Mar 31, 2015
1.1 Basis of Preparation of Financial Statements
a) Basis of Accounting
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under historical cost
convention on accrual basis. Pursuant to Section 133 of the Companies
Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014,
till the standards of accounting or any addendum thereto are prescribed
by Central Government in consultation and recommendation of the
National Financial Reporting Authority, the existing Accounting
Standards notified under the Companies Act, 1956 shall continue to
apply. Consequently, these financial statements have been prepared to
comply in all material aspects with the accounting standards notified
under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as
amended] of the Companies Act, 1956 and the other relevant provisions
of the Companies Act, 2013.
b) Use of Estimates
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles requires management to make estimates
and assumptions that affect the reported amounts of assets,
liabilities, revenue and expenses and disclosure of contingent assets
and liabilities. The estimates and assumptions used in the accompanying
financial statements are based upon management evaluation of the
relevant facts and circumstances as on the date of the financial
statements. Actual results may differ from the estimates and
assumptions used in preparing the accompanying financial statements.
Any revisions to accounting estimates are recognised prospectively in
current and future periods.
c) Current / Non-Current Classification
All assets and liabilities have been classified as current and
non-current as per the Company's normal operating cycle and other
criteria set out in the Schedule III to the Companies Act, 2013. Based
on the nature of products and services and the time between acquisition
of assets for processing and their realization in cash and cash
equivalents, The Company has ascertained its operating cycle as 12
months for the purpose of current and non-current classification of
asset and liabilities.
1.2 Fixed Assets and Depreciation / Amortization
a) Tangible Fixed Assets
Tangible Assets are stated at cost net of recoverable taxes, trade
discounts and rebates, less accumulated depreciation and impairment
loss, if any. The cost of Tangible Assets comprises its purchase price,
borrowing cost and any cost directly attributable to bringing the asset
to its working condition for its intended use.
Subsequent expenditures related to an item of Tangible Asset are added
to its book value only if they increase the future benefits from the
existing asset beyond its previously assessed standard of performance.
Pursuant to the enactment of Companies Act 2013, the company has
applied the estimated useful lives as specified in Schedule II.
Depreciation on tangible fixed assets of the company is provided on
Straight line method on pro-rata basis at rates and in manner specified
in Schedule II of the Companies Act, 2013.
b) Intangible Assets
Intangible assets are recognized when it is probable that the future
economic benefits that are attributable to the assets will flow to
enterprise and the cost of the assets can be measured reliably. The
intangible assets are recorded at the consideration paid for the
acquisition of such assets and are carried at cost less accumulated
amortization and accumulated impairment loss, if any.
Costs incurred on acquisition of intangible assets are capitalized and
amortized on a straight- line basis over their technically assessed
useful lives, as mentioned below:
Intangible Assets Estimated Useful Lives (Years)
Trade Mark 5
Website 5
c) Capital Work-in-Progress
Projects under which assets are not ready for their intended use and
other capital work-in- progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.
d) Impairment
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal / external
factors. An asset is impaired when the carrying amount of the asset
exceeds the recoverable amount. An impairment loss is charged to the
statement of Profit and Loss in the year in which an asset is
identified as impaired. An impairment loss recognised in prior
accounting periods is reversed if there has been change in the estimate
of the recoverable amount.
1.3 Investments
Investments are classified into current and long-term investments.
Investments that are readily realizable and intended to be held for not
more than a year from the date of acquisition are classified as current
investments. All other investments are classified as long-term
investments.
Long-term investments are stated at cost. A provision for diminution in
the value of long-term investments is made only if such a decline is
other than temporary in the opinion of the management.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is recognised in the Statement of
Profit and Loss.
1.4 Inventories
a) Raw materials, finished goods, stock-in-trade, and stores and spares
are carried at the lower of cost and net realizable value after
providing for obsolescence, if any. The comparison of cost and net
realizable value is made on an item-by item basis.
b) In determining the cost of raw materials, stock-in-trade, stores and
spares, First-in-First-Out (FIFO) method is used. Cost of inventory
comprises all costs of purchase, duties, taxes (other than those
subsequently recoverable from tax authorities) and all other costs
incurred in bringing the inventory to their present location and
condition.
c) Cost of finished goods includes the cost of raw materials, an
appropriate share of fixed and variable production overheads, excise
duty as applicable and other costs incurred in bringing the inventories
to their present location and condition.
1.5 Transactions in Foreign Currency:
a) Initial recognition:
Transactions in foreign currencies entered into by the Company are
accounted at the exchange rates prevailing on the on the transaction.
Exchange differences arising on foreign exchange transactions settled
during the year are recognized in the statement of profit and loss.
b) Measurement of foreign currency items at the Balance Sheet date:
Foreign currency monetary items of the Company are restated at the
closing exchange rates. Non-monetary items are recorded at the
exchange rate prevailing on the date of the transaction. Exchange
differences arising out of these translations are recognized in the
Statement of Profit and Loss.
c) Forward exchange contracts:
The Company enters into forward exchange contracts to hedge against its
foreign currency exposures relating to the underlying transactions and
firm commitments. The Company does not enter into any derivative
instruments for trading or speculative purposes.
The premium or discount arising at the inception of forward exchange
contract is amortized and recognized as an expense/income over the life
of the contract. Exchange differences on such contracts are recognized
in the Statement of Profit and Loss in the period in which the exchange
rates change. Any Profit or Loss arising on cancellation or renewal of
such forward exchange contract is also recognized as income or expense
for the period.
1.6 Revenue Recognition
Revenue from sale of goods is recognised when all the significant risks
and rewards of ownership in the goods are transferred to the buyer, 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. Sales are recognised net of trade discounts,
rebates, sales taxes and excise duties (on goods manufactured and
outsourced).
Export Incentives are recognised when the right to receive credit as
per the terms of Incentives is established in respect of the exports
made and when there is no significant uncertainty regarding the
ultimate collection of the relevant export proceeds.
Dividend Income is recognised when the right to receive dividend is
established. Interest income is recognised on the time proportion basis.
Other incomes are accounted on accrual basis.
1.7 Employee Benefits
a) Short Term Employees Benefit
Employee benefits payable wholly within twelve months of receiving
employee services are classified as short-term employee benefits. These
benefits include salaries and wages, bonus, short term compensated
absences, ex-gratia, etc. The undiscounted amount of short-term
employee benefits to be paid in exchange for employee services is
recognised as an expense as the related service is rendered by
employees.
b) Post Employment Benefit
Defined Contribution Plans:
A defined contribution plan is a post-employment benefit plan under
which an entity pays specified contributions to a separate entity and
has no obligation to pay any further amounts. The Company makes
specified monthly contributions towards employee provident fund to
Government administered provident fund scheme and Employees' State
Insurance Corporation (ESIC) which are a defined contribution plan. The
Company's contribution is recognised as an expense in the Statement of
Profit and Loss during the period in which the employee renders the
related service.
Defined Benefit Plans:
The Company's gratuity benefit scheme is a defined benefit plan. The
Company's net obligation in respect of a defined benefit plan is
calculated by estimating the amount of future benefit that employees
have earned in return for their service in the current and prior
periods; that benefit is discounted to determine its present value. Any
unrecognized past service costs and the fair value of any plan assets
are deducted. The calculation of the Company's obligation under the
plan is performed annually by a qualified actuary using the projected
unit credit method, which recognizes each period of service as giving
rise to additional unit of employee benefit entitlement and measures
each unit separately to build up the final obligation. The discount
rates used for determining the present value of the obligation under
defined benefit plan, are based on the market yields on Government
securities as at the Balance sheet date.
The Company recognizes all actuarial gains and losses arising from
defined benefit plans immediately in the Statement of Profit and Loss.
All expenses related to defined benefit plans are recognized in
employee benefits expense in the Statement of Profit and Loss. The
Company recognizes gains and losses on the curtailment or settlement of
a defined benefit plan when the curtailment or settlement occurs.
The Company has funded its gratuity liability with Life Insurance
Corporation of India (LIC) under the Employees Group Gratuity and Ass.
Scheme.
Termination Benefits:
Termination Benefits are charged to the Statement of Profit and Loss in
the year of accrual.
Compensated Absences:
Accumulated leave, which is expected to be utilized within the next 12
months, is treated as short-term employee benefit. The Company measures
the expected cost of such absences as the additional amount that it
expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
8 Borrowing Cost
Borrowing costs attributable to the acquisition, construction or
production of qualifying assets, are added to the cost of those assets,
upto the date when the assets are ready for their intended use. All
other borrowing costs are expensed in the period they occur.
9 Provisions and Contingencies
A provision is recognised if, as a result of a past event, the Company
has a present obligation that can be estimated reliably and it is
probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are recognised at the best estimate
of the expenditure required to settle the present obligation at the
balance sheet date. The provisions are measured on an undiscounted
basis.
A contingent liability exists when there is a possible but not probable
obligation or a present obligation that may, but probably will not,
require an outflow of resources, or a present obligation whose amount
cannot be estimated reliably. Contingent liabilities do not warrant
provisions, but are disclosed unless the possibility of outflow of
resources is remote. Contingent assets are neither recognised nor
disclosed in the financial statements. However, contingent assets are
assessed continually and if it is virtually certain that an inflow of
economic benefits will arise, the asset and related income are
recognised in the period in which the change occurs.
1.10 Taxes on Income
Income tax expenses comprise current and deferred taxes. Current tax is
determined on income for the year chargeable to tax in accordance with
the applicable tax rates and the provisions of the Income Tax Act, 1961
and other applicable tax laws and after considering credit for Minimum
Alternate Tax (MAT) available under the said Act. MAT paid in
accordance with the tax laws which gives future economic benefits in
the form of adjustments to future tax liability, is considered as an
asset if there is convincing evidence that the future economic benefit
associated with it will flow to the Company resulting in payment of
normal income tax.
Deferred tax is recognized on timing differences; being the difference
between taxable income and accounting income that originate in one
period and are capable of reversing in one or more subsequent periods.
Deferred tax is measured using the tax rates and the tax laws enacted
or substantively enacted as at the reporting date. Deferred tax
liabilities are recognized for all timing differences. Deferred tax
assets are recognized for timing differences of items other than
unabsorbed depreciation and carry forward losses only to the extent
that there is a reasonable certainty that there will be sufficient
future taxable income will be available against which these can be
realized. However if there are unabsorbed depreciation and carry
forward of losses and items relating to capital losses, deferred tax
assets are recognized only if there is virtual certainty supported by
convincing evidence that there will be sufficient future taxable income
available to realize the assets. Deferred tax assets and liabilities
are offset if such items relate to taxes on income levied by the same
governing tax laws and the Company has a legally enforceable right for
such set off. Deferred tax assets are reviewed at each balance sheet
date for their realizability.
1.11 Segment Accounting
Segment accounting policies are in line with the accounting policies of
the Company. In addition, the following specific accounting policies
have been followed for segment reporting:
a) Segment revenue includes sales and other income directly
identifiable with/allocable to the segment.
b) Expenses that are directly identifiable with/ allocable to segments
are considered for determining the segment result. Expenses which
relate to the Company as a whole and not allocable to segments are
included under "Un-allocable Corporate Expenditure".
c) Income which relates to the Company as a whole and not allocable to
segments is included in "Un-allocable Corporate Income".
d) Segment assets and liabilities include those directly identifiable
with the respective segments. Un-allocable Corporate Assets and
Liabilities represent the assets and liabilities that relate to the
Company as whole and not allocable to any segment.
1.12 Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders after deducting
preference dividends and attributable taxes by the weighted average
number of equity shares outstanding during the year.
For the purpose of calculating diluted earning 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, if
any.
1.13 Research and Development Expenditure
Expenditure on Research and Development of revenue nature incurred by
the Company are charged to Profit and Loss Account, while those of
capital nature are treated as Fixed Assets.
1.14 Deferred Revenue Expenditure
Expenditure Incurred on Promotion of new Products are shown as Deferred
Revenue Expenditure. Deferred Revenue Expenditure has been amortized
over a period of Five year.
1.15 Cash and Cash Equivalents
The Company considers all highly liquid financial instruments, which
are readily convertible into known amount of cash that are subject to
an insignificant risk of change in value and having original maturities
of three months or less from the date of purchase, to be cash
equivalents.
1.16 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated.
Mar 31, 2014
1.1 Basis of Preparation of Financial Statements
a) Basis of Accounting
The financial statements of the Company are prepared under the
historical cost convention as a going concern on accrual basis and to
comply in all material aspects with the Accounting Standards prescribed
in the Companies (Accounting Standards) Rules, 2006 issued by the
Central Government, the relevant provisions of the Companies Act, 1956
("the Act") which as per clarification issued by the Ministry of
Corporate Affairs continue to apply under Section 133 of the Companies
Act, 2013 (which has superseded Section 211(3C) of the Act w.e.f 12th
September 2013) and other accounting principles generally accepted in
India, to the extent applicable.
b) Use of Estimates
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles requires management to make estimates
and assumptions that affect the reported amounts of assets,
liabilities, revenue and expenses and disclosure of contingent assets
and liabilities. The estimates and assumptions used in the accompanying
financial statements are based upon management evaluation of the
relevant facts and circumstances as on the date of the financial
statements. Actual results may differ from the estimates and
assumptions used in preparing the accompanying financial statements.
Any revisions to accounting estimates are recognised prospectively in
current and future periods.
c) Current / Non Current Classification
All assets and liabilities have been classified as current and
non-current as per the Company''s normal operating cycle and other
criteria set out in the Schedule VI of the Companies Act, 1956. Based
on the nature of products and services and their realization in cash
and cash equivalents, the Company has ascertained its operating cycle
as 12 months for the purpose of current and non-current classification
of asset and liabilities.
1.2 Fixed Assets and Depreciation / Amortization
a) Tangible Fixed Assets
Fixed Assets are stated at cost of acquisition/construction (net of
recoverable taxes)less Accumulated Depreciation and impairment loss if
any. Cost of acquisition includes non refundable taxes, duties, freight
and other costs that are directly attributable to bringing assets to
their working condition for their intended use. All costs, including
financing costs till the asset is put to use and adjustments arising
from exchange rate variations attributable to the fixed assets are
capitalized.
Depreciation on fixed assets is provided on straight line method on
pro-rata basis at rates and in manner specified in Schedule XIV of the
Companies Act, 1956.
b) Intangible Assets
Intangible assets are recognized when it is probable that the future
economic benefits that are attributable to the assets will flow to
enterprise and the cost of the assets can be measured reliably. The
intangible assets are recorded at the consideration paid for the
acquisition of such assets and are carried at cost less accumulated
amortization and accumulated impairment loss, if any.
Costs incurred on acquisition of intangible assets are capitalized and
amortized on a straight-line basis over their technically assessed
useful lives, as mentioned below :
Intangible Assets Estimated Useful Lives (Years)
Trade Mark 5
Website 5
c) Impairment of Assets
At each balance sheet date, the management reviews the carrying amounts
of its assets included in each cash generating unit to determine
whether there is any indication that those assets were impaired. If any
such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of impairment. Recoverable
amount is the higher of an asset''s net selling price and value in
use. In assessing value in use, the estimated future cash flows
expected from the continuing use of the asset and from its disposal are
discounted to their present value using a pre-tax discount rate that
reflects the current market assessments of time value of money and the
risks specific to the asset.
Reversal of impairment loss is recognised as income in the statement of
profit and loss.
1.3 Investments
Investments are classified into current and long-term investments.
Investments that are readily realizable and intended to be held for not
more than a year from the date of acquisition are classified as current
investments. All other investments are classified as long-term
investments. However, that part of long term investments which are
expected to be realized within twelve months from Balance Sheet date is
also presented under "Current Assets" under "Current portion of
long term investments" in consonance with the current / non-current
classification of revised Schedule VI to the Companies Act, 1956.
Current investments are stated at the lower of cost and fair value. The
comparison of cost and fair value is done separately in respect of each
category of investments.
Long-term investments are stated at cost. A provision for diminution in
the value of long-term investments is made only if such a decline is
other than temporary in the opinion of the management.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is recognised in the Statement of
Profit and Loss.
1.4 Inventories
Finished goods (including for trade), work-in-process, semi-finished
goods for trade, Raw materials, Stores are valued at cost or net
realizable value whichever is lower. Cost comprises all cost of
purchase, cost of conversion and other costs incurred in bringing the
inventories to their present location and condition. Due allowance is
estimated and made for defective and obsolete items, wherever
necessary, based on the past experience of the Company. The cost
formula used for determination of cost is ''First in First Out''.
1.5 Transactions in Foreign Currency:
a) Initial recognition:
Transactions in foreign currencies entered into by the Company are
accounted at the exchange rates prevailing on the date of the
transaction. Exchange differences arising on foreign exchange
transactions settled during the year are recognized in the statement of
profit and loss.
b) Measurement of foreign currency items at the Balance Sheet date:
Foreign currency monetary items of the Company are restated at the
closing exchange rates. Non-monetary items are recorded at the exchange
rate prevailing on the date of the transaction. Exchange differences
arising out of these translations are recognized in the Statement of
Profit and Loss.
1.6 Revenue Recognition
a) Sales
Revenue from sale of goods is recognised on transfer of all significant
risks and rewards of ownership to the buyer. The amount recognised as
sale is exclusive of sales tax/VAT and is net of returns & discounts.
Sales are stated gross of excise duty as well as net of excise duty;
excise duty being the amount included in the amount of gross turnover.
b) Other Income
Dividend Income is recognised when the right to receive the dividend is
established.
Interest income is recognised on the time proportion basis.
Other incomes are accounted on accrual basis.
1.7 Employee Benefits
a) Short Term Employees Benefit
Employee benefits payable wholly within twelve months of receiving
employee services are classified as short-term employee benefits. These
benefits include salaries and wages, bonus, short term compensated
absences, ex-gratia, etc. The undiscounted amount of short- term
employee benefits to be paid in exchange for employee services is
recognised as an expense as the related service is rendered by
employees.
b) Post Employment Benefit
Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under
which an entity pays specified contributions to a separate entity and
has no obligation to pay any further amounts. The Company makes
specified monthly contributions towards employee provident fund to
Government administered provident fund scheme and Employees'' State
Insurance Corporation (ESIC) which are a defined contribution plan. The
Company''s contribution is recognised as an expense in the Statement
of Profit and Loss during the period in which the employee renders the
related service.
Defined Benefit Plans
The Company''s gratuity benefit scheme is a defined benefit plan. The
Company''s net obligation in respect of a defined benefit plan is
calculated by estimating the amount of future benefit that employees
have earned in return for their service in the current and prior
periods; that benefit is discounted to determine its present value. Any
unrecognized past service costs and the fair value of any plan assets
are deducted. The calculation of the Company''s obligation under the
plan is performed annually by a qualified actuary using the projected
unit credit method, which recognizes each period of service as giving
rise to additional unit of employee benefit entitlement and measures
each unit separately to build up the final obligation. The discount
rates used for determining the present value of the obligation under
defined benefit plan, are based on the market yields on Government
securities as at the Balance sheet date.
The Company recognizes all actuarial gains and losses arising from
defined benefit plans immediately in the Statement of Profit and Loss.
All expenses related to defined benefit plans are recognised in
employee benefits expense in the Statement of Profit and Loss. The
Company recognizes gains and losses on the curtailment or settlement of
a defined benefit plan when the curtailment or settlement occurs.
The Company has funded its gratuity liability with Life Insurance
Corporation of India (LIC) under the Employees Group Gratuity and ASS.
Scheme.
c) Compensated Absences
Accumulated leave, which is expected to be utilized within the next 12
months, is treated as short-term employee benefit. The Company measures
the expected cost of such absences as the additional amount that it
expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
1.8 Borrowing Cost
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use are capitalized as part of
the cost of the respective asset. All other borrowing costs are
expensed in the period they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing
of funds.
1.9 Provisions and Contingencies
A provision is recognised if, as a result of a past event, the Company
has a present obligation that can be estimated reliably and it is
probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are recognised at the best estimate
of the expenditure required to settle the present obligation at the
balance sheet date. The provisions are measured on an undiscounted
basis.
A contingent liability exists when there is a possible but not probable
obligation or a present obligation that may, but probably will not,
require an outflow of resources, or a present obligation whose amount
cannot be estimated reliably. Contingent liabilities do not warrant
provisions, but are disclosed unless the possibility of outflow of
resources is remote. Contingent assets are neither recognised nor
disclosed in the financial statements. However, contingent assets are
assessed continually and if it is virtually certain that an inflow of
economic benefits will arise, the asset and related income are
recognised in the period in which the change occurs.
1.10 Taxes on Income
Income tax expense comprises current tax (i.e. amount of tax for the
year determined in accordance with the income-tax law) and deferred tax
charge or credit (reflecting the tax effects of timing differences
between accounting income and taxable income for the year).
Provision for current tax is based on the results for the year ended
31st March, in accordance with the provisions of the Income Tax Act,
1961.
The deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates and tax laws
that have been enacted or substantively enacted by the balance sheet
date. Deferred tax assets are recognised only to the extent there is
reasonable certainty that the assets can be realized in future, however
when there is unabsorbed depreciation or carry forward loss under
taxation laws, deferred tax assets are recognised only if there is a
virtual certainty supported by convincing evidence that sufficient
future taxable income will be available against which such deferred tax
assets can be realized.
Deferred tax assets are reviewed as at each balance sheet date and
written down or written-up to reflect the amount that is reasonably /
virtually certain (as the case may be) to be realized.
Minimum Alternative Tax (MAT) under the provisions of the Income Tax
Act, 1961 is recognized as current tax. The credit available under the
said act in respect of MAT is recognized as an asset only when there is
certainty that the company will pay income tax in future periods and
MAT credit can be carried forward to set-off against the normal tax
liability. MAT credit recognized as an asset is reviewed at each
Balance sheet date and written down to the extent the aforesaid
certainty no longer exists.
1.11 Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders after deducting
preference dividends and attributable taxes by the weighted average
number of equity shares outstanding during the year.
For the purpose of calculating diluted earning 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, if
any.
1.12 Segment Accounting
Segment accounting policies are in line with the accounting policies of
the Company. In addition, the following specific accounting policies
have been followed for segment reporting:
(i) Segment revenue includes sales and other income directly
identifiable with/ allocable to the segment.
(ii) Expenses that are directly identifiable with/ allocable to
segments are considered for determining the segment result. Expenses
which relate to the Company as a whole and not allocable to segments
are included under "Un-allocable Corporate Expenditure".
(iii) Income which relates to the Company as a whole and not allocable
to segments is included in "Un-allocable Corporate Income".
(iv) Segment assets and liabilities include those directly identifiable
with the respective segments. Un-allocable Corporate Assets and
Liabilities represent the assets and liabilities that relate to the
Company as whole and not allocable to any segment.
1.13 Research and Development Expenditure
Expenditure on Research and Development of revenue nature incurred by
the Company are charged to Profit and Loss Account, while those of
capital nature are treated as Fixed Assets.
1.14 Deferred Revenue Expenditure
Expenditure Incurred on Promotion of new Products are shown as Deferred
Revenue Expenditure. Deferred Revenue Expenditure has been amortized
over a period of Five year.
1.15 Cash and Cash Equivalents
The Company considers all highly liquid financial instruments, which
are readily convertible into known amount of cash that are subject to
an insignificant risk of change in value and having original maturities
of three months or less from the date of purchase, to be cash
equivalents.
1.16 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated.
Mar 31, 2012
A) Accounting Conventions
I) Basis of Preparation of Financial Statements
The financial statements of the Company are prepared under the
historical cost convention on accrual basis of accounting in all
material respects in accordance with the notified Accounting Standards
by Companies (Accounting Standards) Rules 2006 (as amended) and the
relevant Provisions of the Companies Act,1956. The accounting policies
have been consistently applied by the Company during the year.
II) Presentation And Disclosure Of Financial Statements
During the year ended 31st March, 2012, the revised Schedule-VI
notified under Companies Act 1956, has become applicable to the
company, for preparation and presentation of its financial statements.
The adoption of revised Schedule-VI does not impact recognition and
measurement principles followed for preparation of financial
statements. However, it has significant impact on presentation and
disclosure made in financial statements. The company has also restated
the previous year figures in accordance with the requirements
applicable for the current year.
III) Use of Estimates
The preparation of the financial statements in conformity with Indian
Generally Accepted Accounting Practices requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates. Any revision to accounting estimates is
recognized prospectively in current and future periods.
b) Fixed Assets
I) Tangible
Fixed Assets are stated at cost of acquisition/construction (net of
recoverable taxes) less Accumulated Depreciation and impairment loss if
any. Cost of acquisition includes non refundable taxes, duties, freight
and other costs that are directly attributable to bringing assets to
their working condition for their intended use. All costs, including
financing costs till the asset is put to use and adjustments arising
from exchange rate variations attributable to the fixed assets are
capitalized.
II) Intangible
Intangible assets are recognized when it is probable that the future
economic benefits that are attributable to the assets will flow to
enterprise and the cost of the assets can be measured reliably. The
intangible assets are recorded at the consideration paid for the
acquisition of such assets and are carried at cost less accumulated
amortization and accumulated impairment loss, if any.
c) Depreciation / Amortization
I) Tangible
Depreciation on fixed assets is provided on straight line method on
pro-rata basis at rates and in manner specified in Schedule XIV of the
Companies Act, 1956.
II) Intangible
Intangible Assets are amortized over a period of five years or
according to the life cycle of Intangible Assets.
d) Capital Work-in-Progress
Projects under which assets are not ready for their intended use and
other capital work-in- progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.
e) Intangible Assets under Development
Intangible assets for which Development is in process are carried at
cost ,comprising direct cost ,related incidental expenses.
f) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. Current
Investments are valued at Cost or Net realizable value whichever is
lower. All other investments are classified as long term Investments.
Long term investments are stated at cost of acquisition. Provision for
diminution in value of long term investments is made, only if such
decline is other than temporary.
g) Inventories
Finished goods (including for trade), work-in-process, semi-finished
goods for trade, Raw materials, Stores are valued at cost or net
realizable value whichever is lower. Cost comprises all cost of
purchase, cost of conversion and other costs incurred in bringing the
inventories to their present location and condition. Due allowance is
estimated and made
for defective and obsolete items, wherever necessary, based on the past
experience of the Company. The cost formula used for determination of
cost is ÃFirst in First OutÃ.
h) Foreign Currency Translations :
(i) All Transactions in foreign currency, are recorded at the rates of
exchange prevailing as at the date of the transaction.
(ii) Monetary assets and liabilities in foreign currency, outstanding
at the close of the year, are converted in Indian currency at the
appropriate rates of exchange prevailing at the close of the year. Any
income or expense on account of exchange difference either on
settlement or on translation is recognized in the Profit and Loss
account except in case of long term liabilities, where they relate to
acquisition of fixed assets, in which case they are adjusted to the
carrying cost of such assets.
i) Revenue Recognition
I) Sales
The Company recognises sale of goods when the significant risks and
rewards of ownership are transferred to the buyer, which is usually
when the goods are dispatched to customers. Sales represents the
invoice value of goods and services provided to third parties net of
discounts, excise duty, sales tax / value added tax .
II) Other Income
Other incomes except dividend income are accounted on accrual basis.
Dividend Income is recognised when the right to receive the dividend is
established.
j) Employee Benefits
1) Short Term Employees Benefit
Short Term Benefits are recognized as expenditure at the undiscounted
value in the Profit and Loss Account of the year in which the related
services are rendered.
2) Post Employment Benefit
a. Defined Contribution Plans - Monthly contributions to the Provident
Fund and E.S.I.C which are defined contribution schemes are charged to
Profit and Loss Account and deposited with the Provident Fund and
E.S.I. Authorities on monthly basis.
b. Defined Benefit Plans - Gratuity to Employees are covered under the
Employees Group Gratuity Scheme and the premium is paid on the basis of
their actuarial valuation using the Projected Unit Credit Method.
Actuarial gain and losses arising on such valuation are recognized
immediately in the Profit and Loss Account. Any shortfall in case of
premature termination / resignation to the extent not reimbursed by LIC
is being absorbed in the year of payment. The amount funded by the
trust administrated by the Company under the aforesaid policy is
reduced from the gross obligation under the defined benefit plan, to
recognize the obligation on net basis.
3) Termination Benefit Termination Benefits are charged to Profit and
Loss Account in the year of accrual.
k) Borrowing Cost
Borrowing Costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
l) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
m) Taxes on Income
Tax expense for a year comprises of current tax and deferred tax.
Current tax are measured at the amount expected to be paid to the tax
authorities, after taking into consideration, the applicable deductions
and exemptions admissible under the provisions of the Income tax Act,
1961.
Deferred tax reflects the impact of current year timing differences
between taxable income and accounting income for the year and reversal
of timing difference of earlier years. Deferred tax is measured based
on the tax rates and the tax laws enacted or substantively enacted at
the balance sheet date. Deferred tax assets are recognized 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 realized. If there is unabsorbed depreciation or carry forward
of losses under tax laws, deferred tax assets are recognized only to
the extent that there is virtual certainty supported by convincing
evidence that sufficient future taxable income will be available
against which such deferred tax assets can be realized.
Minimum Alternative Tax (MAT) credit is recognized as an asset only
when and to the extent there is convincing evidence that the Company
will pay income tax higher than that computed under MAT, during the
period that MAT is permitted to be set off under the Income Tax Act,
1961.
n) Impairment of Assets
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal/external
factors. An asset is impaired when the carrying amount of the asset
exceeds the recoverable amount. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. An impairment loss recognized in prior accounting periods is
reversed if there has been change in the estimate of the recoverable
amount.
o) Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or
loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year. The
weighted average number of equity shares outstanding during the year
are adjusted for events such as bonus shares, other than the conversion
of potential equity 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 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.
p) Cash and Cash Equivalents
Cash and cash equivalents include cash in hand, demand deposits with
banks, other short- term highly liquid investments with original
maturities of three months or less.
q) Operating Cycle
Based on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalent, the Company has ascertained its operating cycle to be less
than 12 months.
r) Research and Development Expenditure :
Expenditure on Research and Development of revenue nature incurred by
the Company are charged to Profit and Loss Account, while those of
capital nature are treated as Fixed Assets.
Mar 31, 2010
I) Basis of Preparation of Financial Statements
The financial statements of the Company are prepared under the
historical cost convention on accrual basis of accounting in all
material respects in accordance with the notified Accounting Standards
by Companies (Accounting Standards) Rules 2006 ( as amended) and the
relevant Provisions of the Companies Act, 1956. The accounting policies
have been consistently applied by the Company during the year.
ii) Use of Estimates
The preparation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent liabilities on the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Any revision to
accounting estimates is recognized prospectively in current and future
periods.
FIXED ASSETS: i) Tangible:
Fixed Assets are stated at cost of acquisition / construction (less
Accumulated Depreciations). Cost comprises the purchase price and other
attributable costs.
ii) Intangible:
Intangible Assets are recorded at the consideration paid for
acquisition of such assets and are carried at cost less accumulated
amortization and accumulated impairment loss, if any.
DEPRECIATION/ AMORTIZATION i) Tangible:
Depreciation on Fixed Assets is provided on straight-line method on pro
rata basis at rates and in manner specified in Schedule XIV of the
Companies Act, 1956
ii) Intangible:
Intangible Assets are amortised over their estimated useful life on a
straight-line basis.
INVESTMENTS:
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investment. Long term
investments are stated at cost of acquisition. Provision for diminution
in the value of long term investments is made, only if such decline is
other than temporary.
INVENTORIES:
Finished goods (including for trade), work-in-process, semi-finished
goods for trade, Raw materials and Stores are valued at cost or net
realizable value whichever is lower. Cost comprises all cost of
purchase, cost of conversion and other costs incurred in bringing the
inventories to their present location and condition. Due allowance is
estimated and made for defective and obsolete items, wherever necessary,
based on the past experience of the Company. The cost formulae used for
determination of cost is First in First Out.
FOREIGN CURRENCY TRANSACTIONS:
(i) All Transactions in foreign currency, are recorded at the rates of
exchange prevailing as at the date of the transaction. ,
(ii) Monetary assets and liabilities in foreign currency, outstanding
at the close of the year, are converted in Indian currency at the
appropriate rates of exchange prevailing at the close of the year. The
resultant gain or loss is accounted for during the year.
PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
REVENUE RECOGNITION:
i) Sales The Company recognizes sale of goods when the significant
risks and rewards of ownership are transferred to the buyer, which
is usually when the goods are dispatched to customers.
ii) Other Income Other Income are accounted on accrual basis.
EMPLOYEE BENEFITS:
1. Short Term Employees Benefit:
Short Term Benefits are recognized as expenditure at the undiscounted
value in the Profit and Loss Account of the year in which the related
services are rendered.
2. Post Employment Benefit:
a. Defined Contribution Plans: Monthly contributions to the Provident
Fund and E.S.I, which are defined contribution schemes are charged to
Profit and Loss Account and deposited with the Provident Fund and
E.S.I. Authorities on monthly basis.
b. Defined Benefit Plans: Gratuity to Employees are covered under the
Employees Group Gratuity Policy of Life Insurance Corporation of India
(LIC) and the premium is paid on the basis of their actuarial valuation
using the Projected Unit Credit Method. Actuarial gain and losses
arising on such valuation are recognized immediately in the Profit and
Loss Account. Any shortfall in case of premature termination /
resignation to the extent not reimbursed by LIC is being absorbed in
the year of payment. The amount funded by the trust administrated by
the Company under the aforesaid policy is reduced from the gross
obligation under the defined benefit plan, to recognize the obligation
on net basis.
3. Termination Benefit:
Termination Benefits are charged to Profit & Loss Account in the year
of accrual.
TAXES ON INCOME:
Tax expense comprises of current tax and deferred taxes. Provision for
current income taxes is made on the taxable income at the tax rate
applicable to the relevant assessment year. Deferred income taxes are
recognised for the future tax consequences attributable to timing
differences between the financial statement determinations of income
and their recognition for tax purposes. The effect on deferred tax
assets and liabilities of a change in tax rates is recognised in income
using the tax laws that have been enacted or substantively enacted by
the balance sheet date. Deferred tax assets are recognised and carried
forward only to the extent that there is a reasonable certainty
supported by convincing evidence that sufficient future taxable income
will be available against which such deferred tax assets can be
realized.
Minimum Alternative Tax (MAT) credit is recognized as an asset only
when and to the extent there is convincing evidence that the Company
will pay income tax higher than that computed under MAT, during the
period that MAT is permitted to be set off under the Income Tax Act,
1961 (specified period). In the year, in which the MAT credit becomes
eligible to be recognized as an asset in accordance with the
recommendations contained in the guidance note issued by the Institute
of Chartered Accountants of India (ICAI), the said asset is created by
way of a credit to the profit and loss account and shown as MAT credit
entitlement. The Company reviews the same at each balance sheet date
and writes down the carrying amount of MAT credit entitlement to the
extent there is no longer convincing evidence to the effect that the
Company will pay income tax higher than MAT during the specified
period.
RESEARCH AND DEVELOPMENT EXPENDITURE:
Expenditure on Research and Development of revenue nature incurred by
the Company are charged to Profit and Loss Account, while those of
capital nature are treated as Fixed Assets.
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 then its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognised in the Profit and Loss account. If at the Balance Sheet date
there is an indication that if previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount.
BORROWING COSTS:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of cost of
such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
MISCELLANEOUS EXPENDITURE:
Deferred Revenue Expenditures are written off over a period of 5 years.
Deferred Development Expenditure is expenditure incurred for the
development of new products, and is written off over a period of 5
years from the year in which it is commercially developed.