Accounting Policies of Metalyst Forgings Ltd. Company
Mar 31, 2023
1. Company Overview and Significant Accounting Policies
M/S Metalyst Forgings Limited (hereinafter referred to as MFL) was previously known as Ahmednagar Forging Limited. The change in the name of the company took on 07.05.2015. Ahmednagar Forging Limited started its operations in 1977 and it was primarily engaged in the manufacturing of high precision closed die steel forgings and auto components for the automotive, Defence and railway, non-auto and tractor sectors. During the year 2002-03, the company was acquired by Amtek Auto Ltd, which is the largest manufacturer of connecting rod assemblies in the country since 1987. Their manufacturing facilities are located at Ahmednagar, Chakan, Kuruli, Aurangabad in Maharashtra and Baddi in Himachal Pradesh. Currently, MFL is the second largest manufacturer of forged automotive component in India. Its product portfolio consists of a range of components for 2/3 Wheelers, passenger Cars, Tractors, Light Commercial Vehicles (LCV), Heavy Commercial Vehicles (HCV) and Stationary Engines. The major customers of the Company are John Deere, Mahindra, Daimler India, Greaves Cotton, Isuzu Motor India, Mahindra & Mahindra, Ashok Layland, Tata Motors, ACIL, Cummins India, Sandvik Asia, BEML, and Kirloskar.
Company has its Registered Office at Gat No,- 614, Village Kuruli Tal. Khed Dist. Pune-410501 (Maharashtra) Their manufacturing facilities are located at Ahmednagar, Chakan, Kuruli, Aurangabad in Maharashtra and Baddi in Himachal Pradesh.
2. Significant Accounting Policies2.1 Statement of Compliance
The Financial Statements have been prepared in accordance with IND ASs notified under the Companies (Indian Accounting Standard) Rules, 2015. The company has adopted Indian Accounting Standards from April 1,2016 and accordingly these standalone financial statements have been prepared in accordance with IND ASs notified by section 133 of the Companies Act, 2013 read with relevant rules issued thereunder from time to time, to the extent applicable to the company. The company has adopted change of year to coincide with 31st March, in terms of section 2(41) of the Companies Act, 2013 from financial year 2015-16.
A Corporate Insolvency Resolution Process ("CIRP") has been initiated against Metalyst Forgings Limited ( ''the Company'' ) vide an order of Mumbai bench of the National Company Law Tribunal (NCLT) dated December 15, 2017 under the provisions of the Insolvency and Bankruptcy code 2016 (Code). Pursuant to the order, the power of the Board of directors stands suspended and are exercisable by Mr. Dinker T. Venkatasubramanian, who was appointed as Interim Resolution Professional (IRP) by the NCLT vide order dated December 20, 2017 and was consequently confirmed as Resolution Professional (RP) by the Committee of Creditors (CoC) in its meeting held on January 12, 2018.
As the powers of the Board of Directors have been suspended, the above result have not been adopted by the Board of Directors. However, the same have been signed by Mr Dinkar T. Venkatasubramanian (IRP), Mr. Yogesh Kapur Director, Mr Jayaram Shetty, Chief Financial Officer and Ms. Divya Srivastava, Company Secretary of the Company, confirming, accuracy & completeness of the results.
As the Company is under CIRP, the financial statements have been presented on a ''going concern basis''. Under CIRP, Resolution Plan submitted by the prospective Resolution Applicants needs to be presented to and approved by the CoC. Thereafter, the Resolution Plan approved by the CoC will need to be approved by NCLT to keep the company as a going concern. Pursuant to the provisions of the Code, the Committee of Creditors has approved the resolution plan submitted by Deccan Value Investors L.P. through e - voting
process (held from 10 am on August 24, 2018 till 10 am on August 25, 2018) which was conducted subsequent to the meeting of Committee of Creditors held on August 21, 2018 and the same is subject to approval by the Hon''ble NCLT.
However, DVI withdrew their application while the same was pending for approval form the Hon''ble NCLT. The matter was litigated in NCLT and NCLAT and is currently sub judice in Hon''ble Supreme Court of India.
In the mean while the Company is presently undergoing CIRP and the Resolution Process is underway in line with the provisions of IBC. Accordingly, financial statements for the year ended March 31st, 2022 have been prepared on a going concern basis.
As per the Code the RP has to receive, collate and all the claims submitted by the creditors of the Company. Such claims can be admitted to the RP during the CIRP, till the approval of a resolution plan by the CoC. The RP has verified and admitted the claims submitted by the creditors against the company as per the Code. Pending finalisation of resolution plan, the impact of such claims if any that may also not been considered in the preparation of the financial statements.
The Standalone Financial Statements are presented in Indian Rupees and all values are rounded to the nearest lakhs, except when otherwise indicated.
The preparation of the financial statements in conformity with IND AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
2.2.1 Useful lives of property, plant and equipment
Considering the current operating levels of the Company, and the ongoing CIRP it is not possible to determine Impairment, if any, in the economic value of the fixed assets & capital work in progress.
2.2.2 Valuation of deferred tax assets / liabilities
The Company reviews the carrying amount of deferred tax assets / liabilities at the end of each reporting period. The policy for the same has been explained under Note no. 2.9.
2.2.3 Provisions and contingent liabilities
A provision is recognised when the company has a present obligation as a result of past event and it is probable than an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits and compensated absences) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date adjusted to reflect the current best estimates. Contingent Liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements, however, the detail of existing contingencies as on 31st March, 2021 is provided in Note No 3.26.4
Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are exclusive of GST and net of returns, trade allowances, rebates, value added taxes.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured regardless of when the payment is being made. The company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
Sales are recognised when substantial risk and rewards of ownership are transferred to customer as per the terms of the contract, there is no continuing managerial involvement with the goods. The Company retains no effective control of the goods transferred to a degree usually associated with ownership and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods, in case of domestic customer, sales take place when goods are dispatched or delivery is handed over to transporter, in case of export customers, sales takes place when goods are shipped on board based on bill of lading.
Revenue from services is recognised in the accounting period in which the services are rendered.
Other operating revenue - Export incentives
Revenue in respect of export incentives is recognised when such incentives accrue upon export of goods.
2.4 Recent Accounting Pronouncements
Appendix B to Ind AS 21, Foreign Currency Transactions and Advance Consideration : On March 28, 2018, the Ministry of Corporate Affairs (''the MCA'') notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign Currency Transactions and Advance Consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.
Ind AS 115, Revenue from Contract with Customers: On March 28, 2018, the MCA notified the Ind AS 115. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers.
The standard permits two possible methods of transition:
⢠Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors.
⢠Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach)
The effective date for adoption of Ind AS 115 is financial period beginning on or after April 1, 2018.
The Company will adopt the standard on April 1, 2018 by using the cumulative catch-up transition method and accordingly, comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The effect on adoption of Ind AS 115 is expected to be insignificant
2.5 Employee benefits⢠Long - Term Employee Benefits
The liability for gratuity & leave encashment is determined using Projected Unit Credit [PUC] Method and is accounted for on the basis of actuarial valuation in Accordance with IND AS - 19. The company recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Actuarial Gains and Losses through re-measurements of the net defined benefit liability/(asset) are recognized in Other Comprehensive Income. The current service cost is included in the employee benefit expense in the statement of Profit & Loss account. The interest cost calculated by applying the discount rate to the net balance of defined benefit obligation, is included in the finance cost in the statement of Profit & Loss Account.
⢠Short-Term Employee Benefits
Short - term employee benefits include performance incentive, salaries & wages, bonus and leave travel allowance. The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized during the year when the employees render the services.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the interest costs. 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 are capitalised as part of the cost of the asset.
Processing fee paid for borrowings is amortised over the term of long term loan through statement of Profit & Loss. All other borrowing costs are expensed in the period in which they occur.
Preference Shares are separated into equity and liability components based on the terms of the issue / contract. Interest on liability component of Preference Shares is determined using amortised cost method and is charged to the statement of profit & loss and from 1st April, 2020 the interest on Liability component of Preference Share is not provided considering the ongoing CIRP Process.
Considering the ongoing Corporate Insolvency Resolution Process, Company has not provided for interest of term loans and cash credits after the initiation of CIRP process i.e. 15th Dec 2017.
2.7 Depreciation & Amortization:
The company depreciates property, plant and equipment over their estimated useful lives using the straightline method. Depreciation on additions/deductions to property, plant and equipment is provided on pro-rata basis from the date of actual installation or up to the date of such sale or disposal, as the case may be.
Considering the current operating levels of the company, and the ongoing CIRP it is not possible to determine impairment, if any, in the economic value of the fixed assets & capital work in progress.
2.8 Impairment of Assetsi) Financial Assets (other than at fair value)
The company assesses at each Balance Sheet date whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The company recognises lifetime expected losses for all contract assets and/or all trade receivables that do not constitute a financing transaction.
Considering the current operating levels of the Company, and the ongoing CIRP it is not possible to determine Diminution, if any, in the value of investments.
(i) Non-financial assetsa) Property, Plant & equipment and Intangible Assets
Property, plant and equipment and intangible assets with finite life are evaluated for recoverability whenever there is an indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-inuse) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the Statement of Profit or Loss. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the Statement of Profit or Loss.
Considering the current operating levels of the Company, and the ongoing CIRP it is not possible to determine Impairment, if any, in the economic value of the fixed assets, capital work in progress.
Income Tax expense comprises Current and Deferred Income Tax. Income tax expense is recognized in net profit in the Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in Other Comprehensive 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. 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.
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.
Minimum Alternative Tax [MAT] paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the company will pay normal income tax in future periods. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefits associated with it flow to the company and the asset can be measured reliably.
Considering the ongoing Corporate Insolvency Resolution Process, the uncertainity as to the realisation of unused tax losses and MAT credit available cannot be asscertained at this stage. Consiquently, adjustment to Defferred Tax (Net) and MAT Credit available have not been given effect to.
2.10 Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation /amortization and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by management. The cost of property, plant & equipment also includes initial estimates of dismantling cost and restoring the site to its original position, on which the site is located.
The company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets (Except Net Investments) and Financial liabilities (Except Borrowings) are recognized at fair value on initial recognition, except for trade receivables and security deposits, which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through Profit or Loss are added to the fair value on initial recognition.
Trade receivables as on March 31st, 2019, which also includes balances from group entities, are subject to confirmation/reconciliation and recoverability assessment thereof is under process.
Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination, 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 are approximately at fair value due to the short maturity of these instruments.
De-recognition of Financial Instruments
The company de-recognises 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 de-recognition under IND AS 109.
A financial liability (or a part of a financial liability) is de-recognised from the company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
Borrowings are initially measured at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in Profit or Loss over the period of the borrowings using the effective interest method.
Preference Shares are separated into liability and equity components based on the terms of the issue / contract. On issuance of the Preference Shares, the fair value of the liability component is determined using a market rate for an equivalent instrument. This amount is classified as financial liability and is measured at amortised cost (net of transaction costs) until it is extinguished on conversion or redemption. The remainder of the proceeds is recognised and included in equity. Transaction costs are deducted from equity, net of associated income tax. The carrying amount of the equity component is not re-measured in subsequent years. In view of default in payment of interest/repayment of instalments, all term loans/NCD''s and ECB''S have become payable on demand and therefore, have been taken to the head "Other Current Financial Liability"
2.13 Investmentsa) Investment - Others Current Investments
Quoted financial assets have been classified as FVTOCI and unquoted financial assets have been classified as Fair Value through Profit & Loss [FVTPL].
Quoted long term investments have been classified as FVTOCI and unquoted long term investments have been classified as FVTPL.
⢠Raw Materials and Goods under process and finished goods are valued at cost (Net of provision for diminution) or *Net Realizable value, whichever is lower.
⢠Waste and Scrap is valued at Net Realizable Value.
⢠Cost of inventories of Raw Materials and stores and Spares is ascertained on FIFO basis.
⢠Cost of inventories also included all other costs incurred in bringing the inventories to their present location and condition.
⢠Cost of goods under process comprise of cost of materials and proportionate production overhead. Cost of material for this purpose is ascertained on FIFO basis.
⢠Provision for obsolescence in inventories is made, whenever required.
⢠Considering the current operating levels of the Company, and the ongoing CIRP it is not possible to determine, Impairment, if any, in the economic value of the tools, dies and moulds.
*Net Realizable Value is the estimated selling price in the ordinary course of business less any applicable selling expenses.
2.15 Earnings per Equity Share
Basic earnings per equity share is computed by dividing the Net Profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the Net Profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.
Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.
Furthermore, unpaid/ unclaimed dividend are transferred to unpaid dividend account and on expiration of 7 years period, same are deposited in Investor Education and Protection Fund.
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 and Loss over the lease term.
2.18 Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
2.19 Foreign Currency Translation
Foreign Currency Translations are translated into the functional currency using the exchange rates at the dates of the transitions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in Profit or Loss.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either.
In the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group 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 assets and liabilities for which fair value is measured or disclosed in the Consolidated 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:
Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is Unobservable
For assets and liabilities that are recognized in the Consolidated Financial Statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period or each case.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
This note summarizes accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.
* Disclosures for valuation methods, significant estimates and assumptions
* Quantitative disclosures of fair value measurement hierarchy
* Investment in unquoted equity shares
* Financial instruments
2.21 Current versus non-current classification
All assets and liabilities have been classified as current or non-current as per company''s normal operating cycle and other criteria set out in the Schedule III to the Act. Current and non-current financial liabilities are reclassified during the current period and corresponding reclassification in previous years.
Mar 31, 2018
1. Significant Accounting Policies
1.1 Statement of Compliance
The Financial Statements have been prepared in accordance with IND ASs notified under the Companies (Indian Accounting Standard) Rules, 2015. The company has adopted Indian Accounting Standards from April 1,2016 and accordingly these standalone financial statements have been prepared in accordance with IND ASs notified by section 133 of the Companies Act, 2013 read with relevant rules issued thereunder from time to time, to the extent applicable to the company. The company has adopted change of year to coincide with 31st March, in terms of section 2(41) of the Companies Act, 2013 from financial year 2015-16 and accordingly, the said financial year of the company was of a six months period beginning 01st October 2015 to 31st March 2016. Accordingly, the date transition to IND AS for the company is October 1, 2015.
A Corporate Insolvency Resolution Process (âCIRPâ) has been initiated against Metalyst Forgings Limited ( âthe Companyâ ) vide an order of Mumbai bench of the National Company Law Tribunal (NCLT) dated December 15, 2017 under the provisions of the Insolvency and Bankruptcy code 2016 (Code). Pursuant to the order, the power of the Board of Directors stands suspended and are exercisable by Mr. Dinker T. Venkatasubramanian, who was appointed as Interim Resolution Professional (IRP) by the NCLT vide order dated December 20, 2017 and was consequently confirmed as Resolution Professional (RP) by the Committee of Creditors (CoC) in its meeting held on January 12, 2018.
As the powers of the Board of Directors have been suspended, the above result have not been adopted by the Board of Directors. However, the same have been signed by Mr. Shekhar Gupta, Whole Time Director, Mr Arun Kumar Maiti, Chief Financial Officer and Mr Pavan Kumar Mishra, Company Secretary of the Company, confirming, accuracy & completeness of the results and taken in record by Resolution Professional..
As the Company is under CIRP, the financial statements have been presented on a âgoing concernâ basisâ. Under CIRP, Resolution Plan submitted by the prospective Resolution Applicants needs to be presented to and approved by the CoC. Thereafter, the Resolution Plan approved by the CoC will need to be approved by NCLT to keep the company as a going concern. Currently, the RP / CoC is in the process of considering the Resolution Plan(s) received from the Resolution Applicant(s) for potential revival of the company and carrying out various compliances as required under the Code.
As per the Code the RP has to receive, collate and all the claims submitted by the creditors of the Company. Such claims can be admitted to the RP during the CIRP, till the approval of a resolution plan by the CoC. The RP is still in the process of collatting and verifying such claims as and when they are received and shall subsequently admit such verified claims against the company as per Code. Pending finalisation of Resolution Plan, the impact of such claims if any that may also has not been considered in the preparation of the financial statements.
Financials for the year ended March 31st, 2017 and as at June 30th, 2017 were audited by previous auditors - M/S Manoj Mohan & Associates.
The Standalone Financial Statements are presented in Indian Rupees and all values are rounded to the nearest lakhs, except when otherwise indicated.
2.2 Use of Estimates
The preparation of the financial statements in conformity with IND AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
2.2.1 Useful lives of property, plant and equipment
Considering the current operating levels of the Company, and the ongoing CIRP it is not possible to determine Impairment, if any, in the economic value of the fixed assets & capital work in progress.
2.2.2 Valuation of deferred tax assets / liabilities
The Company reviews the carrying amount of deferred tax assets / liabilities at the end of each reporting period. The policy for the same has been explained under Note no. 2.9.
2.2.3 Provisions and contingent liabilities
A provision is recognised when the company has a present obligation as a result of past event and it is probable than an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits and compensated absences) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date adjusted to reflect the current best estimates. Contingent Liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements, however, the detail of existing contingencies as on 31st March, 2018 is provided in Note No 3.26.4
2.3 Revenue Recognition
Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are exclusive of excise duty/GST and net of returns, trade allowances, rebates, value added taxes.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured regardless of when the payment is being made. The company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
Sale of goods
Sales are recognised when substantial risk and rewards of ownership are transferred to customer as per the terms of the contract, there is no continuing managerial involvement with the goods. The Company retains no effective control of the goods transferred to a degree usually associated with ownership and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods, in case of domestic customer, sales take place when goods are dispatched or delivery is handed over to transporter, in case of export customers, sales takes place when goods are shipped on board based on bill of lading.
Revenue from Services
Revenue from services is recognised in the accounting period in which the services are rendered.
Other operating revenue - Export incentives
Revenue in respect of export incentives is recognised when such incentives accrue upon export of goods.
2.4 Recent Accounting Pronouncements
Appendix B to IND AS 21, Foreign Currency Transactions and Advance Consideration : On March 28, 2018, the Ministry of Corporate Affairs (âthe MCAâ) notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to IND AS 21, Foreign Currency Transactions and Advance Consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.
IND AS 115, Revenue from Contract with Customers: On March 28, 2018, the MCA notified the IND AS 115. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers.
The standard permits two possible methods of transition:
- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with IND AS 8, Accounting Policies, Changes in Accounting Estimates and Errors.
- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach)
The effective date for adoption of IND AS 115 is financial period beginning on or after April 1, 2018.
The Company will adopt the standard on April 1, 2018 by using the cumulative catch-up transition method and accordingly, comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The effect on adoption of IND AS 115 is expected to be insignificant
2.5 Employee benefits
- Long - Term Employee Benefits
The liability for gratuity & leave encashment is determined using Projected Unit Credit [PUC] Method and is accounted for on the basis of actuarial valuation in accordance with IND AS - 19. The company recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Actuarial Gains and Losses through re-measurements of the net defined benefit liability/(asset) are recognized in Other Comprehensive Income. The current service cost is included in the employee benefit expense in the statement of Profit & Loss account. The interest cost calculated by applying the discount rate to the net balance of defined benefit obligation, is included in the finance cost in the statement of Profit & Loss Account.
- Short-Term Employee Benefits
Short - term employee benefits include performance incentive, salaries & wages, bonus and leave travel allowance. The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized during the year when the employees render the services.
2.6 Borrowing Costs
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the interest costs. 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 are capitalised as part of the cost of the asset.
Processing fee paid for borrowings is amortised over the term of long term loan through statement of Profit & Loss. All other borrowing costs are expensed in the period in which they occur.
Preference Shares are separated into equity and liability components based on the terms of the issue / contract. Interest on liability component of Preference Shares is determined using amortised cost method and is charged to the statement of profit & loss.
Considering the ongoing Corporate Insolvency Resolution Process, Company has not provided for interest of term loans and cash credits after the initiation of CIRP process i.e. 15th Dec 2017.
2.7 Depreciation & Amortization:
The company depreciates property, plant and equipment over their estimated useful lives using the straight-line method. Depreciation on additions/deductions to property, plant and equipment is provided on pro-rata basis from the date of actual installation or up to the date of such sale or disposal, as the case may be.
Considering the current operating levels of the company, and the ongoing CIRP it is not possible to determine impairment, if any, in the economic value of the fixed assets & capital work in progress.
2.8 Impairment of Assets
i) Financial Assets (other than at fair value)
The company assesses at each Balance Sheet date whether a financial asset or a group of financial assets is impaired. IND AS 109 requires expected credit losses to be measured through a loss allowance. The company recognises lifetime expected losses for all contract assets and/or all trade receivables that do not constitute a financing transaction.
Considering the current operating levels of the Company, and the ongoing CIRP it is not possible to determine diminution, if any, in the value of investments.
(i) Non-financial assets
a) Property, Plant & equipment and Intangible Assets
Property, plant and equipment and intangible assets with finite life are evaluated for recoverability whenever there is an indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the Statement of Profit & Loss. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the assetâs recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the Statement of Profit & Loss.
Considering the current operating levels of the Company, and the ongoing CIRP it is not possible to determine Impairment, if any, in the economic value of the fixed assets, capital work in progress.
2.9 Income Taxes
Income Tax expense comprises Current and Deferred Income Tax. Income tax expense is recognized in net profit in the Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in Other Comprehensive 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. 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.
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.
Minimum Alternative Tax [MAT] paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the company will pay normal income tax in future periods. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefits associated with it flow to the company and the asset can be measured reliably.
2.10 Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation /amortization and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by management. The cost of property, plant & equipment also includes initial estimates of dismantling cost and restoring the site to its original position, on which the site is located.
2.11 Financial instruments
The company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets (Except Net Investments) and Financial liabilities (Except Borrowings) are recognized at fair value on initial recognition, except for trade receivables and security deposits, which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through Profit and Loss are added to the fair value on initial recognition.
Trade receivables as on March 31st, 2018, which also includes balances from group entities, are subject to confirmation/reconciliation.
Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination, which is subsequently measured at fair value through Profit & Loss.
For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts are approximately at fair value due to the short maturity of these instruments.
De-recognition of Financial Instruments
The company de-recognises 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 de-recognition under IND AS 109. A financial liability (or a part of a financial liability) is de-recognised from the companyâs Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
2.12 Borrowings
Borrowings are initially measured at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in Profit or Loss over the period of the borrowings using the effective interest method.
Preference Shares are separated into liability and equity components based on the terms of the issue / contract. On issuance of the Preference Shares, the fair value of the liability component is determined using a market rate for an equivalent instrument. This amount is classified as financial liability and is measured at amortised cost (net of transaction costs) until it is extinguished on conversion or redemption. The remainder of the proceeds is recognised and included in equity. Transaction costs are deducted from equity, net of associated income tax. The carrying amount of the equity component is not re-measured in subsequent years. In view of default in payment of interest/repayment of instalments, all term loans/NCDâs and ECBâS have become payable on demand and therefore, have been taken to the head âOther Current Financial Liabilityâ
2.13 Investments
a) Investment - Others Current Investments
Quoted financial assets have been classified as FVTOCI and unquoted financial assets have been classified as Fair Value through Profit & Loss [FVTPL].
Non-Current Investments
Quoted long term investments have been classified as FVTOCI and unquoted long term investments have been classified as FVTPL.
2.14 Inventories
- Raw Materials and Goods under process and finished goods are valued at cost (Net of provision for diminution) or *Net Realizable value, whichever is lower.
- Waste and Scrap is valued at Net Realizable Value.
- Cost of inventories of Raw Materials and stores and Spares is ascertained on FIFO basis.
- Cost of inventories also included all other costs incurred in bringing the inventories to their present location and condition.
- Cost of goods under process comprise of cost of materials and proportionate production overhead. Cost of material for this purpose is ascertained on FIFO basis.
- Provision for obsolescence in inventories is made, whenever required.
- Considering the current operating levels of the Company, and the ongoing CIRP it is not possible to determine, Impairment, if any, in the economic value of the tools, dies and moulds.
*Net Realizable Value is the estimated selling price in the ordinary course of business less any applicable selling expenses.
2.15 Earnings Per Equity Share
Basic earnings per equity share is computed by dividing the Net Profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the Net Profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.
2.16 Dividends
Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Companyâs Board of Directors.
Furthermore, unpaid/ unclaimed dividend are transferred to unpaid dividend account and on expiration of 7 years period, same are deposited in Investor Education and Protection Fund.
2.17 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 and Loss over the lease term.
2.18 Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
2.19 Foreign Currency Translation
Foreign Currency Translations are translated into the functional currency using the exchange rates at the dates of the transitions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in Profit & Loss.
2.20 Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either.
In the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group 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 assets and liabilities for which fair value is measured or disclosed in the Consolidated 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:
Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is Unobservable
For assets and liabilities that are recognized in the Consolidated Financial Statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period or each case.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
This note summarizes accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.
- Disclosures for valuation methods, significant estimates and assumptions
- Quantitative disclosures of fair value measurement hierarchy
- Investment in unquoted equity shares
- Financial instruments
2.21 Current versus non-current classification
All assets and liabilities have been classified as current or non-current as per companyâs normal operating cycle and other criteria set out in the Schedule III to the Act.
Mar 31, 2016
I. SIGNIFICANT ACCOUNTING POLICIES
A. BASIS OF ACCOUNTING
These accounts are prepared under historical cost convention ,on a going concern basis and on accrual basis and are in compliance with the accounting standards notified under section 133 of the Companies Act, 2013 and the relevant provisions thereof.
B. REVENUE RECOGNITION
Sales are recognized at the time of dispatch of goods and are exclusive of excise duty and Central sales Tax/ VAT. All expenses and income are accounted for on accrual basis.
C. FIXED ASSETS
Fixed assets are stated at cost less accumulated depreciation. The cost of fixed assets includes their original cost of acquisition net of cenvat including taxes, freight and other incidental expenses related to acquisition and installation of the concerned assets.
D. DEPRECIATION
Depreciation on fixed assets is provided on "Straight Line Method" (SLM) as per useful life method prescribed under Part C of Schedule II of the Companies Act, 2013. Depreciation on additions / deductions to Fixed Assets is provided on pro-rata basis from the date of actual installation or up to the date of such sale / disposal, as the case may be. The residual value of the asset has been taken to be 5 percent of the original cost of the asset.
E. INVENTORIES
Raw Materials, Stores & Spares, Goods under process and Finished Goods are valued at cost or Net Realizable Value, whichever is lower. Waste and Scrap is valued at Net Realizable Value.
Cost of inventories of Raw Materials and Stores and Spares is ascertained on FIFO Basis.
Cost of goods under process and finished goods comprise of cost of materials, production overhead and depreciation on plant and machinery. Cost of material for this purpose is ascertained on First In First Out basis.
Provision for obsolescence in inventories is made, whenever required.
F. INVESTMENT
Current investments are valued at lower of cost or fair market value.
Non current Investments are valued at cost. However, when there is a decline other than temporary in the value of a non current Investment, the carrying amount is reduced to recognize the decline.
G. FOREIGN CURRENCY TRANSACTIONS
a) The working capital loans are revalued at exchange rates prevailing at the year end. Exchange differences arising on such revaluation are duly recognized in the Profit & Loss Account.
b) In case of forward exchange contracts to repay working capital loans, the difference between the forward rate and the exchange rate at the date of transaction is recognized as income or expenses over the life of the contract.
c) Debtors and working capital loans in foreign currency are revalued at the year end exchange rates. Exchange differences arising on such revaluation are recognized in Profit & Loss Account.
d) Exchange differences arising on revaluation of foreign currency loans relating to acquisition of fixed assets from outside India are adjusted against relevant fixed assets.
H. EXCISE DUTY
Excise duty is paid on clearance of goods, but is accounted for in the books on accrual basis. Accordingly, provision for excise duty is made for goods lying in the Bonded Warehouse.
I. EMPLOYEES'' RETIREMENT BENEFITS
a) The liability for superannuation pension Gratuity & Leave Encashment is accounted for on the basis of actuarial valuation in accordance with Accounting Standards -15 (Revised) issued by the Institute of Chartered Accountants of India.
b) Retirement benefits in the form of Provident Fund and Superannuation / Pension Schemes are charged to the Profit and Loss Account for the year when the contribution to the respective funds are due.
J. RESEARCH AND DEVELOPMENT
Capital Expenditure is shown separately under respective heads of fixed assets. Revenue expenses including depreciation are included under the respective heads of expenses.
K. BORROWING COST
Interest on borrowings are recognized in the Profit and Loss account except interest incurred on borrowings, specifically raised for Projects which is capitalized with the cost of the asset until such time the asset is ready to be put to use for intended purpose.
L. TAXATION
a) Provision for Taxation is made on the basis of the taxable profits computed for the current accounting year (reporting year) in accordance with Income Tax Act, 1961.
b) Deferred Tax is recognized, subject to consideration of prudence, on timing difference, being difference between taxable income and accounting income / expenditure that originate in one period and are capable of reversal in one or subsequent year(s). Deferred taxes are reviewed for their carrying value at each balance sheet date.
M. IMPAIRMENT OF ASSETS
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognized in the profit and loss account. If at any subsequent balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at recoverable amount subject to a maximum of depreciated historical cost and is accordingly reversed in the profit and loss account.
Sep 30, 2015
A. BASIS OF ACCOUNTING
These accounts are prepared under historical cost convention ,on a
going concern basis and on accrual basis and are in compliance with the
accounting standards notified under section 133 of the Companies Act,
2013 and the relevant provisions thereof.
B. REVENUE RECOGNITION
Sales are recognized at the time of dispatch of goods and are exclusive
of excise duty and Central sales Tax/ VAT. All expenses and income are
accounted for on accrual basis.
C. FIXED ASSETS
Fixed assets are stated at cost less accumulated deprecia-tion. The
cost of fixed assets includes their original cost of acquisition net of
cenvat including taxes, freight and other incidental expenses related
to acquisition and installation of the concerned assets.
D. DEPRECIATION
Depreciation on fixed assets is provided on "Straight Line Method"
(SLM) as per useful life method prescribed under Part C of Schedule II
of the Companies Act, 2013. Depreciation on addi-tions / deductions to
Fixed Assets is provided on pro-rata basis from the date of actual
installation or up to the date of such sale / disposal, as the case may
be. The residual value of the asset has been taken to be 5 percent of
the original cost of the asset.
E. INVENTORIES
Raw Materials, Stores & Spares, Goods under process and Finished Goods
are valued at cost or Net Realizable Value, whichever is lower. Waste
and Scrap is valued at Net Realizable Value.
Cost of inventories of Raw Materials and Stores and Spares is
ascertained on FIFO Basis.
Cost of goods under process and finished goods comprise of cost of
materials, production overhead and depreciation on plant and machinery.
Cost of material for this purpose is ascertained on First In First Out
basis.
Provision for obsolescence in inventories is made, whenever required.
F. INVESTMENT
Current investments are valued at lower of cost or fair market value.
Non current Investments are valued at cost. However, when there is a
decline other than temporary in the value of a non current Investment,
the carrying amount is reduced to recognize the decline.
G. FOREIGN CURRENCY TRANSACTIONS
a) The working capital loans are revalued at exchange rates prevailing
at the year end. Exchange differences arising on such revaluation are
duly recognized in the Profit & Loss Account.
b) In case of forward exchange contracts to repay working capital
loans, the difference between the forward rate and the exchange rate at
the date of transaction is recognized as income or expenses over the
life of the contract.
c) Debtors and working capital loans in foreign currency are revalued
at the year end exchange rates. Exchange differences arising on such
revaluation are recognized in Profit & Loss Account.
d) Exchange differences arising on revaluation of foreign currency
loans relating to acquisition of fixed assets from outside India are
adjusted against relevant fixed assets.
H. EXCISE DUTY
Excise duty is paid on clearance of goods, but is accounted for in the
books on accrual basis. Accordingly, provision for excise duty is made
for goods lying in the Bonded Warehouse.
I. EMPLOYEES' RETIREMENT BENEFITS
a) The liability for superannuation pension Gratuity & Leave
Encashment is accounted for on the basis of actuarial valuation in
accordance with Accounting Standards -15 (Revised) issued by the
Institute of Chartered Accountants of India.
b) Retirement benefits in the form of Provident Fund and Superannuation
/ Pension Schemes are charged to the Profit and Loss Account for the
year when the contribution to the respective funds are due.
J. RESEARCH AND DEVELOPMENT
Capital Expenditure is shown separately under respective heads of fixed
assets. Revenue expenses including depreciation are included under the
respective heads of expenses.
K. BORROWING COST
Interest on borrowings are recognized in the Profit and Loss account
except interest incurred on borrowings, specifically raised for
Projects which is capitalized with the cost of the asset until such
time the asset is ready to be put to use for intended purpose.
L. TAXATION
a) Provision for Taxation is made on the basis of the taxable profits
computed for the current accounting year (reporting year) in accordance
with Income Tax Act, 1961.
b) Deferred Tax is recognized, subject to consideration of prudence, on
timing difference, being difference between taxable income and
accounting income / expenditure that originate in one period and are
capable of reversal in one or subsequent year(s). Deferred taxes are
reviewed for their carrying value at each balance sheet date.
M. IMPAIRMENT OF ASSETS
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognized in the profit and loss account. If at any subsequent balance
sheet date there is an indication that a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed and the
asset is reflected at recoverable amount subject to a maximum of
depreciated historical cost and is accordingly reversed in the profit
and loss account.
Sep 30, 2014
A. BASIS OF ACCOUNTING
These accounts are prepared on the historical cost basis and on the
accounting principles of a going concern. Accounting policies, not
specifically referred to otherwise are consistent and in accordance
with generally accepted accounting principles in India (Indian GAAP)
and in compliance with the Accounting Standards notified under the
Companies Act, 1956 read with the General Circular 15/2013 dated 13th
September, 2013 of the Ministry of Corporate Affairs in respect of
section 133 of the Companies Act, 2013.
B. REVENUE RECOGNITION
Sales are recognized at the time of dispatch of goods and are exclusive
of excise duty and Central sales Tax/ VAT. All expenses and income are
accounted for on accrual basis.
C. FIXED ASSETS
Fixed assets are stated at cost less accumulated deprecia-tion. The
cost of fixed assets includes their original cost of acquisition net of
cenvat including taxes, freight and other incidental expenses related
to acquisition and installation of the concerned assets.
D. DEPRECIATION
Depreciation on fixed assets is provided on "Straight Line Method"
(SLM) in the manner and at the rates as specified in Schedule XIV of
the Companies Act, 1956. Depreciation on addi-tions / deductions to
Fixed Assets is provided on pro-rata basis from the date of actual
installation or up to the date of such sale / disposal, as the case may
be.
E. INVENTORIES
Raw Materials, Stores & Spares, Goods under process and Finished Goods
are valued at cost or Net Realizable Value, whichever is lower. Waste
and Scrap is valued at Net Realizable Value.
Cost of inventories of Raw Materials and Stores and Spares is
ascertained on FIFO Basis.
Cost of goods under process and finished goods comprise of cost of
materials, production overhead and depreciation on plant and machinery.
Cost of material for this purpose is ascertained on First In First Out
basis.
Provision for obsolescence in inventories is made, whenever required.
F. INVESTMENT
Current investments are valued at lower of cost or fair market value.
Non current Investments are valued at cost. However, when there is a
decline other than temporary in the value of a long term Investment,
the carrying amount is reduced to recognize the decline.
G. FOREIGN CURRENCY TRANSACTIONS
a) The working capital loans are revalued at exchange rates prevailing
at the year end. Exchange differences arising on such revaluation are
duly recognized in the Profit & Loss Account.
b) In case of forward exchange contracts to repay working capital
loans, the difference between the forward rate and the exchange rate at
the date of transaction is recognized as income or expenses over the
life of the contract.
c) Debtors and working capital loans in foreign currency are revalued
at the year end exchange rates. Exchange differences arising on such
revaluation are recognized in Profit & Loss Account.
d) Exchange differences arising on revaluation of foreign currency
loans relating to acquisition of fixed assets from outside India are
adjusted against relevant fixed assets.
H. EXCISE DUTY
Excise duty is paid on clearance of goods, but is accounted for in the
books on accrual basis. Accordingly, provision for excise duty is made
for goods lying in the Bonded Warehouse.
I. EMPLOYEES'' RETIREMENT BENEFITS
a) The liability for superannuation pension Gratuity & Leave Encashment
is accounted for on the basis of actuarial valuation in accordance with
Accounting Standards -15 (Revised) issued by the Institute of Chartered
Accountants of India.
b) Retirement benefits in the form of Provident Fund and Superannuation
/ Pension Schemes are charged to the Profit and Loss Account for the
year when the contribution to the respective funds are due.
J. RESEARCH AND DEVELOPMENT
Capital Expenditure is shown separately under respective heads of fixed
assets. Revenue expenses including depreciation are included under the
respective heads of expenses.
K. BORROWING COST
Interest on borrowings are recognized in the Profit and Loss account
except interest incurred on borrowings, specifically raised for
Projects which is capitalized with the cost of the asset until such
time the asset is ready to be put to use for intended purpose.
L. TAXATION
a) Provision for Taxation is made on the basis of the taxable profits
computed for the current accounting year (reporting year) in accordance
with Income Tax Act, 1961.
b) Deferred Tax is recognized, subject to consideration of prudence, on
timing difference, being difference between taxable income and
accounting income / expenditure that originate in one period and are
capable of reversal in one or subsequent year(s). Deferred taxes are
reviewed for their carrying value at each balance sheet date.
M. IMPAIRMENT OF ASSETS
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognized in the profit and loss account. If at any subsequent balance
sheet date there is an indication that a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed and the
asset is reflected at recoverable amount subject to a maximum of
depreciated historical cost and is accordingly reversed in the profit
and loss account.
Sep 30, 2013
A. BASIS OF ACCOUNTING
These accounts are prepared on the historical cost basis and on the
accounting principles of a going concern. Accounting policies, not
specifically referred to otherwise are consistent and in accordance
with generally accepted accounting principles in India (Indian GAAP)
and in compliance with the Accounting Standards issued by the Institute
of Chartered Accountants of India (ICAI) as referred in sec. 211(3c) of
the Companies Act, 1956.
B. REVENUE RECOGNITION
Sales are recognized at the time of dispatch of goods and are exclusive
of excise duty and Central sales Tax/ VAT. All expenses and income are
accounted for on accrual basis.
C. FIXED ASSETS
Fixed assets are stated at cost less accumulated depreciation. The cost
of fixed assets includes their original cost of acquisition net of
cenvat including taxes, freight and other incidental expenses related
to acquisition and installation of the concerned assets.
D. DEPRECIATION
Depreciation on fixed assets is provided on "Straight Line Method"
(SLM) in the manner and at the rates as specified in Schedule XIV of
the Companies Act, 1956. Depreciation on additions / deductions to
Fixed Assets is provided on pro-rata basis from the date of actual
installation or up to the date of such sale / disposal, as the case may
be.
E. INVENTORIES
Raw Materials, Stores & Spares, Goods under process and Finished Goods
are valued at cost or Net Realizable Value, whichever is lower. Waste
and Scrap is valued at Net Realizable Value.
Cost of inventories of Raw Materials and Stores and Spares is
ascertained on FIFO Basis.
Cost of goods under process and finished goods comprise of cost of
materials, production overhead and depreciation on plant and machinery.
Cost of material for this purpose is ascertained on First In First Out
basis.
Provision for obsolescence in inventories is made, whenever required.
F. INVESTMENT
Current investments are valued at lower of cost or fair market value.
G. FOREIGN CURRENCY TRANSACTIONS
a) The working capital loans are revalued at exchange rates prevailing
at the year end. Exchange differences arising on such revaluation are
duly recognized in the Profit & Loss Account.
b) In case of forward exchange contracts to repay working capital
loans, the difference between the forward rate and the exchange rate at
the date of transaction is recognized as income or expenses over the
life of the contract.
c) Debtors and working capital loans in foreign currency are revalued
at the year end exchange rates. Exchange differences arising on such
revaluation are recognized in Profit & Loss Account.
d) Exchange differences arising on revaluation of foreign currency
loans relating to acquisition of fixed assets from outside India are
adjusted against relevant fixed assets.
H. EXCISE DUTY
Excise duty is paid on clearance of goods, but is accounted for in the
books on accrual basis. Accordingly, provision for excise duty is made
for goods lying in the Bonded Warehouse.
I. EMPLOYEES'' RETIREMENT BENEFITS
a) The liability for superannuation pension Gratuity & Leave Encashment
is accounted for on the basis of actuarial valuation in accordance with
Accounting Standards -15 (Revised) issued by the Institute of Chartered
Accountants of India.
b) Retirement benefits in the form of Provident Fund and Superannuation
/ Pension Schemes are charged to the Profit and Loss Account for the
year when the contribution to the respective funds are due.
J. RESEARCH AND DEVELOPMENT
Capital Expenditure is shown separately under respective heads of fixed
assets. Revenue expenses including depreciation are included under the
respective heads of expenses.
K. BORROWING COST
Interest on borrowings are recognized in the Profit and Loss account
except interest incurred on borrowings, specifically raised for
Projects which is capitalized with the cost of the asset until such
time the asset is ready to be put to use for intended purpose.
L. TAXATION
A) Provision for Taxation is made on the basis of the taxable profits
computed for the current accounting year (reporting year) in accordance
with Income Tax Act, 1961.
B) Deferred Tax is recognized, subject to consideration of prudence, on
timing difference, being difference between taxable income and
accounting income / expenditure that originate in one period and are
capable of reversal in one or subsequent year(s). Deferred taxes are
reviewed for their carrying value at each balance sheet date.
M. IMPAIRMENT OF ASSETS
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognized in the profit and loss account. If at any subsequent balance
sheet date there is an indication that a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed and the
asset is reflected at recoverable amount subject to a maximum of
depreciated historical cost and is accordingly reversed in the profit
and loss account.
Jun 30, 2010
A. BASIS OF ACCOUNTING
These accounts are prepared on the historical cost basis and on the
accounting principles of a going concern. Accounting policies, not
specifically referred to otherwise are consistent and in accordance
with generally accepted accounting principles in India (Indian GAAP)
and in compliance with the Accounting Standards issued by the Institute
of Chartered Accountants of India (ICAI) as referred in sec. 211 (2c)
of the Companies Act, 1956.
B. REVENUE RECOGNITION
Sales are recognized at the time of dispatch of goods and are exclusive
of excise duty and Central sales Tax/ VAT. All expenses and income are
accounted for on accrual basis.
C. FIXED ASSETS
Fixed assets are stated at cost less accumulated deprecia-tion. The
cost of fixed assets includes their original cost of acquisition net of
cenvat including taxes, freight and other incidental expenses related
to acquisition and installation of the concerned assets.
D. DEPRECIATION
Depreciation on fixed assets is provided on "Straight Line Method"(SLM)
in the manner and at the rates as specified in Schedule XIV of the
Companies Act, 1956. Depreciation on addi-tions / deductions to Fixed
Assets is provided on pro-rata basis from the date of actual
installation or upto the date of such sale / disposal, as the case may
be.
E. INVENTORIES
Raw Materials, Stores & Spares, Goods under process and Finished Goods
are valued at cost or Net Realizable Value, whichever is lower. Waste
and Scrap is valued at Net Realizable Value.
Cost of inventories of Raw Materials and Stores and Spares is
ascertained on FIFO Basis.
Cost of goods under process and finished goods comprise of cost of
materials, production overhead and depreciation on plant and machinery.
Cost of material for this purpose is ascertained on First In First Out
basis.
Provision for obsolescence in inventories is made, whenever required.
F. INVESTMENT
Current investments are valued at lower of cost or fair market value.
G. FOREIGN CURRENCY TRANSACTIONS
a) The working capital loans are revalued at exchange rates prevailing
at the year end. Exchange difference arising on such revaluation are
duly recognized in the Profit & Loss Account.
b) In case of forward exchange contracts to repay working capital
loans, the difference between the forward rate and the exchange rate at
the date of transaction is recognized as income or expenses over the
life of the contract.
c) Debtors and working capital loans in foreign currency are revalued
at the year end exchange rates. Exchange differences arising on such
revaluation are recognized in Profit & Loss Account.
d) Exchange differences arising on revaluation of foreign currency
loans relating to acquisition of fixed assets from outside India are
adjusted against relevant fixed assets.
H. EXCISE DUTY
Excise duty is paid on clearance of goods, but is accounted for in the
books on accrual basis. Accordingly, provision for excise duty is made
for goods lying in the Bonded Warehouse.
I. EMPLOYEES RETIREMENT BENEFITS
a) The liability for superannuatiorA pension Gratuity & Leave
Encashment is accounted for on the basis of actuarial valuation in
accordance with Accounting Standards -15 (Revised) issued by the
Institute of Chartered Accountants of India.
b) Retirement benefits in the form of Provident Fund and Superannuation
/ Pension Schemes are charged to the Profit and Loss Account for the
year when the contribution to the respective funds are due.
J. RESEARCH AND DEVELOPMENT
Capital Expenditure is shown separately under respective heads of fixed
assets. Revenue expenses including depreciation are included under the
respective heads of expenses.
K. BORROWING COST
Interest on borrowings are recognized in the Profit and Loss account
except interest incurred on borrowings, specifically raised for
Projects which is capitalized with the cost of the asset until such
time the asset is ready to be put to use for intended purpose.
L. TAXATION
A) Provision for Taxation is made on the basis of the taxable profits
computed for the current accounting year (reporting year) in accordance
with Income Tax Act,1961.
B) Deferred Tax is recognized, subject to consideration of prudence, on
timing difference, being difference between taxable income and
accounting income / expenditure that originate in one period and are
capable of reversal in one or subsequent year(s). Deferred taxes are
reviewed for their carrying value at each balance sheet date.
M. IMPAIRMENT OF ASSETS
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognized in the profit and loss account. If at any subsequent balance
sheet date there is an indication that a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed and the
asset is reflected at recoverable amount subject to a maximum of
depreciated historical cost and is accordingly reversed in the profit
and loss account.
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