Mar 31, 2016
1. Nature of Operation:
The Company is primarily engaged in the power industry, the company manufactures range of transformers. The Company''s products include transformers, energy metering system, substation and transmission towers and lines which constitutes of generation, transmission, distribution and manufacture of power equipment viz Generation Equipment and T&D Equipment.
Significant Accounting Policies
The financial statements are prepared to comply in all material aspects with the applicable accounting principles in India, the Accounting Standards notified by the Companies (Accounting Standard) Rule 2006 and the relevant provisions of the Companies Act, 2013. The significant accounting policies are as follows
A. Basis of Accounting
The financial statements are prepared in accordance with the historical cost convention.
B. Use of Estimates
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent amounts as at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively when revised.
C. Fixed Assets / Capital Work in Progress
Expenditure, which is of capital nature, is capitalized. Such expenditure includes purchase price, import duties, levies, and attributable cost of bringing the asset to its operating condition. The assets acquired on Hire Purchase basis have been capitalized at the gross value and interest thereon is charged to Statement of profit and loss. Projects under commissioning and other Capital Work-in-Progress are carried at costs, comprising direct cost, related incidental expenses and interest on borrowings.
D. Depreciation / Amortization:
I. Tangible Assets
Depreciation has been calculated in accordance with Section 123 of the Companies Act, 2013, as under
a. The depreciation is provided from the date the assets are put to use, on straight-line method at the rates prescribed under Schedule II of the Companies Act, 2013, except following assets which are depreciated over period of its estimated useful life
b. For these classes of assets, based on technical advice, the management believes that the useful lives of following assets best represent the period over which management expects to use these assets. Hence the useful lives for these assets are different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013.
c. The Company provides 100% depreciation on fixed assets with value less than or equal to Rs,0.05 lakhs as per the provisions of Schedule II of the Companies Act 2013
Notes to Financial Statements as at 31st March 2016
d. Leasehold Improvements are amortized over the primary lease period.
II. Intangible Assets
a. These are amortized over their useful life, not exceeding five years.
b. Deferred Revenue Expenditure is written off in the year of expenditure.
c. Development costs for new design is amortized over a period of 5 years.
III. Leasehold land, which are given by Central / State Government authorities are not amortized in view of the long tenure of the lease.
E. Investments
Long term investments are stated at cost less permanent diminution in value, if any.
F. Valuation of Inventories
Raw Materials, Stock in Process, Stores and Spares are valued at cost and net of credits under the scheme of Convert Rules and VAT Rules. Finished goods are valued at cost, or Market Value / Net Realizable Value, whichever is less. Cost is determined on a Moving Weighted Average basis. Excise duty is included in the value of finished goods.
G. Revenue Recognition
I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales Tax, Vat, Returns, Trade Discounts and incentives.
II. Revenue from long term contracts are recognized on the percentage of completion method, in proportion that the contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. Contract revenue earned in excess of billing has been reflected under "Other Current Assets" and billing in excess of contract revenue has been reflected under "Current Liabilities" in the balance sheet. Full provision is made for any loss in the year in which it is first foreseen.
III. Dividend Income is recognized when the right to receive dividend is established. Interest Income is recognized on time proportion basis.
H. Foreign Exchange Transactions
Foreign Currency transactions are recorded at exchange rates prevailing on the date of respective transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end rates. Non - Monetary foreign currency items are carried at cost. The differences in translation of monetary assets and liabilities and realized gains and losses on foreign exchange transactions are recognized in the Statement of profit and loss, except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted in carrying cost of fixed assets.
The Company uses derivative financial instruments such as forward exchange contracts to hedge its risks associated with foreign currency fluctuation.
Gain or loss on restatement of forward exchange contracts for hedging underlying outstanding at the balance sheet date are recognized in the statement of profit and loss for the year in which it occurs. The premium or discount on such contracts is recognized in the statement of profit and loss over the period of the contract.
Loss on fair valuation of forward exchange contracts and embedded derivative contracts for hedging highly forecasted transaction are recognized in the statement of profit and loss for the year in which it occurs.
I. Derivative instruments (Commodity derivatives)
In order to hedge its exposure to commodity price risk, the Company enters into non speculative hedges, such as forward, option or swap contracts and other appropriate derivative instruments. These instruments are used only for the purpose of managing the exposure to commodity price risk and not for speculative purposes. The premium and gains / losses arising from settled derivative contracts, and mark to market (MTM) losses in respect of outstanding derivative contracts as at balance sheet date are credited for gains or charged for losses to the raw material consumed in so far as it relates to the derivative instruments taken to hedge risk of movement in price of Raw Material, the net MTM gains in respect of outstanding derivatives contracts are not recognized on conservative basis.
J. Export Obligations / Entitlements / Incentives
Benefit / (Obligation) on account of entitlement on export or deemed export orders, to import duty-free raw materials, under the various Exam Schemes are estimated and accounted in the year in which the export / deemed export orders are executed.
Notes to Financial Statements as at 31st March 2016 K. Employee Benefits
Short term employee benefits are recognized as an expense at un-discounted amount in the statement of profit and loss of the year in which services are rendered. Provision for gratuity and other long term employee benefits- leave, defined benefit schemes, are made on the basis of actuarial valuations made at the end of each financial year are charged to the statement of profit and loss during the year.
Actuarial gains and losses are recognized immediately in the statement of profit and loss.
L. Operating Lease
Leases, where the less or effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.
M. Stock Based Compensation
In accordance with the Employee Stock Option Scheme (ESOS), the Company recognizes the excess, if any, of the market price of the options granted as on the date of the grant over the exercise price of the options, and amortizes it on a straight-line basis over the vesting period.
N. Taxation
a. Provision for Income Tax is made under the liability method after availing exemptions and deductions at the rates applicable under the Income Tax Act, 1961.
b. Deferred tax resulting from timing difference between book and tax profits is accounted for using the tax rates and laws that have been enacted as on the Balance Sheet Date.
c. Deferred tax assets arising on the temporary timing differences are recognized only if there is reasonable certainty of realization.
O. Impairment of Assets
The carrying amount of assets is reviewed periodically for any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The 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 weighted average cost of capital. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.
P. Borrowing Costs
Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and other borrowing costs are charged to the Statement of profit and loss.
Q. Provisions for contingencies
A provision is recognized when:
- The Company has a present obligation as a result of a past event;
- It is probable that an outflow of resources embodying economic benefits which will be required to settle the obligation; and
- A reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
The Company provides for warranty cost based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.
R. Research & Development
All revenue expenses pertaining to research are charged to the statement of profit and loss in the year in which they are incurred and development expenditure of capital nature is capitalized as fixed assets and depreciated as per the company''s policy.
Nature of Security and Repayment Terms
a) Vehicle Loans are secured by way of hypothecation on respective vehicles financed.
b) Term loan from banks referred in (b) (i) above Includes Rs,2,393.42 Lacs (Rs,2578.59 Lacs) loan which is secured by exclusive first charge by way of mortgage on the specific land on which the windmills are installed in Maharashtra and exclusive first charge by way of hypothecation on current assets and movable fixed assets (plant, machinery equipments) pertaining to windmills.
c) Term loan from banks referred in (b) (i) above includes Rs,9,753.71 Lacs (Rs,8850.00 Lacs) loan which is secured by first charge basis (pari passu) by way of registered mortgage on Company''s immovable and movable property situated at MIDC-Thane, MIDC- Jalgaon, Umala- Jalgoan, Vadodara (Gujarat) and Silvassa except assets exclusively financed by other lenders i.e. Wind Mill and Solar farm and second charge (pari passu) by way of hypothecation on the Company''s movable assets including current assets except assets exclusively financed by other lenders i.e. Wind Mill and Solar farm. Further out of this working capital term loan Rs,6,574.58 Lacs (Rs,7350.00 Lacs) is secured by personal guarantee of promoter directors.
d) Term loan from banks referred above in (b) (i) includes Rs,848.53 Lacs (Rs,1904.40 lacs) loan which is secured by bank guarantee.
e) Term loan from banks referred in (b) (ii) above is secured on first charge basis by way of exclusive mortgage on Solar Project''s land and all other immovable properties, present and future and also by way of hypothecation on solar project''s all movable, present and future, all book debts, operating cash flows, receivables, commissions, revenues of what so ever nature and where ever arising out of Solar Project.
a) Working Capital Loans from banks referred in (a) and (b) above and bank facilities mentioned in Note 26 (I) (a) and
(b) are secured on first charge basis (pari passu) by way of hypothecation on current assets of the Company such as raw Materials, stocks-in-process, finished goods, consumable stores and spares, book debts, outstanding and claims, receivable both present and future except book debts and receivables pertaining to wind mill and solar farm which are exclusively financed by other lenders. Further the said working capital facilities are secured on second charge ) by way of registered mortgage on Company''s immovable and movable property situated at MIDC-Thane, MIDC- Jalgaon, Umala- Jalgoan, Vadodara (Gujarat) and Silvassa except assets exclusively financed by other lenders i.e. Wind Mill and Solar farm.
b) Working capital referred in (b ) above is in excess of section limit by Rs,6,256 Lacs (Rs,3,324 Lacs) as at year end.
c) Working capital referred in (b ) above is also secured by mortgage of 21 flats.
* Includes buyer''s credit of Rs,1,434.75 lakhs (Rs,1,684.63 lakhs)
Following disclosures required for Micro and Small Enterprises has been determined on the basis of information available with the company.
Defined Benefit Plans
The employees'' gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.
Claims for Liquidated Damages against the company are recognized in the accounts based on Management assessment of probable outcome with reference to available information supplemented by experience of similar transactions. Accordingly additional provision of Rs,300.00 lacs ( Rs,493.44 lacs) has been made to meet the future probable losses on this account and cumulative provision as at year end Rs,1,872.60 lacs (Rs,1,725.09 lacs). b In respect of certain trade receivables, the customers have deducted amounts aggregating to Rs,5,805 Lacs on account of liquidated damages and other deductions. The Company has or is in the process of taking legal action for recovery of above amounts. Management considers these amounts as good of recovery and on the basis of legal advice, no provision has been made on the same.
c Trade receivable includes contractual retention amount of Rs,20,171 lacs( Rs,21,187 lacs) billed to customers and Liquidated Damages & Other Deductions withheld by customers aggregating to Rs,7,155 lacs (Rs,7,005 lacs) excluding amount of deductions made by customers as disclosed in 27(b) above. Considering the nature of industry, past experience, correspondences with customers, ongoing business relationships with these customers, management expect to collect these dues in due course.
Mar 31, 2015
The financial statements are prepared to comply in all material aspects
with the applicable accounting principles in India and the relevant
provisions of the Companies Act, 2013. The Significant accounting
policies are as follows
A. Basis of Accounting
The financial statements are prepared in accordance with the historical
cost convention.
B. Use of Estimates
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent amounts as at the date of the
financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates. Any revision to accounting estimates is recognised
prospectively when revised.
C. Fixed Assets / Capital Work in Progress
Expenditure, which is of capital nature, is capitalised. Such
expenditure includes purchase price, import duties, levies, and
attributable cost of bringing the asset to its operating condition. The
assets acquired on Hire Purchase basis have been capitalised at the
gross value and interest thereon is charged to Statement of Profit and
loss. Projects under commissioning and other Capital Work-in-Progress
are carried at costs, comprising direct cost, related incidental
expenses and interest on borrowings.
D. Depreciation / Amortisation:
I Tangible Assets
a. Depreciation is provided from the date the assets are put to use and
has been calculated on straight line method as per the useful life
prescribed under Schedule II of the Companies Act, 2013, except
following assets which are depreciated over period of its estimated
useful life
b. For following class of assets where the useful life is estimated
based on technical advice and the management believes that such useful
lives best represent the period over which the assets will be used.
c. Leasehold Improvements are amortised over the primary lease period.
II. Intangible Assets
a. These are amortised over their useful life, not exceeding five
years.
b. Development costs for new design is amortised over a period of 5
years
III. Leasehold land, which are given by Central / State Government
authorities are not amortised in view of the long tenure of the lease.
E Investments
Long term investments are stated at cost less permanent diminution in
value, if any.
F Valuation of Inventories
Raw Materials, Stock in Process, Stores and Spares are valued at cost
and net of credits under the scheme of Cenvat Rules and VAT Rules.
Finished goods are valued at cost, or Market Value / Net Realisable
Value, whichever is less. Cost is determined on a Moving Weighted
Average basis. Excise duty is included in the value of finished goods.
G Revenue Recognition
I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales
Tax, Vat, Returns, Trade Discounts and incentives.
II. Revenue from long term contracts are recognized on the percentage
of completion method, in proportion that the contract costs incurred
for work performed up to the reporting date bear to the estimated total
contract costs. Contract revenue earned in excess of billing has been
reflected under "Other Current Assets" and billing in excess of
contract revenue has been reflected under "Current Liabilities" in the
balance sheet. Full provision is made for any loss in the year in which
it is first foreseen.
III. Dividend Income is recognised when the right to receive dividend
is established. Interest Income is recognized on time proportion basis.
H Foreign Exchange Transactions
Foreign Currency transactions are recorded at exchange rates prevailing
on the date of respective transactions. Monetary assets and
liabilities related to foreign currency transactions remaining
unsettled at the end of the year are translated at year-end rates. Non
 Monetary foreign currency items are carried at cost. The differences
in translation of monetary assets and liabilities and realised gains
and losses on foreign exchange transactions are recognised in the
Statement of Profit and loss, except in case of long term liabilities,
where they relate to acquisition of fixed assets, in which case they
are adjusted in carrying cost of fixed assets.
The Company uses derivative financial instruments such as forward
exchange contracts to hedge its risks associated with foreign currency
fluctuation.
Gain or loss on restatement of forward exchange contracts for hedging
underlying outstanding at the balance sheet date are recognised in the
statement of Profit and loss for the year in which it occurs. The
premium or discount on such contracts is recognised in the statement of
Profit and loss over the period of the contract.
Loss on fair valuation of forward exchange contracts and embedded
derivative contracts for hedging highly forecasted transaction are
recognised in the statement of Profit and loss for the year in which it
occurs.
I Derivative instruments (Commodity derivatives)
In order to hedge its exposure to commodity price risk, the Company
enters into non speculative hedges, such as forward, option or swap
contracts and other appropriate derivative instruments. These
instruments are used only for the purpose of managing the exposure to
commodity price risk and not for speculative purposes. The premium and
gains / losses arising from settled derivative contracts, and mark to
market (MTM) losses in respect of outstanding derivative contracts as
at balance sheet date are credited for gains or charged for losses to
the raw material consumed in so far as it relates to the derivative
instruments taken to hedge risk of movement in price of Raw Material,
the net MTM gains in respect of outstanding derivatives contracts are
not recognized on conservative basis.
J Export Obligations / Entitlements / Incentives
Benefit / (Obligation) on account of entitlement on export or deemed
export orders, to import duty-free raw materials, under the various
Exim Schemes are estimated and accounted in the year in which the
export / deemed export orders are executed.
K Employee Benefits
Short term employee Benefits are recognised as an expense at
un-discounted amount in the statement of Profit and loss of the year in
which services are rendered. Provision for gratuity and other long term
employee Benefits- leave, defined benefit schemes, are made on the
basis of actuarial valuations made at the end of each financial year
are charged to the statement of Profit and loss during the year.
Actuarial gains and losses are recognised immediately in the statement
of Profit and loss.
L Operating Lease
Leases, where the lessor effectively retains substantially all the
risks and Benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognised as an expense
in the statement of Profit and loss on a straight-line basis over the
lease term.
M Stock Based Compensation
In accordance with the Employee Stock Option Scheme (ESOS), the Company
recognises the excess, if any, of the market price of the options
granted as on the date of the grant over the exercise price of the
options, and amortises it on a straight-line basis over the vesting
period.
N Taxation
a. Provision for Income Tax is made under the liability method after
availing exemptions and deductions at the rates applicable under the
Income Tax Act, 1961.
b. Deferred tax resulting from timing difference between book and tax
Profits is accounted for using the tax rates and laws that have been
enacted as on the Balance Sheet Date.
c. Deferred tax assets arising on the temporary timing differences are
recognised only if there is reasonable certainty of realisation.
d. Minimum Alternate Tax ('MAT') credit is recognised 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. In the year in
which the company recognises MAT credit as an asset in accordance with
the Guidance Note on Accounting for Credit available in respect of
Minimum Alternate Tax under the Income-tax Act, 1961, the said asset is
created by way of credit to the statement of Profit and loss and shown
as "MAT Credit Entitlement". The Company reviews the "MAT Credit
Entitlement" asset at each reporting date and writes down the extent
the Company does not have convincing evidence that it will be able to
utilise the MAT Credit Entitlement within the period specified under
the Income-tax Act, 1961.
O Impairment of Assets
The carrying amount of assets is reviewed periodically for any
indication of impairment based on internal / external factors. An
impairment loss is recognized wherever the carrying amount of an asset
exceeds its recoverable amount. The 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 weighted average cost of capital. Post impairment,
depreciation is provided on the revised carrying value of the asset
over its remaining useful life.
P Borrowing Costs
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalised up to the date when such assets
are ready for its intended use and other borrowing costs are charged to
the Statement of Profit and loss.
Q Provisions for contingencies
A provision is recognised when:
- The Company has a present obligation as a result of a past event;
- It is probable that an outflow of resources embodying economic
Benefits which will be required to settle the obligation; and
- A reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
The Company provides for warranty cost based on a technical estimate of
the costs required to be incurred for repairs, replacement, material
cost, servicing and past experience in respect of warranty costs. It is
expected that this expenditure will be incurred over the contractual
warranty period.
R Research & Development
All revenue expenses pertaining to research are charged to the
statement of Profit and loss in the year in which they are incurred and
development expenditure of capital nature is capitalised as fixed
assets and depreciated as per the company's policy.
Mar 31, 2014
The financial statements are prepared to comply in all material aspects
with the applicable accounting principles in India, the Accounting
Standards notified by the Companies (Accounting Standard) Rule 2006 and
the relevant provisions of the Companies Act, 1956. The significant
accounting policies are as follows
A. Basis of Accounting
The financial statements are prepared in accordance with the historical
cost convention.
B. Use of Estimates
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent amounts as at the date of the
financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates. Any revision to accounting estimates is recognised
prospectively when revised.
C. Fixed Assets / Capital Work in Progress
Expenditure, which is of capital nature, is capitalised. Such
expenditure includes purchase price, import duties, levies, and
attributable cost of bringing the asset to its operating condition. The
assets acquired on Hire Purchase basis have been capitalised at the
gross value and interest thereon is charged to Statement of profit and
loss. Projects under commissioning and other Capital Work-in-Progress
are carried at costs, comprising direct cost, related incidental
expenses and interest on borrowings.
D. Depreciation / Amortisation:
I. Tangible Assets
Depreciation has been calculated in accordance with Section 205(2) (b)
of the Companies Act, 1956, as under
a. The depreciation is provided from the date the assets are put to
use, on straight-line method at the rates prescribed under Schedule XIV
of the Companies Act, 1956, except following assets which are
depreciated over period of its estimated useful life
b. The Company provides 100% depreciation on fixed assets with value
less than or equal to Rs. 0.05 lakhs as per the provisions of Schedule
XIV of the Companies Act 1956.
c. Leasehold Improvements are amortised over the primary lease period.
II. Intangible Assets
a. These are amortised over their useful life, not exceeding fve
years.
b. Deferred Revenue Expenditure is written off in the year of
expenditure.
c. Development costs for new design is amortised over a period of 5
years.
III. Leasehold land, which are given by Central / State Government
authorities are not amortised in view of the long tenure of the lease.
E. Investments
Long term investments are stated at cost less permanent diminution in
value, if any.
F. Valuation of Inventories
Raw Materials, Stock in Process, Stores and Spares are valued at cost
and net of credits under the scheme of Cenvat Rules and VAT Rules.
Finished goods are valued at cost, or Market Value / Contract Price,
whichever is less. Cost is determined on a weighted average basis.
Excise duty is included in the value of finished goods.
G. Revenue Recognition
I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales
Tax, Vat, Returns, Trade Discounts and incentives.
II. Revenue from long term contracts are recognized on the percentage
of completion method, in proportion that the contract costs incurred
for work performed up to the reporting date bear to the estimated total
contract costs. Contract revenue earned in excess of billing has been
reflected under "Other Current Assets" and billing in excess of contract
revenue has been reflected under "Current Liabilities" in the balance
sheet. Full provision is made for any loss in the year in which it is
first foreseen.
III. Dividend Income is recognised when the right to receive dividend
is established. Interest Income is recognized on time proportion basis.
H. Foreign Exchange Transactions
Foreign Currency transactions are recorded at exchange rates prevailing
on the date of respective transactions. Monetary assets and liabilities
related to foreign currency transactions remaining unsettled at the end
of the year are translated at year-end rates. Non  Monetory foreign
currency items are carried at cost. The differences in translation of
monetary assets and liabilities and realised gains and losses on
foreign exchange transactions are recognised in the Statement of profit
and loss, except in case of long term liabilities, where they relate to
acquisition of fixed assets, in which case they are adjusted in carrying
cost of fixed assets.
The Company uses derivative financial instruments such as forward
exchange contracts to hedge its risks associated with foreign currency
fluctuation.
Gain or loss on restatement of forward exchange contracts for hedging
underlying outstanding at the balance sheet date are recognised in the
statement of profit and loss for the year in which it occurs. The
premium or discount on such contracts is recognised in the statement of
profit and loss over the period of the contract.
Loss on fair valuation of forward exchange contracts and embedded
derivative contracts for hedging highly forecasted transaction are
recognised in the statement of profit and loss for the year in which it
occurs.
I. Derivative instruments (Commodity derivatives)
In order to hedge its exposure to commodity price risk, the Company
enters into non speculative hedges, such as forward, option or swap
contracts and other appropriate derivative instruments. These
instruments are used only for the purpose of managing the exposure to
commodity price risk and not for speculative purposes. The premium and
gains / losses arising from settled derivative contracts, and mark to
market (MTM) losses in respect of outstanding derivative contracts as
at balance sheet date are credited for gains or charged for losses to
the raw material consumed in so far as it relates to the derivative
instruments taken to hedge risk of movement in price of Raw Material,
the net MTM gains in respect of outstanding derivatives contracts are
not recognized on conservative basis.
J. Export Obligations / Entitlements / Incentives
Benefit / (Obligation) on account of entitlement on export or deemed
export orders, to import duty-free raw materials, under the various
Exam Schemes are estimated and accounted in the year in which the
export / deemed export orders are executed.
K. Employee Benefits
Short term employee benefits are recognised as an expense at
un-discounted amount in the statement of profit and loss of the year in
which services are rendered. Provision for gratuity and other long term
employee benefits- leave, defend benefit schemes, are made on the basis
of actuarial valuations made at the end of each financial year are
charged to the statement of profit and loss during the year.
Actuarial gains and losses are recognised immediately in the statement
of profit and loss.
L. Operating Lease
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognised as an expense
in the statement of profit and loss on a straight-line basis over the
lease term.
M. Stock Based Compensation
In accordance with the Employee Stock Option Scheme (ESOS), the Company
recognises the excess, if any, of the market price of the options
granted as on the date of the grant over the exercise price of the
options, and amortises it on a straight-line basis over the vesting
period.
N. Taxation
a. Provision for Income Tax is made under the liability method after
availing exemptions and deductions at the rates applicable under the
Income Tax Act, 1961.
b. Deferred tax resulting from timing difference between book and tax
profits is accounted for using the tax rates and laws that have been
enacted as on the Balance Sheet Date.
c. Deferred tax assets arising on the temporary timing differences are
recognised only if there is reasonable certainty of realisation.
O. Impairment of Assets
The carrying amount of assets is reviewed periodically for any
indication of impairment based on internal / external factors. An
impairment loss is recognized wherever the carrying amount of an asset
exceeds its recoverable amount. The 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 weighted average cost of capital. Post impairment,
depreciation is provided on the revised carrying value of the asset
over its remaining useful life.
P. Borrowing Costs
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalised up to the date when such assets
are ready for its intended use and other borrowing costs are charged to
the Statement of profit and loss.
Q. Provisions for contingencies
A provision is recognised when:
- The Company has a present obligation as a result of a past event;
- It is probable that an outflow of resources embodying economic benefits
which will be required to settle the obligation; and
- A reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
The Company provides for warranty cost based on a technical estimate of
the costs required to be incurred for repairs, replacement, material
cost, servicing and past experience in respect of warranty costs. It is
expected that this expenditure will be incurred over the contractual
warranty period.
R. Research & Development
All revenue expenses pertaining to research are charged to the
statement of profit and loss in the year in which they are incurred and
development expenditure of capital nature is capitalised as fixed assets
and depreciated as per the company''s policy.
a) Working Capital Term Loan referred in (a) above is secured on first
charge basis (pari passu) by way of equitable mortgage on Company''s
immovable properties situated at MIDC-Thane and MIDC-Jalgaon both
present or future. Further the said working capital term loan is
secured on second charge (pari passu) by way of hypothecation on the
Company''s movable assets including current assets except assets
exclusively financed by other lenders i.e. Wind Mill and Solar farm.
b) Working Capital Loans from banks referred in (b) and (c) above and
bank facilities mentioned in Note 26 (I) (a) and (b) are secured on
first charge basis (pari passu) by way of hypothecation on current
assets of the Company such as raw Materials, stocks-in-process, finished
goods, consumable stores and spares, book debts, outstanding and
claims, receivable both present and future except book debts and
receivables pertaining to wind mill and solar farm which are
exclusively financed by other lenders. Further the said working capital
facilities are secured on first charge basis (pari passu) by way of
registered mortgage on the movable and immovable Properties situated at
Vadodara (Gujarat) Silvassa (UT-Dadara and Nagar Haveli) and second
charge by way of registered mortgage on the Company''s all movable fixed
assets and on immovable properties situated at MIDC-Thane, MIDC-Jalgaon
and Umala-Jalgaon.
c) Working capital referred in (c ) above is overdrawn by Rs. 3,356 Lakhs
(nil).
Mar 31, 2013
The fi nancial statements are prepared to comply in all material
aspects with the applicable accounting principles in India, the
Accounting Standards notifi ed by the Companies (Accounting Standard)
Rule 2006 and the relevant provisions of the Companies Act, 1956. The
signifi cant accounting policies are as follows
A. Basis of Accounting
The fi nancial statements are prepared in accordance with the
historical cost convention.
B. Use of Estimates
The preparation of fi nancial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent amounts as at the date of the
fi nancial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates. Any revision to accounting estimates is recognised
prospectively when revised.
C. Fixed Assets / Capital Work in Progress
Expenditure, which is of capital nature, is capitalised. Such
expenditure includes purchase price, import duties, levies, and
attributable cost of bringing the asset to its operating condition. The
assets acquired on Hire Purchase basis have been capitalised at the
gross value and interest thereon is charged to Statement of profi t and
loss. Projects under commissioning and other Capital Work-in-Progress
are carried at costs, comprising direct cost, related incidental
expenses and interest on borrowings.
D. Depreciation / Amortisation
I. Tangible Assets
Depreciation has been calculated in accordance with Section 205(2) (b)
of the Companies Act, 1956, as under
a. The depreciation is provided from the date the assets are put to
use, on straight-line method at the rates prescribed under Schedule XIV
of the Companies Act, 1956, except following assets which are
depreciated over period of its estimated useful life
Asset Estimated Useful Life
Porta Cabin 5 years
Form Box 5 years
Templates 5 years
b. The Company provides 100% depreciation on fi xed assets with value
less than or equal toRs. 0.05 lakhs as per the provisions of Schedule XIV
of the Companies Act 1956.
c. Leasehold Improvements are amortised over the primary lease period.
II. Intangible Assets
a. These are amortised over their useful life, not exceeding fi ve
yea
b. Deferred Revenue Expenditure is written off in the year of
expenditure.
III. Leasehold land, which are given by Central / State Government
authorities are not amortised in view of the long tenure of the lease.
E. Investments
Long term investments are stated at cost less permanent diminution in
value, if any.
F. Valuation of Inventories
Raw Materials, Stock in Process, Stores and Spares are valued at cost
and net of credits under the scheme of Cenvat Rules and VAT Rules.
Finished goods are valued at cost, or Market Value / Contract Price,
whichever is less. Cost is determined on a weighted average basis.
Excise duty is included in the value of fi nished goods.
G. Revenue Recognition
I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales
Tax, Vat, Returns, Trade Discounts and incentives.
II. Revenue from long term contracts are recognized on the percentage
of completion method, in proportion that the contract costs incurred
for work performed up to the reporting date bear to the estimated total
contract costs. Contract revenue earned in excess of billing has been
refl ected under "Other Current Assets" and billing in excess of
contract revenue has been refl ected under "Current Liabilities" in the
balance sheet. Full provision is made for any loss in the year in which
it is fi rst foreseen.
III. Dividend Income is recognised when the right to receive dividend
is established. Interest Income is recognized on time proportion basis.
H. Foreign Exchange Transactions
Foreign Currency transactions are recorded at exchange rates prevailing
on the date of respective transactions. Monetary assets and liabilities
related to foreign currency transactions remaining unsettled at the end
of the year are translated at year-end rates. Non  Monetory foreign
currency items are carried at cost. The differences in translation of
monetary assets and liabilities and realised gains and losses on
foreign exchange transactions are recognised in the Statement of profi
t and loss, except in case of long term liabilities, where they relate
to acquisition of fi xed assets, in which case they are adjusted in
carrying cost of fi xed assets.
The Company uses derivative fi nancial instruments such as forward
exchange contracts to hedge its risks associated with foreign currency
fl uctuation.
Gain or loss on restatement of forward exchange contracts for hedging
underlying outstanding at the balance sheet date are recognised in the
statement of profi t and loss for the year in which it occu The
premium or discount on such contracts is recognised in the statement of
profi t and loss over the period of the contract.
Gain or loss on fair valuation of forward exchange contracts and
embedded derivative contracts for hedging highly forecasted transaction
are recognised in the statement of profi t and loss for the year in
which it occu
I. Derivative instruments (Commodity derivatives)
In order to hedge its exposure to commodity price risk, the Company
enters into non speculative hedges, such as forward, option or swap
contracts and other appropriate derivative instruments. These
instruments are used only for the purpose of managing the exposure to
commodity price risk and not for speculative purposes. The premium and
gains / losses arising from settled derivative contracts, and mark to
market (MTM) losses in respect of outstanding derivative contracts as
at balance sheet date are credited for gains or charged for losses to
the raw material consumed in so far as it relates to the derivative
instruments taken to hedge risk of movement in price of Raw Material,
the net MTM gains in respect of outstanding derivatives contracts are
not recognized on conservative basis.
J. Export Obligations / Entitlements / Incentives
Benefi t / (Obligation) on account of entitlement on export or deemed
export orders, to import duty-free raw materials, under the various
Exim Schemes are estimated and accounted in the year in which the
export / deemed export orders are executed.
K. Employee Benefi ts
Short term employee benefi ts are recognised as an expense at
un-discounted amount in the statement of profi t and loss of the year
in which services are rendered. Provision for gratuity and other long
term employee benefi ts- leave, defi ned benefi t schemes, are made on
the basis of actuarial valuations made at the end of each fi nancial
year are charged to the statement of profi t and loss during the year.
Actuarial gains and losses are recognised immediately in the statement
of profi t and loss.
L. Operating Lease
Leases, where the lessor effectively retains substantially all the
risks and benefi ts of ownership of the leased item, are classifi ed as
operating leases. Operating lease payments are recognised as an expense
in the statement of profi t and loss on a straight-line basis over the
lease term.
M. Stock Based Compensation
In accordance with the Employee Stock Option Scheme (ESOS), the Company
recognises the excess, if any, of the market price of the options
granted as on the date of the grant over the exercise price of the
options, and amortises it on a straight- line basis over the vesting
period.
N. Taxation
a. Provision for Income Tax is made under the liability method after
availing exemptions and deductions at the rates applicable under the
Income Tax Act, 1961.
b. Deferred tax resulting from timing difference between book and tax
profi ts is accounted for using the tax rates and laws that have been
enacted as on the Balance Sheet Date.
c. Deferred tax assets arising on the temporary timing differences are
recognised only if there is reasonable certainty of realisation.
O. Impairment of Assets
The carrying amount of assets is reviewed periodically for any
indication of impairment based on internal / external facto An
impairment loss is recognized wherever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is the greater
of the assets net selling price and value in use. In assessing value in
use, the estimated future cash fl ows are discounted to their present
value at the weighted average cost of capital. Post impairment,
depreciation is provided on the revised carrying value of the asset
over its remaining useful life.
P. Borrowing Costs
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / construction of
qualifying fi xed assets are capitalised up to the date when such
assets are ready for its intended use and other borrowing costs are
charged to the Statement of profi t and loss.
Q. Provisions for contingencies
A provision is recognised when:
- The Company has a present obligation as a result of a past event;
- It is probable that an outfl ow of resources embodying economic
benefi ts which will be required to settle the obligation; and
- A reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outfl ow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outfl ow of
resources is remote, no provision or disclosure is made.
The Company provides for warranty cost based on a technical estimate of
the costs required to be incurred for repairs, replacement, material
cost, servicing and past experience in respect of warranty costs. It is
expected that this expenditure will be incurred over the contractual
warranty period.
R. Research & Development
All revenue expenses pertaining to research are charged to the
statement of profi t and loss in the year in which they are incurred
and development expenditure of capital nature is capitalised as fi xed
assets and depreciated as per the company s policy.
Mar 31, 2012
The financial statements are prepared to comply in all material aspects
with the applicable accounting principles in India, the Accounting
Standards notified by the Companies (Accounting Standard) Rule 2006 and
the relevant provisions of the Companies Act, 1956. The significant
accounting policies are as follows
A. Basis of Accounting
The financial statements are prepared in accordance with the historical
cost convention.
B. Use of Estimates
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent amounts as at the date of the
financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates. Any revision to accounting estimates is recognized
prospectively when revised.
C. Fixed Assets / Capital Work in Progress
Expenditure, which is of capital nature, is capitalized. Such
expenditure includes purchase price, import duties, levies and
attributable cost of bringing the asset to its operating condition. The
assets acquired on Hire Purchase basis have been capitalized at the
gross value and interest thereon is charged to Statement of profit and
loss. Projects under commissioning and other Capital Work-in-Progress
are carried at costs; comprising direct cost, related incidental
expenses and interest on borrowings.
D. Depreciation / Amortization
I. Tangible Assets
Depreciation has been calculated in accordance with Section 205(2) (b)
of the Companies Act, 1956, as under:
a. The depreciation is provided from the date the assets are put to
use, on straight-line method at the rates prescribed under Schedule XIV
of the Companies Act, 1956, except following assets which are
depreciated over period of its estimated useful life:
b. The Company provides 100% depreciation on fixed assets with value
less than or equal to Rs. 0.05 lakhs as per the provisions of Schedule
XIV of the Companies Act 1956.
c. Leasehold Improvements are amortized over the primary lease period.
II. Intangible Assets
a. These are amortized over their useful life, not exceeding five
years.
b. Deferred Revenue Expenditure is written off in the year of
expenditure.
III. Leasehold land, which are given by Central / State Government
authorities are not amortized in view of the long tenure of the lease.
E. Investments
Long term investments are stated at cost less permanent diminution in
value, if any.
F. Valuation of Inventories
Raw Materials, Stock in Process, Stores and Spares are valued at cost
and net of credits under the scheme of Cenvat Rules and VAT Rules.
Finished goods are valued at cost or Market Value / Contract Price,
whichever is less. Cost is determined on a weighted average basis.
Excise duty is included in the value of finished goods.
G. Revenue Recognition
I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales
Tax, Vat, Returns, Trade Discounts and incentives.
II. Revenue from long term contracts are recognized on the percentage
of completion method, in proportion that the contract costs incurred
for work performed up to the reporting date bear to the estimated total
contract costs. Contract revenue earned in excess of billing has been
reflected under "Other Current Assets" and billing in excess of
contract revenue has been reflected under "Current Liabilities" in
the balance sheet. Full provision is made for any loss in the year in
which it is first foreseen.
III. Dividend Income is recognized when the right to receive dividend
is established. Interest Income is recognized on time proportion basis.
H. Foreign Exchange Transactions
Foreign Currency transactions are recorded at exchange rates prevailing
on the date of respective transactions. Monetary assets and liabilities
related to foreign currency transactions remaining unsettled at the end
of the year are translated at year-end rates. Non-monitory foreign
currency items are carried at cost. The differences in translation of
monetary assets and liabilities and realized gains and losses on
foreign exchange transactions are recognized in the Statement of profit
and loss, except in case of long term liabilities, where they relate to
acquisition of fixed assets, in which case they are adjusted in
carrying cost of fixed assets.
The Company uses derivative financial instruments such as forward
exchange contracts to hedge its risks associated with foreign currency
fluctuation.
Gain or loss on restatement of forward exchange contracts for hedging
underlying outstanding at the balance sheet date are recognized in the
statement of profit and loss for the year in which it occurs. The
premium or discount on such contracts is recognized in the statement of
profit and loss over the period of the contract.
Gain or loss on fair valuation of forward exchange contracts and
embedded derivative contracts for hedging highly forecasted transaction
are recognized in the statement of profit and loss for the year in
which it occurs.
I. Derivative instruments (Commodity derivatives)
In order to hedge its exposure to commodity price risk, the Company
enters into non speculative hedges, such as forward, option or swap
contracts and other appropriate derivative instruments. These
instruments are used only for the purpose of managing the exposure to
commodity price risk and not for speculative purposes. The premium and
gains / losses arising from settled derivative contracts, and mark to
market (MTM) losses in respect of outstanding derivative contracts as
at balance sheet date are credited for gains or charged for losses to
the raw material consumed in so far as it relates to the derivative
instruments taken to hedge risk of movement in price of Raw Material,
the net MTM gains in respect of outstanding derivatives contracts are
not recognized on conservative basis.
J. Export Obligations / Entitlements / Incentives
Benefit / (Obligation) on account of entitlement on export or deemed
export orders, to import duty-free raw materials, under the various
Exim Schemes are estimated and accounted in the year in which the
export / deemed export orders are executed.
K. Employee Benefits
Short term employee benefits are recognized as an expense at
un-discounted amount in the statement of profit and loss of the year in
which services are rendered. Provision for gratuity and other long term
employee benefits-leave, defined benefit schemes, are made on the basis
of actuarial valuations made at the end of each financial year are
charged to the statement of profit and loss during the year.
Actuarial gains and losses are recognized immediately in the statement
of profit and loss.
L. Operating Lease
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognized as an expense
in the statement of profit and loss on a straight-line basis over the
lease term.
M. Stock Based Compensation
In accordance with the Employee Stock Option Scheme (ESOS), the Company
recognizes the excess, if any, of the market price of the options
granted as on the date of the grant over the exercise price of the
options, and amortizes it on a straight-line basis over the vesting
period.
N. Taxation
a. Provision for Income Tax is made under the liability method after
availing exemptions and deductions at the rates applicable under the
Income Tax Act, 1961.
b. Deferred tax resulting from timing difference between book and tax
profits is accounted for using the tax rates and laws
that have been enacted as on the Balance Sheet Date.
c. Deferred tax assets arising on the temporary timing differences are
recognized only if there is reasonable certainty of realization.
O. Impairment of Assets
The carrying amount of assets is reviewed periodically for any
indication of impairment based on internal / external factors. An
impairment loss is recognized wherever the carrying amount of an asset
exceeds its recoverable amount. The 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 weighted average cost of capital. Post impairment,
depreciation is provided on the revised carrying value of the asset
over its remaining useful life.
P. Borrowing Costs
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalized up to the date when such assets
are ready for its intended use and other borrowing costs are charged to
the Statement of Profit and Loss.
Q. Provisions for contingencies
A provision is recognized when:
- The Company has a present obligation as a result of a past event;
- It is probable that an outflow of resources embodying economic
benefits which will be required to settle the obligation; and
- A reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
The Company provides for warranty cost based on a technical estimate of
the costs required to be incurred for repairs, replacement, material
cost, servicing and past experience in respect of warranty costs. It is
expected that this expenditure will be incurred over the contractual
warranty period.
R. Research and Development
All revenue expenses pertaining to research are charged to the
statement of profit and loss in the year in which they are incurred and
development expenditure of capital nature is capitalized as fixed
assets and depreciated as per the Company's policy.
In the Extra Ordinary General Meeting of the Members of the Company
held on 22nd June 2009, the members had approved the issuance of
warrants to the Promoter / Promoter Group, entitling the warrant
holders to apply from time to time for equity shares of the company in
one or more tranches on preferential basis not exceeding 63,00,000
fully paid-up equity shares of the face value of Rs. 2 each. During the
year, One of the Promoter has applied for conversion of balance Nil
(32,10,000) warrants applied in previous year into equivalent number of
equity shares and the company has allotted Nil (32,10,000) equity
shares to One of the Promoter @ Rs. Nil (Rs. 62) per shares (including
premium of Rs. Nil (Rs. 60) per share).
Mar 31, 2011
The financial statements are prepared to comply in all material aspects
with the applicable accounting principles in India, the Accounting
Standards issued by the Institute of Chartered Accountants of India and
the relevant provisions of the Companies Act, 1956. The signifcant
accounting policies are as follows:
A. Basis of Accounting:
The financial statements are prepared in accordance with the historical
cost convention.
B. Use of Estimates:
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent amounts as at the date of the
financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates. Any revision to accounting estimates is recognised
prospectively when revised.
C. Fixed Assets / Capital Work in Progress:
Expenditure, which is of capital nature, is capitalised. Such
expenditure includes purchase price, import duties, levies, and
attributable cost of bringing the asset to its operating condition. The
assets acquired on Hire Purchase basis have been capitalised at the
gross value and interest thereon is charged to Profit and Loss Account.
Projects under commissioning and other Capital Work-in-Progress are
carried at costs, comprising direct cost, related incidental expenses
and interest on borrowings.
D. Depreciation / Amortisation:
I. Tangible Assets
Depreciation has been calculated in accordance with Section 205(2) (b)
of the Companies Act, 1956, as under:
a. The depreciation is provided from the date the assets are put to
use, on straight-line method at the rates prescribed under Schedule XIV
of the Companies Act, 1956, except following Assets which are
depreciated over period of its estimated useful life:
Asset Estimated Useful Life
i) Porta Cabin 5 years
ii) Form Box 5 years
iii) Templates 5 years
b. The Company provides 100% depreciation on fxed assets with value
less than or equal to ` 5,000 as per the provisions
of Schedule XIV of the Companies Act 1956.
c. Leasehold Improvements are amortised over the primary lease period.
II. Intangible Assets
a. These are amortised over their useful life, not exceeding fve
years.
b. Deferred Revenue Expenditure is written off in the year of
expenditure.
III. Leasehold land, which are given by Central/State Government
authorities are not amortised in view of the long tenure of the lease.
E. Investments:
Long term investments are stated at cost less permanent diminution in
value, if any.
F. Valuation of Inventories:
Raw Materials, Stock in Process, Stores and Spares are valued at cost
and net of credits under the scheme of Cenvat Rules and VAT Rules.
Finished goods are valued at cost, or Market Value / Contract Price,
whichever is less. Cost is determined on a weighted average basis.
Excise duty is included in the value of fnished goods.
G. Revenue Recognition:
I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales
Tax, Returns, Trade Discounts and incentives.
II. Revenue from long term contracts are recognized on the percentage
of completion method, in proportion that the contract costs incurred
for work performed up to the reporting date bear to the estimated total
contract costs. Contract revenue earned in excess of billing has been
refected under ÃOther Current Assetsà and billing in excess of contract
revenue has been refected under ÃCurrent Liabilitiesà in the balance
sheet. Full provision is made for any loss in the year in which it is
frst foreseen.
III. Dividend Income is recognised when the right to receive dividend
is established. Interest Income is recognized on time proportion basis.
H. Foreign Exchange Transactions:
Foreign Currency transactions are recorded at exchange rates prevailing
on the date of respective transactions. Monetary assets and liabilities
related to foreign currency transactions remaining unsettled at the end
of the year are translated at year-end rates. The differences in
translation of monetary assets and liabilities and realised gains and
losses on foreign exchange transactions are recognised in the Profit and
Loss Account.
The Company uses derivative financial instruments such as forward
exchange contracts to hedge its risks associated with foreign currency
fuctuation.
Gain or loss on restatement of forward exchange contracts for hedging
underlying outstanding at the balance sheet date are recognised in the
profit and loss account for the year in which it occurs. The premium or
discount on such contracts is recognised in the profit and loss account
over the period of the contract.
Gain or loss on fair valuation of forward exchange contracts and
embedded derivative contracts for hedging highly forecasted transaction
are recognised in the profit and loss account for the year in which it
occurs.
I. Derivative instruments (Commodity derivatives)
In order to hedge its exposure to commodity price risk, the Company
enters into non speculative hedges, such as forward, option or swap
contracts and other appropriate derivative instruments. These
instruments are used only for the purpose of managing the exposure to
commodity price risk and not for speculative purposes. The premium and
gains/ losses arising from settled derivative contracts, and mark to
market (MTM) losses in respect of outstanding derivative contracts as
at balance sheet date are credited for gains or charged for losses to
the raw material consumed in so far as it relates to the derivative
instruments taken to hedge risk of movement in price of Raw Material,
the net MTM gains in respect of outstanding derivatives contracts are
not recognized on conservative basis.
J. Export Obligations / Entitlements / Incentives:
Beneft / (Obligation) on account of entitlement on export or deemed
export orders, to import duty-free raw materials, under the various
Exim Schemes are estimated and accounted in the year in which the
export/deemed export orders are executed.
K. Employee Benefts:
Contributions to the recognised Provident Fund/Gratuity Fund and
provision for other long term employee benefts- leave, defned beneft
schemes, are made on the basis of actuarial valuations made at the end
of each financial year are charged to the profit and loss account during
the year.
Actuarial gains and losses are recognised immediately in the profit and
loss account.
L. Operating Lease:
Leases, where the lessor effectively retains substantially all the
risks and benefts of ownership of the leased item, are classifed as
operating leases. Operating lease payments are recognised as an expense
in the profit and loss account on a straight-line basis over the lease
term.
M. Stock Based Compensation:
In accordance with the Employee Stock Option Scheme (ESOS), the Company
recognises the excess, if any, of the market price of the options
granted as on the date of the grant over the exercise price of the
options, and amortises it on a straight-line basis over the vesting
period.
N. Taxation:
a. Provision for Income Tax is made under the liability method after
availing exemptions and deductions at the rates applicable under the
Income Tax Act, 1961.
b. Deferred tax resulting from timing difference between book and tax
profits is accounted for using the tax rates and laws that have been
enacted as on the Balance Sheet Date.
c. Deferred tax assets arising on the temporary timing differences are
recognised only if there is reasonable certainty of realisation.
O. Impairment of Fixed Assets:
The carrying amount of assets is reviewed periodically for any
indication of impairment based on internal/external factors. An
impairment loss is recognized wherever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is the greater
of the assets net selling price and value in use. In assessing value in
use, the estimated future cash fows are discounted to their present
value at the weighted average cost of capital. Post impairment,
depreciation is provided on the revised carrying value of the asset
over its remaining useful life.
P. Borrowing Costs:
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / construction of
qualifying fxed assets are capitalised up to the date when such assets
are ready for its intended use and other borrowing costs are charged to
the Profit & Loss Account.
Q. Provisions for contingencies:
A provision is recognised when:
- The Company has a present obligation as a result of a past event;
- It is probable that an outfow of resources embodying economic benefts
which will be required to settle the obligation; and
- A reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outfow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outfow of
resources is remote, no provision or disclosure is made.
The Company provides for warranty cost based on a technical estimate of
the costs required to be incurred for repairs, replacement, material
cost, servicing and past experience in respect of warranty costs. It is
expected that this expenditure will be incurred over the contractual
warranty period.
R. Research & Development
All revenue expenses pertaining to research and development are charged
to the profit and loss account in the year in which they are incurred
and expenditure of capital nature is capitalised as fxed assets and
depreciated as per the company's policy.
Mar 31, 2010
The financial statements are prepared to comply in all material aspects
with the applicable accounting principles in India, the Accounting
Standards issued by the Institute of Chartered Accountants of India and
the relevant provisions of the Companies Act, 1 956, The significant
accounting policies are as follows:
A. Basis of Accounting:
The financial statements are prepared in accordance with the historical
cost convention,
B. Use of Estimates:
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent amounts as at the date of the
financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates. Any revision to accounting estimates is recognised
prospectively when revised.
C. Fixed Assets / Capital Work in Progress:
Expenditure, which is of capital nature, is capitalised. Such
expenditure includes purchase price, import duties, levies, and
attributable cost of bringing the asset to its operating condition. The
assets acquired on Hire Purchase basis have been capitalised at the
gross value and interest thereon is charged to Profit and Loss Account.
Projects under commissioning and other Capital Work-in-Progress are
carried at costs, comprising direct cost, related incidental expenses
and interest on borrowings.
D. Depreciation/Amortisation:
I. Tangible Assets
Depreciation has been calculated in accordance with Section 205(2) (b)
of the Companies Act, 1956, as under:
a. The depreciation is provided from the date the assets are put to
use, on straight-line method at the rates prescribed under Schedule
XIV of the Companies Act, 1 956, except following Assets which are
depreciated over period of its estimated useful life:
b. The Company provides 100% depreciation on fixed assets with value
less than or equal to Rs. 5,000 as per the provisions of Schedule XIV
of the Companies Act 1956.
II. Intangible Assets
a. These are amortised over their useful life, not exceeding five
years,
b. Deferred Revenue Expenditure is written off in the year of
expenditure.
III. Leasehold land, which are given by Central/State Government
authorities are not amortised in view of the long tenure of the lease.
E. Investments:
Long term investments are stated at cost less permanent diminution in
value, if any.
F. Valuation of Inventories:
Raw Materials, Stock in Process, Stores and Spares are valued at cost
and net of credits under the scheme of Cenvat Rules and VAT Rules.
Finished goods are valued at cost, or Market Value / Contract Price,
whichever is less. Cost is determined on a weighted average basis.
G. Revenue Recognition:
I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales
Tax, Returns, Trade Discounts and incentives.
II. Excise Duty on manufactured goods is accounted at the time of
their clearance from factory.
III. Revenue from long term contracts are recognized on the percentage
of completion method, in proportion that the contract costs incurred
for work performed up to the reporting date bear to the estimated total
contract costs. Contract revenue earned in excess of billing has been
reflected under "Other Current Assets" and billing in excess of
contract revenue has been reflected under "Current Liabilities" in the
balance sheet. Full provision is made for any loss in the year in which
it is first foreseen.
IV. Dividend Income is recognised when the right to receive dividend
is established. Interest Income is recognized on time proportion basis.
H. Foreign Exchange Transactions:
Foreign Currency transactions are recorded at exchange rates prevailing
on the date of respective transactions.
Monetary assets and liabilities related to foreign currency
transactions remaining unsettled at the end of the year
are translated at year-end rates. The differences in translation of
monetary assets and liabilities and realised gains and losses on
foreign exchange transactions are recognised in the Profit and
Loss Account.
The Company uses derivative financial instruments such as forward
exchange contracts to hedge its risks associated with foreign
currency fluctuation
Gain or loss on restatement of forward exchange contracts for hedging
underlying outstanding at the balance sheet date are recognised in
the profit and loss account for the year in which it occurs. The
premium or discount on such contracts is recognised in the prof
it and loss account over the period of the contract.
Gain or loss on fair valuation of forward exchange contracts and
embedded derivative contracts for hedging highly forecasted
transaction are recognised in the profit and loss account for the
year in which it occurs.
I. Derivative instruments (Commodity derivatives):
In order to hedge its exposure to commodity price risk, the Company
enters into non speculative hedges, such as forward, option or swap
contracts and other appropriate derivative instruments. These
instruments are used only for the purpose of managing the exposure to
commodity price risk and not for speculative purposes. The premium and
gains/losses arising from settled derivative contracts, and mark to
market (MTM) losses in respect of outstanding derivative contracts as
at balance sheet date are credited for gains or charged for losses to
the raw material consumed in so far as it relates to the derivative
instruments taken to hedge risk of movement in price of Raw Material,
the net MTM gains in respect of outstanding derivatives contracts are
not recognized on conservative basis.
J. Export Obligations / Entitlements / Incentives:
Benefit/(Obligation) on account of entitlement on export or deemed
export orders, to import duty-free raw materials, under the various
Exim Schemes are estimated and accounted in the year in which the
export/deemed export orders are executed.
K. Employee Benefits:
Contributions to the recognised Provident Fund/Gratuity Fund and
provision for other long term employee benefits-leave, defined benefit
schemes, are made on the basis of actuarial valuations made at the end
of each financial year are charged to the profit and loss account
during the year. Actuarial gains and losses are recognised immediately
in the profit and loss account.
L. Operating Lease:
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognised as an expense
in the profit and loss account on a straight line basis over the lease
term,
M. Stock Based Compensation:
In accordance with the Employee Stock Option Scheme (ESOS), the Company
recognises the excess, if any, of the market price of the options
granted as on the date of the grant over the exercise price of the
options, and amortises it on a straight line basis over the vesting
period.
N. Taxation:
a. Provision for Income Tax is made under the liability method after
availing exemptions and deductions at the rates applicable under the
Income Tax Act, 1961.
b. Deferred tax resulting from timing difference between book and tax
profits is accounted for using the tax rates and laws that have been
enacted as on the Balance Sheet Date.
c. Deferred tax assets arising on the temporary timing differences are
recognised only if there is reasonable certainty of realisation.
0. Impairment of Fixed Assets:
The carrying amount of assets is reviewed periodically for any
indication of impairment based on internal/external factors. An
impairment loss is recognized wherever the carrying amount of an asset
exceeds its recoverable amount. The 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 weighted average cost of capital. Post impairment,
depreciation is provided on the revised carrying value of the asset
over its remaining useful life.
P. Borrowing Costs:
Interest and other costs in connection with the borrowing of the funds
to the extent related/attributed to the acquisition/construction of
qualifying fixed assets are capitalised up to the date when such assets
ate ready for its intended use and other borrowing costs are charged to
the Profit & Loss Account.
Q. Provisions for contingencies:
A provision is recognised when:
- The Company has a present obligation as a result of a past event;
- It is probable that an outflow of resources embodying economic
benefits which will be required to settle the obligation; and
- A reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, requires an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made. The Company
provides for warranty cost based on a technical estimate of the costs
required to be incurred for repairs, replacement, material cost,
servicing and past experience in respect of warranty costs. It is
expected that this expenditure will be incurred over the contractual
warranty period.
R. Research & Development:
All revenue expenses pertaining to research and development are charged
to the profit and loss account in the year in which they are incurred
and expenditure of capital nature is capitalised as fixed assets and
depreciated as per the Companys policy.