Accounting Policies of J L Morison (India) Ltd. Company
Mar 31, 2018
SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2018
A. CORPORATE INFORMATION:
J. L. Morison (India) Limited (The Company'') is a public limited company domiciled in India and is incorporated under the provision of The Companies Act applicable in India. Its shares are listed on BSE Ltd. (BSE) and The Calcutta Stock Exchange Ltd. The Company is engaged in the trading and manufacturing of personal care products.
B. SIGNIFICANT ACCOUNTING POLICIES:
1 Basis of Preparation of Financial Statements:
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (''the Act'') read with Rule 4 of the Companies (Indian Accounting Standards) Rules, 2015 and other related provisions of the Act.
The figures for the previous year ended 31st March, 2017 and opening balance sheet as on 1st April, 2016 have also been reinstated by the management as per the requirements of Ind AS. These financial statements are the first financial statements of the Company under Ind AS. Refer note no. 50 for an explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows. The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1st April, 2016 being the date of transition to Ind AS.
The financial statements of the Company are prepared on the accrual basis of accounting and Historical cost convention except for the following material items that have been measured at fair value as required by the relevant Ind AS:
(i) Certain financial assets and liabilities are measured at Fair value (Refer note no. 4 & 9) (ii) Defined benefit employee plan (Refer note no. 39) (iii) Derivative Financial instruments
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 Schedule III to the Companies Act, 2013.
2 Use of Estimates and judgments:
The preparation of the financial statements requires the Management to make, judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The recognition, measurement, classification or disclosure of an item or information in the financial statements is made relying on these estimates. The estimates and judgements used in the preparation of the financial statements are continuously evaluated by the management and are based on historical experience and various other assumptions and factors (including expectations of future events) that the management believes to be reasonable under the existing circumstances. Actual results may differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.
Critical accounting judgements and key source of estimation uncertainty
The Company is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. The estimates and underlying assumptions are reviewed on an on-going basis.
(a) Recognition and measurement of defined benefit obligations, key actuarial assumptions - Refer note no. 39
(b) Estimation of current tax expenses and payable - Refer note no. 46
3 Property. Plant and Equipment (PPE):
Property, Plant and Equipment (PPE) are capitalized on the day they are ready for use and are stated at cost. The Company had applied for the one time transition exemption of considering the carrying cost on the transition date i.e. 1st April, 2016 as the deemed cost under Ind AS. Hence regarded thereafter as historical cost.
Freehold land is carried at cost and is not depreciated. The cost of an item of Property, Plant and Equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable costs of bringing the asset to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the item and restoring the site on which it is located.
If significant parts of an item of Property, Plant and Equipment have different useful lives, then they are accounted for as separate items (major components) of Property, Plant and Equipment. Subsequent expenditure, subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate only if it is probable that the future economic benefits associated with the item will flow to the Company and that the cost of the item can be reliably measured.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss.
Assets which are not ready for their intended use are disclosed under Capital Work-in-Progress.
4 Intangible Assets:
Intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.
5 Depreciation and Amortization:
(a) Property Plant and Equipment (PPE)
Leasehold land is amortised over 95 years.
Depreciation is provided on a pro-rata basis on the straight line method based on estimated useful life prescribed under Schedule II to the Companies Act, 2013.
The residual values, useful lives and method of depreciation of Property, Plant and Equipment is reviewed at each financial year end and adjusted prospectively, if appropriate.
(b) Intangible assets
Software is amortized over a period of 5 years
6 Investment Property:
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property. Investment property is measured at its cost, including related transaction costs and where applicable borrowing costs less depreciation and impairment, if any.
Depreciation on building is provided based on straight line method using the useful life as specified in schedule II of the Companies Act, 2013.
7 Financial Instruments:
Financial assets - Initial recognition:
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instruments. On initial recognition, a financial asset is recognised at fair value, in case of Financial assets which are recognised at fair value through profit and loss (FVTPL), its transaction cost are recognised in the statement of profit and loss. In other cases, the transaction cost are attributed to the acquisition value of the financial asset.
Subsequent measurement:
Financial assets are subsequently classified as measured at: amortised cost fair value through profit & loss (FVTPL)
fair value through other comprehensive income (FVTOCI) The above classification is being determined considering the:
(a) the entity''s business model for managing the financial assets
(b) the contractual cash flow characteristics of the financial asset.
Financial assets are not reclassified subsequent to their recognition, except if and in the period the group changes its business model for managing financial assets.
(i) Measured at amortised cost:
Financial assets are subsequently measured at amortised cost, if these financial assets are held within a business module whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified date to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) Measured at fair value through other comprehensive income (FVTOCI):
Financial assets are measured at FVTOCI, if these financial assets are held within a business model whose objective is achieved by both collecting contractual cash flows that give rise on specified dates to solely payments of principal and interest on the principal amount outstanding and by selling financial assets. Fair value movements are recognized in the other comprehensive income (OCI). Interest income measured using the EIR method and impairment losses, if any are recognised in the Statement of Profit and Loss. On derecognition, cumulative gain or loss previously recognised in OCI is reclassified from the equity to ''other income'' in the Statement of Profit and Loss.
(iii) Measured at fair value through profit or loss (FVTPL):
Financial assets other than equity instrument are measured at FVTPL unless it is measured at amortised cost or at FVTOCI on initial recognition. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognised in the Statement of Profit and Loss.
Equity instruments
On initial recognition, the Company can make an irrevocable election (on an instrument-by instrument basis) to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments. This election is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the ''Reserve for equity instruments through other comprehensive income''. The cumulative gain or loss is not reclassified to Statement of Profit and Loss on disposal of the investments.
Dividends on these investments in equity instruments are recognised in Statement of Profit and Loss when the Company''s right to receive the dividends is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably. Dividends recognised in Statement of Profit and Loss are included in the ''Other income'' line item.
Impairment
The Company recognises a loss allowance for Expected Credit Losses (ECL) on financial assets that are measured at amortised cost and at FVOCI. The credit loss is difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate. This is assessed on an individual or collective basis after considering all reasonable and supportable including that which is forward looking.
The Company''s trade receivables or contract revenue receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall, being simplified approach for recognition of impairment loss allowance.
Under simplified approach, the Company does not track changes in credit risk. Rather it recognizes impairment loss allowance based on the lifetime ECL at each reporting date right from its initial recognition. The Company uses a provision matrix to determine impairment loss allowance on the portfolio of trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.
For financial assets other than trade receivables, the Company recognises 12-months expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. If, in a subsequent period, credit quality of the instrument improves such that there is no longer significant increase in credit risks since initial recognition, then the Company reverts to recognizing impairment loss allowance based on 12 months ECL. The impairment losses and reversals are recognised in Statement of Profit and Loss. For equity instruments and financial assets measured at FVTPL, there is no requirement of impairment testing.
Derecognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers rights to receive cash flows from an asset, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement.
In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Financial Liabilities
Initial Recognition and measurement
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial liabilities are initially recognised at fair value net of transaction costs for all financial liabilities not carried at fair value through profit or loss.
The Company''s financial liabilities includes trade and other payables, loans and borrowings including bank overdrafts.
Subsequent measurement
Financial liabilities measured at amortised cost are subsequently measured at using EIR method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.
Loans & Borrowings
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using EIR method. Gains and losses are recognized in profit & loss when the liabilities are derecognized as well as through EIR amortization process.
Financial Guarantee Contracts
Financial guarantee contracts issued by the Company are those contracts that requires a payment to be made or to reimburse the holder for a loss it incurs because the specified debtors fails to make payment when due in accordance with the term of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
Derivative financial instruments
The Company uses derivative financial instruments, such as forward foreign exchange contracts, to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value, with changes in fair value recognised in Statement of Profit and Loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
8 Fair Value Measurement:
The Company measures financial instruments, such as, derivatives, investments at fair value at each balance sheet date.
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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
9 Inventory:
Inventories includes Raw Material, Work-in-Progress, Finished Goods, Stores & Spares, Consumables, Packing Materials, Goods for resale and are valued at lower of cost and net realizable value.
Raw Materials and Packing Materials
Raw Material and Components - Cost include cost of purchases and other costs incurred in bringing the inventories to their present location and condition. Cost is determined using identified lot basis / First in First Out (FIFO) basis.
Work-in-Progress and Finished Goods
Cost includes cost of direct material, labour, other direct cost and a proportion of fixed manufacturing overheads allocated based on the normal operating capacity but excluding borrowing costs. Cost is determined on weighted average cost basis.
Traded Goods
Stock in trade are valued at lower of cost and net realizable value. For this purpose cost is determined on first in first out basis. Cost includes cost of purchase and other direct costs incurred.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale.
Adequate allowance is made for obsolete and slow moving items.
10 Cash and Cash Equivalents:
Cash and Cash equivalents include cash and cheque in hand, bank balances, demand deposits with banks and other short-term highly liquid investments that are readily convertible to known amounts of cash & which are subject to an insignificant risk of changes in value where original maturity is three months or less.
11 Foreign Currency Transactions:
a) Initial Recognition
Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss of the year.
b) Measurement of Foreign Currency Items at the Balance Sheet Date
Foreign currency monetary items of the Company are restated at the closing exchange rates. Non monetary items are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising out of these transactions are charged to the Statement of Profit and Loss.
12 Revenue Recognition: Sale of Goods
Revenue from sale of goods is recognised when all the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, there is no continuing managerial involvement with the goods and the amount of revenue can be measured reliably.
Revenue is measured at fair value of the consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government which are levied on sales such as value added tax, goods and service tax, etc.
Interest
Revenue is recognised on a time proportion basis taking into account the amount outstanding and the interest rate applicable and based on effective interest rate method.
Dividend
Dividend Income is recognized when right to receive the same is established.
13 Employee Benefits:
The Company has provides following post-employment plans:
(a) Defined benefit plans such a gratuity and
(b) Defined contribution plans such as Provident fund & Superannuation fund a) Defined-benefit plan:
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plan is the present value of defined benefit obligations at the end of the reporting period less fair value of plan assets. The defined benefit
obligations is calculated annually by actuaries through actuarial valuation using the projected unit credit method.
The Company recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:
(a) Service costs comprising current service costs, past-service costs, gains and losses on curtailment and non-routine settlements; and
(b) Net interest expense or income
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and fair value of plan assets. This cost is included in employee benefit expenses in the statement of the profit & loss.
Re-measurement comprising of actuarial gains and losses arising from
(a) Re-measurement of Actuarial(gains)/losses
(b) Return on plan assets, excluding amount recognized in effect of asset ceiling
(c) Re-measurement arising because of change in effect of asset ceiling are recognised in the period in which they occur directly in Other comprehensive income. Re-measurement are not reclassified to profit or loss in subsequent periods.
Ind AS 19 requires the exercise of judgment in relation to various assumptions including future pay rises, inflation and discount rates and employee and pensioner demographics. The Company determines the assumptions in conjunction with its actuaries, and believes these assumptions to be in line with best practice, but the application of different assumptions could have a significant effect on the amounts reflected in the income statement, other comprehensive income and balance sheet. There may be also interdependency between some of the assumptions.
b) Defined-contribution plan:
Under defined contribution plans, provident fund, the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. Defined Contribution plan comprise of contributions to the employees'' provident fund with the government, superannuation fund and certain state plans like Employees'' State Insurance and Employees'' Pension Scheme. The Company''s payments to the defined contribution plans are recognised as expenses during the period in which the employees perform the services that the payment covers.
c) Other employee benefits:
(a) Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as a liability at the present value of the obligation as at the Balance sheet date determined based on an actuarial valuation.
(b) Undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the period when the employee renders the related services.
14 Taxes on Income:
Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and loss except to the extent it relates to items directly recognized in equity or in other comprehensive income.
Current tax is based on taxable profit for the year. Taxable profit is different from accounting profit due to temporary differences between accounting and tax treatments, and due to items that are never taxable or tax deductible. Tax provisions are included in current liabilities. Interest and penalties on tax liabilities are provided for in the tax charge. The Company offsets, the current tax assets and liabilities (on a year on year basis) where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis or to realise the assets and liabilities on net basis.
Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in financial statements. Deferred income tax asset are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized. Deferred tax assets are not recognised where it is more likely than not that the assets will not be realised in the future.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Minimum Alternative Tax (''MAT'') credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income-tax during the specified period. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income-tax during the specified period.
15 Borrowing Cost:
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of cost of that assets, during the period till all the activities necessary to prepare the qualifying assets for its intended use or sale are complete during the period of time that is required to complete and prepare the assets for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Other borrowing costs are recognized as an expense in the period in which they are incurred.
16 Earnings Per Share:
Basic earnings per shares are calculated by dividing the net profit or loss after tax for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to the equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
17 Leases :
Where the Company is Lessee
Lessee, 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 accrual basis as per the terms of agreements entered with the counter parties.
Where the Company is Lessor
Leases in which the Company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in property, plant and equipment. The Company recognizes lease rentals from the property leased out, on accrual basis as per the terms of agreements entered with the counter parties. Costs, including depreciation, are recognized as an expense in the Statement of Profit and Loss.
18 Provisions. Contingent Liabilities and Contingent Assets:
A provision is recognised if, as a result of a past event, the group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract.
A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that may probably not require an outflow of resources or an obligation for which the future outcome cannot be ascertained with reasonable certainty. When there is a possible or a present obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made.
Contingent assets are neither recognized nor disclosed in financial statements.
C) RECENT ACCOUNTING PRONOUNCEMENTS:
Ind AS 115 - Revenue from Contracts with Customers
On 28th March, 2018, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from Contract with Customers effective from 1st April, 2018. The core principle of the new standard is that an entity should recognize revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service (i.e. an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers.
Control of an asset refers to the ability to direct the use of, and obtain substantially all of the remaining benefits from, the asset. Control includes the ability to prevent other entities from directing the use of, and obtaining the benefits from, an asset.
Amendment to Ind AS 21, Foreign currency transactions and advance consideration:
On 28th March, 2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 effective from 1st April, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.
Consequential amendments to other Ind AS due to notification of Ind AS 115 and other amendments discussed above. The management is yet to assess the impact of the aforesaid amendments on the Company''s financial information.
Mar 31, 2016
A. SIGNIFICANT ACCOUNTING POLICIES:
a) Basis of Preparation:
These financial statements have been prepared to comply with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under Section 133 of the Companies Act 2013 (âThe Actâ) read with Rule 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policy has been consistently applied by the Company.
The Company follows the mercantile system of accounting in general and recognizes income and expenditure on accrual basis except as otherwise stated.
b) Use of Estimates:
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.
c) Fixed Assets:
Tangible assets
Tangible assets are capitalized on the day they are ready for use and are stated at cost less accumulated depreciation and impairment losses, if any. Cost includes the purchase price and all identifiable cost incurred to bring the assets to its working condition and location. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.
Subsequent expenditures related to an item of Tangible Asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.
Assets which are not ready for their intended use are disclosed under Capital Work-in-Progress.
Intangible assets
Intangible assets comprising software are stated at cost of acquisition net of recoverable taxes less accumulated amortization/ depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use.
The amortization period and the amortization method are reviewed at least at each financials year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly.
d) Depreciation:
Tangible assets
Depreciation is provided using the straight line method on a pro-rata basis as per useful lives as prescribed under Part C of Schedule II of Companies Act, 2013 except for leasehold land which is amortized over 95 years. Individual assets costing rupees five thousand or less are considered as low value assets and are depreciated in full in the year of purchase.
Intangible assets
Computer Software amortized over a period of 5 years
e) Impairment of Fixed Assets:
The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factor. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. If at the Balance Sheet date there is any evaluation that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect.
f) Investments:
On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.
Long term investments are stated at cost less provision for diminution in value, which is other than temporary. Current investments are carried at lower of cost or fair value. In respect of current investments, the shortfall in the book value when compared to market value of said investment on individual basis is charged to Revenue account.
g) Inventory Valuation:
Raw Materials and Packing Materials
Raw Materials and Packing Materials are valued at cost (determined on weighted average basis).
Semi-Finished Goods and Finished Goods
Semi-Finished Goods and Finished Goods are valued at lower of cost and net realizable value. Cost includes material cost, direct and indirect labour cost, attributable factory overheads and excise duty
Traded Goods
Stock in trade are valued at lower of cost and net realizable value. For this purpose cost is determined on first in first out basis. Cost includes cost of purchase and other direct costs incurred.
h) Foreign Currency Transactions:
The transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognized in Profit and Loss Account. Monetary Assets and liabilities denominated in foreign currencies are stated at the exchange rate prevailing on the date of the Balance Sheet.
i) Derivatives Transaction :
Gains / losses arising on settlement of Derivative transactions entered into by the Company are recognized in the Statement of Profit and Loss. Provision for losses in respect of outstanding contracts as on Balance Sheet date is made based on mark to market valuations of such contracts.
j) revenue recognition:
Sale of Goods
Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer which normally coincides with dispatch of goods. Sales are net of returns, trade discounts, and sales tax and include excise duty.
Interest
Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
Dividend
Dividend Income is recognized when right to receive the same is established.
Others
Subsidy from governments, Sales Tax assessment dues, Insurance claims are accounted for when reasonable certainty of receipt is established.
k) Employee Benefits:
(i) Defined benefit plans Gratuity
Gratuity liability is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.
The Company makes annual contribution to the Employees'' Group Gratuity Scheme of the Life Insurance Corporation of India, a funded defined benefit plan for qualifying employees. The scheme provides lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary, payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.
Actuarial gains/losses are immediately taken to statement of profit and loss account and are not deferred.
Compensated Absences
Compensated Absences liability is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. Actuarial gains/losses are immediately taken to statement of Profit & Loss and are not deferred.
The Company allows to encash the privilege leave up to maximum of 15 days per annum from the maximum accumulated leaves of 84 days of qualifying employees.
(ii) Defined contribution plans
These are Plans in which the Company pays predefined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the employees provident fund with the government and certain state plans like Employees State Insurance. The Company''s payments to the defined contribution plans are recognized as expenses during the period in which the employees perform the services that the payment covers.
l) Taxes on Income:
Income tax is accounted in accordance with AS22 ''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 year Deferred tax assets are recognized 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 recognized if there is virtual certainty that sufficient future taxable income will be available to realize 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 Alternative Tax 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 asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified year.
m) Cash & Cash Equivalent:
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.
n) 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.
o) Earnings Per Share:
Basic earnings per shares are calculated by dividing the net profit or loss after tax for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to the equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
p) Leases:
Where the Company is Lessee
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 accrual basis as per the terms of agreements entered with the counter parties.
Where the Company is Lessor
Leases in which the Company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in fixed assets. The Company recognizes lease rentals from the property leased out, on accrual basis as per the terms of agreements entered with the counter parties. Costs, including depreciation, are recognized as an expense in the Statement of Profit and Loss.
q) Provisions, Contingent Liabilities and Contingent Assets:
A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Where no reliable estimate can be made, a disclosure is made as a contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.
Mar 31, 2015
A) Basis of Preparation
These financial statements have been prepared to comply with the
Generally Accepted Accounting Principles in India (Indian GAAP),
including the Accounting Standards notified under the relevant
provisions of the Companies act 2013. The financial statements have
been prepared under the historical cost convention on an accrual basis.
The accounting policy has been consistently applied by the Company.
The Company follows the mercantile system of accounting in general and
recognizes income and expenditure on accrual basis except as otherwise
stated.
b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates.
c) Fixed Assets:
Tangible assets
Tangible assets are capitalised on the day they are ready for use and
are stated at cost less accumulated depreciation. Cost includes the
purchase price and all identifiable cost incurred to bring the assets
to its working condition and location. Borrowing costs relating to
acquisition of fixed assets which takes substantial period of time to
get ready for its intended use are also included to the extent they
relate to the period till such assets are ready to be put to use.
Subsequent expenditures related to an item of Tangible Asset are added
to its book value only if they increase the future benefits from the
existing asset beyond its previously assessed standard of performance.
Assets which are not ready for their intended use are disclosed under
Capital Work-in-Progress.
Intangible assets
Intangible assets comprising software are stated at cost of acquisition
net of recoverable taxes less accumulated amortization/ depletion and
impairment loss, if any. The cost comprises purchase price, borrowing
costs, and any cost directly attributable to bringing the asset to its
working condition for the intended use.
d) Depreciation:
Tangible assets
Depreciation is provided using the straight line method on a pro-rata
basis as per useful lives as prescribed under Part C of Schedule II of
Companies Act, 2013. Individual assets costing rupees five thousand or
less considered low value assets are depreciated in full in the year of
purchase.
Intangible assets
Computer Software amortised over a period of 5 years
e) Impairment of Fixed Assets:
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factor. An impairment loss is recognised whenever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital. If at
the Balance Sheet date there is any evaluation that a previously
assessed impairment loss no longer exists, then such loss is reversed
and the asset is restated to that effect.
f) Investments:
Long term investments are stated at cost less provision for diminution
in value, which is other than temporary. Current investments are
carried at lower of cost or fair value. In respect of current
investments, the shortfall in the book value when compared to market
value of said investment on individual basis is charged to Revenue
account.
g) Inventory Valuation:
Traded Goods
Stock in trade are valued at lower of cost and net realizable value.
For this purpose cost is determined on first in first out basis. Cost
includes cost of purchase and other direct costs incurred.
h) Foreign Currency Transactions:
The transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction. Any income or expense on account of exchange difference
either on settlement or on translation is recognized in Profit and Loss
Account. Monetary Assets and liabilities denominated in foreign
currencies are stated at the exchange rate prevailing on the date of
the Balance Sheet.
i) Forward Contracts:
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contracts is recognised as income or as expense for
the year.
j) Revenue Recognition:
Sale of Goods
Revenue is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer which normally
coincides with dispatch of goods. Sales are net of returns, trade
discounts, and sales tax and include excise duty.
Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable. Commission
Commission is recognized when right to receive the same from principal
is established on sale.
Dividend
Dividend Income is recognized when right to receive the same is
established.
Others
Subsidy from governments, Sales Tax assessment dues, Insurance claims
are accounted for when reasonable certainty of receipt is established.
k) Employee Benefits:
(i) Defined benefit plans Gratuity
Gratuity liability is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each
financial year.
The Company makes annual contribution to the Employees'' Group Gratuity
Scheme of the Life Insurance Corporation of India, a funded defined
benefit plan for qualifying employees. The scheme provides lump sum
payment to vested employees at retirement, death while in employment or
on termination of employment of an amount equivalent to 15 days salary,
payable for each completed year of service or part thereof in excess of
six months. Vesting occurs upon completion of five years of service.
Actuarial gains/losses are immediately taken to profit and loss account
and are not deferred.
Leave Encashment
Leave Encashment liability is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each
financial year.
The Company allows to encash the privilege leave up to maximum of 15
days per annum from the maximum accumulated leaves of 84 days of
qualifying employees. The company provides for unencashed portion of
leave of qualified employees at each year end and the same is unfunded.
(ii) Defined contribution plans
These are Plans in which the company pays predefined amounts to
separate funds and does not have any legal or informal obligation to
pay additional sums. These comprise of contributions to the employees
provident fund with the government and certain state plans like
Employees State Insurance. The Company''s payments to the defined
contribution plans are recognised as expenses during the period in
which the employees perform the services that the payment covers.
l) Taxes on Income:
Income tax is accounted in accordance with AS22 ''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 year 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.
Credit entitlement in respect of Minimum Alternate Tax (MAT) is
considered on management estimation of regular taxation in future
Wealth tax is accounted in accordance with Wealth Tax Act, 1957.
m) Cash & Cash Equivalent:
Cash and Cash Equivalent comprises Cash, Fixed deposit and Short Term
deposit which matured in less than three months.
n) Borrowing Cost:
Interest and other costs related to borrowing are considered as part of
cost of qualifying fixed assets upto the date asset is ready for use.
Other borrowing costs are charged to revenue.
o) Earnings Per Share:
Basic earnings per shares are calculated by dividing the net profit or
loss after tax for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the
period. For the purpose of calculating diluted earnings per share, the
net profit or loss for the period attributable to the equity
shareholders and the weighted average number of shares outstanding
during the period is adjusted for the effects of all dilutive potential
equity shares.
p) Provisions, Contingent Liabilities and Contingent Assets:
A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation. Contingent liabilites, if material
are disclosed by way of notes to accounts. Contingent assets are
neither recognised nor disclosed in the financial statements.
Mar 31, 2014
A) Basis of Preparation:
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis.
The accounting policy has been consistently applied by the Company.
The Company follows the mercantile system of accounting in general and
recognizes income and expenditure on accrual basis except as otherwise
stated.
b) Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates.
c) Fixed Assets:
Fixed Assets are stated at cost (or revalued amounts, as the case may
be), less accumulated depreciation/amortisation and impairment losses
if any. Cost comprises the purchase price and any attributable cost of
bringing the asset to its working condition for its intended use.
Borrowing costs relating to acquisition of fixed assets which takes
substantial period of time to get ready for its intended use are also
included to the extent they relate to the period till such assets are
ready to be put to use.
d) Depreciation:
Depreciation is provided using the Straight Line Method at the rates
prescribed under Schedule XIV of the Companies Act, 1956.
Leasehold land/building is amortized over the lease period.
Fixed assets costing each Rs. 5000/- or less are fully depreciated in the
year of purchase.
Depreciation on the fixed Assets added/disposed off during the year
provided on prorata basis.
e) Impairment of Fixed Assets:
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factor. An impairment loss is recognised whenever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital. If at
the Balance Sheet date there is any evaluation that a previously
assessed impairment loss no longer exists, then such loss is reversed
and the asset is restated to that effect.
f) Investments:
Long term investments are stated at cost less provision for diminution
in value, which is other than temporary. Current investments are
carried at lower of cost or fair value. In respect of current
investments, the shortfall in the book value when compared to market
value of said investment on individual basis is charged to Revenue
account.
g) Inventory Valuation:
Traded Goods
Stock in trade are valued at lower of cost and net realizable value.
For this purpose cost is determined on first in first out basis. Cost
includes cost of purchase and other direct costs incurred.
h) Foreign Currency Transactions:
The transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction. Any income or expense on account of exchange difference
either on settlement or on translation is recognized
in Statment of Profit and Loss. Monetary Assets and Liabilities
denominated in foreign currencies are stated at the exchange rate
prevailing on the date of the Balance Sheet.
i) Forward Contracts:
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contracts is recognised as income or as expense for
the year.
j) Revenue Recognition:
Sale of Goods
Revenue is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer which normally
coincides with dispatch of goods. Sales are net of returns, trade
discounts, and sales tax and include excise duty.
Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Commission
Commission is recognized when right to receive the same from principal
is established on sale.
Dividend
Dividend Income is recognized when right to receive the same is
established.
Others
Subsidy from governments, Sales Tax assessment dues, Insurance claims
are accounted for when reasonable certainty of receipt is established.
k) Employee Benefits:
(i) Defined benefit plans
Gratuity
Gratuity liability is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each
financial year.
The Company makes annual contribution to the Employees'' Group Gratuity
Scheme of the Life Insurance Corporation of India, a funded defined
benefit plan for qualifying employees. The scheme provides lump sum
payment to vested employees at retirement, death while in employment or
on termination of employment of an amount equivalent to 15 days salary,
payable for each completed year of service or part thereof in excess of
six months. Vesting occurs upon completion of five years of service.
Actuarial gains/losses are immediately taken to profit and loss account
and are not deferred.
Leave Encashment
Leave Encashment liability is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each
financial year.
The Company allows to encash the privilege leave up to maximum of 15
days per annum from the maximum accumulated leaves of 84 days of
qualifying employees. The company provides for unencashed portion of
leave of qualified employees at each year end and the same is unfunded.
(ii) Defined contribution plans
These are Plans in which the company pays predefined amounts to
separate funds and does not have any legal or informal obligation to
pay additional sums. These comprise of contributions to the employees
provident fund with the government and certain state plans like
Employees State Insurance. The Company''s payments to the defined
contribution plans are recognised as expenses during the period in
which the employees perform the services that the payment covers.
l) Taxes on Income:
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 year 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.
Credit entitlement in respect of Minimum Alternate Tax (MAT) is
considered on management estimation of regular taxation in future
Wealth tax is accounted in accordance with Wealth Tax Act, 1957.
m) Cash & Cash Equivalent:
Cash and Cash Equivalent comprises Cash, Fixed deposit and Short Term
deposit which matured in less than three months.
n) Borrowing Cost:
Interest and other costs related to borrowing are considered as part of
cost of qualifying fixed assets upto the date asset is ready for use.
Other borrowing costs are charged to revenue.
o) Earnings Per Share:
Basic earnings per shares are calculated by dividing the net profit or
loss after tax for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the
period. For the purpose of calculating diluted earnings per share, the
net profit or loss for the period attributable to the equity
shareholders and the weighted average number of shares outstanding
during the period is adjusted for the effects of all dilutive potential
equity shares.
p) Provisions, Contingent Liabilities and Contingent Assets:
A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation. Contingent liabilites, if material
are disclosed by way of notes to accounts. Contingent assets are
neither recognised nor disclosed in the financial statements.
1 SHARE CAPITAL AUTHORISED
a) Rights of Equity Shareholders
The Company has only one class of Equity Shares having a par value of
Rs.10 per share. Each holder of equity shares is entitled to one vote per
share. The Company declares and pays dividends in Indian rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting.
During the year ended 31st March, 2014, the amount of per share
dividend recognized as distributions to equity shareholders was Rs. 1
(31st March, 2013: Rs. 1)
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
c) Share held by holding/ultimate holding company and / or their
subsidiaries / associates
None of the equity shares are held by the holding/ ultimate holding
company and/ or their subsidiaries / associates.
e) Aggregate number of bonus shares issued, share issued for
consideration other than cash and shares bought back during the period
of five years immediately preceding the reporting date : Nil
f) Shares reserved for issue under options : Nil
Mar 31, 2013
A) Basis of Preparation:
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis.
The accounting policy has been consistently applied by the Company.
The Company follows the mercantile system of accounting in general and
recognizes income and expenditure on accrual basis except as otherwise
stated.
b) Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates.
c) Fixed Assets:
Fixed Assets are stated at cost (or revalued amounts, as the case may
be), less accumulated depreciation/amortisation and impairment losses
if any. Cost comprises the purchase price and any attributable cost of
bringing the asset to its working condition for its intended use.
Borrowing costs relating to acquisition of fixed assets which takes
substantial period of time to get ready for its intended use are also
included to the extent they relate to the period till such assets are
ready to be put to use.
d) Depreciation:
Depreciation is provided using the Straight Line Method at the rates
prescribed under schedule XIV of the Companies Act, 1956.
Leasehold land/building is amortized over the lease period.
Fixed assets costing each Rs. 5000/- or less are fully depreciated in the
year of purchase.
Depreciation on the fixed Assets added/disposed off during the year
provided on prorata basis.
e) Impairment of Fixed Assets:
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factor. An impairment loss is recognised whenever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital. If at
the Balance Sheet date there is any evaluation that a previously
assessed impairment loss no longer exists, then such loss is reversed
and the asset is restated to that effect.
f) Investments:
Long term investments are stated at cost less provision for diminution
in value, which is other than temporary. Current investments are
carried at lower of cost or fair value. In respect of current
investments, the shortfall in the book value when compared to market
value of said investment on individual basis is charged to Revenue
Account.
g) Inventory Valuation:
Traded Goods
Stock in trade are valued at lower of cost and net realizable value.
For this purpose cost is determined on first in first out basis. Cost
includes cost of purchase and other direct costs incurred.
h) Foreign Currency Transactions:
The transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction. Any income or expense on account of exchange difference
either on settlement or on translation is recognized in Statement of
Profit & Loss. Monetary Assets and liabilities denominated in foreign
currencies are stated at the exchange rate prevailing on the date of
the Balance Sheet.
i) Forward Contracts:
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contracts is recognised as income or as expense for
the year.
j) Revenue Recognition:
Sale of Goods
Revenue is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer which normally
coincides with dispatch of goods. Sales are net of returns, trade
discounts, and sales tax and include excise duty.
Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Commission
Commission is recognized when right to receive the same from principal
is established on sale.
Dividend
Dividend Income is recognized when right to receive the same is
established.
Others
Subsidiary from governments, Sales Tax assessment dues, Insurance
claims are accounted for when reasonable certainty of receipt is
established.
k) Employee Benefits:
(i) Defined benefit plans
Gratuity
Gratuity liability is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each
financial year.
The Company makes annual contribution to the Employees'' Group Gratuity
Scheme of the Life Insurance Corporation of India, a funded defined
benefit plan for qualifying employees. The scheme provides lump sum
payment to vested employees at retirement, death while in employment or
on termination of employment of an amount equivalent to 15 days salary,
payable for each completed year of service or part thereof in excess of
six months. Vesting occurs upon completion of five years of service.
Actuarial gains/losses are immediately taken to Statement of Profit &
Loss and are not deferred.
Leave Encashment
Leave Encashment liability is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each
financial year.
The Company allows to encash the privilege leave up to maximum of 15
days per annum from the maximum accumulated leaves of 84 days of
qualifying employees. The company provides for unencashed portion of
leave of qualified employees at each year end and the same is unfunded.
(ii) Defined contribution plans
These are plans in which the company pays predefined amounts to
separate funds and does not have any legal or informal obligation to
pay additional sums. These comprise of contributions to the employees
provident fund with the government and certain state plans like
Employees State Insurance. The Company''s payments to the defined
contribution plans are recognised as expenses during the period in
which the employees perform the services that the payment covers.
l) Taxes on Income:
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 year 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.
MAT credit is recognised as an asset only when and to the extent there
is convincing evidence that the Company will pay normal income tax
during the specified period. In the year in which the Minimum
Alternative Tax (MAT) credit becomes eligible to be recognised as an
asset in accordance with the recommendations contained in Guidance Note
issued by the Institute of Chartered Accountants of India, the said
asset is created by way of a credit to the Statement of Profit & Loss
and shown as MAT Credit Entitlement. The Company reviews the same at
each balance sheet date and writes down the carrying amount of MAT
Credit Entitlement to the extent there is no longer convincing evidence
to the effect that Company will pay normal Income Tax during the
specified period.
Wealth tax is accounted in accordance with Wealth Tax Act, 1957.
m) Cash & Cash Equivalent:
Cash and Cash Equivalent comprises Cash, Fixed deposit and Short Term
deposit which matured in less than three months.
n) Borrowing Cost:
Interest and other costs related to borrowing are considered as part of
cost of qualifying fixed assets upto the date asset is ready for use.
Other borrowing costs are charged to revenue.
o) Earnings Per Share:
Basic earnings per shares are calculated by dividing the net profit or
loss after tax for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the
period. For the purpose of calculating diluted earnings per share, the
net profit or loss for the period attributable to the equity
shareholders and the weighted average number of shares outstanding
during the period is adjusted for the effects of all dilutive potential
equity shares.
p) Provisions, Contingent Liabilities and Contingent Assets:
A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation. Contingent liabilites, if material
are disclosed by way of notes to accounts. Contingent assets are
neither recognised nor disclosed in the financial statements.
Mar 31, 2012
A) Basis of Preparation:
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis.
The accounting policy has been consistently applied by the Company.
The Company follows the mercantile system of accounting in general and
recognizes income and expenditure on accrual basis except as otherwise
stated.
b) Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management's best
knowledge of current events and actions, actual results could differ
from these estimates.
c) Fixed Assets:
Fixed Assets are stated at cost (or revalued amounts, as the case may
be), less accumulated depreciation/amortisation and impairment losses,
if any. Cost comprises the purchase price and any attributable cost of
bringing the asset to its working condition for its intended use.
Borrowing costs relating to acquisition of fixed assets which takes
substantial period of time to get ready for its intended use are also
included to the extent they relate to the period till such assets are
ready to be put to use.
d) Depreciation:
Depreciation is provided using the Straight Line Method at the rates
prescribed under schedule XIV of the Companies Act, 1956.
Leasehold land/building is amortized over the lease period.
Fixed assets costing each Rs. 5,000/- or less are fully depreciated in
the year of purchase.
Depreciation on the fixed Assets added/disposed off during the year
provided on pro-rata basis.
e) Impairment of Fixed Assets:
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factor. An impairment loss is recognised whenever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital. If at
the Balance Sheet date there is any evaluation that a previously
assessed impairment loss no longer exists, then such loss is reversed
and the asset is restated to that effect.
f) Investments:
Long term investments are stated at cost less provision for diminution
in value, which is other than temporary. Current investments are
carried at lower of cost or fair value. In respect of current
investments, the shortfall in the book value when compared to market
value of said investment on individual basis is charged to Revenue
account.
g) Inventory Valuation:
Traded Goods
Stock in trade are valued at lower of cost and net realizable value.
For this purpose cost is determined on first in first out basis. Cost
includes cost of purchase and other direct costs incurred.
h) Foreign Currency Transactions:
The transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction. Any income or expense on account of exchange difference
either on settlement or on translation is recognised in statement of
profit and loss. Monetary Assets and liabilities denominated in foreign
currencies are stated at the exchange rate prevailing on the date of
the Balance Sheet.
i) Forward Contracts:
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contracts is recognised as income or as expense for
the year.
j) Revenue Recognition:
Sale of Goods
Revenue is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer which normally coincides
with dispatch of goods. Sales are net of returns, trade discounts, and
sales tax and include excise duty.
Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Commission
Commission is recognized when right to receive the same from principal
is established on sale.
Dividend
Dividend Income is recognized when right to receive the same is
established.
Others
Subsidiary from governments, Sales Tax assessment dues, Insurance
claims are accounted for when reasonable certainty of receipt is
established.
k) Employee Benefits:
(i) Defined benefit plans Gratuity
Gratuity liability is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each
financial year.
The Company makes annual contribution to the Employees' Group Gratuity
Scheme of the Life Insurance Corporation of India, a funded defined
benefit plan for qualifying employees. The scheme provides lump sum
payment to vested employees at retirement, death while in employment or
on termination of employment of an amount equivalent to 15 days salary,
payable for each completed year of service or part thereof in excess of
six months. Vesting occurs upon completion of five years of service.
Actuarial gains/losses are immediately taken to statement of profit and
loss and are not deferred.
Leave Encashment
Leave Encashment liability is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each
financial year.
The Company allows to encash the privilege leave up to maximum of 15
days per annum from the maximum accumulated leaves of 84 days of
qualifying employees. The company provides for unencashed portion of
leave of qualified employees at each year end and the same is unfunded.
(ii) Defined contribution plans
These are Plans in which the company pays pre-defined amounts to
separate funds and does not have any legal or informal obligation to
pay additional sums. These comprise of contributions to the employees
provident fund with the government and certain state plans like
Employees State Insurance. The Company's payments to the defined
contribution plans are recognised as expenses during the period in
which the employees perform the services that the payment covers.
I) Taxes on Income:
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 year 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.
MAT credit is recognised as an asset only when and to the extent there
is convincing evidence that the Company will pay normal income tax
during the specified period. In the year in which the Minimum
Alternative Tax (MAT) credit becomes eligible to be recognised as an
asset in accordance with the recommendations contained in Guidance Note
issued by the Institute of Chartered Accountants of India, the said
asset is created by way of a credit to the statement of profit and loss
and shown as MAT Credit Entitlement. The Company reviews the same at
each balance sheet date and writes down the carrying amount of MAT
Credit Entitlement to the extent there is no longer convincing evidence
to the effect that Company will pay normal Income Tax during the
specified period.
Wealth tax is accounted in accordance with Wealth Tax Act, 1957.
m) Cash & Cash Equivalent:
Cash and Cash Equivalent comprises Cash, Fixed deposit and Short Term
deposit which matured in less than three months.
n) Borrowing Cost:
Interest and other costs related to borrowing are considered as part of
cost of qualifying fixed assets upto the date asset is ready for use.
Other borrowing costs are charged to revenue.
Earnings Per Share:
Basic earnings per shares are calculated by dividing the net profit or
loss after tax for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the
period. For the purpose of calculating diluted earnings per share, the
net profit or loss for the period attributable to the equity
shareholders and the weighted average number of shares outstanding
during the period is adjusted for the effects of all dilutive potential
equity shares.
Provisions, Contingent Liabilities and Contingent Assets:
A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation. Contingent liabilites, if material
are disclosed by way of notes to accounts. Contingent assets are
neither recognised nor disclosed in the financial statements.
Mar 31, 2011
A) Basis of Preparation
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis.
The accounting policy has been consistently applied by the Company.
The Company follows the mercantile system of accounting in general and
recognizes income and expenditure on accrual basis except as otherwise
stated.
b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management's best
knowledge of current events and actions, actual results could differ
from these estimates.
c) Fixed Assets:
Fixed Assets are stated at cost (or revalued amounts, as the case may
be), less accumulated depreciation/amortisation and impairment losses
if any. Cost comprises the purchase price and any attributable cost of
bringing the asset to its working condition for its intended use.
Borrowing costs relating to acquisition of fixed assets which takes
substantial period of time to get ready for its intended use are also
included to the extent they relate to the period till such assets are
ready to be put to use.
Advances paid towards acquisition of the fixed assets which have not
been installed or put to use and the cost of the assets not put to use
before the year end are disclosed under capital work-in-progress.
d) Depreciation:
Depreciation is provided using the Straight Line Method at the rates
prescribed under schedule XIV of the Companies Act, 1956.
Leasehold land/building is amortized over the lease period.
Fixed assets costing each Rs. 5000/- or less are fully depreciated in
the year of purchase.
Depreciation on the fixed Assets added/disposed off during the year
provided on pro-rata basis.
e) Impairment of Fixed Assets:
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognised whenever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital. If at
the Balance Sheet date there is any evaluation that a previously
assessed impairment loss no longer exists, then such loss is reversed
and the asset is restated to that effect.
f) Investments:
Long term investments are stated at cost less provision for diminution
in value, which is other than temporary. Current investments are
carried at lower of cost or fair value. In respect of current
investments, the shortfall in the book value when compared to market
value of said investment on individual basis charged to Revenue A/c.
g) Inventory Valuation:
Inventories are valued as under:
Category Method of Valuation
Raw materials, packing materials, At lower of cost and net
stores and spares realizable value. For this
purpose cost is determined
on moving weighted average
basis.
Semi-finished goods and At lower of cost and net
manufactured Goods realizable value. Cost includes
material cost, direct and
indirect labour cost,
attributable factory overheads
and excise duty.
Traded goods At lower of cost and net
realizable value. For this
purpose cost is determined on
first in first out basis. Cost
includes cost of purchase and
other direct costs incurred.
h) Foreign Currency Transactions:
The transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction. Any income or expense on account of exchange difference
either on settlement or on translation is recognized in Profit and Loss
Account. Monetary Assets and liabilities denominated in foreign
currencies are stated at the exchange rate prevailing on the date of
the Balance Sheet.
i) Forward Contracts
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contracts is recognised as income or as expense for
the year.
j) Revenue Regonition:
Sale of Goods
Revenue is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer which normally
coincides with dispatch of goods. Sales are net of returns, trade
discounts, and sales tax and include excise duty.
Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Commission
Commission is recognized when right to receive the same from principal
is established on sale.
Dividend
Dividend Income is recognized when right to receive the same is
established.
Others
Subsidiary from governments, Sales Tax assessment dues, Insurance
claims are accounted for when reasonable certainty of receipt is
established.
k) Employee Benefits
(i) Defined benefit plans
Gratuity:
Gratuity liability is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each
financial year.
The Company makes annual contribution to the Employees' Group Gratuity
Scheme of the Life Insurance Corporation of India, a funded defined
benefit plan for qualifying employees. The scheme provides lump sum
payment to vested employees at retirement, death while in employment or
on termination of employment of an amount equivalent to 15 days salary,
payable for each completed year of service or part thereof in excess of
six months. Vesting occurs upon completion of five years of service.
Actuarial gains/losses are immediately taken to profit and loss account
and are not deferred.
Leave Encashment
Leave Encashment liability is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each
financial year.
The Company allows to encash the privilege leave up to maximum of 15
days per annum from the maximum accumulated leaves of 84 days of
qualifying employees. The company provides for unencashed portion of
leave of qualified employees at each year end and the same is unfunded.
(ii) Defined contribution plans
These are Plans in which the company pays pre-defined amounts to
separate funds and does not have any legal or informal obligation to
pay additional sums. These comprise of contributions to the employees
provident fund with the government, superannuation fund and certain
state plans like Employees State Insurance. The Company's payments to
the defined contribution plans are recognised as expenses during the
period in which the employees perform the services that the payment
covers.
l) Taxes on Income:
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.
MAT credit is recognised as an asset only when and to the extent there
is convincing evidence that the Company will pay normal income tax
during the specified period. In the year in which the Minimum
Alternative Tax (MAT) credit becomes eligible to be recognised as an
asset in accordance with the recommendations contained in Guidance Note
issued by the Institute of Chartered Accountants of India, the said
asset is created by way of a credit to the profit and loss account and
shown as MAT Credit Entitlement. The Company reviews the same at each
balance sheet date and writes down the carrying amount of MAT Credit
Entitlement to the extent there is no longer convincing evidence to the
effect that Company will pay normal Income Tax during the specified
period.
Wealth tax is accounted in accordance with Wealth Tax Act, 1957.
m) Cash & Cash Equivalent:
Cash and Cash Equivalent comprises Cash, Fixed deposit and Short Term
deposit which matured in less than three months.
n) Borrowing Cost:
Interest and other costs related to borrowing are considered as part of
cost of qualifying fixed assets upto the date asset is ready for use.
Other borrowing costs are charged to revenue.
o) Earning Per share
Basis earnings per shares are calculated by dividing the net profit or
loss after tax for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the
period. For the purpose of calculating diluted earnings per share, the
net profit or loss for the period attributable to the equity
shareholders and the weighted average number of shares outstanding
during the period is adjusted for the effects of all dilutive potential
equity shares.
p) Provisions, Contingent Liabilities and Contingent Assets
A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation. Contingent liabilites, if material
are disclosed by way of notes to accounts. Contingent assets are
neither recognised nor disclosed in the financial statements.
q) Cenvat & Excise Duty and Service Tax:
Cenvat benefit on Raw Materials, Packing Materials, Tools and Stores
and Spares is accounted for at the time of consumption by reducing the
same from the respective costs, wherever applicable. Cenvat benefit on
capita! goods is credited to the acquisition cost of the respective
assets whenever they are available for adjustment against Central
Excise duty payment. Service Tax on input service is accounted for at
the time of availing the service by reducing the same from the
respective cost of service, wherever applicable. It is adjusted against
excise duty payment after the payment of the bill for services together
with the Service Tax in line with the Cenvat Credit Rules 2004.
Mar 31, 2010
A) Basis of Preparation
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis.
The accounting policy have been consistently applied by the Company and
except for the changes in accounting policy discussed more fully below,
are consistent with those used in the previous year.
The Company follows the mercantile system of accounting in general and
recognizes income and expenditure on accrual basis except as otherwise
stated.
b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon managements best
knowledge of current events and actions, actual results could differ
from these estimates.
c) Fixed Assets:
Fixed Assets are stated at cost (or revalued amounts, as the case may
be), less accumulated depreciation/amortisation and impairment losses
if any. Cost comprises the purchase price and any attributable cost of
bringing the asset to its working condition for its intended use.
Borrowing costs relating to acquisition of fixed assets which takes
substantial period of time to get ready for its intended use are also
included to the extent they relate to the period till such assets are
ready to be put to use.
Advances paid towards acquisition of the fixed assets which have not
been installed or put to use and the cost of the assets not put to use
before the year end are disclosed undercapital work-in-progress.
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognised whenever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital. If at
the Balance Sheet date there is any evaluation that a previously
assessed impairment loss no longer exists, then such loss is reversed
and the asset is restated to that effect.
d) Depreciation:
Depreciation is provided using the Straight Line Method at the rates
prescribed under schedule XIV of the Companies Act, 1956.
Leasehold land/building is amortized over the lease period.
Fixed assets costing each Rs. 5000/-or less are fully depreciated in
the year of purchase.
e) Investments:
Long term investments are stated at cost less provision for diminution
in value, which is other than temporary. Current investments are
carried at lower of carrying value or fair value.
g) Foreign Currency Transactions:
The transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction. Any income or expense on account of exchange difference
either on settlement or on translation is recognized in Profit and Loss
Account. Assets and liabilities denominated in foreign currencies are
stated at the exchange rate prevailing on the date of the Balance
Sheet.
h) Forward Contracts
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contracts is recognised as income or as expense for
the year. None of the forward exchange contracts are taken for trading
or speculation purpose.
i) Revenue Regonition:
Sale of Goods
Revenue is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer which normally
coincides with dispatch of goods. Sales are net of returns, trade
discounts, and sales tax and include excise duty.
Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Commission
Commission is recognized when right to receive the same from principal
is established on sale to select party/ies.
Dividend
Dividend Income is recognized when right to receive the same is
established.
Others
Subsidiary from governments, Sales Tax assessment dues, Insurance
claims are accounted for when reasonable certainty of receipt is
established.
j) Employee Benefits
(i) Defined benefit plans
Gratuity:
Gratuity liability is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each
financial year.
The Company makes annual contribution to the Employees Group Gratuity
Scheme of the Life Insurance Corporation of India, a funded defined
benefit plan for qualifying employees. The scheme provides lump sum
payment to vested employees at retirement, death while in employment or
on termination of employment of an amount equivalent to 15 days salary,
payable for each completed year of service or part thereof in excess of
six months. Vesting occurs upon completion of five years of service.
Actuarial gains/losses are immediately taken to profit and loss account
and are not deferred.
Leave Encashment
Leave Encashment liability is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each
financial year.
The Company encash the privilege leave up to maximum of 15 days per
annum from the maximum accumulated leaves of 84 days of qualifying
employees. The company provides for unencashed portion of leave of
qualified employees at each year end and the same is unfunded..
(ii) Defined contribution plans
These are Plans in which the company pays pre-defined amounts to
separate funds and does not have any legal or informal obligation to
pay additional sums. These comprise of contributions to the employees
provident fund with the government, superannuation fund and certain
state plans like Employees State Insurance. The Companys payments to
the defined contribution plans are recognised as expenses during the
period in which the employees perform the services that the payment
covers.
k) Taxes on Income:
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 orsubstantively
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.
MAT credit is recognised as an asset only when and to the extent there
is convincing evidence that the Company will pay normal income tax
during the specified period. In the year in which the Minimum
Alternative Tax (MAT) credit becomes eligible to be recognised as an
asset in accordance with the recommendations contained in Guidance Note
issued by the Institute of Chartered Accountants of India, the said
asset is created by way of a credit to the profit and loss account and
shown as MAT Credit Entitlement. The Company reviews the same at each
balance sheet date and writes down the carrying amount of MAT Credit
Entitlement to the extent there is no longer convincing evidence to the
effect that Company will pay normal Income Tax during the specified
period.
Wealth tax is accounted in accordance with Wealth Tax Act, 1957.
l) Borrowing Cost:
Interest and other costs related to borrowing are considered as part of
cost of qualifying fixed assets upto the date asset is ready for use.
Other borrowing costs are charged to revenue.
m) Earning Pershare
Basis earnings per shares are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, the net profit or
loss for the period attributable to the equity shareholders and the
weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
n) Provisions, Contingent Liabilities and Contingent Assets
A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation. Contingent liabilites, if material
are disclosed by way of notes to accounts. Contingent assets are
neither recognised nor disclosed in the financial statements.
o) Cenvat & Excise Duty and Service Tax:
Cenvat benefit on Raw Materials, Packing Materials, Tools and Stores
and Spares is accounted for at the time of consumption by reducing the
same from the respective costs, wherever applicable. Cenvat benefit on
capital goods is credited to the acquisition cost of the respective
assets whenever they are available for adjustment against Central
Excise duty payment.
Service Tax on input service is accounted for at the time of availing
the service by reducing the same from the respective cost of service,
wherever applicable. It is adjusted against excise duty payment after
the payment of the bill for services together with the Service Tax in
line with the Cenvat Credit Rules 2004.
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 J L Morison (India) Ltd.
-
J L Morison (India) Ltd. Tools
- Bulk Deals
-
J L Morison (India) Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- BSE Price History
-
J L Morison (India) Ltd. Key Financial Ratios
- Ratios
-
J L Morison (India) Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
J L Morison (India) Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
J L Morison (India) Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
J L Morison (India) Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
