Accounting Policies of Goenka Diamond & Jewels Ltd. Company
Mar 31, 2023
Corporate Information
Goenka Diamond and Jewels Limited (âthe Companyâ) is a public limited company domiciled in India and incorporated under the Companies Act, 1956. The Company is engaged in the business of trading and manufacturing of diamond and gold jewellery. The Company is listed on Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE).
The financial statement has been approved by the Board of Directors as on 30th May, 2023.
I. Basis of preparation and presentation
Statement of Compliance: The Standalone Ind AS Financial Statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules as amended time to time and accounting principles generally accepted in India.
The Standalone Ind AS Financial Statements have been prepared on the historical cost basis except for certain financial instruments measured at fair values, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current / non-current classification. An asset is treated as current when it is:
a) Expected to be realised or intended to be sold or consumed in normal operating cycle
b) Held primarily for the purpose of trading, or
c) Expected to be realised within twelve months after the reporting period other than for (a ) above, or
d) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
a) It is expected to be settled in normal operating cycle
b) It is held primarily for the purpose of trading
c) It is due to be settled within twelve months after the reporting period other than for (a ) above, or
d) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period All other liabilities are classified as non-current.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability, the Company takes in to account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these Standalone Ind AS Financial Statements is determined on such a basis, except for leasing transactions that are within the scope of Ind AS 17, and measurement that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurement is categorized into level 1, 2 and 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurements in its entirely, which are described as follows:
⢠Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
⢠Level 2 inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly, and
⢠Level 3 inputs are unobservable inputs for the asset or liability.
II. Summary of significant accounting policies:
A. Property, plant and equipment
The cost of property, plant and equipment comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, including relevant borrowing costs for qualifying assets.
Depreciation is recognized so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using written down value method as per the useful life prescribed in Schedule II to the Companies Act, 2013.
Leasehold land is amortized over the initial period of lease.
The expenditure incurred on improvement on leased premises is written off proportionately over the initial period of lease.
The Company reviews the residual value, useful lives and depreciation method annually and, if expectations differ from previous estimates, the change is accounted for as a change in accounting estimate on a prospective basis.
B. Intangible assets
Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the assets will flow to the Company and the cost of the assets can be measured reliably. Intangible assets are stated at cost less accumulated amortisation and impairment loss, if any.
Expenditure on software is recognized as âIntangible Assetsâ and is amortized over a period of three years.
C. Impairment of tangible and intangible assets other than goodwill
At the end of each reporting period, the carrying amounts of tangible and intangible assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest Company of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Companyâs CGUs to which the individual assets are allocated. To estimate cash flow projections beyond periods covered by the most recent budgets/forecasts, the Company extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the products, industries, or country or countries in which the entity operates, or for the market in which the asset is used.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the Statement of Profit and Loss.
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as a lessee
The Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.
The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets are depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. Right of- use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. For leases with reasonably similar characteristics, the Company, on a lease by lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole. The lease payments shall include fixed payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The Company recognises the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in statement of profit and loss.
The Company has elected not to apply the requirements of Ind AS 116 Leases to short term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.
⢠Inventories are valued at lower of cost and estimated net realisable value. Cost is determined on First-in First-outâ, âSpecific Identificationâ, or âWeighted Averageâ basis, as the case may be. Cost of Inventories Comprises of all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.
⢠Raw Materials include materials issued for production. Materials consumed are materials used for production of finished goods only.
⢠Determination of estimated net realizable value and specific identification involve technical judgments of the management, which has been relied upon by the Auditors.
IND AS 115: Revenue from contract with customers
The Company earns revenue primarily from sale of cut and polished diamonds, gold and diamond studded jewellery etc.
Ind AS 115 provides a single, principles based five-step model to be applied to all contracts with customers. The five steps in the model are as follows:
⢠Identify the contract with the customer;
⢠Identify the performance obligations in the contract;
⢠Determine the transaction price;
⢠Allocate the transaction price to the performance obligations in the contracts;
⢠Recognise revenue when (or as) the entity satisfies a performance obligation.
Revenue is recognised upon transfer of promised goods to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those products. In case of sale of gold and diamond jewellery, the revenue is recognised on transfer of control of promised goods to customers.
Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, service level credits, performance bonuses, price concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.
Contract assets are recognised when there is excess of revenue earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms.
Unearned and deferred revenue (âcontract liabilityâ) is recognised when there is billings in excess of revenues. The billing schedules agreed with customers include periodic performance-based payments and / or milestone-based progress payments. Invoices are payable within contractually agreed credit period.
Contracts are subject to modification to account for changes in contract specification and requirements. The Company reviews modification to contract in conjunction with the original contract, basis which the transaction price could be allocated to a new performance obligation, or transaction price of an existing obligation could undergo a change. In the event transaction price is revised for existing obligation, a cumulative adjustment is accounted for.
Use of significant judgements in revenue recognition:
⢠The Companyâs contracts with customers could include promises to transfer multiple products to a customer. The Company assesses the products promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligation involves judgement to determine the deliverables and the ability of the customer to benefit independently from such deliverables.
⢠Judgement is also required to determine the transaction price for the contract. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as volume discounts, service level credits, performance bonuses, price concessions and incentives. The transaction price is also adjusted for the effects of the time value of money if the contract includes a significant financing component. Any consideration payable to the customer is adjusted to the transaction price, unless it is a payment for a distinct product or service from the customer. The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed at the end of each reporting period. The Company allocates the elements of variable considerations to all the performance obligations of the contract unless there is observable evidence that they pertain to one or more distinct performance obligations.
⢠The Company uses judgement to determine an appropriate standalone selling price for a performance obligation. The Company allocates the transaction price to each performance obligation on the basis of the relative standalone selling price of each distinct product or service promised in the contract. Where standalone selling price is not observable, the Company uses the expected cost-plus margin approach to allocate the transaction price to each distinct performance obligation.
⢠The Company exercises judgement in determining whether the performance obligation is satisfied at a point in time or over a period of time. The Company considers indicators such as how customer consumes benefits as services are rendered or who controls the asset as it is being created or existence of enforceable right to payment for performance to date and alternate use of such products, transfer of significant risks and rewards to the customer etc.
The company does not have any unsatisfied performance obligation as at the year end.
Interest income is recognised on a time proportion basis following effective interest rate method.
Revenue is recognized when the Companyâs right to receive the payment is established, which is generally when shareholders approve the dividend.
G. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Capitalisation of the borrowing costs is suspended during extended periods in which it suspends active development of a qualifying asset.
All other borrowing costs are recognised in the Statement of Profit and Loss in the period in which they are incurred.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs
H. Employee benefits
Retirement benefit costs and termination benefits
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Defined benefit costs are categorised as follows:
⢠service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
⢠net interest expense or income; and
⢠re-measurement
The Company presents the first two components of defined benefit costs in the Statement of Profit and Loss in the line item âEmployee benefits expenses. Curtailment gains and losses are accounted for as past service costs.
Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income in the period in which they occur. Re-measurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to the Statement of profit and loss. Past service cost is recognised in the Statement of Profit and Loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.
The retirement benefit obligation recognised in the statement of financial position represents the actual deficit or surplus in the Companyâs defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.
Short-term and other long-term employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
I. Foreign currencies
The functional currency of the Company is determined on the basis of the primary economic environment in which it operates. The functional currency of the Company is Indian National Rupee (INR).
The transactions in currencies other than the entityâs functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in Statement of Profit and Loss in the period in which they arise.
Financial instruments comprise of financial assets and financial liabilities. Financial asset primarily comprises of investments, loans and advances, trade receivables and cash and cash equivalents. Financial liabilities primarily comprise of borrowings, trade and other payables.
Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. However, trade receivables that do not contain significant financial component are valued at transaction price. However, trade receivables that do not contain significant financial component are valued at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through Statement of Profit and Loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in Statement of Profit and Loss.
a) Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
All recognized financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets
b) Investments in subsidiaries and associates
Investment in subsidiaries and associates are accounted at cost. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the difference is transferred to the Statement of Profit and Loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to Statement of Profit and Loss.
c) Classification of financial assets
For purposes of subsequent measurement, financial assets are classified in two broad categories:
1. Financial assets at amortised cost
2. Financial assets at fair value
Where assets are measured at fair value, gains and losses are either recognized in the statement of profit and loss (i.e. fair value through profit and loss) (FVTPL), or recognized in other comprehensive income (i.e. fair value through other comprehensive income) (FVTOCI)
Financial asset at amortised cost
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated at FVTPL:
⢠The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
⢠The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
This category is the most relevant to the Company. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. The Company has recognized its financial assets at amortised cost.
d) Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL. Interest income is recognized in the Statement of Profit and Loss and is included in the âOther incomeâ line item.
e) De-recognition of financial assets
The Company de-recognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the assetâs carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in the Statement of Profit and Loss if such gain or loss would have otherwise been recognised in the Statement of Profit and Loss on disposal of that financial asset.
f) Impairment of financial assets
The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, debt instruments at FVTOCI, lease receivables, trade receivables, other contractual rights to receive cash or other financial asset.
Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Company estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.
The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. 12-month expected credit losses are portion of the life-time expected credit losses and represent the lifetime cash shortfalls that will result if default occurs within the 12 months after the reporting date and thus, are not cash shortfalls that are predicted over the next 12 months.
If the Company measured loss allowance for a financial instrument at lifetime expected credit loss model in the previous period, but determines at the end of a reporting period that the credit risk has not increased significantly since initial recognition due to improvement in credit quality as compared to the previous period, the Company again measures the loss allowance based on 12-month expected credit losses.
When making the assessment of whether there has been a significant increase in credit risk since initial recognition, the Company uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition.
I. Financial liabilities and equity instruments
a) Classification as debt or equity
Debt and equity instruments issued by a company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
b) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Companyâs own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in Statement of Profit and Loss on the purchase, sale, issue or cancellation of the Companyâs own equity instruments.
c) Financial liabilities
Financial liabilities are classified as either financial liabilities âat FVTPLâ or âother financial liabilitiesâ.
Financial liabilities at FVTPL:
Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
⢠It has been incurred principally for the purpose of repurchasing it in the near term; or
⢠on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or
⢠it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:
⢠such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;
⢠the financial liability forms part of a Company of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Companyâs documented risk management or investment strategy, and information about the Companying is provided internally on that basis; or
⢠it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits the entire combined contract to be designated as at FVTPL in accordance with Ind AS 109.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in Statement of Profit and Loss. The net gain or loss recognised in Statement of Profit and Loss incorporates any interest paid on the financial liability and is included in the âOther Incomeâ line item in the Statement of Profit and Loss.
Other financial liabilities (including borrowings and trade and other payables) that are not held-for-trading and are not designated as at FVTPL are subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities:
The Company derecognises financial liabilities when, and only when, the Companyâs obligations are discharged, cancelled or have expired. An exchange with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in Statement of Profit or Loss.
Income tax expense represents the sum of the current tax and deferred tax.
Current tax is the amount of tax payable based on the taxable profit for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Standalone Ind AS Financial Statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax during the specified period i.e., the period for which MAT credit is allowed to be carried forward as per tax laws. The Company reviews the âMAT credit entitlementâ asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal income tax during the specified period.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
The company has not recognised deferred tax assets on unabsorbed depreciation and carried forward of losses due to lack of reasonable certainty that future taxable income will be there against which such deferred tax assets can be set off,
Current and deferred tax for the period
Current and deferred tax are recognised in the Statement of Profit and Loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
L. Provisions, contingent liabilities and contingent assets
Provisions are recognised when the Company has a present obligation (legal or constructive), as a result of past event, and it is probable that an outflow of resources embodying economic benefits, that can be reliably estimated, will be required to settle such an obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingent liabilities are not recognised but disclosed unless the probability of an outflow of resources is remote. Contingent assets are disclosed where inflow of economic benefits is probable.
M. Earnings per share
Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
III. Key sources of estimation uncertainty and critical accounting judgements
The preparation of the Standalone Ind AS Financial Statements requires management to make judgmentsâ, estimates and assumptions about the reported amounts of assets and liabilities, and, income and expenses that are not readily apparent from other sources. Such judgments, estimates and associated assumptions are evaluated based on historical experience and various other factors, including estimation of the effects of uncertain future events, which are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
The following are the critical judgments and estimations that have been made by the management in the process of applying the Companyâs accounting policies and that have the most significant effect on the amount recognised in the Standalone Ind AS Financial Statements and/or key sources of estimation uncertainty that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
The management at each close makes an assessment of the Companyâs ability to continue as a going concern. In making such evaluation, it considers, inter alia, the quantum and timing of its cash flows, in particular collection of all its recoverable amount and settlement of its obligations to pay creditors and lenders on due dates. The accounting policy choices in preparation and presentation of the Standalone Ind AS Financial Statements is based on the Companyâs assessment that the Company will continue as a going concern
ii) Useful lives of property, plant and equipment and intangible assets
Management reviews the useful lives of property, plant and equipment at least once a year. Such lives are dependent upon an assessment of both the technical lives of the assets and also their likely economic lives based on various internal and external factors including relative efficiency and operating costs. Accordingly, depreciable lives are reviewed annually using the best information available to the Management.
iii) Impairment of non-financial assets
The management performs annual impairment tests on cash generating units and capital work-in-progress for which there are indicators that the carrying amount might be higher than the recoverable amount. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at armâs length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model.
iv) Income Taxes
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
v) Defined benefit plans (gratuity benefits)
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate; future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.
Further details about gratuity obligations are given in Note 32.
vi) Recoverability of financial assets
Assessment of recoverability of trade receivables require significant judgment. Factors considered include the credit rating, assessment of intention and ability of the counter party to discharge the liability, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment. See Note 9 for further disclosures on impairment of trade receivables.
IV. Standards issued but not yet effective and have not been adopted early by the Company
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31,2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:
Ind AS 1 - Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1,2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the Companyâs standalone financial statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of âaccounting estimatesâ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1,2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.
I nd AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statement.
Mar 31, 2015
A. Basis of Preparation of Financial Statements
a. The financial statements have been prepared in compliance with the
applicable Accounting Standards specified under Section 133 of the
Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules,
2014 and other pronouncement of Institute of Chartered Accountant of
India, with relevant provisions of Companies Act, 2013; applicable
guidelines issued by the Securities Exchange Board of India (SEBI) and
generally accepted accounting principles applicable in India (GAAP).
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires changes in the accounting policy
hitherto in use.
b. The financial statements have been prepared under historical cost
convention on accrual basis.
c. All the assets and liabilities have been classified as current or
noncurrent as per Company's normal operating cycle and other criteria
set out in Schedule III to the Companies Act, 2013. Based on the nature
of product and time between the acquisition of assets for processing
and their realization in cash and cash equivalent, the Company has
ascertained its operating cycle to be 12 months for the purpose of
current - noncurrent classification of assets & liabilities.
B. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Difference between the actual results and
estimates are recognized in the period in which the results are known
/materialized.
C. Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation /
amortisation and impairment losses. Cost includes acquisition cost,
freight, duties, taxes and other incidental expense incurred during the
construction / installation stage attributable to bringing the asset to
working condition for its intended use.
Expenditure on software is recognized as 'Intangible Assets' and is
amortized over a period of three years.
D. Depreciation and Amortization
Depreciation on Fixed Assets is being provided on written down value
method at the rate and in the manner specified in Schedule II of the
Companies Act, 2013.
Leasehold land is amortized over the initial period of lease.
The expenditure incurred on improvement on leased premises is written
off proportionately over the initial period of lease.
E. Impairment of Fixed Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the company estimates the recoverable amount of the assets. If
such recoverable amount of the asset or the recoverable amount of the
cash-generating unit to which the assets belongs, is less than the
carrying amount, 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 previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset is reflected at the
recoverable amount.
F. Inventories
a. Inventories are valued at lower of cost and estimated net
realisable value. Cost is determined on 'First-in First-out', 'Specific
Identification', or "Weighted Average' basis, as the case may be. Cost
of Inventories Comprises of all cost of purchase, cost of conversion
and other costs incurred in bringing the inventories to their present
location and condition.
b. Raw Materials include materials issued for production. Materials
consumed are materials used for production of finished goods only.
c. Determination of estimated net realizable value and specific
identification involve technical judgments of the management, which has
been relied upon by the Auditors.
G. Investments
Investments that are readily realizable and are intended to be held for
not more than 1 year from the date, on which such investments are made,
are classified as current investment. All other investments are
classified as non-current investment. Non-Current investments are
stated at cost. Provision for diminution in the value of non-current
investments is made if such decline is other than temporary in nature.
Current investments are carried at lower of cost or market value.
H. Revenue Recognition Sale of Goods:
Revenue from sales of goods is recognized when risk and rewards of
ownership of the products are passed on to the customers, which is
generally on dispatch of goods and is stated net of returns, trade
discounts, claims etc.
I. Other Income
a) Dividend on Investment:
Dividends are recognised when the right to receive payment is
established.
b) Interest Income:
Interest Income is recognised on time proportion basis taking in to
account the amount outstanding & rate applicable.
J. Foreign Currency Transactions:
a. Initial Recognition:
Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing at the time of the transaction.
b. Conversion:
Monetary items denominated in foreign currencies at the year-end are
translated at closing rates. Non-monetary items which are carried in
terms of historical cost denominated in foreign currency are reported
using the exchange rate at the date of transaction and investment in
foreign companies are recorded at the exchange rates prevailing on the
date of making the investments.
c. Exchange Differences:
Exchange differences arising on the settlement of monetary items or on
restatement of monetary items at rates different from those at which
they were initially recorded during the year, or reported in previous
financial statements, are recognised as income or as expenses in the
year in which they arise.
Exchange differences arising on the monetary items that, in substance,
forms part of an enterprise's net investment in a non integral foreign
operations are accumulated in a foreign currency translation reserve in
the financial statements until the disposal of net investment, at which
time they would be recognized an income or as expense in the Statement
of Profit and Loss.
d. Forward Exchange Contract not intended for trading or speculation
purposes:
The premium or discount arising at the inception of forward exchange
contracts is amortized as expense or income over the life of contract.
Exchange differences on such contract are recognized in the Statement
of Profit and Loss in the year in which the exchange rate changes. Any
profit or loss arising on cancellation or renewal of forward exchange
contract is recognised as income or as expense.
K. Employee Benefits:
Short term employee benefits are recognized as an expense at the
undiscounted amount in Statement of Profit and Loss of the year in
which the related service is rendered.
The Company's Liability towards gratuity and compensated absences are
determined on the basis of year end actuarial valuation applying
Projected Unit Credit Method done by an independent actuary. The
actuarial gains or losses determined by the actuary are recognized in
the Statement of Profit and Loss as income or expense in the year in
which they arise.
L. Borrowing Cost:
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing
of funds.
M. Leases
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.
N. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they were entitled to participate in dividends relative to
a fully paid equity share during the reporting period. The weighted
average numbers of equity shares outstanding during the period are
adjusted for events of bonus issue; bonus element in a rights issue to
existing shareholders; share split; and reverse share split
(consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
O. Cash and Cash Equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
P. Segment Reporting Identification of segments:
The Company's operating businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets. The analysis of geographical
segments is based on the areas in which major operating divisions of
the Company operate.
Inter segment Transfers:
The Company generally accounts for intersegment sales and transfers as
if the sales or transfers were to third parties at current market
prices.
Allocation of common costs:
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items:
Includes general corporate income and expense items which are not
allocated to any business segment.
Segment Policies:
The company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the company as a whole.
Q. Provision for Current and Deferred Taxation:
Income tax is accounted in accordance with AS-22 'Accounting for Taxes
on Income', issued by The Institute of Chartered Accountants of India
(ICAI), which includes current taxes and deferred taxes. Deferred
income taxes reflect the impact of the current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available except that deferred
tax assets arising due to unabsorbed depreciation and losses are
recognised if there is virtual certainty that sufficient future taxable
income will be available to realise the same and are recognized using
the tax rates and tax laws that have been enacted or substantively
enacted.
Current tax is determined as the amount of tax payable in respect of
taxable income using the applicable tax rates and tax laws for the
year.
Minimum Alternate Tax (MAT) credit is recognized as an asset only when
and to the extent there is convincing evidence that the Company will
pay normal Income Tax during the specified period. Such assets is
reviewed at each balance sheet date and carrying amount of the MAT
credit is written down to extend there is no longer a convincing
evidence to the effect that the Company will pay normal Income tax
during the specified period.
R. Provision, Contingent Liabilities and Contingent Assets:
Provisions are recognized for liabilities that can be measured only by
using a substantial degree of estimation, if
a. the Company has a present obligation as a result of past event,
b. a probable outflow of resources is expected to settle the
obligation and
c. the amount of the obligation can be reliably estimated Contingent
Liability is disclosed in case of
a. a present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation
b. a possible obligation, unless the probability of outflow of
resources is remote Contingent Assets are neither recognized, nor
disclosed.
Mar 31, 2014
A. Basis of Preparation of Financial Statements
a. The financial statements have been prepared in compliance with the
mandatory Accounting Standards notified under the Companies (Accounting
Standards) Rules, 2006 (as amended) and generally accepted Accounting
principles applicable in India (GAAP). Accounting policies have been
consistently applied except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting standard
requires changes in the accounting policy hitherto in use.
b. The financial statements have been prepared under historical cost
convention on accrual basis.
c. All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in the Revised Schedule VI of the Companies Act, 1956.
Based on the nature of products and time between the acquisition of
assets for processing and their realization in cash and cash
equivalent, the Company has ascertained its operating cycle as 12
months for the purpose of current and non-current classification of
assets and liabilities.
B. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Difference between the actual results and
estimates are recognized in the period in which the results are known
/materialized.
C. Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation /
amortisation and impairment losses. Cost includes acquisition cost,
freight, duties, taxes and other incidental expense incurred during the
construction / installation stage attributable to bringing the asset to
working condition for its intended use.
Assets costing less than Rs. 5000/- are depreciated fully in the year
of acquisition.
Expenditure on software is recognized as ''Intangible Assets'' and is
amortized over a period of three years.
D. Depreciation and Amortization
Depreciation on Fixed Assets is being provided on written down value
method at the rate and in the manner specified in Schedule XIV of the
Companies Act, l956.
Leasehold land is amortized over the initial period of lease.
The expenditure incurred on improvement on leased premises is written
off proportionately over the initial period of lease.
E. Impairment of Fixed Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the company estimates the recoverable amount of the assets. If
such recoverable amount of the asset or the recoverable amount of the
cash-generating unit to which the assets belongs, is less than the
carrying amount, 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 previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset is reflected at the
recoverable amount.
F. Inventories
a. Inventories are valued at lower of cost and estimated net
realisable value. Cost is determined on First-in First-out'', ''Specific
Identification'', or "Weighted Average'' basis, as the case may be. Cost
of Inventories Comprises of all cost of purchase, cost of conversion
and other costs incurred in bringing the inventories to their present
location and condition.
b. Raw Materials include materials issued for production. Materials
consumed are materials used for production of finished goods only.
c. Determination of estimated net realizable value and specific
identification involve technical judgments of the management, which has
been relied upon by the Auditors.
G. Investments
Investments that are readily realizable and are intended to be held for
not more than 1 year from the date, on which such investments are made,
are classified as current investment. All other investments are
classified as non-current investment.
Non-Current investments are stated at cost. Provision for diminution in
the value of non-current investments is made if such decline is other
than temporary in nature.
Current investments are carried at lower of cost or market value.
H. Revenue Recognition Sale of Goods:
Revenue from sales of goods is recognized when risk and rewards of
ownership of the products are passed on to the customers, which is
generally on dispatch of goods and is stated net of returns, trade
discounts, claims etc.
I. Other Income
a) Dividend on Investment:
Dividends are recognised when the right to receive payment is
established.
b) Interest Income:
Interest Income is recognised on time proportion basis taking in to
account the amount outstanding & rate applicable.
J. Foreign Currency Transactions:
a. Initial Recognition:
Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing at the time of the transaction.
b. Conversion:
Monetary items denominated in foreign currencies at the year-end are
translated at closing rates. Non-monetary items which are carried in
terms of historical cost denominated in foreign currency are reported
using the exchange rate at the date of transaction and investment in
foreign companies are recorded at the exchange rates prevailing on the
date of making the investments.
c. Exchange Differences:
Exchange differences arising on the settlement of monetary items or on
restatement of monetary items at rates different from those at which
they were initially recorded during the year, or reported in previous
financial statements, are recognised as income or as expenses in the
year in which they arise.
Exchange differences arising on the monetary items that, in substance,
forms part of an enterprise''s net investment in a non integral foreign
operations are accumulated in a foreign currency translation reserve in
the financial statements until the disposal of net investment, at which
time they would be recognized an income or as expense in the Statement
of Profit and Loss.
d. Forward Exchange Contract not intended for trading or speculation
purposes:
The premium or discount arising at the inception of forward exchange
contracts is amortized as expense or income over the life of contract.
Exchange differences on such contract are recognized in the Statement
of Profit and Loss in the year in which the exchange rate changes. Any
profit or loss arising on cancellation or renewal of forward exchange
contract is recognised as income or as expense.
K. Employee Benefits:
Short term employee benefits are recognized as an expense at the
undiscounted amount in Statement of Profit and Loss of the year in
which the related service is rendered.
The Company''s Liability towards gratuity and compensated absences are
determined on the basis of year end actuarial valuation applying
Projected Unit Credit Method done by an independent actuary. The
actuarial gains or losses determined by the actuary are recognized in
the Statement of Profit and Loss as income or expense in the year in
which they arise.
L. Borrowing Cost:
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs
are expensed in the period they occur. Borrowing costs consist of
interest and other costs that an entity incurs in connection with the
borrowing of funds.
M. Leases
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.
N. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they were entitled to participate in dividends relative to
a fully paid equity share during the reporting period. The weighted
average numbers of equity shares outstanding during the period are
adjusted for events of bonus issue; bonus element in a rights issue to
existing shareholders; share split; and reverse share split
(consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
O. Cash and Cash Equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
P. Segment Reporting
Identification of segments:
The Company''s operating businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets. The analysis of geographical
segments is based on the areas in which major operating divisions of
the Company operate.
Inter segment Transfers:
The Company generally accounts for intersegment sales and transfers as
if the sales or transfers were to third parties at current market
prices.
Allocation of common costs:
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items:
Includes general corporate income and expense items which are not
allocated to any business segment.
Segment Policies:
The company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the company as a whole.
Q. Provision for Current and Deferred Taxation:
Income tax is accounted in accordance with AS-22 ''Accounting for Taxes
on Income'', issued by The Institute of Chartered Accountants of India
(ICAI), which includes current taxes and deferred taxes. Deferred
income taxes reflect the impact of the current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available except that deferred
tax assets arising due to unabsorbed depreciation and losses are
recognised if there is virtual certainty that sufficient future taxable
income will be available to realise the same and are recognized using
the tax rates and tax laws that have been enacted or substantively
enacted.
Current tax is determined as the amount of tax payable in respect of
taxable income using the applicable tax rates and tax laws for the
year.
Minimum Alternate Tax (MAT) credit is recognized as an asset only when
and to the extent there is convincing evidence that the Company will
pay normal Income Tax during the specified period. Such assets is
reviewed at each balance sheet date and carrying amount of the MAT
credit is written down to extend there is no longer a convincing
evidence to the effect that the Company will pay normal Income tax
during the specified period.
R. Provision, Contingent Liabilities and Contingent Assets:
Provisions are recognized for liabilities that can be measured only by
using a substantial degree of estimation, if
a. the Company has a present obligation as a result of past event,
b. a probable outflow of resources is expected to settle the
obligation and
c. the amount of the obligation can be reliably estimated Contingent
Liability is disclosed in case of
a. a present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation
b. a possible obligation, unless the probability of outflow of
resources is remote Contingent Assets are neither recognized, nor
disclosed.
Provisions, Contingent Liabilities and Contingent Assets are reviewed
at each Balance Sheet Date.
Mar 31, 2013
A. Basis of Preparation of Financial Statements
a. The financial statements have been prepared in compliance with the
mandatory Accounting Standards notified under the Companies (Accounting
Standards) Rules, 2006 (as amended) and generally accepted Accounting
principles applicable in India (GAAP). Accounting policies have been
consistently applied except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting standard
requires changes in the accounting policy hitherto in use.
b. The financial statements have been prepared under historical cost
convention on accrual basis.
c. All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in the Revised Schedule VI of the Companies Act, 1956.
Based on the nature of products and time between the acquisition of
assets for processing and their realization in cash and cash
equivalent, the Company has ascertained its operating cycle as 12
months for the purpose of current and non-current classification of
assets and liabilities.
B. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Difference between the actual results and
estimates are recognized in the period in which the results are known
/materialized.
C. Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation /
amortisation and impairment losses. Cost includes acquisition cost,
freight, duties, taxes and other incidental expense incurred during the
construction / installation stage attributable to bringing the asset to
working condition for its intended use.
Assets costing less than Rs. 5000/- are depreciated fully in the year of
acquisition.
Expenditure on software is recognized as ''Intangible Assets'' and is
amortized over a period of three years.
D. Depreciation and Amortization
Depreciation on Fixed Assets is being provided on written down value
method at the rate and in the manner specified in Schedule XIV of the
Companies Act, 1956.
Leasehold land is amortized over the initial period of lease.
The expenditure incurred on improvement on leased premises is written
off proportionately over the initial period of lease.
E. Impairment of Fixed Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the company estimates the recoverable amount of the assets. If
such recoverable amount of the asset or the recoverable amount of the
cash-generating unit to which the assets belongs, is less than the
carrying amount, 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 previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset is reflected at the
recoverable amount.
F. Inventories
a. Inventories are valued at lower of cost and estimated net
realisable value. Cost is determined on First-in First-out'', ''Specific
Identification'', or "Weighted Average'' basis, as the case may be. Cost
of Inventories Comprises of all cost of purchase, cost of conversion
and other costs incurred in bringing the inventories to their present
location and condition.
b. Raw Materials include materials issued for production. Materials
consumed are materials used for production of finished goods only.
c. Determination of estimated net realizable value and specific
identification involve technical judgments of the management, which has
been relied upon by the Auditors.
G. Investments
Investments that are readily realizable and are intended to be held for
not more than 1 year from the date, on which such investments are made,
are classified as current investment. All other investments are
classified as non-current investment. Non-Current investments are
stated at cost. Provision for diminution in the value of non-current
investments is made if such decline is other than temporary in nature.
Current investments are carried at lower of cost or market value.
H. Revenue Recognition
Sale of Goods:
Revenue from sales of goods is recognized when risk and rewards of
ownership of the products are passed on to the customers, which is
generally on dispatch of goods and is stated net of returns, trade
discounts, claims etc.
I. Other Income
a) Dividend on Investment:
Dividends are recognised when the right to receive payment is
established.
b) Interest Income:
Interest Income is recognised on time proportion basis taking in to
account the amount outstanding & rate applicable.
J. Foreign Currency Transactions:
a. Initial Recognition:
Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing at the time of the transaction.
b. Conversion:
Monetary items denominated in foreign currencies at the year-end are
translated at closing rates. Non-monetary items which are carried in
terms of historical cost denominated in foreign currency are reported
using the exchange rate at the date of transaction and investment in
foreign companies are recorded at the exchange rates prevailing on the
date of making the investments.
c. Exchange Differences:
Exchange differences arising on the settlement of monetary items or on
restatement of monetary items at rates different from those at which
they were initially recorded during the year, or reported in previous
financial statements, are recognised as income or as expenses in the
year in which they arise.
Exchange differences arising on the monetary items that, in substance,
forms part of an enterprise''s net investment in a non integral foreign
operations are accumulated in a foreign currency translation reserve in
the financial statements until the disposal of net investment, at which
time they would be recognized an income or as expense in the Statement
of Profit and Loss.
d. Forward Exchange Contract not intended for trading or speculation
purposes:
The premium or discount arising at the inception of forward exchange
contracts is amortized as expense or income over the life of contract.
Exchange differences on such contract are recognized in the Statement
of Profit and Loss in the year in which the exchange rate changes. Any
profit or loss arising on cancellation or renewal of forward exchange
contract is recognised as income or as expense.
K. Employee Benefits:
Short term employee benefits are recognized as an expense at the
undiscounted amount in Statement of Profit and Loss of the year in
which the related service is rendered.
The Company''s Liability towards gratuity and compensated absences are
determined on the basis of year end actuarial valuation applying
Projected Unit Credit Method done by an independent actuary. The
actuarial gains or losses determined by the actuary are recognized in
the Statement of Profit and Loss as income or expense in the year in
which they arise.
L. Borrowing Cost:
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs
are expensed in the period they occur. Borrowing costs consist of
interest and other costs that an entity incurs in connection with the
borrowing of funds.
M. Leases
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.
N. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they were entitled to participate in dividends relative to
a fully paid equity share during the reporting period. The weighted
average numbers of equity shares outstanding during the period are
adjusted for events of bonus issue; bonus element in a rights issue to
existing shareholders; share split; and reverse share split
(consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
0. Cash and Cash Equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
P. Segment Reporting
Identification of segments:
The Company''s operating businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets. The analysis of geographical
segments is based on the areas in which major operating divisions of
the Company operate.
Inter segment Transfers:
The Company generally accounts for intersegment sales and transfers as
if the sales or transfers were to third parties at current market
prices.
Allocation of common costs:
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items:
Includes general corporate income and expense items which are not
allocated to any business segment.
Segment Policies:
The company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the company as a whole.
Q. Provision for Current and Deferred Taxation:
Income tax is accounted in accordance with AS-22 ÂAccounting for Taxes
on Income'', issued by The Institute of Chartered Accountants of India
(ICAI), which includes current taxes and deferred taxes. Deferred
income taxes reflect the impact of the current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available except that deferred
tax assets arising due to unabsorbed depreciation and losses are
recognised if there is virtual certainty that sufficient future taxable
income will be available to realise the same and are recognized using
the tax rates and tax laws that have been enacted or substantively
enacted.
Current tax is determined as the amount of tax payable in respect of
taxable income using the applicable tax rates and tax laws for the
year.
Minimum Alternate Tax (MAT) credit is recognized as an asset only when
and to the extent there is convincing evidence that the Company will
pay normal Income Tax during the specified period. Such assets is
reviewed at each balance sheet date and carrying amount of the MAT
credit is written down to extend there is no longer a convincing
evidence to the effect that the Company will pay normal Income tax
during the specified period.
R. Provision, Contingent Liabilities and Contingent Assets:
Provisions are recognized for liabilities that can be measured only by
using a substantial degree of estimation, if
a. the Company has a present obligation as a result of past event,
b. a probable outflow of resources is expected to settle the
obligation and
c. the amount of the obligation can be reliably estimated
Contingent Liability is disclosed in case of
a. a present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation
b. a possible obligation, unless the probability of outflow of
resources is remote
Contingent Assets are neither recognized, nor disclosed.
Provisions, Contingent Liabilities and Contingent Assets are reviewed
at each Balance Sheet Date.
Mar 31, 2012
1. Basis of Preparation of Financial Statements
a. The financial statements have been prepared in compliance with the
mandatory Accounting Standards notified under the Companies (Accounting
Standards) Rules, 2006 (as amended) and generally accepted Accounting
principles applicable in India (GAAP).Accounting policies have been
consistently applied except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting standard
requires changes in the accounting policy hitherto in use.
b. The financial statements have been prepared under historical cost
convention on accrual basis.
2. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Difference between the actual results and
estimates are recognized in the period in which the results are known
/materialized.
3. Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation and
impairment losses. Cost includes acquisition cost, freight, duties,
taxes and other incidental expense incurred during the construction /
installation stage attributable to bring- ing the asset to working
condition for its intended use.
Expenditure on software is recognized as 'Intangible Assets' and is
amortized over a period of three years.
4. Depreciation and Amortization
Depreciation on Fixed Assets is being provided on written down value
method at the rate and in the manner specified in Schedule XIV of the
Companies Act, 1956.
Leasehold land is amortized over the initial period of lease.
The expenditure incurred on improvement on leased premises is written
off proportionately over the initial period of lease.
5. Impairment of Fixed Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the company estimates the recoverable amount of the assets. If
such recoverable amount of the asset or the recoverable amount of the
cash-generating unit to which the assets belongs, is less than the
carrying amount, 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 previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset is reflected at the
recoverable amount.
6. Inventories
a. Inventories are valued at lower of cost and estimated net
realisable value. Cost is determined on 'First-in First-out', 'Specific
Identification', or "Weighted Average' basis, as the case may be. Cost
of Inventories Comprises of all cost of purchase, cost of conversion
and other costs incurred in bringing the inventories to their present
location and condition.
b. Raw Materials include materials issued for production. Materials
consumed are materials used for production of fin- ished goods only.
c. Determination of estimated net realizable value and specific
identification involve technical judgments of the manage- ment, which
has been relied upon by the Auditors.
7. Investments
Long-term investments are stated at cost. Provision for diminution in
the value of long-term investments is made if such decline is other
than temporary in nature.
Current investments are carried at lower of cost or market value.
8. Revenue Recognition
Sale of Goods:
Revenue from sales of goods is recognized when risk and rewards of
ownership of the products are passed on to the customers, which is
generally on dispatch of goods and is stated net of returns, trade
discounts, claims etc.
Dividend on Investment:
Dividends are recognised when the right to receive payment is
established.
Interest Income:
Interest Income is recognised on time proportion basis taking in to
account the amount outstanding & rate applicable.
9. Foreign Currency Transactions:
a. Initial Recognition:
Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing at the time of the transaction.
b. Conversion:
Monetary items denominated in foreign currencies at the year-end are
translated at closing rates. Non-monetary items which are carried in
terms of historical cost denominated in foreign currency are reported
using the exchange rate at the date of transaction and investment in
foreign companies are recorded at the exchange rates prevailing on the
date of making the investments.
c. Exchange Differences:
Exchange differences arising on the settlement of monetary items or on
restatement of monetary items at rates differ- ent from those at which
they were initially recorded during the year, or reported in previous
financial statements, are recognised as income or as expenses in the
year in which they arise.
d. Forward Exchange Contract not intended for trading or speculation
purposes:
The premium or discount arising at the inception of forward exchange
contracts is amortized as expense or income over the life of contract.
Exchange differences on such contract are recognized in the profit and
loss account in the year in which the exchange rate changes. Any profit
or loss arising on cancellation or renewal of forward exchange contract
is recognised as income or as expense.
10. Retirement Benefits:
Short term employee benefits are recognized as an expense at the
undiscounted amount in profit and loss account of the year in which the
related service is rendered.
The Company's Liability towards gratuity and leave encashment are
determined on the basis of year end actuarial valuation applying
Projected Unit Credit Method done by an independent actuary. The
actuarial gains or losses determined by the actuary are recognized in
the Profit and Loss Account as income or expense.
11. Borrowing Cost:
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing
of funds.
12. Leases
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 Profit and Loss account on a straight-line basis over the lease
term.
13. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they were entitled to participate in dividends relative to
a fully paid equity share during the reporting period. The weighted
average numbers of equity shares outstanding during the period are
adjusted for events of bonus issue; bonus element in a rights issue to
existing shareholders; share split; and reverse share split
(consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity share- holders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
14. Cash and Cash Equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
15. Segment Reporting
Identification of segments:
The Company's operating businesses are organized and managed separately
according to the nature of products and ser- vices provided, with each
segment representing a strategic business unit that offers different
products and serves different markets. The analysis of geographical
segments is based on the areas in which major operating divisions of
the Company operate.
Inter segment Transfers:
The Company generally accounts for intersegment sales and transfers as
if the sales or transfers were to third parties at current market
prices.
Allocation of common costs:
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items:
Includes general corporate income and expense items which are not
allocated to any business segment.
Segment Policies:
The company prepares its segment information in conformity with the
accounting policies adopted for preparing and pre- senting the
financial statements of the company as a whole.
16. Provision for Current and Deferred Taxation:
Income tax is accounted in accordance with AS-22 'Accounting for taxes
on income', issued by The Institute of Chartered Accountants of India
(ICAI), which includes current taxes and deferred taxes. Deferred
income taxes reflect the impact of the current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available except that deferred
tax assets arising due to unabsorbed depreciation and losses are
recognised if there is virtual certainty that sufficient future taxable
income will be available to realise the same and are recognized using
the tax rates and tax laws that have been enacted or substantively
enacted.
Current tax is determined as the amount of tax payable in respect of
taxable income using the applicable tax rates and tax laws for the
year.
17. Provision, Contingent Liabilities and Contingent Assets:
Provisions are recognized for liabilities that can be measured only by
using a substantial degree of estimation, if
a. the Company has a present obligation as a result of past event,
b. a probable outflow of resources is expected to settle the obligation
and
c. the amount of the obligation can be reliably estimated Contingent
Liability is disclosed in case of
a. a present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation
b. a possible obligation, unless the probability of outflow of
resources is remote. Contingent Assets are neither recognized, nor
disclosed.
Provisions, Contingent Liabilities and Contingent Assets are reviewed
at each Balance Sheet Date.
Mar 31, 2011
1. Basis of Preparation of Financial Statements
a.The financial statements have been prepared in compliance with the
mandatory Accounting Standards notified under the Companies (Accounting
Standards) Rules, 2006 (as amended) and generally accepted Accounting
principles applicable in India (GAAP)Accounting policies have been
consistently applied except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting standard
requires changes in the accounting policy hitherto in use. b.The
financial statements have been prepared under historical cost
convention on an accrual basis.
2. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Difference between the actual results and
estimates are recognized in the period in which the results are known
/materialized.
3. Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation and
impairment losses. Cost includes acquisition cost, freight, duties,
taxes and other incidental expense incurred during the construction /
installation stage attributable to bringing the asset to working
condition for its intended use. Expenditure on software is recognized
as 'Intangible Assets' to be amortized over three years.
4. Depreciation and Amortization
Depreciation on Fixed Assets is being provided on written down value
method at the rate and in the manner specified in Schedule XIV of the
Companies Act, 1956.
Leasehold lands are amortized over the initial period of lease.
The expenditure incurred on improvement on leased premises is written
off proportionately over the initial period of lease.
5. Impairment of Fixed Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the company estimates the recoverable amount of the assets. If
such recoverable amount of the asset or the recoverable amount of the
cash-generating unit to which the assets belongs, is less than the
carrying amount, 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 previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset is reflected at the
recoverable amount.
6. Inventories
a. Inventories are valued at lower of cost and estimated net
realisable value. Cost is determined on 'First-in First-out', 'Specific
Identification', or "Weighted Average' basis, as the case may be. Cost
of Inventories Comprises of all cost of purchase, cost of conversion
and other costs incurred in bringing the inventories to their present
location and condition.
b. Raw Materials include materials issued for production. Materials
consumed are materials used for production of finished goods only.
c. Determination of estimated net realizable value and specific
identification involve technical judgments of the management, which has
been relied upon by the Auditors.
7. Investments
Long-term investments are stated at cost. Provision for diminution in
the value of long-term investments is made if such decline is other
than temporary in nature.
Current investments are carried at lower of cost or market value.
8. Revenue Recognition Sale of Goods:
Revenue from sales of goods is recognized when risk and rewards of
ownership of the products are passed on to the customers, which is
generally on dispatch of goods and is stated net of returns, trade
discounts, claims etc.
Dividend on Investment:
Dividends are recognised when the right to receive payment is
established.
Interest Income:
Interest Income is recognised on time proportion basis taking in to
account the amount outstanding & rate applicable.
9. Foreign Currency Transactions:
a. Initial Recognition:
Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing at the time of the transaction.
b. Conversion:
Monetary items denominated in foreign currencies at the year-end are
translated at closing rates. Non-monetary items which are carried in
terms of historical cost denominated in foreign currency are reported
using the exchange rate at the date of transaction and investment in
foreign companies are recorded at the exchange rates prevailing on the
date of making the investments.
c. Exchange Differences:
Exchange differences arising on the settlement of monetary items or on
restatement of monetary items at rates different from those at which
they were initially recorded during the year, or reported in previous
financial statements, are recognised as income or as expenses in the
year in which they arise.
d. Forward Exchange Contract not intended for trading or speculation
purposes:
The premium or discount arising at the inception of forward exchange
contracts is amortized as expense or income over the life of contract.
Exchange differences on such contract are recognized in the profit and
loss account in the year in which the exchange rate changes. Any profit
or loss arising on cancellation or renewal of forward exchange contract
is recognised as income or as expense.
10. Retirement Benefits:
Short term employee benefits are recognized as an expense at the
undiscounted amount in profit and loss account of the year in which the
related service is rendered.
The Company's Liability towards gratuity is determined on the basis of
year end actuarial valuation applying Projected Unit Credit Method done
by an independent actuary. The actuarial gains or losses determined by
the actuary are recognized in the Profit and Loss Account as income or
expense.
11. Borrowing Cost:
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing
of funds.
12. Leases
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 Profit and Loss account on a straight-line basis over the lease
term.
13. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they were entitled to participate in dividends relative to
a fully paid equity share during the reporting period. The weighted
average number of equity shares outstanding during the period are
adjusted for events of bonus issue; bonus element in a rights issue to
existing shareholders; share split; and reverse share split
(consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
14. Cash and Cash Equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
15. Segment Reporting Identification of segments:
The Company's operating businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets. The analysis of geographical
segments is based on the areas in which major operating divisions of
the Company operate.
Inter segment Transfers:
The Company generally accounts for intersegment sales and transfers as
if the sales or transfers were to third parties at current market
prices.
Allocation of common costs:
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items:
Includes general corporate income and expense items which are not
allocated to any business segment.
Segment Policies:
The company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the company as a whole.
16. Provision for Current and Deferred Taxation:
Income tax is accounted in accordance with AS-22 'Accounting for taxes
on income', issued by The Institute of Chartered Accountants of India
(ICAI), which includes current taxes and deferred taxes. Deferred
income taxes reflect the impact of the current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available except that deferred
tax assets arising due to unabsorbed depreciation and losses are
recognised if there is virtual certainty that sufficient future taxable
income will be available to realise the same and are recognized using
the tax rates and tax laws that have been enacted or substantively
enacted. Current tax is determined as the amount of tax payable in
respect of taxable income using the applicable tax rates and tax laws
for the year.
17. Provision, Contingent Liabilities and Contingent Assets:
Provisions are recognized for liabilities that can be measured only by
using a substantial degree of estimation, if
a. the Company has a present obligation as a result of past event,
b. a probable outflow of resources is expected to settle the
obligation and
c. the amount of the obligation can be reliably estimated Contingent
Liability is disclosed in case of
a. a present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation
b. a possible obligation, unless the probability of outflow of
resources is remote. Contingent Assets are neither recognized, nor
disclosed.
Provisions, Contingent Liabilities and Contingent Assets are reviewed
at each Balance Sheet Date.
Mar 31, 2010
1. Basis of Preparation of Financial Statements
a. The financial statements have been prepared in compliance with the
mandatory Accounting Standards notified under the Companies (Accounting
Standards) Rules, 2006 and generally accepted Accounting principles
applicable in India (GAAP). Accounting policies have been consistently
applied except where a newly issued accounting standard is initially
adopted or a revision to an existing accounting standard requires
changes in the accounting policy hitherto in use.
b. The financial statements have been prepared under historical cost
convention on an accrual basis.
2. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Difference between the actual results and
estimates are recognized in the period in which the results are known
/materialized.
3. Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation and
impairment losses. Cost includes acquisition cost, freight, duties,
taxes and other incidental expense incurred during the construction /
installation stage attributable to bringing the asset to working
condition for its intended use.
Expenditure on software is recognized as ÃIntangible Assetsà to be
amortized over three years.
4. Depreciation and Amortization
Depreciation on Fixed Assets is being provided on written down value
method at the rate and in the manner specified in Schedule XIV of the
Companies Act, 1956.
Leasehold lands are amortized over the initial period of lease.
The expenditure incurred on improvement on leased premises is written
off evenly over the initial period of lease.
5. Impairment of Fixed Assets
The Company assesses at each balance sheet date whether there is
any indication that an asset may be impaired. If any such indication
exists, the company estimates the recoverable amount of the assets.
If such recoverable amount of the asset or the recoverable amount of
the cash-generating unit to which the assets belongs, is less than the
carrying amount, 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 previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset is reflected at the
recoverable amount.
6. Inventories
a. Inventories are valued at lower of cost and estimated net
realisable value. Cost is determined on ÃFirst-in First-outÃ, ÃSpecific
IdentificationÃ, or ÃWeighted Averageà basis. Cost of Inventories
Comprises of all cost of purchase, cost of conversion and other costs
incurred in bringing the inventories to their present location and
condition.
b. Raw Materials include materials issued for production. Materials
consumed are materials used for production of finished goods only.
c. Determination of estimated net realizable value and specific
identification involve technical judgments of the management, which has
been relied upon by the Auditors.
7. Investments
Long-term investments are stated at cost. Provision for diminution in
the value of long-term investments is made if such decline is other
than temporary in nature.
Current investments are carried at cost.
8. Revenue Recognition
Sale of Goods:
Revenue from sales of goods is recognized when risk and rewards of
ownership of the products are passed on to the customers, which is
generally on dispatch of goods and is stated net of returns, trade
discounts, claims etc.
Dividend on Investment:
Dividends are recognised when the right to receive payment is
established.
Interest Income:
Interest Income is recognised on time proportion basis taking in to
account the amount outstanding & rate applicable.
9. Foreign Currency Transactions:
a. Initial Recognition:
Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing at the time of the transaction.
b. Conversion:
Monetary items denominated in foreign currencies at the year-end are
translated at closing rates. Non-monetary items which are carried in
terms of historical cost denominated in foreign currency are reported
using the exchange rate at the date of transaction and investment in
foreign companies are recorded at the exchange rates prevailing on the
date of making the investments. Contingent Liabilities are translated
at closing rate.
c. Exchange Differences:
Exchange differences arising on the settlement of monetary items or on
restatement of monetary items at rates different from those at which
they were initially recorded during the year, or reported in previous
financial statements, are recognised as income or as expenses in the
year in which they arise.
d. Forward Exchange Contract not intended for trading or speculation
purposes:
The premium or discount arising at the inception of forward exchange
contracts is amortized as expense or income over the life of contract.
Exchange differences on such contract are recognized in the profit and
loss account in the year in which the exchange rate changes. Any profit
or loss arising on cancellation or renewal of forward exchange contract
is recognised as income or as expense.
10. Retirement Benefits:
Short term and other long term employee benefits are recognized as an
expense at the undiscounted amount in profit and loss account of the
year in which the related service is rendered.
The CompanyÃs Liability towards gratuity is determined on the basis of
year end actuarial valuation applying Projected Unit Credit Method done
by an independent actuary. The actuarial gains or losses determined by
the actuary are recognized in the Profit and Loss Account as income or
expense.
11. Borrowing Cost:
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing
of funds.
12. Leases
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 Profit and Loss account on a straight-line basis over the lease
term.
13. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they were entitled to participate in dividends relative to
a fully paid equity share during the reporting period. The weighted
average number of equity shares outstanding during the period are
adjusted for events of bonus issue; bonus element in a rights issue to
existing shareholders; share split; and reverse share split
(consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
14. Cash and Cash Equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
15. Segment Reporting
Identification of segments:
The CompanyÃs operating businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets. The analysis of geographical
segments is based on the areas in which major operating divisions of
the Company operate.
Inter segment Transfers:
The Company generally accounts for intersegment sales and transfers as
if the sales or transfers were to third parties at current market
prices.
Allocation of common costs:
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items:
Includes general corporate income and expense items which are not
allocated to any business segment.
Segment Policies:
The company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the company as a whole.
16. Provision for Current and Deferred Taxation:
Provision for current tax is made at the amount expected to be paid to
taxation authority in accordance with the Income Tax Act, 1961.
Deferred tax assets are recognised only to the extent that there is
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realised. In
situations where the company has unabsorbed depreciation or carry
forward tax losses, all deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence that they
can be realised against future taxable profits.
17. Provision, Contingent Liabilities and Contingent Assets:
Provisions are recognized for liabilities that can be measured only by
using a substantial degree of estimation, if
a. the Company has a present obligation as a result of past event,
b. a probable outflow of resources is expected to settle the
obligation and
c. the amount of the obligation can be reliably estimated Contingent
Liability is disclosed in case of
a. a present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation
b. a possible obligation, unless the probability of outflow of
resources is remote. Contingent Assets are neither recognized, nor
disclosed. Provisions, Contingent Liabilities and Contingent Assets
are reviewed at each Balance Sheet Date.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on Goenka Diamond & Jewels Ltd.
-
Goenka Diamond & Jewels Ltd. Tools
- Bulk Deals
-
Goenka Diamond & Jewels Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- BSE Price History
- NSE Price History
-
Goenka Diamond & Jewels Ltd. Key Financial Ratios
- Ratios
-
Goenka Diamond & Jewels Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Goenka Diamond & Jewels Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Goenka Diamond & Jewels Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Goenka Diamond & Jewels Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
