Mar 31, 2018
1.1 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
The standalone financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value :
- Certain financial assets and liabilities (including derivative instruments) and
- Defined benefit plans - plan assets
The financial statements of the Company have been prepared to comply with the Indian Accounting standards (âInd ASâ), including the rules notified under the relevant provisions of the Companies Act, 2013. Upto the year ended March 31, 2017, the Company has prepared its financial statements in accordance with the requirement of Indian Generally Accepted Accounting Principles (GAAP), which include Standards notified under the Companies (Accounting Standards) Rules, 2006 and considered as âPrevious GAAPâ. These financial statements are the Company''s first Ind AS standalone financial statements. Companyâs financial statements are presented in Indian Rupees (INR), which is also its functional currency.
2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Property, Plant and Equipment (PPE)
i) Property, plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
ii) Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably. In the carrying amount of an item of PPE, the cost of replacing the part of such an item is recognized when that cost is incurred if the recognition criteria are met. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition principles.
iii) Expenses incurred relating to project, net of income earned during the project development stage prior to its intended use, are considered as pre - operative expenses and disclosed under Capital Work - in - Progress.
iv) Depreciation on property, plant and equipment is provided using straight line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 except, in respect of Rolls, where useful life taken for one year only as per technical advise. Each part of an item of Property, Plant & Equipment with a cost that is significant in relation to total cost of the Machine is depreciated separately, if its useful life is different than the life of the Machine.
v) The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
vi) Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
vii) Spare parts procured along with the Plant & Machinery or subsequently which meet the recognition criteria are capitalized and added in the carrying amount of such item. The carrying amount of those spare parts that are replaced is derecognized when no future economic benefits are expected from their use or upon disposal. Other machinery spares are treated as âstores & sparesâ forming part of the inventory.
b) Leases
i) Leases are classified as finance leases whenever the terms of the lease, transfers substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
ii) Leased assets: Assets held under finance leases are initially recognised as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.
iii) Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in Statement of Profit and Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized. Contingent rentals are recognised as expenses in the periods in which they are incurred.
iv) A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
v) Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term except where another systematic basis is more representative of time pattern in which economic benefits from the leased assets are consumed.
c) Intangible assets
i) Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less accumulated amortization /depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.
ii) Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
iii) Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
d) Capital Work in Progress
i) Expenditure incurred on assets under construction (including a project) is carried at cost under Capital Work in Progress. Such costs comprises purchase price of asset including import duties and non-refundable taxes after deducting trade discounts and rebates and costs that are 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.
ii) Cost directly attributable to projects under construction include costs of employee benefits, expenditure in relation to survey and investigation activities of the projects, cost of site preparation, initial delivery and handling charges, installation and assembly costs, professional fees, expenditure on maintenance and up-gradation etc. of common public facilities, depreciation on assets used in construction of project, interest during construction and other costs if attributable to construction of projects. Such costs are accumulated under âCapital works in progressâ and subsequently allocated on systematic basis over major assets, other than land and infrastructure facilities, on commissioning of projects.
iii) Capital Expenditure incurred for creation of facilities, over which the Company does not have control but the creation of which is essential principally for construction of the project is capitalized and carried under âCapital work in progressâ and subsequently allocated on systematic basis over major assets, other than land and infrastructure facilities, on commissioning of projects, keeping in view the âattributabilityâ and the âUnit of Measureâ concepts in Ind AS 16-âProperty, Plant & Equipmentâ. Expenditure of such nature incurred after completion of the project, is charged to Statement of Profit and Loss.
e) Research and Development Expenditure
Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are charged to the Statement of Profit and Loss unless a productâs technological and commercial feasibility has been established, in which case such expenditure is capitalised.
f) Finance Cost
i) Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest 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 capitalised as part of the cost of the asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
ii) Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
iii) All other borrowing costs are expensed in the period in which they occur.
g) Inventories
i) Items of inventories are measured at lower of cost and net realisable value after providing for obsolescence, if any, except in case of by-products which are valued at net realisable value. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads net of recoverable taxes incurred in bringing them to their respective present location and condition.
ii) Cost of raw materials, stores and spares, packing materials, trading and other products are determined at Cost, with moving average price on FIFO basis
h) Impairment of non-financial assets - property, plant and equipment and intangible assets
i) The Company assesses at each reporting date as to whether there is any indication that any property, plant and equipment and intangible assets or group of assets, called Cash Generating Units (CGU) may be impaired. If any such indication exists the recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.
ii) An impairment loss is recognised in the Statement of Profit and Loss to the extent, assetâs carrying amount exceeds its recoverable amount. The recoverable amount is higher of an assetâs fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
iii) The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
i) Provisions, Contingent Liabilities and Contingent Assets and Commitments
i) Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Such provisions are determined based on management estimate of the amount required to settle the obligation at the balance sheet date. When the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a standalone asset only when the reimbursement is virtually certain.
ii) If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
iii) Contingent liabilities are disclosed on the basis of judgment of management. These are reviewed at each balance sheet date are adjusted to reflect the current management estimate.
iv) Contingent assets are not recognized but are disclosed in the financial statements when inflow of economic benefits is probable.
h) Income Taxes
The tax expense for the period comprises current and deferred tax. Tax is recognized in Statement of Profit and Loss, except to the extent that it relates to items recognized in the other comprehensive income or in equity. In which case, the tax is also recognised in other comprehensive income or equity.
i) Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance sheet date.
ii) Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
i) Foreign Currency Transactions
i) Transactions in foreign currencies are initially recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date.
ii) Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets.
iii) Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or Statement of Profit and Loss are also recognised in OCI or Statement of Profit and Loss, respectively).
j) Employee Benefits Expense
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
Post-Employment Benefits
Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund, Superannuation Fund and Pension Scheme. The Companyâs contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Defined Benefits Plans
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/superannuation. The gratuity is paid @15 days salary for every completed year of service as per the Payment of Gratuity Act 1972.The gratuity liability amount is contributed to the approved gratuity fund formed exclusively for gratuity payment to the employees. The gratuity fund has been approved by respective IT authorities.The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employeesâ services.Re-measurement of defined benefit plans in respect of postemployment are charged to the Other Comprehensive Income.
Employee Separation Costs
Compensation to employees who have opted for retirement under the voluntary retirement scheme of the Company is payable in the year of exercise of option by the employee. The Company recognises the employee separation cost when the scheme is announced and the Company is demonstrably committed to it.
k) Revenue recognition
Revenue from sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated cost can be estimated reliably, there is no continuing effective control or managerial involvement with the goods, and the amount of revenue can be measured reliably. Revenue from rendering of services is recognised when the performance of agreed contractual task has been completed. Revenue from sale of goods is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. Revenue from operations includes sale of goods, services, service tax, excise duty and adjusted for discounts (net), and gain/ loss on corresponding hedge contracts.
Interest income
Interest income from a financial asset is recognised using effective interest rate (EIR) method.
Dividends
Revenue is recognised when the Companyâs right to receive the payment has been established, which is generally when shareholders approve the dividend.
l) Insurance Claims
Insurance claims are accounted for on the basis of claims admitted/ expected to be admitted to the extent that there is no uncertainty in receiving the claims.
m) Financial Instruments
i) Financial Assets
A. Initial recognition and measurement
All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.
B. Subsequent measurement
Financial assets carried at amortised cost
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through profit or loss (FVTPL)
A financial asset not classified as either amortised cost or FVOCI, is classified as FVTPL.
C. Investment in subsidiaries, Associates and Joint Ventures
The Company has elected to measure investment in subsidiaries, joint venture and associate at cost. On the date of transition, the fair value has been considered as deemed cost.Investment in Equity shares & Mutual Funds etc., are classified at fair value through the profit and loss account.
D. Other Equity Investments
All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in âOther Comprehensive Incomeâ.
E. Impairment of financial assets
In accordance with Ind AS 109, the Company uses âExpected Credit Lossâ (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).Expected credit losses are measured through a loss allowance at an amount equal to: - The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or - Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument) For trade receivables Company applies âsimplified approachâ which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analysed. For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.
ii) Financial Liabilities
A. Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
B. Subsequent measurement
Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
Derivative financial instruments and Hedge Accounting
The Company uses various derivative financial instruments such as interest rate swaps, currency swaps, forwards & options and commodity contracts to mitigate the risk of changes in interest rates, exchange rates and commodity prices. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are also subsequently measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to Statement of Profit and Loss, except for the effective portion of cash flow hedges which is recognised in Other Comprehensive Income and later to Statement of Profit and Loss when the hedged item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial assets or non-financial liability.
Hedges that meet the criteria for hedge accounting are accounted for as follows:
a) Cash flow hedge
The Company designates derivative contracts or non derivative financial assets / liabilities as hedging instruments to mitigate the risk of movement in interest rates and foreign exchange rates for foreign exchange exposure on highly probable future cash flows attributable to a recognised asset or liability or forecast cash transactions. When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in the cash flow hedging reserve being part of other comprehensive income. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting, then hedge accounting is discontinued prospectively. If the hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the hedging instrument recognized in cash flow hedging reserve till the period the hedge was effective remains in cash flow hedging reserve until the underlying transaction occurs. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the Statement of Profit and Loss upon the occurrence of the underlying transaction. If the forecasted transaction is no longer expected to occur, then the amount accumulated in cash flow hedging reserve is reclassified in the Statement of Profit and Loss.
b) Fair Value Hedge
The Company designates derivative contracts or non derivative financial assets / liabilities as hedging instruments to mitigate the risk of change in fair value of hedged item due to movement in interest rates, foreign exchange rates and commodity prices. Changes in the fair value of hedging instruments and hedged items that are designated and qualify as fair value hedges are recorded in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to Statement of Profit and Loss over the period of maturity.
Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
n) Operating Cycle
The Company presents assets and liabilities in the balance sheet based on current / non-current classification based on operating cycle.
An asset is treated as current when it is:
a. Expected to be realized or intended to be sold or consumed in normal operating cycle;
b. Held primarily for the purpose of trading;
c. Expected to be realized within twelve months after the reporting period, or
d. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
a. It is expected to be settled in normal operating cycle;
b. It is held primarily for the purpose of trading;
c. It is due to be settled within twelve months after the reporting period, or
d. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The company has identified twelve months as its operating cycle.
o) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a right issue to existing shareholders.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
p) Dividend Distribution
Dividend distribution to the shareholders is recognised as a liability in the company''s financial statements in the period in which the dividends are approved by the company''s shareholders.
q) Statement of Cash Flows
i) Cash and Cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, 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.
ii) Statement of Cash Flows is prepared in accordance with the Indirect Method prescribed in the relevant Accounting Standard.
2.3 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the financial statements in conformity with the Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and disclosures as at date of the financial statements and the reported amounts of the revenues and expenses for the years presented. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates under different assumptions and conditions. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
a) Depreciation / amortisation and useful lives of property plant and equipment / intangible assets
Property, plant and equipment / intangible assets are depreciated / amortised over their estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated technological changes. The depreciation / amortisation for future periods is revised if there are significant changes from previous estimates.
b) Recoverability of trade receivable
Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
c) Provisions
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgment to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.
d) Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or Cash Generating Units (CGUâs) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account, if no such transactions can be identified, an appropriate valuation model is used.
e) Impairment of financial assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
2.4 First Time adoption of Ind AS
The Company has adopted Ind AS with effect from 1st April 2017 with comparatives being restated. Accordingly the impact of transition has been provided in the Opening Reserves as at 1st April 2016. The figures for the previous period have been restated, regrouped and reclassified wherever required to comply with the requirement of Ind AS and Schedule III.
a) Exemptions from retrospective application
i) Business combination exemption
The Company has applied the exemption as provided in Ind AS 101 on nonapplication of Ind AS 103, âBusiness Combinationsâ to business combinations consummated prior to April 1, 2016 (the âTransition Dateâ), pursuant to which goodwill/capital reserve arising from a business combination has been stated at the carrying amount prior to the date of transition under Indian GAAP. The Company has also applied the exemption for past business combinations to acquisitions of investments in subsidiaries / associates / joint ventures consummated prior to the Transition Date
ii) Fair value as deemed cost exemption
The Company has elected to measure items of property, plant and equipment and intangible assets at its carrying value at the transition date.
iii) Cumulative translation differences
The Company has elected to apply Ind AS 21 - The Effects of changes in Foreign Exchange Rate prospectively. Accordingly all cumulative gains and losses recognised are reset to zero by transferring it to retained earnings.
iv) Investments in subsidiaries, joint ventures and associates
The Company has elected to measure investment in subsidiaries, joint venture and associate at carrying value.
Mar 31, 2016
Company Overview
Mahamaya Steel Industry a major industry in the group is a 15 years young company, manufacturing steel structures in the shape of Angles, Beams, Joist, Channels, Rounds, Flats, Railway sleepers etc. It has high capacity structural rolling mills with full fledged supportive SMS. Mahamaya has many prestigious customers ranging from BHEL, BHPV, MAHAGENCO, CSPDCL, TNEB, GETCO, MSPDCL, MPPDCL, ONGC, RAILWAYS, RELIANCE, JINDAL etc. It is also conversion agent of SAIL, JINDAL. Mahamaya is one of the few in the country who manufactures 600 MM joist and 250 MM angles . Mahamaya has kept pace with modern time, by continuously modernizing its plant and equipment so that its product conifers to specification as required by different customers. The product are inspected by world renowned inspection agencies like - BIS,TUV,DNV,BUREAU VARITAS, SGS, LLOYDS, ABS, RDSO etc. The company is a public limited company incorporated and domiciled in India and has its registered office at Raipur, Chhattisgarh. The company is listed its shares on Bombay stock exchange ltd(BSE).
1) Basis of Preparation of Financial Statements
The financial statements are prepared in accordance with Indian Generally Accepted Accounting principle(GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed under section 133 of the Companies Act 2013(''Act'') read with Rule 7 of the Companies (Accounts) Rule 2014,the provision of the acts (to the extent notified) and guideline issued by the SEBI .Accounting policies have been consistently applied except where a newly accounting standard is initially adopted or to a revision to an AS requires a change in accounting policy hitherto in use.
2) Use of Estimates
The preparation of financial statements require estimates & assumptions to be made that affect the reported amount of asset and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known / materialized
3) Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net of credit under Cenvat / VAT schemes), taxes, incidental expenses, erection / commissioning expenses, including financing cost till commencement and regularization of commercial production, net charges on foreign exchange contracts and adjustments (if any) arising from exchange rate variation relating to borrowings attributable to the fixed assets are capitalized, less accumulated depreciation as per the Schedule-II.
4) Capital Work in progress
It is stated at cost.
5) Depreciation and Amortization
I) Depreciation is provided based on useful life of the assets and scrape value (5% of the original cost) as prescribed in schedule II to the Companies Act, 2013 except, in respect of Rolls, where useful life taken for one year only as per technical advice.
ii) Leasehold Land is amortized on straight line basis over the period of lease.
6) Impairment of Assets
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is normally charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
7) Foreign Currency Transactions
i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.
ii) Monetary items denominated in foreign currencies at the yearend rates. In case of monetary items which are covered by forward exchange contracts, the difference between the yearend rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts has been recognized over the life of the contract.
iii) Non monetary foreign currency items are carried at cost.
iv) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.
8) Investments
Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management.
9) Inventory Valuation
Inventories are valued at lower of cost or net realizable value. Cost of Finished goods is determined by including direct materials, labour, other expenses and a proportion of overheads based on normal operating capacity. Cost of finished goods has been determined on weighted average and includes excise duty. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale. Cost of raw materials stores and spares, are determined on FIFO basis. By products are valued at net realizable value.
10) Revenue Recognition
Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Turnover includes sale of goods, services, sales tax, service tax, excise duty and sales during trial run period, adjusted for discounts (net), Value Added Tax (VAT) and gain / loss on corresponding hedge contracts. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.
11) Excise Duty
Excise Duty is accounted on the basis of, both, payments made in respect of goods cleared as also provision made for finished goods in stock.
12) Recognition of Income and Expenditure
Mercantile method of accounting is employed unless otherwise specifically stated elsewhere in this schedule. However, where the amount is immaterial/negligible and/or establishment of accrual/determination of amount is not possible, no entries are made for the accruals.
13) Employee''s Retirement Benefits
i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.
ii) Post employment and other long term employee benefits are recognized as an expense in the Profit and Loss account for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Profit and Loss account.
14) Borrowing Costs
Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of cost of such assets (if any). A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognized as expenses in the period in which they are incurred.
15) Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from âtiming differencesâ between book and taxable profit is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carry forward only to the extent that there is a reasonable certainty that the asset will be realized in future.
16) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are generally not provided for in books of account and separate disclosure is made in âNotes on Accountsâ. Contingent Assets are neither recognized nor disclosed in the financial statements.
17) Finance Lease
Assets leased by the Company in its capacity as a lessee, where substantially all the risks and rewards of ownership vest in the Company are classified as finance leases. Such leases are capitalized at the inception of the lease at the lower of the fair value and the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year. A leased assets is depreciated on Straight line over the useful life of the asset.
Mar 31, 2015
1) Basis of Preparation of Financial Statements
The Financial Statement have been prepared under the historical cost
convention, on the basis of a going concern, with revenues recognized
and expenses accounted on their accrual, including provisions /
adjustments for committed obligations and amount determined as payable
or receivable during the year. The financial statements have been
prepared in accordance with the generally accepted accounting
principles and provisions of the statute have been followed.
2) Use of Estimates
The preparation of financial statements require estimates & assumptions
to be made that affect the reported amount of asset and liabilities on
the date of financial statements and reported amount of revenues and
expenses during the reporting period. Difference between actual results
and estimates are recognized in the period in which the results are
known / materialized.
3) Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net
of credit under Cenvat / VAT schemes), taxes, incidental expenses,
erection / commissioning expenses, including financing cost till
commencement and regularization of commercial production, net charges
on foreign exchange contracts and adjustments (if any) arising from
exchange rate variation relating to borrowing attributable to the fixed
assets are capitalized, less accumulated depreciation.
4) Capital Work in progress
It is stated at cost.
5) Depreciation and Amortisation
i) Depreciation is provided based on useful life of the assets and
scrape value (5% of the original cost) as prescribed in schedule II to
the Companies Act, 2013 except, in respect of Rolls, where useful life
taken for one year only as per technical advise.
ii) Amortization is not being made on leasehold land being
insignificant amount.
6) Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is normally charged
to the Profit and Loss Account in the year in which an asset is
identified as impaired. The impairment loss recognized in prior
accounting period is reversed if there has been a change in the
estimate of recoverable amount.
7) Foreign Currency Transactions
i) Transactions denominated in foreign currencies are normally recorded
at the exchange rate prevailing at the time of the transaction.
ii) Monetary items denominated in foreign currencies at the year end
rates. In case of monetary items which are covered by forward exchange
contracts, the difference between the year end rate and rate on the
date of the contract is recognized as exchange difference and the
premium paid on forward contracts has been recognized over the life of
the contract.
iii) Non monetary foreign currency items are carried at cost.
iv) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
account except in cases where they relate to acquisition of fixed
assets in which case they are adjusted to the carrying cost of such
assets.
8) Investments
Long Term Investments are stated at cost. Provision for diminution in
the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management.
9) Inventory Valuation
Inventories are valued at lower of cost or net realizable value. Cost
of Finished goods is determined by including direct materials, labour,
other expenses and a proportion of overheads based on normal operating
capacity. Cost of finished goods has been determined on weighted
average and includes excise duty. Net realizable value is the estimated
selling price in the ordinary course of business, less estimated costs
of completion and to make the sale. Cost of raw materials stores and
spares, are determined on FIFO basis. By products are valued at net
realizable value.
10) Revenue Recognition
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. Turnover includes sale of
goods, services, sales tax, service tax, excise duty and sales during
trial run period, adjusted for discounts (net), Value Added Tax (VAT)
and gain / loss on corresponding hedge contracts. Dividend income is
recognized when right to receive is established. Interest income is
recognized on time proportion basis taking into account the amount
outstanding and rate applicable.
11) Excise Duty
Excise Duty is accounted on the basis of, both, payments made in
respect of goods cleared as also provision made for finished goods in
stock.
12) Recognition of Income and Expenditure
Mercantile method of accounting is employed unless otherwise
specifically stated elsewhere in this schedule. However, where the
amount is immaterial/negligible and/or establishment of
accrual/determination of amount is not possible, no entries are made
for the accruals.
13) Employee's Retirement Benefits
i) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
ii) Post employment and other long term employee benefits are
recognized as an expense in the Profit and Loss account for the year in
which the employee has rendered services. The expense is recognized at
the present value of the amounts payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long term benefits are charged to the Profit and
Loss account.
14) Borrowing Costs
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of cost of
such assets (if any). A qualifying asset is an asset that necessarily
requires a substantial period of time to get ready for its intended use
or sale. All other borrowing costs are recognized as expenses in the
period in which they are incurred.
15) Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that are
enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognized and carry forward only to the extent
that there is a reasonable certainty that the asset will be realized in
future.
16) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are generally not provided for in books of
account and separate disclosure is made in 'Notes on Accounts".
Contingent Assets are neither recognized nor disclosed in the financial
statements.
Mar 31, 2014
1) Baals of Preparation of F Inane la I Statements
The Financial Statement have heen prepared under Ihe historical cost
convention, on (lie ba-sis of a going concern, with revenues recognized
and expenses accounted or their accrual, ncluding previsions /
adjustments (or commillcd obligations and amount detwmlned an payable
or recehretle during ihe year The financial statements have been
prepared in accordance wilhi 1he genera ly accepted accounting pr
nciples and previsions of the statute have bee n Tol lowed.
2) Use of Estimates
The preparation of financial statements recuire estimates 4 assumptions
to be made that affect the reported amount of asset and liabilities cm
the date of financial statements and reported amount of revenues and
expenses during Ine reporting period. Difference between actual results
and estimates are recognized in the period in which the results are
known materialized.
3) Fixed Assets
Fixed Assets are stated at Cost of acquisition inclusive of duties (net
of Credit Under Ctenvatf VAT schemes h taxes, incidental expenses,
erection I Mmmia5Kinir,g expenses.. Including finaremg cos! till
commencement and regulanzalion of commercial product on netcharges on
foreign exchange conlracts u';d adjustments (if any) arising from
exchange rale variation reiatmg to borrowings nttrlbutanie to ihe toed
assets are capitalized, less accumulated depreciation.
4) Capital Work in progress
It is stated at cost.
5) Depreciation and Amortisation
i) Depreciation on fined assets is provided on. straight-line method a1
Ihe rates prescribed in Schedule Xl-V of the Companies Act, 1S5G.
Depreciation on acditionsi'deletions to fixed assets i£ beiny provided
on pm-rute basis fruuVto Lhc monlfi of acqciSiliynfdiSposal. Fixed
nssels C-f like nature nave been Clubbed under broad descriptions given
in !he Balance Sheet.
ii Amoriizalion is rot being made on leasehold land being
insignificant amount. At ret realisable value.
G) Impairment of Assets
An asset is treated as impaired when the carrying coat of assets
exceeds its recoverable value. An Impair me nl loss is normally charged
to the Profit ant) Loss Account in the year in which an asset is
identified as. it paired The impairment loss recognized in prior
accounting period is reversed if there has been a change in the
estimate of recoverable amounl.
7) Foreign Currency Transactions
i) Transactions denominated in foreign currencies are normally necordec
at the exchange rale prevailing aLthc time of the transaction.
ii) Monetary items denominated in foreign currencies at Ihe year ord
rates. In case of monetary Items which are covered by forward exchange
contracts, the difference between lha yearend rale and rale on Ihe dale
of the conlrad is recognized as exchange deference arid thu premium paid
on forward conlracli has been recognized over ihe itfe oMhe contract.
iii ) Non monetary foreign currency items are carred at cost.
iv) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
account except in cases where they relate lo acquisition affixed assets
In wh ch case they arc adjusted lo the carrying cost of such assets.
8) Investments
Long Term investments are stated at cost Provision for diminution m the
value of long term investments is made only if such a decline Is other
than temporary in the opinion of the management.
9) Inventory Valuation
Inventories are valued at lower of cost or net realizable value. Cost
of Finished goads is dele-mined by including direct materials, labour,
oltror expenses and a uroportioh or overheads based on normal operating
capacity. Cost pf finished gcods has been determined cn weighted
average and includes excise duty. Met realizable value is the estimated
selling price in thcrordnary course of business, less estimated costs
of completion arid lo make the salts-. Cost of raw materials stones and
spares, are determined on FIFO basis. By products are valued a1 net
realizable value.
10) Revenue Recognition
Revenue is recognized cnly when rt can be reliably measured and it is
reasonable tc expect ultimate collection. Turnover includes sale of
goods, services, sales tax. service lax, excise duly and sales during
trial run ptviori. adjusted for discounts (net), Value Added Tax (VAT)
end gain/less on corresponding heege contracts. Dividend income is
recocnizea when nght to receive is established Interest income is
necogn zed on time prope lion oasis taking into account the amount
outstanding and rat* applicable
11} Excise Duty
Excise Duty is accourtlcd on Ihe basis of, both payments mado in
nc&pcct of goods clcaruo as also provision made for finished goods in
stock.
12) Recognition Income and Expenditure
Mercantile melhod of accounting Is employed un'esn otherwise
specifically stated elsewhere n this schedule Hcwever. where the amount
is immaterial/iieglig.ble and.'cr ostabl shrrent of accrual 'dalarm
ination of a mount is not possi ble. no enfr es arc made for the
accruals.
13) Employee's retirement Benefits
difference and the premium paid on forward coo tracts has been
recognized over the life of the contract.
i} Short-term employee benefits are recognized as an expense at the
un^SCOUnled amount in the profit a nd loss account of the yea'- in
which Ihe related service is rendered.
ii} Post employment and other long term employee benefits a re recogit
zed as an exnense the Profit and Loss account for the year in which the
employee hasrencered services. The expense is reoogn^ed at the present
value ei ihe arnounts payable determined using actuarial valuation
techniques. Actuarial gams ane losses in neaps nr of post employment and
other long Cam benefits a re changed bo the Profit and Loss accounl.
14) Borrowing Coats
Borrowing crate tnat are attributable to foe acquisition, construction
or production of qualifying assets are capitalized as part of 60#
efsuc^i assets (if any). Aquahtying asset is an asset that necessarily
requires a subslanuai period of rime to get ready for Its lmended use
or sale. All other borrowing costs are recognized as expenses in the
period in which they ana incurred.
15) Provision for Current and Deferred Tax
Provision for current tax is made after taking i nto consideration
benefits admissible under the provisions of the into me Tax. Act, 1961
Deferred La* resulting Jrom "liming differences'1 between book and
taxable prof I is accounted tor using the tax rates and law's that are
enacted or subslanfrvely enacted as on the balance sheet date. The
deterred tax asset is recognized and carry forward only te ihc extent
thai ihere is a reasonable certainty that (ho asset wil I be realized
in future
16) Provisions, Contingent Liabilities and Contingent Assets
Provisions Involving substantial degree of estimation In measurement
are recognizee when there is a present obligation as a result of past
events and it is probable that there will he an uu1f luw of reseu rccs.
Cunlfoga nl Ltibi lies a re generally net provided for in books of
accou nt and separate disclosure e made in 'Neics on Accounts" comlngeM
Assets are neither recognized nor disclosed in the financial
sfatements.
Mar 31, 2012
1) Basis of Preparation of Financial Statements
The Financial Statement have been prepared under the historical cost
convention, on the basis of a going concern, with revenues recognized
and expenses accounted on their accrual, including provisions /
adjustments for committed obligations and amount determined as payable
or receivable during the year. The financial statements have been
prepared in accordance with the generally accepted accounting principles
and provisions of the statute have been followed.
2) Use of Estimates
The preparation of financial statements require estimates & assumptions
to be made that affect the reported amount of asset and liabilities on
the date of financial statements and reported amount of revenues and
expenses during the reporting period. Difference between actual results
and estimates are recognized in the period in which the results are
known / materialized
3) Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net
of credit under Cenvat/VAT schemes), taxes, incidental expenses,
erection / commissioning expenses, including financing cost till
commencement and regularization of commercial production, net charges
on foreign exchange contracts and adjustments (if any) arising from
exchange rate variation relating to borrowings attributable to the
fixed assets are capitalized, less accumulated depreciation.
4) Capital Work in progress
It is stated at cost.
5) Depreciation and Amortisation
i) Depreciation on fixed assets is provided on straight-line method at
the rates prescribed in Schedule XIV of the Companies Act, 1956.
Depreciation on additions/deletions to fixed assets is being provided
on pro-rata basis from/to the month of acquisition/disposal. Fixed
assets of like nature have been clubbed under broad descriptions given
in the Balance Sheet.
ii) Amortization is not being made on leasehold land being
insignificant amount. At net realisable value.
6) Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is normally charged
to the Profit and Loss Account in the year in which an asset is
identified as impaired. The impairment loss recognized in prior
accounting period is reversed if there has been a change in the
estimate of recoverable amount.
7) Foreign Currency Transactions
i) Transactions denominated in foreign currencies are normally recorded
at the exchange rate prevailing at the time of the transaction.
ii) Monetary items denominated m foreign currencies at the year end
rates. In case of monetary items which are covered by forward exchange
contracts, the difference between the year end rate and rate on the
date of the contract is recognized as exchange difference and the
premium paid on forward contracts has been recognized over the life of
the contract.
iii) Non monetary foreign currency items are carried at cost.
iv) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
account except in cases where they relate to acquisition of fixed
assets in which case they are adjusted to the carrying cost of such
assets.
8) Investments
Long Term Investments are stated at cost. Provision for diminution in
the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management.
9) Inventory Valuation
Inventories are valued at lower of cost or net realizable value. Cost
of Finished goods is determined by including direct maternal. labour,
other expenses and a proportion of overheads based on normal operating
capacity. Cost of finished goods has been determined on weighted
average and includes excise duty. Net realizable value is the estimated
selling price in the ordinary course of business, less estimated costs
of completion and to make the sale. Cost of raw maternal stores and
spares, are determined on FIFO basis. By products are valued at net
realizable value.
10) Revenue Recognition
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. Turnover induces sale of
goods, services, sales tax, service tax. excise duty and sates during
teal run period, adjusted for discounts (net). Value Added Tax (VAT)
and gain/loss on corresponding hedge contras. Dividend Income is
recognized when right to receive is established. Interest income is
recognized on time proportion basis taking into account the amount
outstanding and rate applicable.
11) Excise Duty
Excise Duty is accounted on the basis of, both, payments made in rasped
of goods cleared as also provision made for finished goods in stock.
12) Recognition of Income and Expenditure
Mercantile method of accounting is employed unless otherwise
specifically stated elsewhere in this schedule. However, where the
amount is immaterial/negligible and/or establishment of
accrual/determination of amount is not possible, no entries are made
for the accruals.
13) Employee's Retirement Benefits
i) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
ii) Post employment and other long term employee benefits are
recognized as an expense in the Profit and Loss account for the year in
which the employee has rendered services. The expense is recognized at
the present value of the amounts payable determined using actuarial
valuation techniques Actuarial games and losses in respect of post
employment and other long term benefits are charged to the Profit and
Loss account.
14) Borrowing Costs
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of cost of
such assets (if any). A qualifying asset is an asset that necessnly
requires a substantial penned of time to get ready for its intended use
or sale. All other borrowing costs are recognized as expenses in the
period in which they are incurred.
15) Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act. 1961
Deferred tax resulting from liming differences' between book and
taxable profit is accounted for using the tax rates and laws that are
enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognized and carry forward only to the extent
that there is a reasonable certainty that the asset will be realized in
future.
16) Provisions. Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are generally not provided for in books of
account and separate disclosure is made in "Notes on Accounts".
Contingent Assets are neither recognized nor disclosed in the financial
statements.
Mar 31, 2011
1.BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The Financial Statement have been prepared under the historical cost
convention, on the basis of a going concern, with revenues recognized
and expenses accounted on their accrual, including provisions /
adjustments for committed obligations and amount determined as payable
or receivable during the year. The financial statements have been
prepared in accordance with the generally accepted accounting
principles and provisions of the statute have been followed.
2. USE OF ESTIMATES:
The preparation of financial statements require estimates & assumptions
to be made that affect the reported amount of asset and liabilities on
the date of financial statements and reported amount of revenues and
expenses during the reporting period. Difference between actual results
and estimates are recognized in the period in which the results are
known / materialized.
3. FIXED ASSETS:
Fixed Assets are stated at cost of acquisition inclusive of duties (net
of credit under Cenvat / VAT schemes), taxes, incidental expenses,
erection / commissioning expenses, including financing cost till
commencement and regularization of commercial production, net charges
on foreign exchange contracts and adjustments (if any) arising from
exchange rate variation relating to borrowings attributable to the
fixed assets are capitalized, less accumulated depreciation.
4. CAPITAL WORK-IN-PROGRESS:
It is stated at cost.
5. DEPRECIATION & AMORTISATION:
(a) Depreciation on fixed assets is provided on straight-line method at
the rates prescribed in Schedule XIV of the Companies Act, 1956.
Depreciation on additions/deletions to fixed assets is being provided
on pro-rata basis from/to the month of acquisition/disposal. Fixed
assets of like nature have been clubbed under broad descriptions given
in the Balance Sheet.
(B) Amortization is not being made on leasehold land being
insignificant amount.
6. IMPAIRMENT OF ASSETS:
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is normally charged
to the Profit and Loss Account in the year in which an asset is
identified as impaired. The impairment loss recognized in prior
accounting period is reversed if there has been a change in the
estimate of recoverable amount.
7. FOREIGN CURRENCY TRANSACTIONS:
(a) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(b) Monetary items denominated in foreign currencies at the year end
rates. In case of monetary items which are covered by forward exchange
contracts, the difference between the year end rate and rate on the
date of the contract is recognized as exchange difference and the
premium paid on forward contracts has been recognized over the life of
the contract.
(c) Non monetary foreign currency items are carried at cost.
(d) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
account except in cases where they relate to acquisition of fixed
assets in which case they are adjusted to the carrying cost of such
assets.
8. INVESTMENTS:
Long Term Investments are stated at cost. Provision for diminution in
the value of long term investments is made only if such a decline is
otherthan temporary in the opinion of the management.
9.INVENTORY VALUATION:
Inventories are valued at lower of cost or net realizable value. Cost
of Finished goods is determined by including direct materials, labour,
other expenses and a proportion of overheads based on normal operating
capacity. Cost of finished goods has been determined on weighted
average and includes excise duty. Net realizable value is the estimated
selling price in the ordinary course of business, less estimated costs
of completion and to make the sale. Cost of raw materials stores and
spares, are determined on FIFO basis. By products are valued at net
realizable value.
10. REVENUE RECOGNITION:
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. Turnover includes sale of
goods, services, sales tax, service tax, excise duty and sales during
trial run period, adjusted for discounts (net), Value Added Tax (VAT)
and gain / loss on corresponding hedge contracts. Dividend income is
recognized when right to receive is established. Interest income is
recognized on time proportion basis taking into account the amount
outstanding and rate applicable.
11.EXCISE DUTY:
Excise Duty is accounted on the basis of, both, payments made in
respect of goods cleared as also provision made for finished goods in
stock.
PRECOGNITION OF INCOME & EXPENDITURE:
Mercantile method of accounting is employed unless otherwise
specifically stated elsewhere in this schedule. However, where the
amount is immaterial/negligible and/or establishment of
Accrual/determination of amount is not possible, no entries are made
for the accruals.
13.EMPLOYEES' RETIREMENT BENEFITS:
a) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
b) Post employment and other long term employee benefits are recognized
as an expense in the Profit and Loss account for the year in which the
employee has rendered services. The expense is recognized at the
present value of the amounts payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long term benefits are charged to the Profit and
Loss account.
14. BORROWING COSTS:
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of cost of
such assets (if any). A qualifying asset is an asset that necessarily
requires a substantial period of time to get ready for its intended use
or sale. All other borrowing costs are recognized as expenses in the
period in which they are incurred.
15. PROVISION FOR CURRENT AND DEFERRED TAX:
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that are
enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognized and carry forward only to the extent
that there is a reasonable certainty that the asset will be realized in
future. i
16. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are generally not provided for in books of
account and separate disclosure is made in 'Notes on Accounts".
Contingent Assets are neither recognized nor disclosed in the financial
statements.
Mar 31, 2010
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The Financial Statement have been prepared under the historical cost
convention, on the basis of a going concern, with revenues recognized
and expenses accounted on their accrual, including provisions /
adjustments for committed obligations and amount determined as payable
or receivable during the year. The financial statements have been
prepared in accordance with the generally accepted accounting
principles and provisions of the statute have been followed.
2. USE OF ESTIMATES:
The preparation of financial statements require estimates & assumptions
to be made that affect the reported amount of asset and liabilities on
the date of financial statements and reported amount of revenues and
expenses during the reporting period. Difference between actual results
and estimates are recognized in the period in which the results are
known / materialized.
3. FIXED ASSETS:
Fixed Assets are stated at cost of acquisition inclusive of duties (net
of credit under Cenvat / VAT schemes), taxes, incidental expenses,
erection / commissioning expenses, including financing cost till
commencement and regularization of commercial production, net charges
on foreign exchange contracts and adjustments (if any) arising from
exchange rate variation relating to borrowings attributable to the
fixed assets are capitalized, less accumulated depreciation.
4. CAPITALWORK-IN-PROGRESS:
It is stated at cost.
5. DEPRECIATIONS AMORTISATION:
(a) Depreciation on fixed assets is provided on straight-line method at
the rates prescribed in Schedule XIV of the Companies Act, 1956.
Depreciation on additions/deletions to fixed assets is being provided
on pro-rata basis from/to the month of acquisition/disposal. Fixed
assets of like nature have been clubbed under broad descriptions given
in the Balance Sheet.
(B) Amortization is not being made on leasehold land being
insignificant amount.
6. IMPAIRMENT OF ASSETS:
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is normally charged
to the Profit and Loss Account in the year in which an asset is
identified as impaired. The impairment loss recognized in prior
accounting period is reversed if there has been a change in the
estimate of recoverable amount.
7. FOREIGN CURRENCYTRANSACTIONS:
(A) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(B) Monetary items denominated in foreign currencies at the year end
rates. In case of monetary items which are covered by forward exchange
contracts, the difference between the year end rate and rate on the
date of the contract is recognized as exchange difference and the
premium paid on forward contracts has been recognized over the life of
the contract.
(C) Non monetary foreign currency items are carried at cost.
(D) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
account except in cases where they relate to acquisition of fixed
assets in which case they are adjusted to the carrying cost of such
assets.
8. INVESTMENTS:
Long Term Investments are stated at cost. Provision for diminution in
the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management.
9. INVENTORY VALUATION:
Finished goods are measured at lower of cost or net realizable value.
Cost includes direct materials, labour, other expenses and a proportion
of overheads based on normal operating capacity. Cost of finished goods
has been determined on weighted average and includes excise duty. Net
realizable value is the estimated selling price in the ordinary course
of business, less estimated costs of completion and to make the sale.
Cost of raw materials stores and spares, are determined on FIFO basis.
By products are valued at net realizable value.
10. TURNOVER:
Turnover includes sale of goods including steel scrap and broken rolls,
services, sales tax, excise duty adjusted for discounts (net) and gain/
loss on corresponding hedge contracts.
11. EXCISE DUTY:
Excise Duty is accounted on the basis of, both, payments made in
respect of goods cleared as also provision made for finished goods in
stock.
12. RECOGNITION OF INCOME & EXPENDITURE:
Mercantile method of accounting is employed unless otherwise
specifically stated elsewhere in this schedule. However, where the
amount is immaterial/negligible and/or establishment of
accrual/determination of amount is not possible, no entries are made
for the accruals.
13. EMPLOYEESRETIREMENT BENEFITS:
(a) Companys contribution to Employees Provident Fund is charged to
revenue every year.
(b) Gratuity has been accounted for as per actuarial valuation.
14. BORROWING COSTS:
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of cost of
such assets (if any). A qualifying asset is an asset that necessarily
requires a substantial period of time to get ready for its intended use
or sale. All other borrowing costs are recognized as expenses in the
period in which they are incurred.
15. PROVISION FOR CURRENT AND DEFERRED TAX:
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that are
enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognized and carry forward only to the extent
that there is a reasonable certainty that the asset will be realized in
future.
16. PROVISION, CONTINGENT LIABILITIES AND CONTINGENTASSETS:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are generally not provided for in books of
account and separate disclosure is made in Notes on Accounts".
Contingent Assets are neither recognized nor disclosed in the financial
statements.
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