Mar 31, 2018
1. Significant Accounting policies
1. Property, Plant and Equipment (PPE)
i. Recognition and measurement
PPE are measured at cost / deemed cost, less accumulated depreciation and impairment losses, if any
The cost of an item of PPE comprises:
a) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.
b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Pre-operative expenses, including interest on borrowings upto the date of commercial operations, are treated as part of project cost and capitalised.
Pre-operative expenses, including interest on borrowings upto the date of commercial operations, are treated as part of project cost and capitalised.
The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labor, any other costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and removing 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.
Income and expenses related to the incidental operations, not necessary to bring the item to the location and condition necessary for it to be capable of operating in the manner intended by management, are recognized in profit or loss.
Any gain or loss on disposal of an item of PPE is recognized in profit and loss.
Transition to Ind AS
On transition to Ind AS, the Company has opted to consider the fair value of certain land and buildings as on the date of transition i.e. April 1, 2016 as deemed cost. All other items of property, plant and equipment have been restated by applying Ind AS 16, Property, plant and equipment retrospectively.
ii. Subsequent expenditure
Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
iii. Depreciation
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.
Depreciation on PPE (other than leasehold land) has been provided based on useful life of the assets as estimated by the management on Straight Line Method. The useful lives used, are in agreement with those specified in Schedule II of the Companies Act, 2013.
Leasehold land are amortized over the lease period. Buildings constructed on leasehold land are depreciated based on the management estimate of useful life, where the lease period is beyond the life of the building. In other cases, buildings constructed on leasehold land is amortized over the primary lease period of the land.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Profit and loss on disposals are determined by comparing proceeds with carrying amount. These are included in statement of profit and loss.
2. Intangible assets
i. Recognition and measurement
Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises of its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use.
Transition to Ind AS
On transition to Ind AS, the carrying value of all of intangible assets have been restated applying Ind AS 38, Intangible assets retrospectively.
ii. Subsequent expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates.
iii. Amortization
Intangible asset comprises computer software purchased, which are not an integral part of the related hardware and are amortized on a straight line basis over a period of 8 years, which in Managementâs estimate represents the period during which the economic benefits will be derived from their use.
iv. Research and development cost:
(1) Research cost:
Revenue expenditure on research is charged to statement of profit and loss under the respective heads of accounts in the period in which it is incurred.
(2) Development cost:
Development expenditure on new product is capitalized as intangible asset, if all of the following can be demonstrated.
(i) the technical feasibility of completing the intangible asset so that it will be available for use or sale;
(ii) the Company has intention to complete the development of intangible asset and use or sell it;
(iii) the Company has ability to use or sell the intangible asset;
(iv) the manner in which the probable future economic benefit will be generated including the existence of a market for output of the intangible asset or the intangible asset itself or if it is to be used internally, the usefulness of the intangible asset;
(v) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
(vi) the Company has ability to measure the expenditure attributable to the intangible asset during the development reliably.
Development costs on the intangible assets, fulfilling the criteria are amortized over a period of five years, otherwise are expensed in the period in which they are incurred.
3. Investment in subsidiary
Investments in subsidiary is carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount.
Transition to Ind AS
Upon first-time adoption of Ind AS, the Company has elected to measure its investments in subsidiary at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., April 1st, 2016.
4. Inventories
Inventories are valued after providing for obsolescence, if any, as under:
(a) Raw materials, components, stores and spare parts and packing materials : At lower of cost computed, on FIFO basis and net realizable value
(b) Work -in-progress - Manufacturing : At lower of cost of materials, plus appropriate production overheads and net realizable value.
(c) Finished goods - Manufacturing : At lower of cost of materials plus appropriate production overheads/ payable on such goods and net realizable value.
(d) Finished goods - Trading (others) : At lower of cost computed, on FIFO basis and net realizable value
(e) Scrap (Reusable) : At cost computed on FIFO basis The cost of inventories have been computed to include all cost of purchases, cost of conversion and other related costs incurred in bringing the inventories to their present location and condition. Materials and supplies held for use in the production of inventories are not written down, if the finished goods in which they will be used are expected to be sold at or above cost.
5. Cash and cash equivalents
Cash and cash equivalents includes cash on hand, call deposits and other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
6. Assets Held for Sale:
Non-current assets comprising of land and buildings are classified as âheld for saleâ when all of the following criteriaâs are met:
(i) decision has been made to sell;
(ii) the assets are available for immediate sale in its present condition;
(iii) the assets are being actively marketed and
(iv) sale has been agreed or is expected to be concluded within 12 months of the Balance Sheet date.
Subsequently, such non-current assets classified as held for sale are measured at the lower of its carrying value and fair value less costs to sell. Non-current assets held for sale are not depreciated.
7. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
i. Financial assets Classification
The Company shall classify financial assets as subsequently measured at amortized cost, fair value through other comprehensive income (FVOCI) or fair value through profit and loss (FVTPL) on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.
Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Debt instruments
- A âdebt instrumentâ is measured at the amortized cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
- After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit and loss.
- Debt instruments included within the fair value through profit and loss (FVTPL) category are measured at fair value with all changes recognized in the statement of profit and loss.
Equity instruments
The Company subsequently measures all equity investments in companies including equity investments in subsidiaries at cost. Dividends from such investments are recognized in profit and loss as other income when the Companyâs right to receive payments is established.
De-recognition
- A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognized (i.e. removed from the Companyâs balance sheet) when:
a) The rights to receive cash flows from the asset have expired, or
b) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpass-throughâ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
- When the Company has transferred its rights to receive cash flows from an asset or has entered into a passthrough arrangement, 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 recognize the transferred asset to the extent of the Companyâs continuing involvement. In that case, the Company also recognizes 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.
- Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Impairment of financial assets
In accordance with IndAS 109, the Company applies Expected Credit Loss (ECL) model for recognition and measurement of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are measured at amortized cost e.g. deposits and bank balance;
b) Trade receivables - The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLâs at each reporting date, right from its initial recognition.
ii. Financial liabilities
Classification
The Company classifies all financial liabilities as subsequently measured at amortized cost, except for financial liabilities at fair value through profit and loss.
Such liabilities shall be subsequently measured at fair value.
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings or as payables as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Companyâs financial liabilities include trade and other payables and loans and borrowings including bank overdrafts.
Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit and loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit and loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.
Gains or losses on liabilities held for trading are recognized in the profit and loss.
Financial liabilities designated upon initial recognition at fair value through profit and loss are designated at the initial date of recognition, and only if the criteria in Ind-AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to profit and loss. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognized in the statement of profit and loss. The Company has not designated any financial liability as at fair value through profit and loss.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit and loss when the liabilities are derecognized.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
This category generally applies to interest-bearing loans and borrowings.
Derecognition
A financial liability is derecognized 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 and loss.
Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty
8. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized if as a result of a past event, the Company has a present obligation (legal or constructive) that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognized at the best estimate of the expenditure required to settle the present obligation at the balance sheet date. If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability.
A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may, but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions but are disclosed unless the possibility of outflow of resources is remote. Contingent assets are disclosed in the financial statements when an inflow of economic benefit is probable. However, when the realization of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.
9. Revenue recognition
Sale of goods
Revenue is measured at the fair value of the consideration received or receivable. Revenue from sale of goods is recognized when the significant risks and rewards in respect of ownership of products are transferred by the Company, the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold and no significant uncertainty exist regarding the amount of consideration that will be derived from the sale of goods as well as regarding its ultimate collection. Amounts disclosed as revenue are inclusive of excise duty and net of returns, Trade Discounts, Rebates, incentives, Goods and Service Tax Act / Value added taxes / Central Sales Tax and amounts collected on behalf of third parties.
The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity
Sale of services
Service income is recognized as per the terms of the contracts / arrangements with the customers on proportionate completion method. When no significant uncertainty exists regarding the amount of the consideration that will be derived from rendering the service and is recognized net of Goods and service tax / Service tax as applicable.
Dividend income
Dividend is recognized as revenue when the right to receive payment has been established.
Interest income
For all interest bearing financial assets measured at amortized cost, interest income is recorded using the Effective Interest Rate (EIR). EIR is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset.
10. Employee benefits
i. Short term employee benefits
Short term employee benefits consisting of salaries, wages, short-term compensated absences, performance incentives, etc., and the expected cost of bonus, ex-gratia are benefits payable and recognized in 12 months. Short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized undiscounted during the year as the related service are rendered by the employee.
11. Defined contribution plans
Companyâs contribution for the year paid/payable to defined contribution retirement benefit schemes are charged to Statement of Profit and Loss.
The Companyâs contribution towards provident fund, superannuation fund and employee state insurance scheme, employee pension scheme and labour welfare fund for certain eligible employees are considered to be defined contribution plan for which the Company made contribution on monthly basis.
iii. Defined benefit plans
Companyâs liabilities towards defined benefit plans viz. gratuity which is expected to occur after twelve months, is determined using the Projected Unit Credit Method. Actuarial valuations under the Projected Unit Credit Method are carried out at the balance sheet date. Actuarial gains and losses are recognized in the Statement of other comprehensive income in the period of occurrence of such gains and losses for gratuity. The retirement benefit obligation recognized in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets, if any.
Other long term employee benefits such as compensated absences payable to the employees is provided for in the books of accounts on accrual basis.
iv. Termination benefits
Termination benefits are recognised as an expense in the period in which they are incurred, if any.
11. Impairment of non-financial assets
The carrying amount of the assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors. An asset is impaired when the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is higher of the assetâs fair value less costs of disposal and value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. For the purposes of assessing impairment, assets are grouped at their lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash generating units). Impairment loss is charged to the profit and loss account in the year in which the asset is identified as impaired.
An impairment loss for an asset is reversed if, and only if, the reversal can be related objectively to an event occurring after the impairment loss was recognized or relates to a change in the estimate of the recoverable amount in the previous periods. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
12. Income Tax
Income tax expense comprises current and deferred tax. It is recognized in profit and loss except to the extent that it relates to items recognized directly in equity or in OCI.
i. Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted as at the reporting date.
Current tax assets and liabilities are offset only if:
a) there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority; and
b) there is intention either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
ii. Deferred tax
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss).
Deferred tax assets are recognized for deductible temporary differences (if any) to the extent that it is probable that future taxable profits will be available against which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore in case of history of recent losses, the Company recognises a deferred tax asset only to the extent that it has sufficient taxable temporary difference or there is convincing other evidence that sufficient taxable profits will be available against which such deferred tax asset can be realized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it has become probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred tax assets and liabilities are offset only if they relate to income taxes levied by the same taxation authority on the same taxable entity.
13. Operating lease
Assets taken on lease under which substantially all risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Payments made under operating leases are generally recognised in profit or loss on a straight-line basis over the term of lease unless such payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases. Lease incentives received are recognised as an integral part of the total lease expense over the term of the lease.
14. Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated into the respective functional currencies of company at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.
(ii) Transactions and balances
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined.
15. Earnings per share (EPS)
Basic EPS is computed using the weighted average number of equity shares outstanding during the period. Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period except where the results would be anti-dilutive.
16. Borrowing cost
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset 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.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Other borrowing costs are expensed in the period in which they are incurred.
17. Segment accounting
(a) Segment accounting policies:
Segment accounting policies are in line with the accounting policies of the Company. The Company identifies primary business segment based on the different risks and returns, the organisation structure and the internal reporting systems. Secondary segments are identified on the basis of geography in which sales have been effected. In addition, the following specific accounting policies have been followed for segment reporting:
1) Segment revenue includes sales and other income directly identifiable with / allocable to the segment including inter-segment revenue.
2) Expenses that are directly identifiable with/ allocable to segments are considered for determining the segment result. Expenses which relate to the Company as a whole and not allocable to segments are included under unallocable expenditure.
3) Income which relates to the Company as a whole and not allocable to segments is included in unallocable income.
4) Segment result includes margins on inter-segment and sales which are reduced in arriving at the profit before tax of the Company.
5) Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable assets and liabilities represent the assets and liabilities that relate to the Company as a whole and not allocable to any segment.
(b) Inter-segment transfer pricing:
Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price agreed between the segments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated basis.
18. Current vs non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
Mar 31, 2016
Notes on Financial Statement for the year ended March 31, 2016
1. Significant Accounting Polices
1.1 Basis of preparation of Financial Statements
The financial statements have been prepared and presented under the historical cost convention in accordance with generally accepted accounting principles (GAAP) in India to comply with the specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Account) Rules, 2014 and the relevant provision of the Companies Act, 2013 /Companies Act, 1956 as applicable
The Accounting Policies adopted in the preparation of the Financial Statement are consistent with those followed in the previous year.
1.2 Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reporting amounts of assets and liabilities, revenue and expenses and the disclosure of contingent liabilities as at the date of financial statements Actual results could differ from these estimates. Such estimate and assumption are based on the management evaluation of the relevant facts and circumstance as on date of Financial Statement.
1.3 Fixed Assets
1.3.1 Own Fixed Assets
Fixed assets are stated at cost of acquisition which includes all related expenses (net of Cenvat and Sales-tax set-off) less accumulated depreciation. All related expenses other than carrying cost, include finance cost till commencement of commercial production and exchange loss on the external commercial borrowing.
The Company has adopted the companies (Accounting Standards) amendment rules, 2009 relating to Accounting Standard -11 notified by the Government of India as on March 31, 2009 (as amend by notification on December 29, 2011) which allowed foreign exchange on long term monetary item to be capitalized to the extent they relate to acquisition of the depreciable assets.
1.3.2 Lease Fixed Assets
Operating Lease: - Rental are expensed with reference to lease term and other consideration.
1.3.3 Intangible Fixed Assets
Intangible Assets (Patent, Trademark) are stated at cost of acquisition net of cenvat and sales tax less accumulated depreciation.
1.4 Depreciation
Depreciation on fixed assets except Leasehold Lands have been provided on straight line method at the rates and manner as provided in Schedule II of the Companies Act, 2013. Amount paid on Leasehold land has been spread over to remaining period of lease and has been written off proportionately.
1.5 Impairment of Assets
In pursuance to Accounting Standard -28 issued by the Institute of Chartered Accountants of India, the Company has assessed no impairment of assets as on March 31, 2016, hence no provision has been made in the books of accounts.
1.6 Investments
Long term investments are stated at cost and short term investments are stated at lower of cost or market value. Provision for diminution in the value of Long Term Investment is made only if such a decline is other than temporary.
1.7 Retirement Benefits
Annual Contribution towards the gratuity liability is funded with the Life Insurance Corporation of India in accordance with their gratuity scheme. The liability in respect of Leave encashment payable to employees at the year end is provided for.
1.8 Inventories
Items of inventories are valued on the basis given below:
* Raw materials
i. At factory landed cost: FIFO basis
ii. In transit: Cost
- Finished goods
i. Lying at factory: Lower of cost on FIFO basis or net realizable value.
ii. Lying at branches: Lower of landed cost at respective branch on FIFO basis or net realizable value.
- Traded goods: At cost on FIFO basis.
- Work-in-Process: At cost of such goods arrived at on FIFO basis.
- Scraps (reusable): At cost of such goods arrived at on FIFO basis.
- Scrap (Other): Lower of cost or net realizable value.
- Stores, Spares and Packing Materials: At cost of such goods arrived at on FIFO basis.
Cost of Inventories comprises of the cost of purchases, cost of conversion and other cost including manufacturing overhead incurred in bringing them to their respective present location and condition.
1.9 Revenue Recognition
Revenue from Sale of goods is recognized when the substantial risk and rewards of ownership are transferred to the buyer which generally coincide when the goods are dispatched from the factory/stock points/or delivered to customer as per terms of the contract. Service revenue is recognized on rendering services.
Dividend income is recognized when right to receive the payment is established.
Interest income is recognized on time proportion basis into accounts the amount outstanding and rate applicable.
1.10 Purchase of Raw materials. Stores & Spares and Packing materials
Purchase is net of discount, sales tax, excise duty, but includes custom duty, clearing & forwarding charges, commission on purchases, cartage inwards, & transit insurance.
1.11 Provision for Excise Duty
Closing stock of the finished goods represent including the excise duty which same debited to the profit & loss account to nullifying the effect of addition in the valuation of the finished goods as per Accounting Standard -2 of the ICAI.
1.12 Provision for Current Tax and Deferred Tax
Income taxes comprise of current tax, deferred tax charges and short excess provision of the earlier year. Provision for current tax is made after taking into consideration benefit admissible under the provision of Income Tax Act, 1961. Deferred tax resulting from the "timing difference" between taxable and accounting income is accounted for using the tax rate and laws that are enacted or substantively enacted as on the balance sheet date.
1.13 Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when the Company has a present obligation as a result of past event and is probable that on out flow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made based on technical evaluation and past experience. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.
1.14 Foreign Currency Transaction
The Company has adopted to account for exchange differences arising on reporting of long term foreign currency monetary item in accordance with Companies (Accounting Standards) amendment Rules, 2009 pertaining to Accounting Standards 11 (AS-11) notified by Government of India on March 31, 2009 (as amended on December 29, 2011).
1A. Previous year''s figures has been regrouped or recast wherever considered necessary to make them comparable with current year''s figures.
Mar 31, 2014
1.1 Basis of preparation of Financial Statements
The financial statements have been prepared and presented under the
historical cost convention in accordance with generally accepted
accounting principles (GAAP) in India, the relevant provisions of The
Companies Act, 1956 and the applicable Accounting Standards issued by
the Institute of Chartered Accountants of India unless otherwise stated
elsewhere.
During the period 2012-2013, the revised schedule notified under
Companies act 1956 has become applicable to the company for preparation
and presentation of the financial statement. The adoption of revised
schedule -VI does not impact recognition and measurement principles
followed for preparation of the financial statement. The company has
also reclassified the previous year figure in accordance with
requirement applicable in the current year.
1.2 Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) requires management to make
estimates and assumptions that affect the reporting amounts of assets
and liabilities and the disclosure of contingent liabilities as at the
date of financial statements and reported amounts of revenues and
expenses during reporting period. Actual results could differ from
these estimates. Any revision to accounting estimates is recognized
prospectively in current and future periods
1.3 FixedAssets
1.3.1 Own Fixed Assets
Fixed assets are stated at cost of acquisition which includes all
related expenses (net of Cenvat and sales - tax set-off) less
accumulated depreciation. All related expenses other than carrying
cost, include finance cost till commencement of commercial production
and exchange loss on the external commercial borrowing.
The company has adopted the companies (Accounting Standards) amendment
rules,2009 relating to accounting Standard - 11 notified by the
Government of India as on 31st March, 2009 ( as amend by notification
on 29th Dec,2011) which allowed foreign exchange on long term monetary
item to be capitalized to the extent they relate to acquisition of the
depreciable assets.
1.3.2 Lease Fixed Assets
Operating Lease: - Rental are expensed with reference to lease term and
other consideration
1.3.3 Intangible Fixed Assets
Intangible Assets (Patent, Trademark) are stated at cost of acquisition
net of cenvat and sales tax less accumulated depreciation.
1.4 Depreciation
Depreciation on fixed assets except Leasehold Lands have been provided
on straight line method at the rates and manner as provided in Schedule
XIV of the Companies Act, 1956. Amount paid on Leasehold land has been
spread over to remaining period of lease and has been written off
proportionately.
1.5 Impairment of Assets
In pursuance to Accounting Standard - 28 issued by the Institute of
Chartered Accountants of India, the company has assessed no impairment
of assets as on 31st March, 2014, hence no provision has been made in
the books of accounts.
1.6 Investments
Long term investments are stated at cost and short term investments are
stated at lower of cost or market value. Provision for diminution in
the value of Long Term Investment is made only if such a decline is
other than temporary.
1.7 Retirement Benefits
Annual Contribution towards the gratuity liability is funded with the
Life Insurance Corporation of India in accordance with their gratuity
scheme. The liability in respect of Leave encashment payable to
employees at the year end is provided for.
1.8 Inventories
Items of inventories are valued on the basis given below:
Raw materials
i. At factory landed cost: FIFO basis
ii. In transit: Cost
Finished goods
i. Lying at factory: Lower of cost on FIFO basis or net realizable
value.
i. Lying at branches: Lower of landed cost at respective branch on FIFO
basis or net realizable value.
Traded goods: At cost on FIFO basis.
Work-in-Process: At cost of such goods arrived at on FIFO basis.
Scraps (reusable): At cost of such goods arrived at on FIFO basis.
Scrap (Other): Lower of cost or net realizable value.
Stores, Spares and Packing Materials: At cost of such goods arrived at
on FIFO basis.
Cost of Inventories comprises of the cost of purchases, cost of
conversion and other cost including manufacturing overhead incurred in
bringing them to their respective present location and condition.
1.9 Revenue Recognition
Revenue from operation includes Sales of goods adjusted for the Excise
duty, value added tax, Central Sales Tax and discounts if any as per
approved by the management.
Dividend income is recognized when right to receive is established.
Interest income is recognized on time proportion basis into accounts
the amount outstanding and rate applicable
1.10 Purchase of Raw materials, Stores &Spares and Packing materials
Purchase is net of discount, sales tax, excise duty, but includes
custom duty, clearing & forwarding charges, commission on purchases,
cartage inwards, & transit insurance.
1.11 Provision for Excise Duty
Closing stock of the finished goods represent including the excise duty
which same debited to the Profit & Loss Account to nullifying the
effect of addition in the valuation of the finished goods as per
accounting standard - 2 of the ICAI
1.12 Provision for Current Tax and Deferred Tax
Income taxes comprise of current tax, deferred tax charges and short
excess provision of the earlier year. Provision for current tax is made
after taking into consideration benefit admissible under the provision
of Income Tax Act, 1961. Deferred tax resulting from the "timing
difference" between taxable and accounting income is accounted for
using the tax rate and laws that are enacted or substantively enacted
as on the balance sheet date
1.13 Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when the Company has a present obligation as
a result of past event and is probable that on out flow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made based on technical evaluation and past
experience. These are reviewed at each balance sheet date and adjusted
to reflect the current management estimates. Contingent Liabilities are
not recognized but are disclosed in the notes. Contingent Assets are
neither recognized nor disclosed in the financial statements.
1.14 Foreign Currency Transaction
The Company has adopted to account for exchange differences arising on
reporting of long term foreign currency monetary item in accordance
with Companies (Accounting Standards) amendment Rules, 2009 pertaining
to Accounting Standards 11 (AS-11) notified by Government of India on
31st March, 2009 (as amended on 29th December, 2011). Accordingly, the
effect of exchange difference on foreign currency loan of the company
is accounted by addition or deduction to the cost of the assets so far
it relates to depreciable capital assets.
IA. Previous year''s figures has been regrouped or recast wherever
considered necessary to make them comparable with current year''s
figures.
IB. The Company is in the process of appointing a full time Company
Secretary by the provision of Section 383A of the Companies Act, 1956.
In the absence of the Company Secretary, these financial statements
have not been authenticated by a Whole Time Company Secretary as
required under Section 215A of the Companies Act, 1956.
2.2 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 & pays dividend in Indian Rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the Share- holders in the ensuing Annual General Meeting.
2.3 During the Year Ended 31st March, 2014 the company has recognised Rs.
0.50 (Previous Year Rs. 0.50) per share dividend as proposed for
distribution to equity shareholders which is subject to approval of
Shareholders in the ensuing Annual General Meeting.
2.4 Information of shareholders having holding more than 5% of Shares
in the company.
There are no shareholders having holding more than 5% of Shares in the
Company.
2.5 Bonus shares /Buy back /shares for consideration other than cash
issued during Past Year.
66.86 lacs equity share were alloted as fully paid up without payment
being effected in cash under the scheme of amalgamation in the F.Y.
2012-13.
Apart from above , there are no issue of the bonus shares/buy back of
own shares issued during any previous five financial year from the
reporting date.
4.1 Additional Information to Secured Long Term Borrowings
The long term portion of term loans are shown under long term
borrowings and the current maturities of the long term borrowings are
shown under other Current Liabilities as per disclosure requirements of
the Revised Schedule VI
4.2 Details Relating to Term Loans
4.2.1 Rupee loans
Details Terms of repayment
A. Secured by way of : -
1. First charge on pari-passu basis on entire fixed assets (excluding
fixed assets acquired by external commercial borrowing (ECB) term loan
from ICICI Bank , office premises acquired by Housing Loan from ICICI
bank) both present and future of the Company.
2. Second charge on pari-passu basis on current assets of the Company.
3. Personal Guarantee of Mr. Ramesh J. Aggarwal - Chairman, Mr. Vijay
J. Aggarwal - Vice Chairman-1 & Whole Time Director, Mr. Ashok
J.Aggarwal-Vice Chairman-2 & Whole Time Director, Mr.Satish J. Aggarwal
- Managing Director and Mr. Sanjeev A. Aggarwal - Joint Managing
Director.
4.2.2 Foreign Currency Term Loan - ICICI Bank A) Secured by way of;
1. First charges on all fixed assests financed from using ICICI Bank
ECB Term Loan.
2. Second charge on pari-passu basis on current assets of the company
3. Personal Guarantee of Mr. Vijay J. Aggarwal - Vice Chairman-1 &
Whole Time Director, Mr. Ashok J. Aggarwal - Vice Chairman-2 & Whole
Time Director, Mr. Satish J. Aggarwal-Managing Director and Mr. Sanjeev
A. Aggarwal - Joint Managing Director.
4.2.3 Office Loan for Office Premises - ICICI Bank
A) Secured by way of hypothecation of specific office premises relates
to ICICI Bank Housing Loan
B) Details Terms of repayment
4.3.1 Rupees Term Loan - NBFC A) Secured by way of;
1. First charges on the mortgage of property situated at Gala-K-1 &
Gala - K-3, K Wings, Tex center, 26A ,Chandiwali Road, Off. Saki Vihar
raod, Andheri - East, Mumbai having appprox market value of Rs. 2.5 Cr.
which is standing in the name of the Reliance Industrial product,a
partnership in which director of Kisan Mouldings ltd and their relative
are partners.
2. Second charge on pari-passu basis on Fixed Assets of the Company to
the extent of Rs. 6.00Cr.
3. Personal Guarantee of Mr. Vijay J. Aggarwal - Vice Chairman-1 &
Whole Time Director, Mr. Ashok J. Aggarwal - Vice Chairman-2 & Whole
Time Director, Mr. Satish J. Aggarwal-Managing Director and Mr. Sanjeev
A. Aggarwal - Joint Managing Director.
4.4. Details Terms of Repayment of Vehicle Loans
A) Secured by way of hypothecation of specific vehicle relates to
vehicle loans
5 DEFERRED TAX LIABILITY (Rs. in Lacs)
Deferred Tax Liabilities for the Period ended 31st March, 2014 has been
provided on the Provisional Tax Computation of the year
7.4. Working Capital Loans A. Secured by way of
1. First pari passu charge by way of hypothecation of the Company''s
entire Current Assets of the Company.
2. Second charge on pari-passu basis over entire Fixed Assets of the
Company.
3. Personal Guarantee of Mr. Ramesh J. Aggarwal-Chairman, Mr. Vijay J.
Aggarwal-Vice Chairman-1 & Whole Time Director, Mr. Ashok J.
Aggarwal-Vice Chairman-2 & Whole Time Director, Mr.Satish J. Aggarwal -
Managing Director and Mr.Sanjeev A. Aggarwal Joint Managing Director.
4. Pledge of 7.15 Lakh equity shares held by the following
directors/associates/their relative persons of the company on
parri-passu basis with term loan lenders.
16.1 The classification of trade receivable between ><6 month period
have been taken according to the company''s standards policy of the due
date i.e. 90 days for the Micro Irrigations and for rest of product 45
days outstanding from the date of invoice.
17.1 Fixed Deposits Classification between >< 12 month period have been
taken from the reporting date (i.e. 01.04.2014 ) to its maturities
mentioned on the Fixed deposits receipts
Mar 31, 2012
1.1 Basis of preparation of financial statements
The financial statements have been prepared and presented under the
historical cost convention in accordance with generally accepted
accounting principles (GAAP) in India, the relevant provisions of The
Companies Act, 1956 and the applicable Accounting Standards issued by
the Institute of Chartered Accountants of India unless otherwise stated
elsewhere.
During the year ended March 31, 2012 the revised schedule notified
under companies act 1956 has become applicable to the company for
preparation and presentation of the financial statement. The adoption
of revised schedule -VI does not impact recognition and measurement
principles followed for preparation of the financial statement. The
company has also reclassified the previous year figure in accordance
with requirement applicable in the current year.
1.2 Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) requires management to make
estimates and assumptions that affect the reporting amounts of assets
and liabilities and the disclosure of contingent liabilities as at the
date of financial statements and reported amounts of revenues and
expenses during reporting period. Actual results could differ from
these estimates. Any revision to accounting estimates is recognised
prospectively in current and future periods
1.3 Fixed Assets
1.3.1 Own Fixed Assets
Fixed assets are stated at cost of acquisition which includes all
related expenses (net of Cenvat and sales- tax set-off) less
accumulated depreciation. All related expenses other than carrying
cost, include finance cost till commencement of commercial production
and exchange loss on the external commercial borrowing.
The company has adopted the companies (Accounting Standards) amendment
rules,2009 relating to accounting Standard -11 notified by the
government of India as on 31 st March, 2009 (as amend by notification
on 29th Dec,2011) which allowed foreign exchange on long term monetary
item to be capitalized to the extent they relate to acquisition of the
depreciable assets.
1.3.2 Lease Fixed Assets
Operating Lease:- Rental are expensed with reference to lease term and
other consideration
1.3.3 Intangible Fixed Assets
Intangible Assets (Patent, Trademark) are stated at cost of acquisition
net of cenvat and sales tax less accumulated depreciation.
1.4 Depreciation
Depreciation on fixed assets except Leasehold Lands have been provided
on straight line method at the rates and manner as provided in Schedule
XIV of the Companies Act, 1956. Amount paid on Leasehold land has been
spread over to remaining period of lease and has been written off
proportionately.
1.5 Impairment of Assets
In pursuance to Accounting Standard -28 issued by the Institute of
Chartered Accountants of India, the company has assessed no impairment
of assets as on 31st March, 2012, hence no provision has been made in
the books of accounts.
1.6 Investments
Long term investments are stated at cost and short term investments are
stated at lower of cost or market value. Provision for diminution in
the value of Long Term Investment is made only if such a decline is
other than temporary.
1.7 Retirement Benefits
Annual Contribution towards the gratuity liability is funded with the
Life Insurance Corporation of India in accordance with their gratuity
scheme. The liability in respect of Leave encashment payable to
employees at the year end is provided for.
1.8 Inventories
Items of inventories are valued on the basis given below:
- Raw materials
I. At factory landed cost: FIFO basis
ii. In transit: Cost
- - Finished goods
I. Lying atfactory: Lowerofcoston FIFO basis or net realizable value.
ii. Lying at branches: Lower of landed cost at respective branch on
FIFO basis or net realizable value.
- Traded goods: At cost on FIFO basis.
- Work-in-Process: At cost of such goods arrived at on FIFO basis.
- Scraps (reusable): At cost of such goods arrived at on FIFO basis.
- Scrap (Other): Lower of cost ornet realizable value.
- Stores, Spares and Packing Materials: At cost of such goods arrived
at on FI FO basis.
Cost of Inventories comprises of the cost of purchases, cost of
conversion and other cost including manufacturing overhead incurred in
bringing them to their respective present location and condition.
1.9 Revenue Recognition
Revenue from operation includes Sales of goods adjusted forthe Excise
duty, value added tax, central Sales Tax and discounts if any as per
approved by the management.
Dividend income is recognised when right to receive is established.
Interest income is recognised on time proportion basis into accounts
the amount outstanding and rate applicable
1.10 Purchase of raw materials, stores, spares and packing materials
Purchase is net of discount, VAT, excise duty, but includes custom
duty, clearing & forwarding charges, commission on purchases, cartage
inwards, interest on LC & transit insurance.
1.11 Excise Duty
Excise duty represents finished goods dispatched through Personal
Ledger Account (PLA) and out of Cenvat on capital goods Account
(RG23C-Part II) but net of unutilized amount in raw material cenvat
Account (RG23A-Part II).
1.12 Provision for Current tax and Deferred tax
Income taxes comprise of current tax, deferred tax charges and short
excess provision of the last year. Provision for current tax is made
after taking into consideration benefit admissible under the provision
of income tax act, 1961. Deferred tax resulting from the "timing
difference" between taxable and accounting income is accounted for
using the tax rate and laws that are enacted or substantively enacted
as on the balance sheet date
1.13 Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when the Company has a present obligation as
a result of past event and is probable that on out flow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made based on technical evaluation and past
experience. These are reviewed at each balance sheet date and adjusted
to reflect the current management estimates. Contingent Liabilities are
not recognised but are disclosed in the notes. Contingent Assets are
neither recognised nor disclosed in the financial statements.
1.14 Foreign currency Transaction
The Company has elected to account for exchange differences arising on
reporting of long term foreign currency monetary item in accordance
with Companies (accounting Standards) amendment Rules ,2009 pertaining
to accounting standards 11 (AS-11) notified by government of India on
31st march 2009 (as amended on 29th December,2011). Accordingly, the
effect of exchange difference on foreign currency loan of the company
is accounted by addition or deduction to the cost of the assets so far
it relates to depreciable capital assets.
Mar 31, 2011
1.1 Basis of preparation of financial statements
The financial statements have been prepared and presented under the
historical cost convention in accordance with generally accepted
accounting principles (GAAP) in India, the relevant provisions of The
Companies Act, 1956 and the applicable Accounting Standards issued by
the Institute of Chartered Accountants of India unless otherwise stated
elsewhere.
The Company recognises income and expenditure on an accrual basis
except those with significant uncertainties such as unsettled rebate
and discounts, claims receivables, interest from customers. The
accounting policies have been consistently applied by the company and
are consistent with those used in the previous year except valuation of
Inventory lying as finished goods and work in process from average cost
method to FIFO method resulting into increase in valuation of inventory
by Rs. 293.17 Lacs.
1.2 Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) requires management to make
estimates and assumptions that affect the reporting amounts of assets
and liabilities and the disclosure of contingent liabilities as at the
date of financial statements and reported amounts of revenues and
expenses during reporting period. Actual results could differ from
these estimates. Any revision to accounting estimates is recognised
prospectively in current and future periods
1.3 Fixed Assets
Fixed assets are stated at cost of acquisition which includes all
related expenses (net of Cenvat and sales- tax set-off) and borrowing
cost up to acquisition and installation of the fixed assets. Intangible
Assets (Patent, Trademark) are capitalized at the historical cost of
acquisition.
Cenvat benefits attributable to acquisition of fixed assets are netted
off against the cost of fixed assets in accordance with the guidance
note issued by The Institute of Chartered Accountants of India.
Interest and Foreign exchange gain or loss capitalised as per
accounting standards issued by The Institute of Chartered Accountants
of India.
1.4 Depreciation
Depreciation on fixed assets except Leasehold Lands have been provided
on straight line method at the rates and manner as provided in Schedule
XIV of the Companies Act, 1956. Amount paid on Leasehold land has been
spread over to remaining period of lease and has been written off
proportionately.
1.5 Investments
Long term investments are stated at cost and short term investments are
stated at lower of cost or market value.
1.6 Retirement Benefits
Annual Contribution towards the gratuity liability is funded with the
Life Insurance Corporation of India in accordance with their gratuity
scheme. The liability in respect of Leave encashment payable to
employees at the year end is provided for.
1.7 Inventories
Items of inventories are valued on the basis given below:
- Raw materials
i. At factory landed cost: FIFO basis ii. In transit: Cost
- Finished goods
i. Lying at factory: Lower of cost on FIFO basis or net realizable
value.
ii. Lying at branches: Lower of landed cost at respective branch on
FIFO basis or net realizable value.
- Traded goods: At cost on FIFO basis.
- Work-in-Process: At cost of such goods arrived at on FIFO basis.
- Scraps (reusable): At cost of such goods arrived at on FIFO basis.
- Scrap (Other): Lower of cost or net realizable value.
- Stores, Spares and Packing Materials: At cost of such goods arrived
at on FIFO basis.
1.8 Revenue Recognition- Sales
Sales includes excise duty, value added tax but net of discounts as
approved by the management.
1.9 Purchase of raw materials, stores, spares and packing materials
Purchase is net of discount, sales tax, excise duty, but includes
custom duty, clearing & forwarding charges, commission on purchases,
cartage inwards, interest on LC & transit insurance.
1.10 Excise Duty
Excise duty represents finished goods dispatched through Personal
Ledger Account (PLA) and out of Cenvat on capital goods Account
(RG23C-Part II) but net of unutilized amount in raw material cenvat
Account (RG23A-Part II).
1.11 Taxation
Income taxes comprise of current tax and deferred tax charges or
credit. The deferred tax liability is calculated by applying tax rate
and tax laws that have been enacted at the Balance Sheet date.
1.12 Provisions
A provision is recognized when the Company has a present obligation as
a result of past event and is probable that on out flow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made based on technical evaluation and past
experience. These are reviewed at each balance sheet date and adjusted
to reflect the current management estimates.
Mar 31, 2010
1.1 Basis of preparation of financial statements
The financial statements have been prepared and presented under
the historical cost convention in accordance with generally
accepted accounting principles (GAAP) in India, the relevant
provisions of The Companies Act, 1956 and the applicable
Accounting Standards issued by the Institute of Chartered
Accountants of India unless otherwise stated elsewhere.
The Company recognises income and expenditure on an accrual
basis except those with significant uncertainties such as
unsettled rebate and discounts, claims receivables, interest
from customers. The accounting policies have been consistently
applied by the company and are consistent with those used in the
previous year.
1.2 Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles (GAAP) requires
management to make estimates and assumptions that affect the
reporting amounts of assets and liabilities and the disclosure
of contingent liabilities as at the date of financial statements
and reported amounts of revenues and expenses during reporting
period. Actual results could differ from these estimates. Any
revision to accounting estimates is recognised prospectively in
current and future periods
1.3 Fixed Assets
Fixed assets are stated at cost of acquisition which includes
all related expenses (net of Cenvat and sales- tax set- off) and
borrowing cost up to acquisition and installation of the fixed
assets. Intangible Assets (Patent, Trademark) are capitalized at
the historical cost of acquisition.
Cenvat benefits attributable to acquisition of fixed assets are
netted off against the cost of fixed assets in accordance with
the guidance note issued by The Institute of Chartered
Accountants of India.
Interest and Foreign exchange gain or loss capitalised as per
accounting standards issued by The Institute of Chartered
Accountants of India.
1.4 Depreciation
Depreciation on fixed assets except Leasehold Lands have been
provided on straight line method at the rates and manner as
provided in Schedule XIV of the Companies Act, 1956. Amount paid
on Leasehold Land has been spread over to remaining period of
lease and has been written off proportionately.
1.5 Investments
Long term investments are stated at cost and short term
investments are stated at lower of cost of market value.
1.6 Retirement Benefits
Annual Contribution towards the gratuity liability is funded
with the Life Insurance Corporation of India in accordance with
their gratuity scheme. The liability in respect of Leave
encashment payable to employees at the year end is provided for.
1.7 Inventories
Items of inventories are valued on the basis given below:
- Raw materials
i. At factory landed cost: FIFO basis ii. In transit: Cost
- Finished goods
i. Lying at factory: Lower of average estimated cost or net
realisable value.
ii. Lying at branches: Lower of landed cost at respective
branch or net realisable value.
- Traded goods: At cost on FIFO basis.
- Work-in-Process: At estimated average cost.
- Scraps (reusable): At estimated average cost.
- Scrap (Other): Lower of cost or net realisable value.
- Stores, Spares and Packing Materials: At cost of such goods
arrived at on FIFO basis.
1.8 Revenue Recognition- Sales
Sales includes excise duty, value added tax but net of discounts
as approved by the management.
1.9 Purchase of raw materials, stores, spares and packing
materials
Purchase is net of discount, sales tax, excise duty, but
includes custom duty, clearing & forwarding charges, commission
on purchases, cartage inwards & transit insurance.
1.10 Excise Duty
Excise duty represents finished goods dispatched through
Personal Ledger Account (PLA) and out of Cenvat on capital goods
Account (RG23C-Part II) but net of unutilised amount in raw
material cenvat Account (RG23A-Part II).
1.11 Taxation
Income taxes comprise of current tax and deferred tax charges or
credit. The deferred tax liability is calculated by applying tax
rate and tax laws that have been enacted at the Balance Sheet
date.
1.12 Provisions
A provision is recognised when the Company has a present
obligation as a result of past event and is probable that on out
flow of resources will be required to settle the obligation, in
respect of which a reliable estimate can be made based on
technical evaluation and past experience. These are reviewed at
each balance sheet date and adjusted to reflect the current
management estimates.