Accounting Policies of Barak Valley Cements Ltd. Company
Mar 31, 2018
1. CORPORATE INFORMATION
Barak Valley Cements Limited (the company) is a public limited company domiciled in India and incorporated on 28th April'' 1999 as per the provisions of the Companies Act, 1956. The company is engaged in the manufacturing and selling of various brands of Cement in north eastern states. The manufacturing unit of the company is located at Badarpurghat, Distt. Karimganj, Assam.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of Preparation:
(i) Compliance with Ind AS
The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.
The financial statements up to year ended 31 March 2017 were prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act. These financial statements are the first financial statements of the company under Ind AS. Refer note 46 for an explanation of how the transition from previous GAAP to Ind AS has affected the company''s financial position, financial performance and cash flows.
The accounting policies are consistently followed by the company and changes in accounting policy are separately disclosed.
(ii) Historical Cost Convention
The financial statements have been prepared on a historical cost basis, except for the following:
- Land & Building that are measured at fair value.
^ defined benefit plans - plan assets measured at fair value
- certain financial assets & Liabilities that are measured at fair value.
(iii) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.
2.2 Use of Estimates :
The preparation of financial statements is in conformity with generally accepted accounting principles which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.
2.3 Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is classified as current when it is:
i) Expected to be realized or intended to be sold or consumed in normal operating cycle
ii) Held primarily for the purpose overtrading
iii) Expected to be realized within twelve months after the reporting period, or
iv) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is classified as current when:
i) It is expected to be settled in normal operating cycle
ii) It is held primarily for the purpose of trading
iii) It is due to be settled within twelve months after the reporting period, or
iv) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
2.4 Property, plant and equipment:
An item of PPE is recognized as an asset, if and only if, it is probable that the future economic benefits associated with the item will flow to the Company and its cost can be measured reliably.
Property, plant and equipment are stated at their cost of acquisition, installation or construction (net of any recoverable amount, if any) less accumulated depreciation, amortization and impairment losses, except freehold land which is carried at cost. Cost comprises the purchase price, installation and attributable cost of bringing the assets to its working condition for its intended use.
Transition to Ind AS
On transition to Ind AS, the Company has elected to continue with the previous carrying value of all its property, plant and equipment measured as per the previous GAAP except Land & Building that are measured at fair value and use that carrying value or fair value as the deemed cost of the property, plant and equipment and capital work-in-progress.
Capital Work In Progress
Capital work in progress is carried at cost and includes any directly attributable cost incurred during construction period.
2.5 Expenditure during construction period:
In case of new projects and substantial expansion of existing units, expenditure incurred including trial production expenses net of revenue earned, and attributable interest and financing costs, prior to commencement of commercial production/ completion of project are capitalized.
2.6 Depreciation:
Depreciation on Property, plant and equipment is provided on Written down Value (WDV) Method in accordance with the provisions of Schedule II to the Companies Act, 2013 and considering the useful lives for computing depreciation specified there in. Useful lives, components and residual amounts of all assets are reviewed annually. In respect of an asset for which impairment loss is recognized, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.
2.7 Intangible Assets :
An Intangible asset is recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the Company and the cost of the asset can be measured reliably. The depreciable amount of an intangible asset is allocated over its estimated useful life. Expenditure on purchased / developed software and IT related expenditure are written off over a period of three years. On transition to Ind AS, the company has elected to continue with the carrying value of intangible assets recognized as at 1st April'' 2016 measured as per the previous GAAP adopted by the company.
2.8 Investments and other financial assets : Classification
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
- those measured at amortized cost
- The classification depends on the company''s business model for managing the financial assets and the contractual terms of cash flows.
Measurement
All the financial assets are recognized at fair value on initial recognition. Transaction costs that are directly attributable to the acquisition or issue of financial assets that are not at fair value through profit or loss, are added to the fair value on initial recognition.
Debt instruments
Subsequent measurement of debt instruments depends on the company''s business model for managing the asset and the cash flow characteristics of the asset. The company classifies its debt instruments into the following categories:
- Amortized 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 Amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method.
- Fair value through other comprehensive income (FVOCI): Assets that are held for collections of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Interest income from these financial assets is included in other income using the effective interest rate method.
- Fair value through profit or loss: Assets that do not meet the criteria for Amortized cost or FVOCI are measured at fair value through profit or loss. Interest income from these financial assets is included in other income.
Equity instruments
The company subsequently measures all equity investments (except subsidiary, associate and joint venture, which are carried at cost) at fair value through other comprehensive income.
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.
Derecognition of financial assets
A financial asset is derecognized only when
- The company has transferred the rights to receive cash flows from the financial asset, or
- Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized.
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognized if the company has not retained control of the financial asset.
2.9 Financial liabilities : Initial recognition and measurement
The company recognizes all the financial liabilities on initial recognition at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial liability that are not at fair value through profit or loss, are added to the fair value on initial recognition.
The company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts.
Subsequent measurement
All the financial liabilities are classified as subsequently measured at Amortized cost, except for those measured at fair value through profit or loss.
De-recognition of financial liabilities
The Company de-recognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or they expire.
2.10 Borrowings :
Borrowings are initially recognized at fair value, net of transaction cost incurred. Borrowings are subsequently measured at amortized cost. Difference between the proceeds and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.
Borrowings are removed from the Balance Sheet when the obligation specified in the contract is discharged or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to any other party and the consideration paid, is recognized in profit or loss as finance cost or other income.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for 12 months after the reporting period.
2.11 Investment in Subsidiaries :
The Company''s investment in its subsidiary, associate and joint venture are carried at cost less accumulated impairment loss if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down to its recoverable amount.
2.12 Inventories:
Raw Materials, stores and spares are valued at lower of cost and net realizable value. However, these items are considered to be realizable at cost if the finished products, in which they will be used, are expected to be sold at or above cost.
Work in progress, traded goods and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials & labour and a part of manufacturing overheads based on normal operating capacity.
Cost of Inventories is computed on weighted average basis.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
2.13 Trade receivables and payables:
Trade receivables are recognized at fair value. Subsequently receivables are measured at amortized cost using the effective interest method.
Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. Payables are also recognized at fair value and subsequently at amortized cost using the effective interest method, if required.
2.14 Revenue Recognition:
The company recognizes revenue when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the company. Sales are recognized when substantial risks and rewards of ownership are transferred to the customer.
Revenue is measured at the fair value of the consideration received or receivable. Amount disclosed as revenue are inclusive of excise duty and are net of trade discounts, sales commission, rebates, sales returns, value added taxes/ Goods & service Tax and other amounts collected on behalf of the government or third parties.
Interest income is recognized using the effective interest rate method.
2.15 Impairment of non - financial assets:
The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is 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 the present value by using weighted average cost of capital. A previously recognized impairment loss is further provided or reversed depending on changes in circumstances.
2.16 Employee Benefits:
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.
(ii) Defined Contribution Plan
Employees benefits in the form of provident fund and other labour welfare fund are considered as defined contribution plan and the contributions are charged to the statement of profit and loss of the year when the contributions to the respective funds are due.
(iii) Defined Benefit Plan
Retirement benefits in the form of gratuity is considered as defined benefits obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.
(iv) Other Long-term benefits
Long-term compensated absences are provided for on the actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.
Actuarial gain/losses, if any, are recognized in the statement of profit and loss
2.17 Government Grants and Subsidies :
Government grants and subsidies are recognized when there is reasonable certainty that the same will be received. Revenue grants in the nature of recoupment or reimbursement of any particular items of expenses are recognized in the statement of profit and loss as deduction from related item of expenditure. Capital grants related to assets which are recognized in the Balance Sheet as deferred income, are recognized in the Statement of Profit and Loss on a systematic basis over the useful life of the related assets by netting off with the related expenses.
2.18 Tax Expenses:
Tax expense comprises current and deferred tax. Provision for the current tax is made on the basis of taxable income for the current accounting year in accordance with the provisions of Income Tax Act, 1961.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the standalone financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.
Deferred tax liabilities are not recognized for temporary differences between the carrying amount and tax bases of investments in subsidiaries, branches and associates and interest in joint arrangements where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets are not recognized for temporary differences between the carrying amount and tax bases of investments in subsidiaries, branches and associates and interest in joint arrangements where it is not probable that the differences will reverse in the foreseeable future and taxable profit will not be available against which the temporary difference can be utilized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
The deferred tax in respect of temporary differences which originate during the tax holiday period and is likely to reverse during the tax holiday period, is not recognized to the extent income is subject to deduction during the tax holiday period as per the requirements of the Income Tax Act 1961.
Minimum Alternate Tax (MAT) : Minimum alternate tax (MAT) paid in a year/period is charged to the statement of profit and loss as current tax for the year/period. The deferred tax asset is recognized for MAT credit available only to the extent that it is probable that the concerned Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset, it is created by way of credit to the statement of profit and loss and shown as part of deferred tax asset. The Company reviews the âMAT credit entitlementâ asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period.
2.19 Research and Development Expenditure :
Revenue expenditure on Research and Development is charged to the statement of profit and loss in the year in which it is incurred and are included under the related head of expenditure. Capital expenditure is added to the cost of property, plant and equipment in the year in which they are incurred.
2.20 Borrowing Costs:
Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset is capitalized as part of cost of such asset till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as expense in the period in which they are incurred.
2.21 Provisions and Contingencies :
A Provision is recognized for a present obligation as a result of past events if it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are determined based on best estimates of the amount required to settle the obligation at the end of the reporting period. The increase in the provision due to the passage of time is recognized as interest expenses. Liabilities which are material in nature and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and disclosed by way of notes to the accounts. Contingent assets are also disclosed by way of notes to the accounts.
2.22 Cash and Cash Equivalents :
Cash and cash equivalents for the purpose of cash flow statement comprise cash in hand, demand deposits with banks and other short term highly liquid investment /deposits with an original maturity period of three or less than three months.
2.23 Earnings Per Share :
Basic earnings per share are calculated by dividing the net profit or loss before other comprehensive income for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss before other comprehensive income for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
2.24 Lease :
Leases of property, plant and equipment; where the Company as lessee has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease''s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
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 (net of any incentives received from the lessor) are charged to profit or 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 lessor''s expected inflationary cost increases.
Lease income from operating leases where the Company is a lessor is recognized 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.
2.25 Offsetting financial instruments :
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the group or the counter party.
2.26 Segment reporting :
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
2.27 Dividends :
Provision is made for the amount of any dividend declared, being appropriately authorized and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
(b) Terms/Rights attached to equity shares
The company has only one class of equity shares having par value of Rs. 10.00 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 the equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Nature and purpose of reserves :
(i) Securities Premium : At the time of Initial Public Offer, the excess of issue price of shares over the face value of shares issued, minus expenditure incurred on issuance of shares is treated as Securities Premium.
(ii) General Reserve : The company had transferred a portion of the net profit of the company before declaring dividend to general reserve pursuant to the earlier provisions of the Companies Act, 1956.
(iii) Retained Earnings : Retained Earnings are the profits that the company has earned till date, less any transfers to general reserve, dividends or other distributions paid to the the shareholders of the company.
(i) Rupee Term Loans (RTL) of Rs. 968.22 lakhs (last year : Rs. 1062.01 lakhs) from a financial institution is consisting of two loans (i) Rs. 199.98 lakhs (sanctioned amount Rs. 2000 lakhs) which is repayable in monthly installments of Rs. 25.00 lakhs and (ii) Rs. 768.24 lakhs (sanctioned amount Rs. 800 lakhs) which is repayable from April'' 2018 in quarterly installments of Rs. 30.77 lakhs. The loan is secured by first charge on land, building including civil structure of the company''s assets and extension of first charge on plant and machinery, fixed and immovable assets of the company on pari -passu basis with IDBI Bank. The loans has also been guaranteed by personal guarantees of some of the Directors of the Company.
(ii) Loans from Other parties are unsecured in nature and due for repayment after 12 months as on the reporting date. The company does not have any existing default as at the date of balance sheet.
(iii) Term Loans from related parties are long term in nature.
(iv) Hire Purchase Finance is secured by hypothecation of vehicles / equipmentâs and is repayable within three to four years.
Mar 31, 2016
1. CORPORATE INFORMATION
Barak Valley Cements Limited (the company) is a public limited company incorporated under the provisions of the Companies Act, 1956. The shares of the company are listed on National Stock Exchange and Bombay Stock Exchange of India. The manufacturing unit of the company is located at Badarpurghat, Distt. Karimganj, Assam. The company is engaged in the manufacturing and selling of various brands of Cement in north eastern states.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 BASIS OF PREPARATION:
The financial statements of the company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply with all material aspects with the Accounting Standards as prescribed under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and other relevant provisions of the Companies Act, 2013 to the extent notified. The financial statements are prepared under the historical cost convention basis on accrual basis and on the basis of going concern. The accounting policies are consistently followed by the company unless otherwise stated.
2.2 USE OF ESTIMATES:
The preparation of financial statements is in conformity with generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.
2.3 FIXED ASSETS:
(a) Tangible Fixed Assets are stated at their cost of acquisition, installation or construction (net of Cenvat credit, if any) less accumulated depreciation, amortization and impairment losses, except freehold land which is carried at cost. Cost comprises the purchase price, installation and attributable cost of bringing the assets to its working condition for its intended use, less trade discounts, rebates, specific grants received.
(b) Capital Work-In-Progress:
Capital work in progress is carried at cost comprising direct cost and preoperative expenses during construction period to be allocated to the fixed assets on the completion of construction.
2.4 DEPRECIATION:
Depreciation on fixed assets has been provided on Written down Value (WDV) Method in accordance with the provisions of Schedule II to the Companies Act, 2013 and considering the useful lives for computing depreciation specified there in. Useful lives, components and residual amounts of all assets are reviewed annually. In respect of an asset for which impairment loss is recognized, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.
2.5 GOVERNMENT GRANTS/ SUBSIDIES :
Government grants and subsidies are recognized when there is reasonable assurance that the same will be received. Revenue grants in the nature of recoupment or reimbursement of any particular items of expenses are recognized in the statement of profit and loss as deduction from related item of expenditure. Capital grants/ subsidies are reduced from cost of respective fixed assets where it relates to specific fixed assets. Other grants/ subsidies are credited to the capital reserve.
2.6 INVESTMENTS:
Investments, that are intended to be held for not more than one year, are classified as current investments and are stated at lower of cost and market value. All other investments are classified as long-term investments/ non -current investments and are stated at cost after deducting provisions for permanent diminution in the value, if any.
2.7 INVENTORIES:
Inventories are carried at the lower of cost and net realizable value. Cost for the purpose is worked out on weighted average basis and comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. In case of finished goods, semi-finished goods and work in progress, an appropriate overhead are allocated on full absorption costing basis and includes excise duty wherever applicable.
2.8 REVENUE RECOGNITION:
Revenue is recognized only when risk and rewards incidental to ownership are transferred to the customer and it can be reliably measured and it is reasonable to expect ultimate collection. Sales include Excise Duty and are net of trade discounts, sales commission, rebate and sales returns. Interest income is recognized on time proportion basis taking into account the amount outstanding and the applicable interest rate.
2.9 IMPAIRMENT OF ASSETS:
The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is 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 the present value by using weighted average cost of capital. A previously recognized impairment loss is further provided or reversed depending on changes in circumstances.
2.10 RETIREMENT BENEFITS:
(i) Defined Contribution Plan
Employees benefits in the form of provident fund and other labour welfare fund are considered as defined contribution plan and the contributions are charged to the statement of profit and loss of the year when the contributions to the respective funds are due.
(ii) Defined Benefit Plan
Retirement benefits in the form of gratuity is considered as defined benefits obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.
(iii) Other Long-term benefits
Long-term compensated absences are provided for on the actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.
Actuarial gain/losses, if any, are recognized in the statement of profit and loss.
2.11 TAXES ON INCOME :
Tax expenses comprise current and deferred tax. Current Tax is measured on the basis of estimated taxable income for the current accounting period in accordance with the provisions of Income Tax Act, 1961. Minimum Alternate Tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. The company reviews the carrying amount of MAT at each Balance Sheet date and adjusts MAT credit entitlement to the extent there is convincing evidence to the effect that the company will pay normal income tax during the specified period.
Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized and carried forward for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets / liabilities are reviewed at the end of each reporting period based on the development during the year to reassess realizations or liabilities.
2.12 RESEARCH AND DEVELOPMENT EXPENDITURE:
Revenue expenditure on Research and Development is charged to statement of profit and loss in the year in which it is incurred and are included under the related head of expenditure. Capital expenditure is added to the cost of fixed assets in the year in which they are incurred.
2.13 BORROWING COSTS:
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset is capitalized as part of cost of such asset till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are occurred.
2.14 INTANGIBLE ASSET:
An Intangible asset is recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the Company and the cost of the asset can be measured reliably. The depreciable amount of an intangible asset is allocated over its estimated useful life. Expenditure on purchased / developed software and IT related expenditure are written off over a period of three years.
2.15 PROVISIONS AND CONTINGENCIES:
A Provision is recognized for a present obligation as a result of past events if it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are determined based on best estimates of the amount required to settle the obligation at the Balance Sheet date. Liabilities which are material in nature and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and disclosed by way of notes to the accounts. Contingent assets are neither recognized nor disclosed in the financial statements.
2.16 CASH & CASH EQUIVALENTS:
Cash and cash equivalents for the purpose of cash flow statement comprise cash in hand, demand deposits with banks and other short term highly liquid investment /deposits with an original maturity period of less than three months.
2.17 EARNINGS PER SHARE:
Basic earnings per share are 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.
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 are adjusted for the effects of all dilutive potential equity shares.
Mar 31, 2014
1.1 BASIS OF PREPARATION:
The financial statements of the company have been prepared in
accordance with the generally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to
comply with all material aspects with the Accounting Standards notified
under the Companies (Accounting Standards) Rules, 2006 (as amended) and
the relevant provisions of the Companies Act, 1956 read with General
Circular No. 15/2013 dated 13th September''2013, issued by the Ministry
of Corporate Affairs, in respect of Section 133 of the Companies Act,
2013. The financial statements are prepared under the historical cost
convention basis on accrual basis and on the basis of going concern.
1.2 ESTIMATES:
The preparation of financial statements is in conformity with generally
accepted accounting principles which require management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent liabilities at the date of
the financial statements and the results of operations during the
reporting period. Although these estimates are based upon management''s
best knowledge of current events and actions, actual results could
differ from these estimates.
1.3 FIXED ASSETS:
(a) Tangible Fixed Assets are stated at their original cost of
acquisition, installation or construction (net of Cenvat credit, if
any) less accumulated depreciation and impairment losses, except
freehold land which is carried at cost. Cost comprises the purchase
price, installation and attributable cost of bringing the assets to its
working condition for its intended use, less trade discounts, rebates,
specific grants received.
(b) An Intangible asset is recognized when it is probable that the
future economic benefit that are attributable to the assets will flow
to the Company and the cost of the assets can be measured reliably. The
depreciable amount of an intangible asset is allocated over its
estimated useful economic life. Expenditure on purchased software and
IT related expenditure are written off over a period of three years.
(c) Capital Work -In -Progress: Capital work in progress is carried at
cost comprising direct cost and preoperative expenses during
construction period to be allocated to the fixed assets on the
completion of construction.
1.4 DEPRECIATION:
Depreciation on fixed assets has been provided on Written Down Value
(WDV) Method at the rates and in the manner prescribed under schedule
XIV to the Companies Act, 1956. Depreciation on additions to fixed
assets is provided on a pro -rata basis from the date of put to use and
in the case of a new project, the same is provided on a pro-rata basis
from the date of commencement of commercial production.
Depreciation on assets sold, discarded or scrapped, is provided up to
the date on which the said asset is sold, discarded or scrapped. In
respect of an asset for which impairment loss is recognized,
depreciation is provided on the revised carrying amount of the assets
over its remaining useful life.
1.5 GOVERNMENT GRANTS/ SUBSIDIES :
Government grants and subsidies are recognized when there is reasonable
assurance that the same will be received and company will comply with
the conditions attached to them. Revenue grants in the nature of
recoupment or reimbursement of any particular items of expenses are
recognized in the statement of profit and loss as deduction from
related item of expenditure. Capital grants/ subsidies are reduced from
cost of respective fixed assets where it relates to specific fixed
assets. Other grants/ subsidies are credited to the capital reserve.
1.6 INVESTMENTS:
Investments, that are intended to be held for not more than one year,
are classified as current investments and are stated at lower of cost
and market value. All other investments are classified as long-term
investments/ non -current investments and are stated at cost after
deducting provisions for permanent diminution in the value, if any.
1.7 INVENTORIES:
Inventories are carried at the lower of cost and net realisable value.
Cost for the purpose is worked out on weighted average basis and
comprises all costs of purchase, cost of conversion and other costs
incurred in bringing the inventories to their present location and
condition. In case of finished goods, semi-finished goods and work in
progress, an appropriate overhead are allocated on full absorption
costing basis and includes excise duty wherever applicable.
1.8 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. The Sales are accounted for on dispatch of goods to
the customer and are stated exclusive of excise duty, VAT/ Sales Tax
and are net of trade discounts, sales commission and sales return.
Other items of revenue are recognised in accordance with the Accounting
Standard (AS - 9). Interest income is recognized on time proportion
basis taking into account the amount outstanding and the applicable
interest rate.
1.9 IMPAIRMENT OF ASSETS:
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal / external
factors. An impairment loss will be recognized wherever the carrying
amount of an asset exceeds its recoverable amount. The recoverable
amount is 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 the present value by using weighted average cost of capital. A
previously recognized impairment loss is further provided or reversed
depending on changes in circumstances.
1.10 RETIREMENT BENEFITS:
(i) Defined Contribution Plan
Employees benefits in the form of provident fund and other labour
welfare fund are considered as defined contribution plan and the
contributions are charged to the statement of profit and loss of the
year when the contributions to the respective funds are due.
(ii) Defined Benefit Plan
Retirement benefits in the form of gratuity is considered as defined
benefits obligations and are provided for on the basis of an actuarial
valuation, using the projected unit credit method, as at the date of
the Balance Sheet.
(iii) Other Long-term benefits
Long-term compensated absences are provided for on the actuarial
valuation, using the projected unit credit method, as at the date of
the Balance Sheet.
Actuarial gain/losses, if any, are recognized in the statement of
profit and loss.
1.11 INCOME TAXES:
Income Tax expenses comprise current and deferred tax charge or credit.
Current Tax is measured on the basis of estimated taxable income for
the current accounting period in accordance with the provisions of
Income Tax Act, 1961. Minimum Alternate Tax (MAT) credit is recognized
as an asset only when and to the extent there is convincing evidence
that the company will pay normal income tax during the specified
period. The company reviews the carrying amount of MAT at each Balance
Sheet date and adjusts MAT credit entitlement to the extent there is
convincing evidence to the effect that the company will pay normal
income tax during the specified period.
Deferred income taxes reflect the impact of timing differences between
taxable income and accounting income originating during current year
and reversal of timing differences for the earlier years. Deferred tax
is measured using the tax rates and the tax laws enacted or
substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized and carried forward for
deductible timing differences only to the extent that there is
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
Deferred tax assets / liabilities are reviewed at the end of each
reporting period based on the development during the year to reassess
realizations or liabilities.
1.12 RESEARCH AND DEVELOPMENT EXPENDITURE:
Revenue expenditure on Research and Development is charged to statement
of profit and loss in the year in which it is incurred and are included
under the related head of expenditure. Capital expenditure is added to
the cost of fixed assets in the year in which they are incurred.
1.13 BORROWING COSTS:
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset is capitalized as part
of cost of such asset till such time the asset is ready for its
intended use. A qualifying asset is an asset that necessarily requires
a substantial period of time to get ready for its intended use. All
other borrowing costs are recognised as an expense in the period in
which they are occurred.
1.14 INTANGIBLE ASSET:
An Intangible asset is recognized when it is probable that the future
economic benefits that are attributable to the assets will flow to the
Company and the cost of the asset can be measured reliably. The
depreciable amount of an intangible asset is allocated over its
estimated useful life. Expenditure on purchased/developed software are
written off over a period of three years.
1.15 PROVISIONS AND CONTINGENCIES:
A Provision is recognized for a present obligation as a result of past
events if it is probable that an outflow of resources will be required
to settle the obligation and in respect of which a reliable estimate
can be made. Provisions are determined based on best estimates of the
amount required to settle the obligation at the Balance Sheet date.
Liabilities which are material in nature and whose future outcome
cannot be ascertained with reasonable certainty are treated as
contingent and disclosed by way of notes to the accounts. Contingent
assets are neither recognized nor disclosed in the financial
statements.
1.16 CASH & CASH EQUIVALENTS:
Cash and cash equivalent comprise cash in hand and deposits with banks
and corporations. The company considers all highly liquid investments
with a original maturity period of three months or less and that are
readily convertible to known amount of cash to be cash equivalents.
1.17 EARNINGS PER SHARE:
Basic earnings per share are 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.
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 are
adjusted for the effects of all dilutive potential equity shares.
Mar 31, 2013
1.1 BASIS OF PREPARATION:
The financial statements of the company have been prepared in
accordance with the generally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under the Companies (Accounting Standards) Rules, 2006 and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on accrual basis and
on the basis of going concern.
1.2 ESTIMATES:
The preparation of financial statements is in conformity with generally
accepted accounting principles which requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent liabilities at the date of
the financial statements and the results of operations during the
reporting period. Although these estimates are based upon management''s
best knowledge of current events and actions, actual results could
differ from these estimates.
1.3 FIXED ASSETS:
(a) Tangible Fixed Assets are stated at their original cost of
acquisition, installation or construction (net of Cenvat credit, if
any) less accumulated depreciation and impairment losses, except
freehold land which is carried at cost. Cost comprises the purchase
price, installation and attributable cost of bringing the assets to its
working condition for its intended use, less trade discounts, rebates,
specific grants received.
(b) An Intangible asset is recognized when it is probable that the
future economic benefit that are attributable to the assets will flow
to the Company and the cost of the assets can be measured reliably. The
depreciable amount of an intangible asset is allocated over its
estimated useful economic life. Expenditure on purchased software and
IT related expendi- ture are written off over a period of three years.
(c) Capital Work -In -Progress: Capital work in progress is carried at
cost comprising direct cost and preoperative expenses during
construction period to be allocated to the fixed assets on the
completion of construction.
1.4 DEPRECIATION:
Depreciation on fixed assets has been provided on Written down Value
(WDV) Method at the rates and in the manner prescribed under schedule
XIV to the Companies Act, 1956. Depreciation on additions to fixed
assets is provided on a pro- rata basis from the date of put to use and
in the case of a new project, the same is provided on a pro-rata basis
from the date of commencement of commercial production. Depreciation on
assets sold, discarded or scrapped, is provided up to the date on which
the said asset is sold, discarded or scrapped. In respect of an asset
for which impairment loss is recognized, depreciation is provided on
the revised carrying amount of the assets over its remaining useful
life.
1.5 GOVERNMENT GRANTS/ SUBSIDIES :
Government grants and subsidies are recognized when there is reasonable
assurance that the same will be received and company will comply with
the conditions attached to them. Revenue grants in the nature of
recoupment or reimbursement of any particular items of expenses are
recognized in the statement of profit and loss as deduction from
related item of expenditure. Capital grants/ subsidies are reduced from
cost of respective fixed assets where it relates to specific fixed
assets. Other grants/ subsidies are credited to the capital reserve.
1.6 INVESTMENTS:
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long- term invest- ments. Current investments are stated
at lower of cost and fair value determined. Long term Investments are
stated at cost after deducting provisions for permanent diminution in
the value, if any.
1.7 INVENTORIES:
Inventories are carried at the lower of cost and net realisable value.
Cost for the purpose is worked out on weighted average basis and
comprises all costs of purchase, cost of conversion and other costs
incurred in bringing the invento- ries to their present location and
condition. In case of finished goods, semi-finished goods and work in
progress, an appropriate overhead are allocated on full absorption
costing basis and includes excise duty wherever applicable.
1.8 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. The Sales are accounted for on dispatch of goods to
the customer and are stated exclusive of excise duty, VAT/ Sales Tax
and are net of trade discounts, sales commission and sales return.
Other items of revenue are recognised in accordance with the Accounting
Standard (AS - 9). Interest income is recognized on time proportion
basis taking into account the amount outstanding and the applicable
interest rate.
1.9 IMPAIRMENT OF ASSETS:
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal / external
factors. An impairment loss will be recognized wherever the carrying
amount of an asset exceeds its recoverable amount. The recoverable
amount is 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 the present value by using weighted average cost of capital. A
previously recognized impairment loss is further provided or reversed
depending on changes in circumstances.
1.10 RETIREMENT BENEFITS:
(i) Defined Contribution Plan
Employees benefits in the form of provident fund and other labour
welfare fund are considered as defined contribu- tion plan and the
contributions are charged to the statement of profit and loss of the
year when the contributions to the respective funds are due.
(ii) Defined Benefit Plan
Retirement benefits in the form of gratuity is considered as defined
benefits obligations and are provided for on the basis of an actuarial
valuation, using the projected unit credit method, as at the date of
the Balance Sheet.
(iii) Other Long-term benefits
Long-term compensated absences are provided for on the actuarial
valuation, using the projected unit credit method, as at the date of
the Balance Sheet.
Actuarial gain/losses, if any, are recognized in the statement of
profit and loss.
1.11 INCOME TAXES:
Income Tax expenses comprise current and deferred tax charge or credit.
Current Tax is measured on the basis of estimated taxable income for
the current accounting period in accordance with the provisions of
Income Tax Act, 1961. Minimum Alternate Tax (MAT) credit is recognized
as an asset only when and to the extent there is convincing evidence
that the company will pay normal income tax during the specified
period. The company reviews the carrying amount of MAT at each Balance
Sheet date and adjusts MAT credit entitlement to the extent there is
convincing evidence to the effect that the company will pay normal
income tax during the specified period.
Deferred income taxes reflect the impact of timing differences between
taxable income and accounting income originating during current year
and reversal of timing differences for the earlier years. Deferred tax
is measured using the tax rates and the tax laws enacted or
substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized and carried forward for
deductible timing differences only to the extent that there is
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
Deferred tax assets / liabilities are reviewed at the end of each
reporting period based on the development during the year to reassess
realizations or liabilities.
1.12 RESEARCH AND DEVELOPMENT EXPENDITURE:
Revenue expenditure on Research and Development is charged to statement
of profit and loss in the year in which it is incurred and are included
under the related head of expenditure. Capital expenditure is added to
the cost of fixed assets in the year in which they are incurred.
1.13 BORROWING COSTS:
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset is capitalized as part
of cost of such asset till such time the asset is ready for its
intended use. A qualifying asset is an asset that necessarily requires
a substantial period of time to get ready for its intended use. All
other borrowing costs are recognised as an expense in the period in
which they are occurred.
1.14 INTANGIBLE ASSET:
An Intangible asset is recognized when it is probable that the future
economic benefits that are attributable to the assets will flow to the
Company and the cost of the asset can be measured reliably. The
depreciable amount of an intangible asset is allocated over its
estimated useful life. Expenditure on purchased / developed software
are written off over a period of three years.
1.15 PROVISIONS AND CONTINGENCIES:
A Provision is recognized for a present obligation as a result of past
events if it is probable that an outflow of resources will be required
to settle the obligation and in respect of which a reliable estimate
can be made. Provisions are determined based on best estimates of the
amount required to settle the obligation at the Balance Sheet date.
Liabilities which are material in nature and whose future outcome
cannot be ascertained with reasonable certainty are treated as
contingent and disclosed by way of notes to the accounts. Contingent
assets are neither recognized nor disclosed in the financial
statements.
1.16 CASH & CASH EQUIVALENTS:
Cash and cash equivalent comprise cash in hand and deposits with banks
and corporations. The company considers all highly liquid investments
with a original maturity period of three months or less and that are
readily convertible to known amount of cash to be cash equivalents.
1.17 EARNINGS PER SHARE:
Basic earnings per share are 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.
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 are
adjusted for the effects of all dilutive potential equity shares.
Mar 31, 2012
1.1 PRESENTATION AND DISLOSURES OF FINANCIAL STATEMENT
During the year ended 31st March, 2012, the revised Schedule VI
notified under the Companies Act 1956, has become applicable to the
company, for preparation and presentation of its financial statements.
The adoption of revised Schedule
VI does not impact recognition and measurement principles followed for
preparation of financial statements. However, it has significant impact
on presentation and disclosures made in the financial statements. The
company has also reclassified the previous year figures in accordance
with the requirements applicable in the current year.
1.2 ESTIMATES :
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period end. Although these estimates are based upon management's best
knowledge of current events and actions, actual results could differ
from these estimates.
1.3 FIXED ASSETS:
(a) Tangible Fixed Assets are stated at their original cost of
acquisition, installation or construction (net of Cenvat credit, if
any) less accumulated depreciation, except freehold land which is
carried at cost. Cost comprises the purchase price, installation and
attributable cost of bringing the assets to its working condition for
its intended use, less trade discounts, rebates, specific grants
received.
(b) An Intangible asset is recognized when it is probable that the
future economic benefit that are attributable to the assets will flow
to the Company and the cost of the assets can be measured reliably. The
depreciable amount of an intangible asset is allocated over its
estimated useful economic life. Expenditure on purchased software and
IT related expenditure are written off over a period of three years.
(c) Capital Work -In -Progress: Capital work in progress is carried at
cost comprising direct cost and preoperative expenses during
construction period to be allocated to the fixed assets on the
completion of construction.
1.4 DEPRECIATION:
Depreciation on fixed assets has been provided on Written down Value
(WDV) Method at the rates and in the manner prescribed under schedule
XIV to the Companies Act, 1956. Depreciation on additions to fixed
assets is provided on a pro -rata basis from the date of put to use.
Depreciation on assets sold, discarded or scrapped, is provided up to
the date on which the said asset is sold, discarded or scrapped. In
respect of an asset for which impairment loss is recognized,
depreciation is provided on the revised carrying amount of the assets
over its remaining useful life.
1.5 GOVERNMENT GRANTS/ SUBSIDIES :
Government grants and subsidies are recognized when there is reasonable
assurance that the same will be received and company will comply with
the conditions attached to them. Revenue grants are recognized in the
financial statements either as income or deducted from related
expenses. Capital grants/ subsidies are credited to respective fixed
assets where it relates to specific fixed assets.
1.6 INVESTMENTS:
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long- term investments. Current investments are stated
at lower of cost and fair value determined. Long term Investments are
stated at cost after deducting provisions for permanent diminution in
the value, if any.
1.7 INVENTORIES:
Inventories are carried at the lower of cost and net realisable value.
Cost for the purpose is worked out on weighted average basis and
comprises all costs of purchase, cost of conversion and other costs
incurred in bringing the inventories to their present location and
condition. In case of finished goods, semi-finished goods and work in
progress, an appropriate overhead are allocated on full absorption
costing basis and includes excise duty wherever applicable.
1.8 REVENUE:
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. The Sales are accounted for on dispatch and are
stated exclusive of excise duty, VAT/ Sales Tax and are net of trade
discounts, sales commission and sales return. Other items of revenue
are recognised in accordance with the Accounting Standard (AS - 9).
Interest income is recognized on time proportion basis taking into
account the amount outstanding and the applicable interest rate.
1.9 RETIREMENT BENEFITS:
(i) Defined Contribution Plan
Employees benefits in the form of provident fund and other labour
welfare fund are considered as defined contribution plan and the
contributions are charged to the profit and loss account of the year
when the contributions to the respective funds are due.
(ii) Defined Benefit Plan
Retirement benefits in the form of gratuity is considered as defined
benefits obligations and are provided for on the basis of an actuarial
valuation, using the projected unit credit method, as at the date of
the Balance Sheet.
(iii) Other Long-term benefits
Long-term compensated absences are provided for on the actuarial
valuation, using the projected unit credit method, as at the date of
the Balance Sheet.
Actuarial gain/losses, if any, are immediately recognized in the Profit
& Loss Account.
1.10 IMPAIRMENT OF ASSETS:
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal / external
factors. An impairment loss will be recognized wherever the carrying
amount of an asset exceeds its recoverable amount. The recoverable
amount is 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 the present value by using weighted average cost of capital. A
previously recognized impairment loss is further provided or reversed
depending on changes in circumstances.
1.11 TAXES ON INCOME:
Tax expense comprises current and deferred tax. Provision for the
current tax is made on the basis of taxable income for the current
accounting year in accordance with the provisions of Income Tax Act, 1
961. Minimum Alternate Tax (MAT) credit is recognized as an asset only
when and to the extent there is convincing evidence that the company
will pay normal income tax during the specified period. The company
reviews the carrying amount of MAT at each Balance Sheet date and
adjusts MAT credit entitlement to the extent there is convincing
evidence to the effect that the company will pay normal income tax
during the specified period.
Deferred income taxes reflect the impact of timing differences between
taxable income and accounting income originating during current year
and reversal of timing differences for the earlier years. Deferred tax
is measured using the tax rates and the tax laws enacted or
substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing
differences. Defered tax assets are recognized and carried forward for
deductible timing differences only to the extent that there is
reasonable certainty that sufficient future taxable income will be
available against which such defered tax assets can be realized.
Deferred tax assets / liabilities are reviewed at the end of each
reporting period based on the development during the year to reassess
realizations or liabilities.
1.12 RESEARCH AND DEVELOPMENT EXPENDITURE:
Revenue expenditure on Research and Development is charged to profit
and loss statement in the year in which it is incurred and are included
under the related head of expenditure.
1.13 BORROWING COSTS:
Borrowing cost includes interest and amortization of ancillary costs
incurred in connection with the arrangement of borrowings. Borrowing
costs 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 as part
of the cost of the respective assets. All other borrowing costs are
recognised as an expense in the period they occur.
1.14 INTANGIBLE ASSET:
Intangible asset is recognized when it is probable that the future
economic benefit that are attributable to the assets will flow to the
Company and the cost of the assets can be measured reliably. The
depreciable amount of an intangible asset is allocated over its
estimated useful life. Expenditure on purchased / developed software
are written off over a period of three years.
1.15 PROVISIONS AND CONTINGENCIES:
A Provision is recognized for a present obligation as a result of past
events if it is probable that an outflow of resources will be required
to settle the obligation and in respect of which a reliable estimate
can be made. Provisions are determined based on best estimates of the
amount required to settle the obligation at the Balance Sheet date.
Liabilities which are material in nature and whose future outcome
cannot be ascertained with reasonable certainty are treated as
contingent and disclosed by way of notes to the accounts. Contingent
assets are neither recognized nor disclosed in the financial
statements. The company does not recognize a contingent liability but
disclose its existence in the financial statements.
1.16 CASH & CASH EQUIVALENTS:
Cash and cash equivalent comprise cash in hand and at bank. The company
considers all highly liquid investments with a original maturity period
of three months or less and that are readily convertible to known
amount of cash to be cash equivalents.
1.17 EARNINGS PER SHARE:
Basic earnings per share are 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.
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 are
adjusted for the effects of all dilutive potential equity shares.
Mar 31, 2011
(1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The financial statements have been prepared under the historical cost
convention on accrual basis and on the basis of going concern. The
Generally Accepted Accounting Principles and the Accounting Standards
referred under section 211(3C) of the Companies Act, 1956 have been
adopted by the Company and disclosures made in accordance with the
requirements of Schedule VI of the Companies Act, 1956 and the Indian
Accounting Standards.
(2) ESTIMATES :
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period end. Although these estimates are based upon management's best
knowledge of current events and actions, actual results could differ
from these estimates.
(3) FIXED ASSETS:
(a) Fixed Assets are stated at their original cost of acquisition,
installation or construction (net of Cenvat credit, if any) less
accumulated depreciation, except freehold land which is carried at
cost. Cost comprises the purchase price, installation and attributable
cost of bringing the assets to its working condition for its intended
use, less specific grants received.
(b) CAPITAL WORK IN PROGRESS:
Capital work in progress is carried at cost comprising direct cost and
preoperative expenses during construction period to be allocated to the
fixed assets on the completion of construction.
(4) DEPRECIATION:
Depreciation has been provided on fixed assets on Written down Value
(WDV) Method at the rates and in the manner prescribed under schedule
XIV to the Companies Act, 1956. Depreciation on additions to fixed
assets is provided on a pro -rata basis from the date of put to use.
Depreciation on assets sold, discarded or scrapped, is provided up to
the date on which the said asset is sold, discarded or scrapped. In
respect of an asset for which impairment loss is recognized,
depreciation is provided on the revised carrying amount of the assets
over its remaining useful life.
(5) INVENTORIES:
Inventories are carried at the lower of cost and net realisable value.
Cost for the purpose is worked out on weighted average basis and
comprises all costs of purchase, cost of conversion and other costs
incurred in bringing the inventories to their present location and
condition. In case of finished goods, semi-finished goods and work in
progress, an appropriate overhead are allocated on full absorption
costing basis and includes excise duty wherever applicable.
(6) INVESTMENTS:
Long term Investments are stated at cost after deducting provisions for
permanent diminution in the value, if any. Current investments are
stated at lower of cost and market / fair value.
(7) REVENUE:
Sales are accounted for on dispatch and are stated inclusive of excise
duty, VAT/ Sales Tax and are net of trade discounts, sales commission
and sales return. Other items of revenue are recognised in accordance
with the Accounting Standard (AS - 9). Interest income is recognized on
time proportion basis.
(8) GOVERNMENT GRANTS/ SUBSIDIES :
Government grants /subsidies are recognized when there is reasonable
certainty that the same will be received. Revenue grants are recognized
in the financial statements either as income or deducted from related
expenses. Capital grants/ subsidies are credited to respective fixed
assets where it relates to specific fixed assets.
(9) RETIREMENT BENEFITS:
(i) Defined Contribution Plan
Employees benefits in the form of provident fund and other labour
welfare fund are considered as defined contribution plan and the
contributions are charged to the profit and loss account of the year
when the contributions to the respective funds are due.
(ii) Defined Benefit Plan
Retirement benefits in the form of gratuity is considered as defined
benefits obligations and are provided for on the basis of an actuarial
valuation, using the projected unit credit method, as at the date of
the Balance Sheet.
(iii) Other Long-term benefits
Long-term compensated absences are provided for on the actuarial
valuation, using the projected unit credit method, as at the date of
the Balance Sheet.
Actuarial gain/losses, if any, are immediately recognized in the Profit
& Loss Account.
(10) MISCELLANEOUS EXPENDITURE:
Miscellaneous expenditure having endurable benefit is amortized over a
period of five to ten years.
(11) IMPAIRMENT OF ASSETS:
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal / external
factors. An impairment loss will be recognized wherever the carrying
amount of an asset exceeds its recoverable amount. The recoverable
amount is 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 the present value by using weighted average cost of capital. A
previously recognized impairment loss is further provided or reversed
depending on changes in circumstances
(12) TAXES ON INCOME:
a) Current Tax:
Provision for the current tax is made on the basis of taxable income
for the current accounting year in accordance with the provisions of
Income Tax Act, 1961. Minimum Alternate Tax (MAT) credit is recognized
as an asset only when and to the extent there is convincing evidence
that the Company will pay normal income tax during the specified
period. The Company reviews the carrying amount of MAT at each Balance
Sheet date and adjusts MAT credit entitlement to the extent there is
convincing evidence to the effect that the Company will pay normal
income tax during the specified period.
b) Deferred Tax :
Deferred Tax Assets and Liabilities are accounted for in accordance
with AS - 22.
(13) RESEARCH AND DEVELOPMENT EXPENDITURE:
Revenue expenditure on Research and Development is charged out in the
year in which it is incurred and are included under the related head of
expenditure.
(14) EXPENDITURE DURING CONSTRUCTION:
In respect of substantial capacity enhancement at existing location
direct costs along with part of indirect expenses are capitalized
together with interest on the funds related to them up to the date of
commercial production.
(15) BORROWING COSTS:
Borrowing cost that are directly attributable to the acquisition,
construction or production of a qualifying asset is capitalised as part
of the cost of such asset till such time the asset is ready for its
intended use. A qualifying asset is an asset that necessarily requires
a substantial period of time to get ready for its intended use. Other
borrowing costs are recognised as an expense in the period in which
they are incurred.
(16) CONTINGENT LIABILITY:
Contingent Liability not acknowledged as debt are disclosed by way of
note.
(17) INTANGIBLE ASSET:
Intangible asset is recognized when it is probable that the future
economic benefit that are attributable to the assets will flow to the
Company and the cost of the assets can be measured reliably. The
depreciable amount of an intangible asset is allocated over its
estimated useful life.
(18) PROVISIONS AND CONTINGENCIES:
A Provision is recognized for a present obligation as a result of past
events if it is probable that an outflow of resources will be required
to settle the obligation and in respect of which a reliable estimate
can be made. Provisions are determined based on best estimates of the
amount required to settle the obligation at the Balance Sheet date. A
contingent liability of an outflow of resources is remote. Contingent
assets are neither recognized nor disclosed in the financial
statements.
Mar 31, 2010
(1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The financial statements hove been prepared on the historical cost
convention basis. The generally accepted accounting principles and the
Accounting Standards referred under section 211 (3C) of the Companies
Act, 1956 have been adopted by the company and disclosures made in
accordance with the requirements of Schedule VI of the Companies Act,
1956 and the Indian Accounting Standards.
(2) FIXED ASSETS:
(a) Fixed Assets are slated at their original cost of acquisition,
installation or construction (net of Modvat / Cenvat credit, if any)
less accumulated depreciation, except freehold land which is carried at
cost. Cost comprises the. purchase price, installation and
attributable cost of bringing the assets to its working condition for
its intended use, less specific grants received.
(b) CAPITAL WORK IN PROGRESS:
Capital work in progress is carried at cost comprising direct cost and
preoperative expenses during construction period to be allocated to the
fixed assets on the completion of construction.
(3) DEPRECIATION:
Depreciation has been provided an fixed assets on Written down Value
(WOV) Method at the rates and in the manner prescribed under schedule
XIV to the Companies Act, 1956. Depreciation on additions to fixed
assets is provided on a pro-rata basis from the date of put to use.
Depreciation on assets sold, discarded or scrapped, is provided up to
the date on which the said asset is sold, discarded or scrapped.
(4) INVENTORIES:
Inventories are carried at the lower of cost and net realisable value.
Cost for the purpose is worked out on weighted overage basis and
comprises all costs of purchase, cost of conversion and other costs
incurred in bringing the inventories to their present location and
condition. In case of finished goods, semi-finished goods and work in
progress, an appropriate overhead are allocated on full absorption
costing basis and includes excise duty wherever applicable.
(5) INVESTMENTS:
Long term Investments are stated at cost after deducting provisions for
permanent diminution in the value, if any. Current investments are
stated at lower of cost and market / fair value.
(6) REVENUES
Sales are accounted for on dispatch and are stated inclusive of excise
duty, VAT/ Sales Tax and are net of trade discounts, sales commission
and sales return. Other items of revenue are recognised in Accordance
with the Accounting Standard (AS - 9). Interest income is recognized on
time proportion basis.
(7) GOVERNMENT GRANTS/ SUBSIDIES:
Government grants /subsidies are recognized when there is reasonable
certainty that the same will be received. Revenue grants are recognized
in Ihe financial statements either as income or deducted from related
expenses. Capital grants/ subsidies ore credited to respective fixed
assets where if relates to specific fixed assets.
(8) RETIREMENT BENEFITS:
(i) Defined Contribution Plan
Employees benefits in the form of provident fund and other labour
welfare fund are considered as defined contribution plan and the
contributions are charged to the profit and loss account of the year
when the contributions to the respective funds are due.
(ii) Defined Benefit Plan
Retirement benefits in the form of gratuity is considered as defined
benefits obligations and are provided for on the basis of an actuarial
valuation, using the projected unit credit method, as at the date of
the Balance Sheet.
(iii) Other Long-term benefits
Long-term compensated absences are provided for on the actuarial
valuation, using the projected unit credit method, os at the dale of
the Balance Sheet.
Actuarial gain/losses, if any, are immediately recognized in the Profit
& Lass Account.
(9) MISCELLANEOUS EXPENDITURE:
Miscellaneous expenditure having endurable benefit is amortized over a
period of five to ten years.
(10) IMPAIRMENT OF ASSETS:
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal / external
factors. An impairment loss will be recognized wherever the carrying
amount of an asset exceeds its recoverable amount. The recoverable
amount is greater of the assets net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to the present value by using weighted average cost of capital. A
previously recognized impairment loss is further provided or reversed
depending on changes in circumstances.
11)TAXES ON INCOME:
a) Current Tax;
Provision for the current fax is made on the basis of taxable income
for the current accounting year in accordance with the provisions of
Income Tax Act, 1961.
b) Deferred Tax:
Deferred Tax Assets and Liabilities are accounted for in accordance
with AS ~ 22.
(12) RESEARCH AND DEVELOPMENT EXPENDITURE:
Revenue expenditure on Research and Development is charged out in the
year in which it is incurred ond are included under the reiated head of
expenditure.
(13) EXPENDITURE DURING CONSTRUCTION:
In respect of substantial capacity enhancement at existing location
direct costs along withpart of indirect expenses are capitalized
together with interest on the funds related to them up to the date of
commercial production.
(14) BORROWING COSTS:
Borrowing cost that are directly attributable to the acquisition,
construction or production of a qualifying asset is capitalised os part
of the cost of such asset till such time the asset is ready for its
intended use. A qualifying asset is an asset that necessarily requires
a substantial period of time to get ready for its intended use. Other
borrowing costs are recognised as an expense in the period in which
they are incurred.
(15) CONTINGENT LIABILITY:
Contingent Liability not acknowledged as debt are disclosed by way of
note.
(16) INTANGIBLE ASSET:
intangible asset is recognized when it is probable that the future
economic benefit that are attributable to the assets will flow to the
Company and the cost of the assets can be measured reliably. The
depreciable amount of an intangible asset is allocated over its
estimated useful life.
(17) PROVISIONS AND CONTINGENCIES:
A Provision is recognized for a present obligation as a result of past
events if it is probable thot an outflow of resources will be required
to settle the obligation and in respect of which a reliable estimate
can be made. Provisions are determined based on best estimates of the
amount required to settle the obligation at the Balance Sheet date. A
contingent liability of an outflow of resources is remote. Contingent
assets are neither recognized nor disclosed in the financial
statements.
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