Leases
Where the Company is the lessee
Finance leases, where substantially all the risks and benefits
incidental to ownership of the leased item, are transferred to the
company, are capitalized at the lower of the fair value and present
value of the minimum lease
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are
classified as operating leases. Operating lease payments are recognised
as an expense in the Profit and Loss account
Where the Company is the lessor
Assets subject to operating leases are included in fixed assets. Lease
income is recognised in the Profit and Loss Account on a straight-line
basis over the lease term. Costs, including depreciation are recognised
as an expense in
the Profit and Loss Account. Intial direct costs such as legal costs,
brokerage cost in the P&L Account.
6. Government grants and subsidies
When the grant or subsidy relates to an expense item, it is recognized
as income over the periods necessary to match
them on a systematic basis to the costs, which it is intended to
compensate. Where asset, its value is deducted in arriving at the
carrying amount of the related asset. 7. investments
of cost and fair value determined on an individual investment basic
8. inventories
Inventories are valued at lower of cost or net realisable value. Cost
is determined on the following basis:
i) Raw materials and manufactured finished goods are valued at cost.
Cost is determined by using average cost
ii) Trade Goods are valued at cost on FIFO basis.
9. Revenue Recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured.
(i) Sale of goods
buyer. Sales revenue is net of sales returns, discounts and rebates.
(ii) interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
(iii) Dividends
Revenue is recognised when the shareholders right to receive payment
is established by the balance sheet date. Dividend from subsidiaries
is recognised even if same are declared after the balance sheet date
but pertains to period on or before the date of balance sheet as per
the requirement of schedule VI of the Companies Act, 1956.
10. Foreign Exchange Transaction
(a) Transaction denominated in foreign currencies is normally recorded
at the exchange rate prevailing at the time
(b) Monetary items denominated in foreign currency as at the balance
sheet date are translated at the year end
(c) Premium on forward cover contracts in respect of import of raw
material is charged to profit & loss account over adjuste in carrying
cost of the same. 11. Employee benefits
L charged to the Profit and Loss Account of the year when the
contributions to the
12. Current Tax and Deferred Tax
(i) Provision for current tax is made after taking into consideration
benefits admissible under the provision of the Income Tax Act, 1961.
(ii) Deferred tax resulting from timing diffference berween the book
and taxable tax rates and laws that have been enacted or substantively
enacted as on the iheetdaS^ ^ USm9 ^
13. Earning per share
Basic EPS is computed using the weighted average number of equity
shares outstanding during the year. Diluted EPS the year except where
the results would be anti-
14. Cash Flow Statement
Statement issued by the Institute of Chartered Accountants of India.
15. Provision,ContingentLiabilitiesandContingentAssets
Provision involving substantial degree of estimation in measurement is
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 recognised but are discolsed in the notes.
Contingent assets are neither recognized statements
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