Mar 31, 2016
Company overview
Gayatri BioOrganics Limited ("GBOL" or "the Company"), was incorporated under the name Starchem Industries Limited on 2nd December 1991 and later on the name was changed to Gayatri Starchem Limited on 24th October 1997. On 13th February 2008 the name was changed to Gayatri BioOrganics Limited and is listed on the Bombay Stock Exchange (BSE). The Company is into the manufacturing of Starch, Modified Starches, Liquid Glucose, Sorbitol, and its allied products, and trading in Maize in South India.
1. Significant accounting policies
1.1 Basis of preparation of financial statements
These financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting and comply with the Accounting Standards prescribed in the Companies (Accounting Standard) Rules, 2006 issued by the Central Government, the relevant provisions of the Companies Act, 1956 and other accounting principles generally accepted in India, to the extent applicable. The financial statements are presented in Indian Rupees.
1.2 Use of estimates
The preparation of financial statements in conformity with Indian Generally Accepted Accounting Principles (GAAP) requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses and the disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenue and expenses for the year. Actual results could differ from those estimates. These estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in current and future periods.
1.3 Current and non-current classification
All assets and liabilities are classified into current and non-current Assets
An asset is classified as current when it satisfies any of the following criteria:
a. it is expected to be realized in, or is intended for sale or consumption in, the Companyâs normal operating cycle;
b. it is held primarily for the purpose of being traded;
c. it is expected to be realized within 12 months after the reporting date; or
d. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.
Current assets include the current portion of non-current financial assets. All other assets are classified as non-current.
Liabilities
A liability is classified as current when it satisfies any of the following criteria:
a. it is expected to be settled in the Companyâs normal operating cycle;
b. it is held primarily for the purpose of being traded;
c. it is due to be settled within 12 months after the reporting date; or
d. the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current.
Liabilities
A liability is classified as current when it satisfies any of the following criteria:
a. it is expected to be settled in the Companyâs normal operating cycle;
b. it is held primarily for the purpose of being traded;
c. it is due to be settled within 12 months after the reporting date; or
1.3 Current and non-current classification (continued)
d. Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current.
Operating cycle
Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.
1.4 Inventories
Inventories which comprise raw materials (including traded goods), work-in-process, finished goods and stores and spares are carried at the lower of cost and net realizable value.
Cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
The methods of determining cost of various categories of inventories are as follows:
Raw materials First-in-first-out (FIFO)
Stores and spares Weighted average method
Work-in-process and finished goods FIFO and including an appropriate share of production overheads Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
The net realizable value of work-in-process is determined with reference to the selling prices of the related finished products. Raw materials and other supplies held for use in the production of finished products are not written down below cost except in cases where the material prices have declined and it is estimated that the cost of the finished products will exceed their net realizable value.
The comparison of cost and net realizable value is made on an item-by-item basis.
1.5 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 measured reliably.
Sale of goods
Revenue is recognized when the significant risks and rewards of ownership have passed to the buyer, which generally coincides with the dispatch of goods and is stated net of returns, rebates, sales tax and applicable trade discounts and allowances.
Interest
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
1.6 Fixed assets and depreciation
Fixed assets are carried at cost of acquisition less accumulated depreciation. The cost of fixed assets includes the purchase price, taxes, duties, freight (net of rebates and discounts) and any other directly attributable costs of bringing the assets to their working condition for their intended use. Borrowing costs directly attributable to acquisition of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalized.
Depreciation on fixed assets is provided using the straight-line method as per the rates specified in Schedule II of the Companies Act, 2013. In the opinion of management, the rates specified in Schedule II reflect the useful lives of these assets. Depreciation is calculated on a pro-rata basis from/up to the date the assets are purchased/sold. Assets costing individually Rs. 5,000 or less are depreciated fully in the year of acquisition.
1.7 Foreign currency transactions
Foreign currency transactions are recorded using the exchange rates prevailing on the date of the respective transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss.
Monetary assets and liabilities denominated in foreign currencies as at the Balance Sheet date, not covered by forward exchange contracts, are translated at year end rates. The resultant exchange differences are recognized in the Statement of Profit and Loss. Non-monetary assets are recorded at the rates prevailing on the date of the transaction.
1.8 Investments
Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as long-term investments. However, that part of long term investments which is expected to be realized within 12 months after the reporting date is also presented under âcurrent assetsâ as "current portion of long term investments" in consonance with the current/non-current classification scheme of revised Schedule VI. Long-term investments (including current portion thereof) are carried at cost less any other-than-temporary diminution in value, determined separately for each individual investment.
Current investments are carried at the lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments i.e., equity shares, preference shares, convertible debentures etc.
Any reductions in the carrying amount and any reversals of such reductions are charged or credited to the Statement of Profit and Loss.
1.9 Employee benefits
Short-term employee benefits
Employee benefits payable wholly within twelve months of receiving employee services are classified as short-term employee benefits. These benefits include salaries and wages, bonus and ex-gratia. The undiscounted amount of short-term employee benefits to be paid in exchange for employee services is recognized as an expense as the related service is rendered by employees.
Post-employment benefits Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts. The Company makes specified monthly contributions towards employee provident fund to Government administered provident fund scheme which is a defined contribution plan. The Companyâs contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Defined benefit plan
The Companyâs gratuity benefit scheme is a defined benefit plan, The Companyâs net obligation in respect of a defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognized past service costs is deducted. The calculation of the Companyâs obligation under this scheme is performed annually by a qualified actuary using the projected unit credit method.
The Company recognizes all actuarial gains and losses arising from this defined benefit plan immediately in the Statement of Profit and Loss. All expenses related to defined benefit plans are recognized in employee benefits expense in the Statement of Profit and Loss. The Company recognizes gains and losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs.
Compensated absences
The employees can carry-forward a portion of the unutilized accrued compensated absences and utilize it in future service periods or receive cash compensation on termination of employment. Since the compensated absences do not fall due wholly within twelve months after the end of the period in which the employees render the related service and are also not expected to be utilized wholly within twelve months after the end of such period, portion of the benefit is classified as a long-term employee benefit. The Company records an obligation for such compensated absences in the period in which the employee renders the services that increase this entitlement. The obligation is measured on the basis of independent actuarial valuation using the projected unit credit method.
1.10Leases
Assets taken on lease where the Company acquires substantially the entire risks and rewards incidental to ownership are classified as finance leases. The amount recorded is the lesser of the present value of minimum lease rental and other incidental expenses during the lease term or the fair value of the assets taken on lease. The rental obligations, net of interest charges, are reflected as secured loans. Leases that do not transfer substantially all the risks and rewards of ownership are classified as operating leases and recorded as expense as and when the payments are made over the lease term.
1.11Earnings per share
The basic earnings per share is computed by dividing the net profit attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. The diluted potential equity shares have been adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. the average market value of the outstanding shares). In computing dilutive earnings per share, only potential equity shares that are dilutive and that either reduce earnings per share or increase loss per share are included.
1.12Income tax
Income tax expense comprises current tax and deferred tax charge or credit. Income-tax expense is recognized in the statement of profit or loss.
Current tax
The current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the Company.
Deferred tax
Deferred tax charge or benefit reflects the tax effects of timing differences between accounting income and taxable income for the year. The deferred tax charge or benefit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantially enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed at each balance sheet date and written-down or written-up to reflect the amount that is reasonably/virtually certain to be realized.
The break-up of the deferred tax assets and liabilities as at the balance sheet date has been arrived at after setting-off deferred tax assets and liabilities where the Company has a legally enforceable right and an intention to set-off assets against liabilities and where such assets and liabilities relate to taxes on income levied by the same governing taxation laws.
1.13Impairment of assets
The Company assesses at each balance sheet date whether there is any indication that any asset forming part of its cash generating units may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of profit and loss.
If at the balance sheet date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the reassessed recoverable amount subject to a maximum of depreciated historical cost.
1.14Cash flow statement
Cash flows are reported using the indirect method, whereby net profit / (loss) before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated. Interest capitalized as part of fixed assets are disclosed under financing activities.
1.15Borrowing costs
Borrowing costs that are attributable to construction of a qualifying asset are capitalized as a part of the cost of that asset. The amount of borrowing costs eligible for capitalization are determined as the actual borrowing costs incurred on that borrowing during the period less any income on the temporary investment of those borrowings. Other borrowing costs are recognized as expenditure in the year in which they are incurred.
1.16Provisions and contingent liabilities
The Company creates a provision when there is a present obligation as a result of an obligating event that probably requires an outflow of resources 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 resource is remote, no provision or disclosure is made.
Mar 31, 2015
1.1 Basis of preparation of financial statements
These financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and
comply with the Accounting Standards prescribed in the Companies
(Accounting Standard) Rules, 2006 issued by the Central Government, the
relevant provisions of the Companies Act, 1956 and other accounting
principles generally accepted in India, to the extent applicable. The
financial statements are presented in Indian Rupees.
1.2 Use of estimates
The preparation of financial statements in conformity with Indian
Generally Accepted Accounting Principles (GAAP) requires management to
make judgments, estimates and assumptions that affect the application
of accounting policies and reported amounts of assets, liabilities,
income and expenses and the disclosure of contingent liabilities on the
date of the financial statements and reported amounts of revenue and
expenses for the year. Actual results could differ from those
estimates. These estimates and underlying assumptions are reviewed on
an ongoing basis. Any revision to accounting estimates is recognised
prospectively in current and future periods.
1.3 Current and non-current classification
All assets and liabilities are classified into current and non-current
Assets
An asset is classified as current when it satisfies any of the
following criteria:
a. it is expected to be realised in, or is intended for sale or
consumption in, the Company's normal operating cycle;
b. it is held primarily for the purpose of being traded;
c. it is expected to be realised within 12 months after the reporting
date; or
d. it is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least 12 months after the
reporting date.
Current assets include the current portion of non-current financial
assets. All other assets are classified as non-current.
Liabilities
A liability is classified as current when it satisfies any of the
following criteria:
a. it is expected to be settled in the Company's normal operating
cycle;
b. it is held primarily for the purpose of being traded;
c. it is due to be settled within 12 months after the reporting date;
or
d. the Company does not have an unconditional right to defer
settlement of the liability for at least 12 months after the
reporting date. Terms of a liability that could, at the option of the
counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.
Current liabilities include current portion of non-current financial
liabilities. All other liabilities are classified as non-current.
Operating cycle
Operating cycle is the time between the acquisition of assets for
processing and their realisation in cash or cash equivalents.
1.4 Inventories
Inventories which comprise raw materials (including traded goods),
work-in-process, finished goods and stores and spares are carried at
the lower of cost and net realisable value.
Cost of inventories comprises all costs of purchase, costs of conversion
and other costs incurred in bringing the inventories to their present
location and condition.
The methods of determining cost of various categories of inventories
are as follows:
Raw materials First-in-first-out (FIFO)
Stores and spares Weighted average method
Work-in-process and finished goods FIFO and including an appropriate
share of production overheads
Net realisable value is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and the
estimated costs necessary to make the sale.
The net realisable value of work-in-process is determined with
reference to the selling prices of the related finished products. Raw
materials and other supplies held for use in the production of finished
products are not written down below cost except in cases where the
material prices have declined and it is estimated that the cost of the
finished products will exceed their net realisable value.
The comparison of cost and net realisable value is made on an
item-by-item basis.
1.5 Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
measured reliably.
Sale of goods
Revenue is recognised when the significant risks and rewards of
ownership have passed to the buyer, which generally coincides with the
dispatch of goods and is stated net of returns, rebates, sales tax and
applicable trade discounts and allowances.
Interest
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
1.6 Fixed assets and depreciation
Fixed assets are carried at cost of acquisition less accumulated
depreciation. The cost of fixed assets includes the purchase price,
taxes, duties, freight (net of rebates and discounts) and any other
directly attributable costs of bringing the assets to their working
condition for their intended use. Borrowing costs directly attributable
to acquisition of those fixed assets which necessarily take a
substantial period of time to get ready for their intended use are
capitalised.
Depreciation on fixed assets is provided using the straight-line method
as per the rates specified in Schedule II of the Companies Act, 2013.
In the opinion of management, the rates specified in Schedule II
reflect the useful lives of these assets. Depreciation is calculated on
a pro-rata basis from/up to the date the assets are purchased/sold.
Assets costing individually Rs. 5,000 or less are depreciated fully in
the year of acquisition.
1.7 Foreign currency transactions
Foreign currency transactions are recorded using the exchange rates
prevailing on the date of the respective transactions. Exchange
differences arising on foreign exchange transactions settled during the
year are recognised in the Statement of Profit and Loss.
Monetary assets and liabilities denominated in foreign currencies as at
the Balance Sheet date, not covered by forward exchange contracts, are
translated at year end rates. The resultant exchange differences are
recognised in the Statement of Profit and Loss. Non-monetary assets are
recorded at the rates prevailing on the date of the transaction.
1.8 Investments
Investments that are readily realisable and intended to be held for not
more than a year from the date of acquisition are classified as current
investments. All other investments are classified as long-term
investments. However, that part of long term investments which is
expected to be realised within 12 months after the reporting date is
also presented under 'current assets' as "current portion of long term
investments" in consonance with the current/non-current classification
scheme of revised Schedule VI.
Long-term investments (including current portion thereof) are carried
at cost less any other-than-temporary diminution in value, determined
separately for each individual investment.
Current investments are carried at the lower of cost and fair value.
The comparison of cost and fair value is done separately in respect of
each category of investments i.e., equity shares, preference shares,
convertible debentures etc.
Any reductions in the carrying amount and any reversals of such
reductions are charged or credited to the Statement of Profit and Loss.
1.9 Employee benefits Short-term employee benefits
Employee benefits payable wholly within twelve months of receiving
employee services are classified as short-term employee benefits. These
benefits include salaries and wages, bonus and ex-gratia. The
undiscounted amount of short-term employee benefits to be paid in
exchange for employee services is recognised as an expense as the
related service is rendered by employees.
Post-employment benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under
which an entity pays specified contributions to a separate entity and
has no obligation to pay any further amounts. The Company makes
specified monthly contributions towards employee provident fund to
Government administered provident fund scheme which is a defined
contribution plan. The Company's contribution is recognised as an
expense in the Statement of Profit and Loss during the period in which
the employee renders the related service.
Defined benefit plan
The Company's gratuity benefit scheme is a defined benefit plan, The
Company's net obligation in respect of a defined benefit plan is
calculated by estimating the amount of future benefit that employees
have earned in return for their service in the current and prior
periods; that benefit is discounted to determine its present value. Any
unrecognised past service costs is deducted. The calculation of the
Company's obligation under this scheme is performed annually by a
qualified actuary using the projected unit credit method.
The Company recognises all actuarial gains and losses arising from this
defined benefit plan immediately in the Statement of Profit and Loss.
All expenses related to defined benefit plans are recognised in
employee benefits expense in the Statement of Profit and Loss. The
Company recognises gains and losses on the curtailment or settlement of
a defined benefit plan when the curtailment or settlement occurs.
Compensated absences
The employees can carry-forward a portion of the unutilised accrued
compensated absences and utilise it in future service periods or
receive cash compensation on termination of employment. Since the
compensated absences do not fall due wholly within twelve months after
the end of the period in which the employees render the related service
and are also not expected to be utilised wholly within twelve months
after the end of such period, portion of the benefit is classified as a
long- term employee benefit. The Company records an obligation for such
compensated absences in the period in which the employee renders the
services that increase this entitlement. The obligation is measured on
the basis of independent actuarial valuation using the projected unit
credit method.
1.10 Leases
Assets taken on lease where the Company acquires substantially the
entire risks and rewards incidental to ownership are classified as
finance leases. The amount recorded is the lesser of the present value
of minimum lease rental and other incidental expenses during the lease
term or the fair value of the assets taken on lease. The rental
obligations, net of interest charges, are reflected as secured loans.
Leases that do not transfer substantially all the risks and rewards of
ownership are classified as operating leases and recorded as expense as
and when the payments are made over the lease term.
1.11 Earnings per share
The basic earnings per share is computed by dividing the net profit
attributable to equity shareholders for the year by the weighted
average number of equity shares outstanding during the year. The number
of shares used in computing diluted earnings per share comprises the
weighted average shares considered for deriving basic earnings per
share, and also the weighted average number of equity shares which
could have been issued on the conversion of all dilutive potential
equity shares. Dilutive potential equity shares are deemed converted as
of the beginning of the year, unless they have been issued at a later
date. The diluted potential equity shares have been adjusted for the
proceeds receivable had the shares been actually issued at fair value
(i.e. the average market value of the outstanding shares). In computing
dilutive earnings per share, only potential equity shares that are
dilutive and that either reduce earnings per share or increase loss per
share are included.
1.12 Income tax
Income tax expense comprises current tax and deferred tax charge or
credit. Income-tax expense is recognised in the statement of profit or
loss.
Current tax
The current charge for income taxes is calculated in accordance with
the relevant tax regulations applicable to the Company.
Deferred tax
Deferred tax charge or benefit reflects the tax effects of timing
differences between accounting income and taxable income for the year.
The deferred tax charge or benefit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates that have been
enacted or substantially enacted by the balance sheet date. Deferred
tax assets are recognised only to the extent there is reasonable
certainty that the assets can be realised in future; however, where
there is unabsorbed depreciation or carry forward of losses, deferred
tax assets are recognised only if there is a virtual certainty of
realisation of such assets. Deferred tax assets are reviewed at each
balance sheet date and written-down or written-up to reflect the amount
that is reasonably/virtually certain to be realised.
The break-up of the deferred tax assets and liabilities as at the
balance sheet date has been arrived at after setting-off deferred tax
assets and liabilities where the Company has a legally enforceable
right and an intention to set-off assets against liabilities and where
such assets and liabilities relate to taxes on income levied by the
same governing taxation laws.
1.13 Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that any asset forming part of its cash generating units may
be impaired. If any such indication exists, the Company estimates the
recoverable amount of the asset. If such recoverable amount of the
asset or the recoverable amount of the cash generating unit to which
the asset belongs is less than its carrying amount, the carrying amount
is reduced to its recoverable amount. The reduction is treated as an
impairment loss and is recognised in the Statement of profit and loss.
If at the balance sheet date, there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the reassessed recoverable
amount subject to a maximum of depreciated historical cost.
1.14 Cash flow statement
Cash flows are reported using the indirect method, whereby net profit /
(loss) before tax is adjusted for the effects of transactions of a
non-cash nature and any deferrals or accruals of past or future cash
receipts or payments. The cash flows from regular revenue generating,
investing and financing activities of the Company are segregated.
Interest capitalised as part of fixed assets are disclosed under
financing activities.
1.15 Borrowing costs
Borrowing costs that are attributable to construction of a qualifying
asset are capitalized as a part of the cost of that asset. The amount
of borrowing costs eligible for capitalisation are determined as the
actual borrowing costs incurred on that borrowing during the period
less any income on the temporary investment of those borrowings. Other
borrowing costs are recognized as expenditure in the year in which they
are incurred.
1.16 Provisions and contingent liabilities
The Company creates a provision when there is a present obligation as a
result of an obligating event that probably requires an outflow of
resources 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
resource is remote, no provision or disclosure is made.
Onerous contracts
A contract is considered as onerous when the expected economic benefits
to be derived by the Company from the contract are lower than the
unavoidable cost of meeting its obligations under the contract. The
provision for an onerous contract is measured at the lower of the
expected cost of terminating the contract and the expected net cost of
continuing with the contract. Before a provision is established, the
Company recognises any impairment loss on the assets associated with
that contract.
Mar 31, 2014
1.1 Basis of preparation of financial statements
These financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and
comply with the Accounting Standards prescribed in the Companies
(Accounting Standard) Rules, 2006 issued by the Central Government, the
relevant provisions of the Companies Act, 1956 and other accounting
principles generally accepted in India, to the extent applicable. The
financial statements are presented in Indian Rupees.
1.2 Use of estimates
The preparation of financial statements in conformity with Indian
Generally Accepted Accounting Principles (GAAP) requires management to
make judgments, estimates and assumptions that affect the application
of accounting policies and reported amounts of assets, liabilities,
income and expenses and the disclosure of contingent liabilities on the
date of the financial statements and reported amounts of revenue and
expenses for the year. Actual results could differ from those
estimates. These estimates and underlying assumptions are reviewed on
an ongoing basis. Any revision to accounting estimates is recognised
prospectively in current and future periods.
1.3 Current and non-current classification
All assets and liabilities are classified into current and non-current
Assets
An asset is classified as current when it satisfies any of the
following criteria:
a. it is expected to be realised in, or is intended for sale or
consumption in, the Company''s normal operating cycle;
b. it is held primarily for the purpose of being traded;
c. it is expected to be realised within 12 months after the reporting
date; or
d. it is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least 12 months after
the reporting date.
Current assets include the current portion of non-current financial
assets. All other assets are classified as non- current.
Liabilities
A liability is classified as current when it satisfies any of the
following criteria:
a. it is expected to be settled in the Company''s normal operating
cycle;
b. it is held primarily for the purpose of being traded;
c. it is due to be settled within 12 months after the reporting date;
or
d. the Company does not have an unconditional right to defer
settlement of the liability for at least 12 months after the reporting
date. Terms of a liability that could, at the option of the
counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.
Current liabilities include current portion of non-current financial
liabilities. All other liabilities are classified as non- current.
Operating cycle
Operating cycle is the time between the acquisition of assets for
processing and their realisation in cash or cash equivalents.
1.4 Inventories
Inventories which comprise raw materials (including traded goods),
work-in-process, finished goods and stores and spares are carried at
the lower of cost and net realisable value.
Cost of inventories comprises all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to
their present location and condition.
The methods of determining cost of various categories of inventories
are as follows:
Raw materials First-in-first-out (FIFO)
Stores and spares Weighted average method
Work-in-process and finished goods FIFO and including an appropriate
share of production overheads Net realisable value is the estimated
selling price in the ordinary course of business, less the estimated
costs of completion and the estimated costs necessary to make the sale.
The net realisable value of work-in-process is determined with
reference to the selling prices of the related finished products. Raw
materials and other supplies held for use in the production of finished
products are not written down below cost except in cases where the
material prices have declined and it is estimated that the cost of the
finished products will exceed their net realisable value.
The comparison of cost and net realisable value is made on an
item-by-item basis.
1.5 Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
measured reliably.
Sale of goods
Revenue is recognised when the significant risks and rewards of
ownership have passed to the buyer, which generally coincides with the
dispatch of goods and is stated net of returns, rebates, sales tax and
applicable trade discounts and allowances.
Interest
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
1.6 Fixed assets and depreciation
Fixed assets are carried at cost of acquisition less accumulated
depreciation. The cost of fixed assets includes the purchase price,
taxes, duties, freight (net of rebates and discounts) and any other
directly attributable costs of bringing the assets to their working
condition for their intended use. Borrowing costs directly attributable
to acquisition of those fixed assets which necessarily take a
substantial period of time to get ready for their intended use are
capitalised.
Depreciation on fixed assets is provided using the straight-line method
as per the rates specified in Schedule XIV of the Companies Act, 1956.
In the opinion of management, the rates specified in Schedule XIV
reflect the useful lives of these assets. Depreciation is calculated on
a pro-rata basis from/up to the date the assets are purchased/ sold.
Assets costing individually Rs. 5,000 or less are depreciated fully in
the year of acquisition.
1.7 Foreign currency transactions
Foreign currency transactions are recorded using the exchange rates
prevailing on the date of the respective transactions. Exchange
differences arising on foreign exchange transactions settled during the
year are recognised in the Statement of Profit and Loss.
Monetary assets and liabilities denominated in foreign currencies as at
the Balance Sheet date, not covered by forward exchange contracts, are
translated at year end rates. The resultant exchange differences are
recognised in the Statement of Profit and Loss. Non-monetary assets are
recorded at the rates prevailing on the date of the transaction.
1.8 Investments
Investments that are readily realisable and intended to be held for not
more than a year from the date of acquisition are classified as current
investments. All other investments are classified as long-term
investments. However, that part of long term investments which is
expected to be realised within 12 months after the reporting date is
also presented under ''current assets'' as "current portion of long term
investments" in consonance with the current/ non-current classification
scheme of revised Schedule VI.
Long-term investments (including current portion thereof) are carried
at cost less any other-than-temporary diminution in value, determined
separately for each individual investment.
Current investments are carried at the lower of cost and fair value.
The comparison of cost and fair value is done separately in respect of
each category of investments i.e., equity shares, preference shares,
convertible debentures etc.
Any reductions in the carrying amount and any reversals of such
reductions are charged or credited to the Statement of Profit and Loss.
1.9 Employee benefits
Short-term employee benefits
Employee benefits payable wholly within twelve months of receiving
employee services are classified as short-term employee benefits. These
benefits include salaries and wages, bonus and ex-gratia. The
undiscounted amount of short-term employee benefits to be paid in
exchange for employee services is recognised as an expense as the
related service is rendered by employees.
Post-employment benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under
which an entity pays specified contributions to a separate entity and
has no obligation to pay any further amounts. The Company makes
specified monthly contributions towards employee provident fund to
Government administered provident fund scheme which is a defined
contribution plan. The Company''s contribution is recognised as an
expense in the Statement of Profit and Loss during the period in which
the employee renders the related service.
Defined benefit plan
The Company''s gratuity benefit scheme is a defined benefit plan, The
Company''s net obligation in respect of a defined benefit plan is
calculated by estimating the amount of future benefit that employees
have earned in return for their service in the current and prior
periods; that benefit is discounted to determine its present value. Any
unrecognised past service costs is deducted. The calculation of the
Company''s obligation under this scheme is performed annually by a
qualified actuary using the projected unit credit method.
The Company recognises all actuarial gains and losses arising from this
defined benefit plan immediately in the Statement of Profit and Loss.
All expenses related to defined benefit plans are recognised in
employee benefits expense in the Statement of Profit and Loss. The
Company recognises gains and losses on the curtailment or settlement of
a defined benefit plan when the curtailment or settlement occurs.
Compensated absences
The employees can carry-forward a portion of the unutilised accrued
compensated absences and utilise it in future service periods or
receive cash compensation on termination of employment. Since the
compensated absences do not fall due wholly within twelve months after
the end of the period in which the employees render the related service
and are also not expected to be utilised wholly within twelve months
after the end of such period, portion of the benefit is classified as a
long-term employee benefit. The Company records an obligation for such
compensated absences in the period in which the employee renders the
services that increase this entitlement. The obligation is measured on
the basis of independent actuarial valuation using the projected unit
credit method.
1.10 Leases
Assets taken on lease where the Company acquires substantially the
entire risks and rewards incidental to ownership are classified as
finance leases. The amount recorded is the lesser of the present value
of minimum lease rental and other incidental expenses during the lease
term or the fair value of the assets taken on lease. The rental
obligations, net of interest charges, are reflected as secured loans.
Leases that do not transfer substantially all the risks and rewards of
ownership are classified as operating leases and recorded as expense as
and when the payments are made over the lease term.
1.11 Earnings per share
The basic earnings per share is computed by dividing the net profit
attributable to equity shareholders for the year by the weighted
average number of equity shares outstanding during the year. The number
of shares used in computing diluted earnings per share comprises the
weighted average shares considered for deriving basic earnings per
share, and also the weighted average number of equity shares which
could have been issued on the conversion of all dilutive potential
equity shares. Dilutive potential equity shares are deemed converted as
of the beginning of the year, unless they have been issued at a later
date. The diluted potential equity shares have been adjusted for the
proceeds receivable had the shares been actually issued at fair value
(i.e. the average market value of the outstanding shares). In computing
dilutive earnings per share, only potential equity shares that are
dilutive and that either reduce earnings per share or increase loss per
share are included.
1.12 Income tax
Income tax expense comprises current tax and deferred tax charge or
credit. Income-tax expense is recognised in the statement of profit or
loss.
Current tax
The current charge for income taxes is calculated in accordance with
the relevant tax regulations applicable to the Company.
Deferred tax
Deferred tax charge or benefit reflects the tax effects of timing
differences between accounting income and taxable income for the year.
The deferred tax charge or benefit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates that have been
enacted or substantially enacted by the balance sheet date. Deferred
tax assets are recognised only to the extent there is reasonable
certainty that the assets can be realised in future; however, where
there is unabsorbed depreciation or carry forward of losses, deferred
tax assets are recognised only if there is a virtual certainty of
realisation of such assets. Deferred tax assets are reviewed at each
balance sheet date and written-down or written-up to reflect the amount
that is reasonably/virtually certain to be realised.
The break-up of the deferred tax assets and liabilities as at the
balance sheet date has been arrived at after setting- off deferred tax
assets and liabilities where the Company has a legally enforceable
right and an intention to set-off assets against liabilities and where
such assets and liabilities relate to taxes on income levied by the
same governing taxation laws.
1.13 Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that any asset forming part of its cash generating units may
be impaired. If any such indication exists, the Company estimates the
recoverable amount of the asset. If such recoverable amount of the
asset or the recoverable amount of the cash generating unit to which
the asset belongs is less than its carrying amount, the carrying amount
is reduced to its recoverable amount. The reduction is treated as an
impairment loss and is recognised in the Statement of profit and loss.
If at the balance sheet date, there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the reassessed recoverable
amount subject to a maximum of depreciated historical cost.
1.14 Cash flow statement
Cash flows are reported using the indirect method, whereby net profit /
(loss) before tax is adjusted for the effects of transactions of a
non-cash nature and any deferrals or accruals of past or future cash
receipts or payments. The cash flows from regular revenue generating,
investing and financing activities of the Company are segregated.
Interest capitalised as part of fixed assets are disclosed under
financing activities.
1.15 Borrowing costs
Borrowing costs that are attributable to construction of a qualifying
asset are capitalized as a part of the cost of that asset. The amount
of borrowing costs eligible for capitalisation are determined as the
actual borrowing costs incurred on that borrowing during the period
less any income on the temporary investment of those borrowings. Other
borrowing costs are recognized as expenditure in the year in which they
are incurred.
1.16 Provisions and contingent liabilities
The Company creates a provision when there is a present obligation as a
result of an obligating event that probably requires an outflow of
resources 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
resource is remote, no provision or disclosure is made.
Onerous contracts
A contract is considered as onerous when the expected economic benefits
to be derived by the Company from the contract are lower than the
unavoidable cost of meeting its obligations under the contract. The
provision for an onerous contract is measured at the lower of the
expected cost of terminating the contract and the expected net cost of
continuing with the contract. Before a provision is established, the
Company recognises any impairment loss on the assets associated with
that contract.
Mar 31, 2012
1.1 Basis of preparation of financial statements
The financial statements of the Company have been prepared and
presented under the historical cost convention on the accrual basis in
accordance with the Indian Generally Accepted Accounting Principles
(Indian GAAP). Indian GAAP comprises of accounting standards notified
by the Central Government of India under Section 211 (3C) of the
Companies Act, 1956, other pronouncements of The Institute of Chartered
Accountants of India, the relevant provisions of the Companies Act,
1956 and guidelines issued by Securities and Exchange Board of India.
The financial statements are presented in Indian rupees (Rs.).
1.2 Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities on the date of the financial statements and reported
amounts of revenue and expenses for the year. Actual results could
differ from those estimates. Any revision to accounting estimates is
recognised prospectively in current and future periods.
1.3 Fixed assets and depreciation
Fixed assets are carried at cost of acquisition less accumulated
depreciation. The cost of fixed assets includes the purchase price,
taxes, duties, freight (net of rebates and discounts) and any other
directly attributable costs of bringing the assets to their working
condition for their intended use. Borrowing costs directly attributable
to acquisition of those fixed assets which necessarily take a
substantial period of time to get ready for their intended use are
capitalised.
Depreciation on fixed assets is provided using the straight-line method
based on the rates specified in Schedule XIV of the Companies Act,
1956. In the opinion of management, the rates specified in Schedule XIV
reflect the useful lives of these assets. Depreciation is calculated on
a pro-rata basis from/up to the date the assets are purchased/sold.
Individual assets costing Rs. 5,000 or less are depreciated in full in
the year of acquisition.
1.4 Investments
Long-term investments are carried at cost less any other-than-temporary
diminution in value, determined separately for each individual
investment.
Current investments are carried at the lower of cost and fair value.
The comparison of cost and fair value is done separately in respect of
each category of investment.
1.5 Inventories
Inventories are valued at the lower of cost and net realisable value.
Cost of inventories comprises all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to
their present location and condition.
The methods of determining cost of various categories of inventories
are as follows:
Raw materials First-in-first-out (FIFO)
Stores and spares Weighted average method
Work-in-process and finished goods FIFO and including an appropriate
share of production overheads
1.6 Employee benefits
Contributions to the recognised provident fund and superannuation
scheme, which are defined contribution schemes, are charged to the
Statement of Profit & Loss.
Employee gratuity and long term compensated absences, which are defined
benefits, are accrued based on the actuarial valuation at the balance
sheet date and are charged to Statement of Profit & Loss. All actuarial
gains and losses arising during the year are recognised in the
Statement of Profit & Loss.
1.7 Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
measured reliably.
Sale of goods
Revenue is recognised when the significant risks and rewards of
ownership have passed to the buyer, which generally coincides with the
dispatch of goods and is stated net of returns, rebates, sales tax and
applicable trade discounts and allowances.
Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
1.8 Foreign currency transactions
Foreign currency transactions are recorded using the exchange rates
prevailing on the date of the respective transactions. Exchange
differences arising on foreign exchange transactions settled during the
year are recognised in the Statement of Profit & Loss.
Monetary assets and liabilities denominated in foreign currencies as at
the balance sheet date are translated at the year end rates. The
resultant exchange differences are recognised in the profit and loss
account. Non- monetary assets are recorded at the rates prevailing on
the date of the transaction.
1.9 Income tax
Income tax expense comprises current tax and deferred tax charge or
credit.
Current tax
The current charge for income taxes is calculated in accordance with
the relevant tax regulations applicable to the Company.
Deferred tax
Deferred tax charge or benefit reflects the tax effects of timing
differences between accounting income and taxable income for the year.
The deferred tax charge or benefit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates that have been
enacted or substantially enacted by the balance sheet date. Deferred
tax assets are recognised only to the extent there is reasonable
certainty that the assets can be realised in future; however, where
there is unabsorbed depreciation or carry forward of losses, deferred
tax assets are recognised only if there is a virtual certainty of
realisation of such assets. Deferred tax assets are reviewed at each
balance sheet date and written-down or written-up to reflect the amount
that is reasonably/virtually certain to be realised.
The break-up of the deferred tax assets and liabilities as at the
balance sheet date has been arrived at after setting-off deferred tax
assets and liabilities where the Company has a legally enforceable
right and an intention to set-off assets against liabilities and where
such assets and liabilities relate to taxes on income levied by the
same governing taxation laws.
1.10 Leases
Assets taken on lease where the company acquires substantially the
entire risks and rewards incidental to ownership are classified as
finance leases. The amount recorded is the lesser of the present value
of minimum lease rental and other incidental expenses during the lease
term or the fair value of the assets taken on lease. The rental
obligations, net of interest charges, are reflected as secured loans.
Leases that do not transfer substantially all the risks and rewards of
ownership are classified as operating leases and recorded as expense as
and when the payments are made over the lease term.
1.11 Earnings per share
The basic earnings per share is computed by dividing the net profit
attributable to equity shareholders for the year by the weighted
average number of equity shares outstanding during the year. The number
of shares used in computing diluted earnings per share comprises the
weighted average shares considered for deriving basic earnings per
share, and also the weighted average number of equity shares which
could have been issued on the conversion of all dilutive potential
equity shares. Dilutive potential equity shares are deemed converted as
of the beginning of the year, unless they have been issued at a later
date. The diluted potential equity shares have been adjusted for the
proceeds receivable had the shares been actually issued at fair value
(i.e. the average market value of the outstanding shares). In computing
dilutive earnings per share, only potential equity shares that are
dilutive and that either reduce earnings per share or increase loss per
share are included.
1.12 Provisions and contingent liabilities
The Company creates a provision when there is a present obligation as a
result of an obligating event that probably requires an outflow of
resources and a reliable estimate can be made of the amount for 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
resource is remote, no provision or disclosure is made.
Provisions for onerous contracts, i.e. contracts where the expected
unavoidable costs of meeting the obligations under the contract exceed
the economic benefits expected to be received under it, are recognised
when it is probable that an outflow of resources embodying economic
benefits will be required to settle a present obligation as a result of
an obligating event, based on a reliable estimate of such obligation.
1.13 Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that any assets forming part of its cash generating units
may be impaired. If any such indication exists, the Company estimates
the recoverable amount of the asset. If such recoverable amount of the
asset or the recoverable amount of the cash generating unit to which
the asset belongs to is less than its carrying amount, the carrying
amount is reduced to its recoverable amount. The reduction is treated
as an impairment loss and is recognised in the profit and loss account.
If at the balance sheet date, there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the reassessed recoverable
amount subject to a maximum of depreciated historical cost.
Mar 31, 2011
Not Available
Mar 31, 2010
1. Basis of preparation of financial statements
The financial statements of the Company have been prepared and
presented under the historical cost convention on the accrual basis in
accordance with the Indian Generally Accepted Accounting Principles
(Indian GAAP). Indian GAAP comprises of accounting standards notified
by the Central Government of India under Section 211 (3C) of the
Companies Act, 1956, other pronouncements of Institute of Chartered
Accountants of India, the relevant provisions of the Companies Act,
1956 and guidelines Issued by Securities and Exchange Board of India.
The financial statements are presented in Indian rupees.
2. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities on the date of the financial statements and reported
amounts of tevenueand expenses for the year. Actual results could
differ from those estimates. Any revision to accounting estimates is
recognised prospectively in current and future periods.
3. Fixed assets and depreciation
Fixed assets are carried at cost of acquisition less accumulated
depreciation. The cost of fixed assets includes the purchase price,
taxes, duties, freight (net of rebates and discounts) and any other
directly attributable costs of bringing the assets to their working
condition for their intended use. Borrowing costs directly attributable
to acquisition of those fixed assets which necessarily take a
substantial period of time to get ready for their intended use are
capitalised.
Advances paid towards the acquisition of fixed assets outstanding at
each balance sheet date and the cost of fixed assets acquired but not
ready for their intended use before such date are disclosed as capital
work-in-progress.
Depreciation on fixed assets is provided using the straight-line method
based on the rates specified in Schedule XIV of the Companies Act,
1956. In the opinion of management, the rates specified in Schedule XIV
reflect the useful lives of these assets. Depreciation is calculated on
a pro-rata basis from/up to the date the assets are purchased/sold.
Individual assets costing less than Rs. 5,000 are depreciated in full
in the year of acquisition.
4. Investments
Long-term investments are carried at cost less any other-than-temporary
diminution in value, determined separately for each individual
investment.
Current investments are carried at the lower of cost and fair value.
The comparison of cost and fair value is done separately in respect of
each category of investment.
5. Inventories
Inventories are valued at the lower of cost and net realisable value.
Cost of inventories comprises all cost of purchase, cost of conversion
and other costs incurred in bringing the inventories to their present
location and condition.
The methods of determining cost of various categories of inventories
are as follows-.
Raw materials First-in-first-out (FIFO)
Stores and spares Weighted average method
Work-in-process and
Finished goods FIFO and including an appropriate share of
production overheads
6. Employee benefits
Contributions to the recognised provident fund and superannuation
scheme, which are defined contribution schemes, are charged to the
profit and loss account.
Employee gratuity and long term compensated absences, which are defined
benefits, are accrued based on the actuarial valuation at the balance
sheet date and are charged to profit and loss account. All actuarial
gains and losses arising during the year are recognized in the profit
and loss account.
7. 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
measured reliably.
Sale of goods
Revenue is recognized when the significant risks and rewards of
ownership have passed to the buyer, which generally coincides with the
dispatch of goods and is stated net of returns, rebates, sales tax and
applicable trade discounts and allowances.
Interest
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable.
8. Foreign currency transactions
Foreign currency transactions are recorded using the exchange rates
prevailing on the date of the respective transactions. Exchange
differences arising on foreign exchange transactions settled during the
year are recognised in the profit and loss account.
Monetary assets and liabilities denominated in foreign currencies as at
the balance sheet date and not covered by forward exchange contracts
are translated at the year end rates. The resultant exchange
differences are recognised in the profit and loss account. Non-monetary
assets are recorded at the rates prevailing on the date of the
transaction.
9. Income tax.
Income tax expense comprises current tax, deferred tax and fringe
benefit tax. Current tax The current charge for income taxes is
calculated in accordance with the relevant tax regulations applicable
to the Company.
Deferred tax
Deferred tax charge or benefit reflects the tax effects of timing
differences between accounting income and taxable income for the year.
The deferred tax charge or benefit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates that have been
enacted or substantially enacted by the balance sheet date. Deferred
tax assets are recognised only to the extent there is reasonable
certainty that the assets can be realised in future; however, where
there is unabsorbed depreciation or carry forward of losses, deferred
tax assets are recognised only if there is a virtual certainty of
realisation of such assets. Deferred tax assets are reviewed at each
balance sheet date and written-down or written-up to reflect the amount
that is reasonably/ virtually certain to be realised.
The break-up of the deferred tax assets and liabilities as at the
balance sheet date has been arrived at after setting-off deferred tax
assets and liabilities where the Company has a legally enforceable
right and an intention to set-off assets against liabilities and where
such assets and liabilities relate to taxes on income levied by the
same governing taxation laws.
10.Earnings per share
The basic earnings per share is computed by dividing the net profit
attributable to equity shareholders for the period by the weighted
average number of equity shares outstanding during the period. The
number of shares used in computing diluted earnings per share comprises
the weighted average shares considered for deriving basic earnings per
share, and also the weighted average number of equity shares which
could have been issued on the conversion of all dilutive potential
equity shares. Dilutive potential equity shares are deemed converted as
of the beginning of the period, unless they have been issued at a later
date. The diluted potential equity shares have been adjusted for the
proceeds receivable had the shares been actually issued at fair value
(i.e. the average market value of the outstanding shares). In computing
dilutive earnings per share, only potential equity shares that are
dilutive and that either reduce earnings per share or increase loss per
share are included.
11. Provisions and contingent liabilities
The Company creates a provision when there is a present obligation as a
result of an obligating event that probably requires an outflow of
resources and a reliable estimate can be made of the amount for 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
resource is remote, no provision or disclosure is made.
Provisions for onerous contracts, i.e. contracts where the expected
unavoidable costs of meeting the obligations under the contract exceed
the economic benefits expected to be received under it, are recognised
when It is probable that an outflow of resources embodying economic
benefits will be required to settle a present obligation as a result of
an obligating event, based on a reliable estimate of such obligation.
12. Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that any assets forming part of its cash generating units
may be impaired. If any such indication exists, the Company estimates
the recoverable amount of the asset. If such recoverable amount of the
asset or the recoverable amount of the cash generating unit to which
the asset belongs to is less than its carrying amount, the carrying
amount is reduced to its recoverable amount. The reduction is treated
as an impairment loss and is recognized in the profit and loss account.
If at the balance sheet date, there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the reassessed recoverable
amount subject to a maximum of depreciated historical cost.
The Company has issued 3,838,135 outstanding 6% cumulative redeemable
convertible preference shares of Rs.100 each to the Promoters on 12
September 2007. Out of these shares 752,500 shares shall be converted
after the expiry of a period of thirty six months at par and 3,085,635
shares shall carry the option of being converted at the option of the
holder into ordinary equity shares of the Company after the expiry of a
period of sixty months at a price to be determined in accordance with
the then prevailing SEBI (DIP) guidelines or can be redeemed by the
Company at par after the end of year 5, 6, 7 and 8 from the date of
allotment.
Notes
1. Secured against the pledge of Maize stock.
2. Against hypothecation of Vehicles.
3. Secured against the hypothecation of entire fixed assets of the
Company, all present and future receivables and personal guarantee of
the Chairman.