Mar 31, 2018
1. Significant Accounting Poilicies
I) Basis of Preparation
These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act 2013 (âActâ) read with Rule 3 of the Companies (Indian Accounti ng Standards) Rules, 2015, as amended. These financial statements are prepared under the historical cost convention on the accrual basis except for certain items of assets and liabilities which have been measured at their fair values.
The Company has adopted all the Ind AS and the adoption was carried out in accordance with Ind AS 101- First time adoption of Indian Accounting Standards. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Act, read with relevant Rules which was the previous GAAP. Reconciliations and descriptions of the effect of the transition has been summarized in Note 38.
II) Revenue Recognition
Revenue from sale of goods in the course of ordinary activiti es is recognised when all the significant risks and rewards of ownership are transferred to the buyer as per the terms of the contract and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of the goods and regarding its collection. Revenue is measured at the fair value of the consideration received or receivable and includes excise duty and are net of returns and allowances, trade discounts, volume rebates, value added tax and goods and service tax.
Dividend income is recognised when the Companyâs right to receive dividend is established. Interest income is recognized using the effective interest method. Effective Interest Rate is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. All other income are recognized on accrual basis.
III) Property, Plant & Equipment
Property, plant and equipment are stated at acquisition cost, less accumulated depreciation and accumulated impairment loss, if any. The cost of Property, Plant & Equipment comprises of its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use. Interest and other financial charges on loans borrowed specifically for acquisition of capital assets are capitalised till the start of commercial production.
Depreciation is provided on the straight line method over the estimated useful lives of assets and are in line with the requirements of Part C of Schedule II of the Companies Act, 2013. The estimated useful lives are as follows :
Building 30 Years
Plant & Equipment 15 Years
Computers 3, 6 Years
Office Equipment 5 Years
Furniture & Fixtures 10 Years
Motor Vehicles 8 Years
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date are classified as âCapital Advancesâ under other âNon-Current Assetsâ Assets and the cost of assets not put to use before such date are disclosed under âCapital Work in Progressâ.
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.
IV) Intangible Assets
Intangible Assets acquired separately are measured on initial recogniti on at cost. Intangible Assets acquired in a business combination is valued at their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any.
The useful lives of Intangible Assets are assessed as either finite or indefinite. Intangible Assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indicati on that the intangible asset may be impaired. The amortization period and the amortization method for an Intangible Asset with a finite useful life are reviewed at the end of each reporting period. The amortization expense on Intangible Assets with finite lives is recognized in the Statement of Profit & Loss. The Company amortizes intangible assets over their estimated useful lives using the straight line method.
Intangible Assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
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 recognized in the Statement of Profit & Loss when the asset is derecognized.
V) Inventories
Inventories are valued at cost or net realisable value whichever is lower except for saleable scraps, whose cost is not identifiable, which are valued at estimated net realisable value. Closing stock has been valued on Weighted Average basis. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
VI) Financial Instruments
Initial recognition and measurement
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. 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 added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.
Subsequent measurement
i. Non derivative financial instruments
a) Financial assets carried at amortized cost
A financial asset is subsequently measured at amortized 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.
b) Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income 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. The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model.
c) Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
d) Financial liabilities
Financial liabiliti es are subsequently carried at amorti zed cost using the effecti ve interest method, except for contingent considerati on recognized in a business combinati on which is subsequently measured at fair value through profit and loss. 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.
e) Investment in subsidiaries
Investment in subsidiaries is carried at cost in the separate financial statements.
ii. Derivative financial instruments
The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income.
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 Companyâs Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
VII) Fair Value Measurement
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
i) Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
ii) Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
iii) Level 3 â Valuati on techniques for which the lowest level input that is significant to the fair value measurement is unobservable
VIII) Impairment
Impairment is recognized based on the following principles:
Financial Assets
The Company recognizes loss allowances using the Expected Credit Loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to life time ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at life time ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in profit or loss.
Non-Financial Assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortizati on and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an assets fair value less costs of disposal and value in use. For the purpose of assessing impairment, assets are grouped at the lowest level 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 unit) Non- financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of reporting period.
IX) Provisions and Contingent Liabilities
Provisions are recognised when the Company has a present obligati on (legal or constructi ve) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligati on and a reliable estimate can be made of the amount of the obligation.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
X) Foreign Currency Transactions & Translations
The functional currency of the Company is Indian Rupee. These Financial Statements are presented in Indian Rupee (rounded off to the nearest Lacs).
Transactions in foreign currencies entered into by the company are accounted at the exchange rates prevailing on the date of the transaction. Gains & losses arising on account of realization are accounted for in the Statement of Profit & Loss.
Monetary Assets & Liabilities in foreign currency that are outstanding at the year end are translated at the year end exchange rates and the resultant gain/loss is accounted for in the Statement of Profit & Loss.
XI) Cash and Cash Equivalents
Cash and Cash Equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
XII) Employee Benefits Defined Contribution Plan
The Company makes contributions towards provident fund to the regulatory authorities to a defined contribution retirement benefit plan for qualifying employees, where the Company has no further obligations. Both the employees and the Company make monthly contributions to the Provident Fund Plan equal to a specified percentage of the covered employeeâs salary.
Defined Benefit Plan
Gratuity is paid to employees under the Payment of Gratuity Act 1972 through unfunded scheme. The Companyâs liability is actuarially determined using the Projected Unit Credit method at the end of the year in accordance with the provision of Ind AS 19 - Employee Benefits.
The Company recognizes the net obligati on of the defined benefit plan in its balance sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability/(asset) are recognized in other comprehensive income and are not reclassified to profit or loss in subsequent periods.
The Company recognises the changes in the net defined benefit obligation like service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements and net interest expense or income, as an expense in the Statement of Profit and Loss.
Short term employee benefits are charged off at the undiscounted amount in the year in which the related services are rendered.
XIII) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of ti me to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connecti on with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
XIV) Leases
Leases under which the company assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments under operating leases are recognized as an expense on a straight line basis in net profit in the Statement of Profit & Loss over the lease term.
XV) Government Grants
The Company recognizes government grants only when there is reasonable assurance that the conditions attached to them shall be complied with and the grants will be received. Grants related to assets are treated as deferred income and are recognized as other income in the Statement of profit & loss on a systematic and rational basis over the useful life of the asset. Grants related to income are recognized on a systematic basis over the periods necessary to match them with the related costs which they are intended to compensate and are deducted from the expense in the statement of profit & loss.
XVI) Income Taxes
Income tax expense is recognized in the Statement of Profit & Loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income. Provision for current tax is made at the current tax rates based on assessable income.
Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Financial Statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. 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.
Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or sett led. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substanti ve enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings of subsidiaries and branches where it is expected that the earnings of the subsidiary or branch will not be distributed in the foreseeable future. The company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
XVII) Earnings per Share
Basic earnings per share is computed by dividing the net profit for the period attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
XVIII) Current and Non-current classification
The Company presents assets and liabilities in the Balance Sheet based on current/non-current classification.
An asset is classified as current when it is:
i) expected to be realised or intended to be sold or consumed in the normal operating cycle,
ii) held primarily for the purpose of trading,
iii) expected to be realised within twelve months after the reporting period, or
iv) cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
A liability is classified as current when it is:
i) it is expected to be settled in the normal operating cycle,
ii) it is due to be settled within twelve months after the reporting period, or
iii) there is no unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
All other l iabilities are classified as non-current.
Deferred tax assets and liabilities are classified as noncurrent.
XIX) Dividend
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
XX) Rounding of Amounts
All amounts disclosed in the standalone Financial Statements and notes have been rounded off to the nearest Lacs (with two places of decimal) as per the requirement of Schedule III, unless otherwise stated.
XXI) Recent Accounting Pronuncements
Ind AS 115 - Revenue from Contracts with Customers
The Company is currently evaluati ng the impact of implementati on of Ind AS 115 âRevenue from Contracts with Customersâ which is applicable to it w.e.f 01.04.2018. However, based on the evaluation done so far and based on the arrangement that the Company has with its customers for sale of its products, the implementati on of Ind AS 115 will not have any significant recognition and measurement impact.
Ind AS 21 - The Effect of Changes in Foreign Exchange Rates
The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The Company is evaluating the impact of this amendment on its financial statements.
Mar 31, 2015
I) Basis of preparation of Financial Statement
The financial statements are prepared under the Historical cost
convention method, using the accrual system of accounting in accordance
with the Generally Accepted Accounting Principles in India including
the Accounting Standards specified under Section 133 of the Companies
Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.
II) Revenue Recognition
Revenue from sale of goods and services rendered is recognized upon
transfer of title and rendering of services to the customers.
- Sales include trade sales.
- Gross Sales include applicable taxes unless separately charged and
are net of discount.
- Sales are recognized on dispatch except consignment sales which are
recognized on receipt of statement of accounts from the agent.
III) Use of Estimates
The preparation of financial statements in conformity with Indian GAAP
requires judgements estimates and assumptions to be made that affect
the reported amount of assets and liabilities, disclosure of contingent
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the
period in which the results are known/materialized.
IV) Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (
net of CENVAT/VAT), taxes, borrowing costs directly attributable to
acquisition, incidental expenses and erection/ commissioning etc., upto
the date, the asset is ready for its intended use.
V) Impairment of Assets
The carrying amount of assets are reviewed at each balance sheet date
to determine if there is any indication of impairment based on
external/internal factor. An impairment loss is recognised wherever the
carrying amount of an asset exceeds it's recoverable amount which
represents the greater of the net selling price and value in use of the
assets. The estimated cash flows considered for determining the value
in use, are discounted to the present value at weighted average cost of
capital.
VI) Foreign currency transaction
a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
b) Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
c) Exchange Differences
Exchange differences arising on the settlement/conversion of monetary
items are recognized as income or expenses in the year in which they
arise.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expenses or income over the life of the
respective contracts. Exchange differences on such contracts are
recognised in the statement of Profit and loss in the year in which
the exchange rates change. Any Profit or loss arising on cancellation
or renewal of forward exchange contract is recognised as income or
expense for the year.
VII) Depreciation
a) Depreciation on all Fixed Assets is provided as per Schedule II of
Companies Act, 2013 under Straight Line Method over estimated useful
lives for each category of assets as under:
- Factory Building : 30 years
- Plant and Machinery : 10 to 20 years
- Electrical Installation and Equipments : 10 Years
- Furniture and Fixture : 10 Years
- Office Equipment : 5 Years
- Motor Vehicles : 8 Years
- Computers : 3 Years
b) Depreciation includes amortisation of leasehold land over the period
of lease.
c) The residual value of assets has been considered as five percent of
the original cost of the assets as per Schedule II of the Act.
d) Depreciation is provided on pro-rata basis on additions and
deletions of Fixed Assets during the year.
e) In case of impairment, if any, depreciation is provided on the
revised carrying amount of the assets over its remaining useful life.
f) Software costs are amortized using the Straight Line Method over
estimated useful life of 3 years.
VIII) Investments
Long term Investments are stated at Cost less provisions recorded to
recognise any decline, other than temporary in the carrying value of
each investment. Investments in foreign companies are considered at the
exchange rates prevailing on the date of their acquisition. Current
investments are carried at lower of cost or fair value of each
investment. Short term Investments in liquid fund scheme of mutual
funds have been stated at their NAV on year end date or purchase price
whichever is less.
IX) Inventories
Inventories are valued as follows:
a) Raw materials, finished goods, Stock in trade, Work in process,
Packing materials and stores & spares are valued at lower of cost and
net realisable value. Closing stock has been valued on Weighted Average
basis.
b) Saleable scraps, whose cost is not identify able, are valued at
estimated realisable value.
X) Research & Development
Research and development expenditure of revenue nature are charged to
Profit & Loss Account, while capital expenditure are added to the cost
of fixed assets in the year in which these are incurred.
XI) Employee Benefits
i) Short term employee benefits are charged off at the undiscounted
amount in the year in which the related services is rendered.
ii) Post employment and other long term employee benefits are charged
off in the year in which the employee has rendered services. The amount
charged off is recognised at the present value of the amounts payable
determined using actuarial valuation techniques. Actuarial gain and
losses in respect of post employment and other long term benefits are
charged to Profit and Loss Account/Project Development Expenditure
Account.
XII) Earning Per Share
Basic earning per share is calculated by dividing the net Profit or
Loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
Profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
XIII) Excise Duty and Custom Duty
Excise duty on finished goods stock lying at factories is accounted
for at the point of manufacture of goods and accordingly, is considered
for valuation of finished goods as on the Balance Sheet date. Custom
duty on imported material in transit / lying in bonded warehouse is
accounted for at the time, the same are released from Customs/ Bonded
warehouse.
XIV) Financial Derivatives and Commodity Hedging Transactions
In respect of derivative contracts, premium paid, gains/losses on
settlement and provision for losses for cash flow hedges are
recognised in the Profit and Loss Account, except in case where they
relate to borrowing costs that are attributable to the acquisition or
construction of fi xed assets, in which case, they are adjusted to the
carrying cost of such assets.
XV) Borrowing Costs
Borrowing Costs relating to acquisition / construction of qualifying
assets are capitalized until the time all substantial activities
necessary to prepare the qualifying assets for their intended use are
complete. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use. All other borrowing
costs are charged to revenue.
XVI) Taxation
Tax expenses comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act, 1961. Deferred income taxes
refl ects the impact of current year timing differences between
taxable income for the year and reversal of timing differences of
earlier years.
The deferred tax for timing differences between the book and tax profits
for the year is accounted for using the tax rates and laws that have
been substantially enacted as on the Balance Sheet date. Deferred tax
assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. If the company
has carry forward unabsorbed depreciation and tax losses, deferred tax
assets are recognised only to the extent there is virtual certainty
supported by convincing evidence that sufficient taxable income will
be available against which such deferred tax asset can be realized.
XVII) Segment Reporting
a) Identification of segments
The company has identified its business segments as the primary
segments . The company's businesses are organized and managed
separately according to the nature of products/ services, with each
segment representing a strategic business unit that offers different product
/ services and serves different markets. The analysis of
geographical segments is based on the areas in which the customers of
the company are located.
b) Allocation of Common Costs
Common allocable costs are allocated to each segment on case to case
basis applying the ratio, appropriate to each relevant case. Revenue
and expenses, which relate to the enterprise as a whole and are not
allocable to segment on a reasonable basis, have been included under
the head "Unallocated".
The accounting policies adopted for segment reporting are in line with
those of the Company.
XVIII) Prior Period Expenses/Income
Material items of prior period expenses/income are disclosed
separately.
XIX) Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised 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 not recognised but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
Mar 31, 2014
(Annexed to and forming part of the financial statements for the year
ended 31St March, 2014)
Note:1
I) Basis of preparation of Financial Statement
The financial statements are prepared under the Historical cost
convention method, using the accrual system of accounting in accordance
with the Generally Accepted Accounting Principles in India & the
requirements of the Companies Act,1956,including the Notified
Accounting Standards as prescribed by the Companies (Accounting
Standards) Rules,2006.
II) Revenue Recognition
Revenue from sale of goods and services rendered is recognized upon
transfer of title and rendering of services to the customers.
III) Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (
net of CENVAT/VAT), taxes, borrowing costs directly attributable to
acquisition, incidental expenses and erection/ commissioning etc., upto
the date, the asset is ready for its intended use.
IV) Impairment of Assets
The carrying amount of assets are reviewed at each balance sheet date
to determine if there is any indication of impairment based on
external/internal factor. An impairment loss is recognised wherever the
carrying amount of an asset exceeds it''s recoverable amount which
represents the greater of the net selling price and value in use of the
assets. The estimated cash flows considered for determining the value
in use, are discounted to the present value at weighted average cost of
capital.
V) Foreign currency transaction a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency
amount the exchange rate between the reporting currency and the foreign
currency at the date of the transaction.
b) Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
c) Exchange Differences
Exchange differences arising on the settlement/conversion of monetary
items are recognized as income or
expenses in the year in which they arise.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expenses or income over the life of the
respective contracts. Exchange differences on such contracts are
recognised in the statement of profit and loss in the year in which the
exchange rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognised as income or expense
for the year.
VI) Depreciation
a) Depreciation on all Fixed Assets is provided under Straight Line
Method at the rates specified in Schedule XIV to the Companies Act,
1956.
b) Depreciation includes amortisation of leasehold land over the period
of lease.
c) Depreciation is provided on prorata basis on additions and deletions
of Fixed Assets during the year except for assets costing Rs.5000/- or
less on which 100% Depreciation is provided.
d) Depreciation on individual items of plant and machinery costing Rs.
5000/- or less is being provided at
41 normal applicable rates, whenever aggregate cost of such items
constitute more than 10% of the total cost of
MANAKSIA LIMITED ANNUAL REPORT 2013-14
MANAKSIA LIMITED
plant and machinery in accordance with amendments to Schedule XIV to
the Companies Act, 1956 vide
Notification No. GSR No. 101(E) dated 01.03.1995.
e) In case of impairment, if any, depreciation is provided on the
revised carrying amount of the assets over its remaining useful life.
f) Computer software costs capitalised are amortised using the Straight
Line Method over estimated useful life of 5 years, as estimated at the
time of capitalisation.
VII) Investments
Long term Investments are stated at Cost less provisions recorded to
recognise any decline,other than temporary, in the carrying value of
each investment. Investments in foreign companies are considered at the
exchange rates prevailing on the date of their acquisition. Current
investments are carried at lower of cost or fair value of each
investment. Short term Investments in liquid fund scheme of mutual
funds have been stated at their NAV on year end date or purchase price
whichever is less.
VIII) Inventories
Inventories are valued as follows:
a) Raw materials, finished goods, Stock in trade, Work in process,
Packing materials and stores & spares are valued at lower of cost and
net realisable value. Closing stock has been valued on Weighted Average
basis. b) Saleable scraps, whose cost is not identifiable, are valued
at estimated realisable value.
IX) Research & Development
Research and development expenditure of revenue nature are charged to
Profit & Loss Account, while capital expenditure are added to the cost
of fixed assets in the year in which these are incurred.
X) Employee Benefits
i) Short term employee benefits are charged off at the undiscounted
amount in the year in which the related services is rendered.
ii) Post employment and other long term employee benefits are charged
off in the year in which the employee has rendered services. The amount
charged off is recognised at the present value of the amounts payable
determined using actuarial valuation techniques. Actuarial gain and
losses in respect of post employment and other long term benefits are
charged to Profit and Loss Account/Project Development Expenditure
Account.
XI) Earning Per Share
Basic earning per share is calculated by dividing the net Profit or
Loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, the net profit or
loss for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
XII) Excise Duty and Custom Duty
Excise duty on finished goods stock lying at factories is accounted for
at the point of manufacture of goods and accordingly, is considered for
valuation of finished goods as on the Balance Sheet date. Custom duty
on imported material in transit / lying in bonded warehouse is
accounted for at the time, the same are released from Customs/ Bonded
warehouse.
XIII) Financial Derivatives and Commodity Hedging Transactions
In respect of derivative contracts, premium paid, gains/losses on
settlement and provision for losses for cash flow hedges are recognised
in the Profit and Loss Account, except in case where they relate to
borrowing costs that are attributable to the acquisition or
construction of fixed assets, in which case, they are adjusted to the
carrying cost of such assets.
42
MANAKSIA LIMITED ANNUAL REPORT 2013-14
MANAKSIA LIMITED
XIV) Borrowing Costs
Borrowing Costs relating to acquisition / construction of qualifying
assets are capitalized until the time all substantial activities
necessary to prepare the qualifying assets for their intended use are
complete. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use. All other borrowing
costs are charged to revenue.
XV) Taxation
Tax expenses comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act, 1961. Deferred income taxes
reflects the impact of current year timing differences between taxable
income for the year and reversal of timing differences of earlier
years.
The deferred tax for timing differences between the book and tax
profits for the year is accounted for using the tax rates and laws that
have been substantially enacted as on the Balance Sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. If the company
has carry forward unabsorbed depreciation and tax losses, deferred tax
assets are recognised only to the extent there is virtual certainty
supported by convincing evidence that sufficient taxable income will be
available against which such deferred tax asset can be realized.
XVI) Segment Reporting
a) Identification of segments
The company has identified its business segments as the primary
segments . The company''s businesses are
organized and managed separately according to the nature of products/
services, with each segment representing a strategic business unit that
offers different product / services and serves different markets. The
analysis of geographical segments is based on the areas in which the
customers of the company are located.
b) Allocation of Common Costs
Common allocable costs are allocated to each segment on case to case
basis applying the ratio, appropriate to each
relevant case. Revenue and expenses, which relate to the enterprise as
a whole and are not allocable to segment on
a reasonable basis, have been included under the head " Unallocated".
The accounting policies adopted for segment reporting are in line with
those of the Company.
XVII) Lease Assets
The Companys significant leasing arrangements are in respect of
operating leases for premises.These leasing arrangements which are not
non-cancellable and range between 1 year to 3 years generally and are
renewable by mutual consent on mutually agreeable terms.
XVIII) Sales
a) Sales include trade sales.
b) Gross Sales include applicable taxes unless separately charged and
are net of discount.
c) Sales are recognised on dispatch except consignment sales which are
recognised on receipt of statement of accounts from the agent.
XIX) Prior Period Expenses/Income
Material items of prior period expenses/income are disclosed
separately.
XX) Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised 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 not recognised but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
Mar 31, 2013
I) Basis of preparation of Financial Statement
The financial statements are prepared under the Historical cost
convention method, using the accrual system of accounting in accordance
with the Generally Accepted Accounting Principles in India & the
requirements of the Companies Act,1956,including the Notified
Accounting Standards as prescribed by the Companies(Accounting
Standards) Rules,2006.
II) Revenue Recognition
Revenue from sale of goods and services rendered is recognized upon
transfer of title and rendering of services to the customers.
III) Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (
net of CENVAT/VAT), taxes, borrowing costs directly attributable to
acquisition, incidental expenses and erection/ commissioning etc., upto
the date, the asset is ready for its intended use.
IV) Impairment of Assets
The carrying amount of assets are reviewed at each balance sheet date
to determine if there is any indication of impairment based on
external/internal factor. An impairment loss is recognised wherever the
carrying amount of an asset exceeds it''s recoverable amount which
represents the greater of the net selling price and value in use of the
assets. The estimated cash flows considered for determining the value
in use, are discounted to the present value at weighted average cost of
capital.
V) Foreign currency transaction a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
b) Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
c) Exchange Differences
Exchange differences arising on the settlement/conversion of monetary
items are recognized as income or expenses in the year in which they
arise.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expenses or income over the life of the
respective contracts. Exchange differences on such contracts are
recognised in the statement of profit and loss in the year in which the
exchange rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognised as income or expense
for the year.
VI) Depreciation
a) Depreciation on all Fixed Assets is provided under Straight Line
Method at the rates specified in Schedule XIV to the Companies Act,
1956.
b) Depreciation includes amortisation of leasehold land over the period
of lease.
c) Depreciation is provided on prorata basis on additions and deletions
of Fixed Assets during the year except for assets costing Rs.5000/- or
less on which 100% Depreciation is provided.
d) Depreciation on individual items of plant and machinery costing Rs.
5000/- or less is being provided at normal applicable rates, whenever
aggregate cost of such items constitute more than 10% of the total cost
of plant and machinery in accordance with amendments to Schedule XIV to
the Companies Act, 1956 vide Notification No. GSR No. 101(E) dated
01.03.1995.
e) In case of impairment, if any, depreciation is provided on the
revised carrying amount of the assets over its remaining useful life.
f) Computer software costs capitalised are amortised using the Straight
Line Method over estimated useful life of 5 years, as estimated at the
time of capitalisation.
VII) Investments
Long term Investments are stated at Cost less provisions recorded to
recognise any decline,other than temporary, in the carrying value of
each investment. Investments in foreign companies are considered at the
exchange rates prevailing on the date of their acquisition. Current
investments are carried at lower of cost or fair value of each
investment. Short term Investments in liquid fund scheme of mutual
funds have been stated at their NAV on year end date or purchase price
whichever is less.
VIII) Inventories
Inventories are valued as follows:
a) Raw materials, finished goods, Stock in trade, Work in process,
Packing materials and stores & spares are valued at lower of cost and
net realisable value. Closing stock has been valued on Weighted Average
basis. b) Saleable scraps, whose cost is not identifiable, are valued
at estimated realisable value.
IX) Research & Development
Research and development expenditure of revenue nature are charged to
Profit & Loss Account ,while capital expenditure are added to the cost
of fixed assets in the year in which these are incurred.
X) Employee Benefits
i) Short term employee benefits are charged off at the undiscounted
amount in the year in which the related services is rendered.
ii) Post employment and other long term employee benefits are charged
off in the year in which the employee has rendered services. The amount
charged off is recognised at the present value of the amounts payable
determined using actuarial valuation techniques. Actuarial gain and
losses in respect of post employment and other long term benefits are
charged to Profit and Loss Account/Project Development Expenditure
Account.
XI) Earning Per Share
Basic earning per share is calculated by dividing the net Profit or
Loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, the net profit or
loss for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
XII) Excise Duty and Custom Duty
Excise duty on finished goods stock lying at factories is accounted for
at the point of manufacture of goods and accordingly, is considered for
valuation of finished goods as on the Balance Sheet date. Custom duty
on imported material in transit / lying in bonded warehouse is
accounted for at the time, the same are released from Customs/ Bonded
warehouse.
XIII) Financial Derivatives and Commodity Hedging Transactions
In respect of derivative contracts, premium paid, gains/losses on
settlement and provision for losses for cash flow hedges are recognised
in the Profit and Loss Account, except in case where they relate to
borrowing costs that are attributable to the acquisition or
construction of fixed assets, in which case, they are adjusted to the
carrying cost of such assets.
XIV) Borrowing Costs
Borrowing Costs relating to acquisition / construction of qualifying
assets are capitalized until the time all substantial activities
necessary to prepare the qualifying assets for their intended use are
complete. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use. All other borrowing
costs are charged to revenue.
XV) Taxation
Tax expenses comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act, 1961. Deferred income taxes
reflects the impact of current year timing differences between taxable
income for the year and reversal of timing differences of earlier
years.
The deferred tax for timing differences between the book and tax
profits for the year is accounted for using the tax rates and laws that
have been substantially enacted as on the Balance Sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. If the company
has carry forward unabsorbed depreciation and tax losses, deferred tax
assets are recognised only to the extent there is virtual certainty
supported by convincing evidence that sufficient taxable income will be
available against which such deferred tax asset can be realized.
XVI) Segment Reporting a) Identification of segments
The company has identified its business segments as the primary
segments . The company''s businesses are
organized and managed separately according to the nature of products/
services, with each segment representing a strategic business unit that
offers different product / services and serves different markets. The
analysis of geographical segments is based on the areas in which the
customers of the company are located.
b) Allocation of Common Costs
Common allocable costs are allocated to each segment on case to case
basis applying the ratio, appropriate to each relevant case. Revenue
and expenses, which relate to the enterprise as a whole and are not
allocable to segment on a reasonable basis, have been included under
the head " Unallocated".
The accounting policies adopted for segment reporting are in line with
those of the Company.
XVII) Lease Assets
The Companys significant leasing arrangements are in respect of
operating leases for premises.These leasing arrangements which are not
non-cancellable and range between 1 year to 3 years generally and are
renewable by mutual consent on mutually agreeable terms.
XVIII) Sales
a) Sales include trade sales.
b) Gross Sales include applicable taxes unless separately charged and
are net of discount.
c) Sales are recognised on dispatch except consignment sales which are
recognised on receipt of statement of accounts from the agent.
XIX) Prior Period Expenses/Income
Material items of prior period expenses/income are disclosed
separately.
XX) Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised 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 not recognised but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
Mar 31, 2012
I) Basis of Preparation of Financial Statements
The financial statements are prepared under the Historical cost
convention method,using the accrual system of accounting in accordance
with the Generally Accepted Accounting Principles in India & the
requirements of the Companies Act,1956,including the Notified
Accounting Standards as prescribed by the Companies(Accounting
Standards) Rules,2006.
ii) Revenue Recognition
Revenue from sale of goods and services rendered is recognized upon
transfer of title and rendering of services to the customers.
iii) Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (
net of CENVAT/VAT), taxes, borrowing costs directly attributable to
acqusition, incidental expenses and erection /commissioning etc., upto
the date, the asset is ready for its intended use.
iv) Impairment of Assets
The carrying amount of assets are reviewed at each balance sheet date
to determine if there is any indication of impairment based on
external/internal factor. An impairment loss is recognised wherever the
carrying amount of an asset exceeds it's recoverable amount which
represents the greater of the net selling price and value in use of the
assets. The estimated cash flows considered for determining the value
in use, are discounted to the present value at weighted average cost of
capital.
v) Foreign Currency Transactions
a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
b) Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
c) Exchange Differences
Exchange differences arising on the settlement/conversion of monetary
items are recognized as income or expenses in the year in which they
arise.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expenses or income over the life of the
respective contracts. Exchange differences on such contracts are
recognised in the statement of profit and loss in the year in which the
exchange rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognised as income or expense
for the year.
vi) Depreciation
a) Depreciation on all Fixed Assets is provided under Straight Line
Method at the rates specified in Schedule XIV to the Companies Act,
1956
b) Depreciation includes amortisation of leasehold land over the period
of lease.
c) Depreciation is provided on prorata basis on additions and deletions
of Fixed Assets during the year except for assets costing Rs. 5000/- or
less on which 100% Depreciation is provided.
d) Depreciation on individual items of plant and machinery costing Rs.
5000/- or less is being provided at normal applicable rates, whenever
aggregate cost of such items constitute more than 10% of the total cost
of plant and machinery in accordance with amendments to Schedule XIV to
the Companies Act, 1956 vide Notification No. GSR No. 101(E) dated
01.03.1995.
e) In case of impairment, if any, depreciation is provided on the
revised carrying amount of the assets over its remaining useful life.
f) Computer software costs capitalised are amortised using the Straight
Line Method over estimated useful life of 5 years, as estimated at the
time of capitalisation.
vii) Investments
Long term Investments are stated at Cost less provisions recorded to
recognise any decline,other than temporary,
in the carrying value of each investment. Investments in foreign
companies are considered at the exchange rates prevailing on the date
of their acquisition. Current investments are carried at lower of cost
or fair value of each investment. Short term Investments in liquid fund
scheme of mutual funds have been stated at their NAV on year end date
or purchase price whichever is less.
viii) Inventories
Inventories are valued as under Ã
a) Raw materials, Finished goods, Stock in trade, Work in process,
Packing materials and stores & spares are valued at lower of cost and
net realisable value.Closing stock has been valued on Weighted Average
basis.
b) Saleable scraps, whose cost is not identifiable, are valued at
estimated realisable value.
ix) Research & Development
Research and development expenditure of revenue nature are charged to
Profit & Loss Account ,while capital expenditure are added to the cost
of fixed assets in the year in which these are incurred.
x) Employee Benefits
i) Short term employee benefits are charged off at the undiscounted
amount in the year in which the related services is rendered.
ii) Post employment and other long term employee benefits are charged
off in the year in which the employee has rendered services. The amount
charged off is recognised at the present value of the amounts payable
determined using actuarial valuation techniques. Actuarial gain and
losses in respect of post employment and other long term benefits are
charged to Profit and Loss Account/Project Development Expenditure
Account.
xi) Earning per Share
Basic earning per share is calculated by dividing the net Profit or
Loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
xii) Excise Duty and Custom Duty
Excise duty on finished goods stock lying at factories is accounted for
at the point of manufacture of goods and accordingly, is considered for
valuation of finished goods as on the Balance Sheet date. Custom duty
on imported material in transit / lying in bonded warehouse is
accounted for at the time, the same are released from Customs/ Bonded
warehouse.
xiii) Financial Derivatives and Commodity Hedging Transactions
In respect of derivative contracts, premium paid, gains/losses on
settlement and provision for losses for cash flow hedges are recognised
in the Profit and Loss Account, except in case where they relate to
borrowing costs that are attributable to the acquisition or
construction of fixed assets, in which case, they are adjusted to the
carrying cost of such assets.
xiv) Borrowing Costs
Borrowing Costs relating to acquisition / construction of qualifying
assets are capitalized until the time all substantial activities
necessary to prepare the qualifying assets for their intended use are
complete. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use. All other borrowing
costs are charged to revenue.
xv) Taxation
Tax expenses comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act, 1961. Deferred income taxes
reflects the impact of current year timing differences between taxable
income for the year and reversal of timing differences of earlier
years.
The deferred tax for timing differences between the book and tax
profits for the year is accounted for using the tax rates and laws that
have been substantially enacted as on the Balance Sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. If the company
has carry forward unabsorbed depreciation and tax losses, deferred tax
assets are recognised only to the extent there is virtual certainty
supported by convincing evidence that sufficient taxable income will be
available against which such deferred tax asset can be realized.
xvi) Segment Reporting
a) Identification of segments
The company has identified its business segments as the primary
segments . The company's businesses are organized and managed
separately according to the nature of products/ services, with each
segment representing a strategic business unit that offers different
product / services and serves different markets. The analysis of
geographical segments is based on the areas in which the customers of
the company are located.
b) Allocation of Common Costs
Common allocable costs are allocated to each segment on case to case
basis applying the ratio, appropriate to each relevant case. Revenue
and expenses, which relate to the enterprise as a whole and are not
allocable to segment on a reasonable basis, have been included under
the head " Unallocated".
The accounting policies adopted for segment reporting are in line with
those of the Company.
xvii) Lease Assets
The Companys significant leasing arrangements are in respect of
operating leases for premises.These leasing arrangements which are not
non-cancellable and range between 1 year to 3 years generally and are
renewable by mutual consent on mutually agreeable terms. The aggregate
lease rentals payable are charged as Lease rent under Note 23.
xviii) Sales
a) Sales includes trade sales.
b) Gross Sales include applicable taxes unless seperately charged and
are net of discount.
c) Sales are recognised on despatch except consignment sales which are
recognised on receipt of statement of accounts from the agent.
xix) Prior Period Expenses/Income
Material items of prior period expenses/income are disclosed
separately.
xx) Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised 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 not recognised but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
Mar 31, 2011
I) Basis of Preparation
The financial statements are prepared under the Historical Cost
Convention method, using the accrual system of accounting in accordance
with the Generally Accepted Accounting Principles in India & the
requirements of the Companies Act,1956, including the Notified
Accounting Standards as prescribed by the Companies(Accounting
Standards) Rules,2006.
ii) Revenue Recognition
Revenue from sale of goods and services rendered is recognized upon
transfer of title and rendering of services to the customers.
iii) Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (
net of CENVAT/VAT), taxes, borrowing costs directly attributable to
acqusition, incidental expenses and erection / commissioning etc., upto
the date, the asset is ready for its intended use.
iv) Impairment of Assets
The carrying amount of assets are reviewed at each balance sheet date
to determine if there is any indication of impairment based on
external/internal factor. An impairment loss is recognised wherever the
carrying amount of an asset exceeds its recoverable amount which
represents the greater of the net selling price and value in use of the
asset. The estimated cash flows considerd for determining the value in
use, are discounted to the present value at weighted average cost of
capital.
v) Foreign Currency Transactions
a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency by
applying to the foreign currency amount the exchange rate between the
reporting currency and the foreign currency at the date of the
transaction.
b) Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
c) Exchange Differences
Exchange differences arising on the settlement/conversion of monetary
items are recognized as income or expenses in the year in which they
arise.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expenses or income over the life of the
respective contracts. Exchange differences on such contracts are
recognised in the statement of profit and loss in the year in which the
exchange rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognised as income or expense
for the year.
vi) Depreciation
a) Depreciation on all Fixed Assets are calculated under Straight Line
Method at the rates specified in Schedule XIV to the Companies Act,
1956
b) Depreciation includes amortisation of leasehold land over the period
of lease.
c) Depreciation is calculated on prorata basis on additions and
deletions of Fixed Assets during the year except for assets costing Rs.
5000/- or less on which 100% depreciation is provided.
d) Depreciation on individual items of plant and machinery costing Rs.
5000/- or less is being provided at normal applicable rates, whenever
aggregate cost of such items constitute more than 10% of the total cost
of plant and machinery in accordance with amendments to Schedule XIV to
the Companies Act, 1956 vide Notification No. GSR No. 101(E) dated
01.03.1995.
e) In case of impairment, if any, depreciation is provided on the
revised carrying amount of the assets over its remaining useful life.
f) Computer software costs capitalised are amortised using the Straight
Line Method over estimated useful life of 5 years, as estimated at the
time of capitalisation.
vii) Investments
Long term Investments are stated at Cost. Investments in foreign
companies are considered at the exchange rates prevailing on the date
of their acquisition. Short term Investments in liquid fund scheme of
mutual funds have been stated at their NAV on year end date or purchase
price whichever is less.
viii) Inventories
Inventories are valued as under -
a) Raw materials, Finished goods, Stock in trade, Work in process,
Packing materials and Stores & Spares are valued at lower of cost or
net realisable value. Closing stock has been valued on Weighted Average
basis.
b) Saleable scraps, whose cost is not identifiable, are valued at
estimated realisable value.
ix) Research & Development
Research and development expenditure of revenue nature are charged to
Profit & Loss Account , while capital expenditure are added to the cost
of fixed assets in the year in which these are incurred.
x) Employee Benefits
i) Short term employee benefits are charged off at the undiscounted
amount in the year in which the related services is rendered.
ii) Post employment and other long term employee benefits are charged
off in the year in which the employee has rendered services. The amount
charged off is recognised at the present value of the amounts payable
determined using actuarial valuation techniques. Actuarial gain and
losses in respect of post employment and other long term benefits are
charged to Profit and Loss Account/Project Development Expenditure
Account.
xi) Earning per Share
Basic earning per share is calculated by dividing the net Profit or
Loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
xii) Excise Duty and Custom Duty
Excise duty on finished goods stock lying at factories is accounted for
at the point of manufacture of goods and accordingly, is considered for
valuation of finished goods stock lying in the factories as on the
Balance Sheet date. Similarly, Custom duty on imported material in
transit / lying in bonded warehouse is accounted for at the time, the
same are released from Customs/ Bonded warehouse.
xiii) Financial Derivatives and Commodity Hedging Transactions
In respect of derivative contracts, premium paid, gains/losses on
settlement and provision for losses for cash flow hedges are recognised
in the Profit and Loss Account, except in case where they relate to
borrowing costs that are attributable to the acquisition or
construction of fixed assets, in which case, they are adjusted to the
carrying cost of such assets.
xiv) Borrowing Costs
Borrowing Costs relating to acquisition / construction of qualifying
assets are capitalized until the time all substantial activities
necessary to prepare the qualifying assets for their intended use are
complete. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use. All other borrowing
costs are charged to revenue.
xv) Taxation
Tax expenses comprises of current and deferred tax. Current income tax
is measured at the amount expected to be thorities in accordance with
the Indian Income Tax Act, 1961. Deferred income taxes reflects the year
timing differences between taxable income for the year and reversal of
timing differences of earlier years.
The deferred for timing differences between the book and tax profits for
the year is accounted for using the tax at have been substantially
enacted as on the Balance Sheet date. Deferred tax asset is recognised
that there is reasonable certainty that sufficient future taxable income
will be available against red tax assets can be realised. If the company
has carry forward unabsorbed depreciation and tax ax asset is recognised
only to the extent there is virtual certainty supported by convincing
evidence able income will be available against which such deferred tax
asset can be realized.
xvi) Segment Reporting
a) Identification of segments
The Company has identified its business segments as the primary segments.
The company's businesses are organized and managed separately according
to the nature of products/ services, with each segment representing a
strategic business unit that offers different product / services and
serves different markets. The analysis of geographical segments is
based on the areas in which the customers of the company are located.
b) Allocation of Common Costs
Common allocable costs are allocated to each segment on case to case
basis applying the ratio, appropriate to each relevant case. Revenue
and expenses, which relate to the enterprise as a whole and are not
allocable to segment on a resonable basis, have been included under the
head "Unallocated".
The accounting policies adopted for segment reporting are in line with
those of the Company.
xvii) The Company's significant leasing arrangements are in respect of
operating leases for premises. These leasing arrangements which are not
non-cancellable and range between 1 year to 3 years generally and are
renewable by mutual consent on mutually agreeable terms. The aggregate
lease rentals payable are charged as Lease rent underSchedule 'P'.
xviii) Sales
a) Sales includes trade sales.
b) Gross Sales include applicables taxes unless seperately charged and
are net of discount.
c) Sales are recognised on despatch except consignment sales which are
recognised on receipt of statement of accounts from the agent.
xix) Prior Period Expenses/Income
Material items of prior period expenses/income are disclosed
separately.
xx) Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised 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 not recognised but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article