Mar 31, 2015
Basis of Accounting:
These financial statements have been prepared to comply with the
Generally Accepted Accounting Principles in India (Indian GAAP),
including the Accounting Standards notified under the relevant
provisions of the Companies Act, 2013.
The financial statements are prepared on accrual basis under the
historical cost convention. The financial statements are presented in
Indian rupees rounded off to the nearest rupees in Lakhs.
Use of Estimates:
The preparation of financial statements in conformity with Indian GAAP
requires judgments, estimates and assumptions to be made that affect
the reported amount of assets and liabilities, disclosure of contingent
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known/ materialised.
Presentation and disclosure in financial statements:
For the year ended 31st March, 2015, the schedule III notified under
the Companies Act, 2013, is applicable to the Company, for presentation
and disclosures in financial statements. The company has reclassified
the previous year's figures in accordance with the Schedule III as
applicable in the current year.
Fixed Assets:
Tangible Fixed Assets:
Tangible Assets are stated at cost net of recoverable taxes, trade
discounts and rebates and include amounts added on revaluation, less
accumulated depreciation and impairment loss, if any. The cost of
Tangible Assets comprises of its purchase price, borrowing cost and any
cost directly attributable to bringing the asset to its working
condition for its intended use, net charges on foreign exchange
contracts and adjustments arising from exchange rate variations
attributable to the assets.
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.
Projects under which assets are not ready for their intended use are
disclosed under Capital Work-in-Progress.
Intangible Assets:
Intangible assets comprising of technical know-how, product designs,
prototypes etc. either acquired or internally developed are stated at
cost. In case of internally generated intangible assets, appropriate
overheads including salaries and wages are allocated to the cost of the
asset.
Leasehold land
Leasehold lands are shown at cost less accumulated amortization.
Lease:
Asset leased by the company in its capacity as lessee where
substantially all the risk and rewards of ownership vest in the company
are classified as finance lease and capitalized at the inception of the
lease at cost. Lease payments under operating lease are recognized as
an expense over the period of lease on straight line basis in statement
of profit and loss account.
Depreciation and Amortisation :
Tangible Assets:
Depreciation on Fixed assets is provided to the extent of depreciable
amount on Written Down Value method over the useful lives of assets
specified in the Schedule II of the Companies Act, 2013.The Management
(Technical Expert) estimates the useful lives for some fixed assets
based on internal assessment and/or independent technical evaluation
carried out by external valuers. Depreciation for Assets Purchased/
sold, discarded, demolished or destroyed during the period is
proportionately charged from the date of such addition or, as the case
may be, up to the date, on which such asset has been sold, discarded,
demolished or destroyed.
The cost and the accumulated depreciation for fixed assets sold,
retired or otherwise disposed off are removed from the stated values
and the resulting gains and losses are recognised in the profit and
loss account.
Leasehold Assets are amortised over their period of lease.
Intangible Assets:
Intangible Assets are amortised over their estimated useful life. The
estimated useful life of the intangible assets and the amortisation
period are reviewed at the end of each financial year and the
amortization method is reviewed to reflect the changed pattern.
Impairment of Assets :
The carrying amounts of assets are reviewed at each Balance Sheet date
in accordance with Accounting Standards - 28 'Impairment of Assets' to
determine whether there is any indication of impairment based on
internal / external factors.
An impairment loss is recognized in the statement of Profit & Loss
wherever the carrying amount of an asset exceeds its recoverable
amount.
The impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss
is reversed only to the extent that the asset's carrying amount does
not exceed the carrying amount that would have been determined net of
depreciation or amortization if no impairment loss had been recognized.
The recoverable amount is the greater of the assets net selling price
and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value at the weighted average
cost of capital.
Investments:
Non-current investments are carried at cost. Provision for diminution
in the value of non-current investments is made only if such a decline
is other than temporary in the opinion of the management.
Current investments are carried at lower of cost and fair value. The
comparison of cost and fair value is done separately in respect of each
category of investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of Profit and Loss. Profit or loss on sale of investments is
determined on a first-in- first-out (FIFO) basis.
Investments in properties are carried individually at cost less
depreciation and impairment if any. Investment in properties are
capitalized and depreciated in accordance with the policy stated for
fixed assets. Impairment in investment property is determined in
accordance with the policy stated for impairment of assets.
Inventories:
Items of inventories are measured at lower of cost and net realisable
value after providing for obsolescence, if any, except in case of
by-products which are valued at net realisable value. Cost of
inventories comprises of cost of purchase, cost of conversion and other
costs including manufacturing overheads incurred in bringing them to
their respective present location and condition.
Cost of raw materials, process chemicals, stores and spares, packing
materials, trading and other products are determined on weighted
average basis.
Cash and cash equivalents:
Cash comprises cash on hand and demand deposits with bank. Cash
equivalents are short term balances, highly liquid investments that are
readily convertible into known amounts of cash and which are subject to
insignificant risk of changes in value.
Foreign currency transactions :
Initial recognition:
Transactions in foreign currencies entered into by the company are
accounted at the exchange rates prevailing on the date of the
transaction.
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 charged to the Statement of
Profit & Loss.
Derivative Contracts:
Inrespect of Derivative contracts, premium paid, gains / losses on
settlement and losses on restatement are recognised in the Profit and
Loss account except in case where they relate to the acquisition or
construction of Fixed Assets, in which case, they are adjusted to the
carrying cost of such assets.
Forward exchange contracts:
The premium or discount arising at the inception of forward exchange
contract is amortized and recognized as an expenses/income over the
life of the contract. Exchange differences on such contracts are
recognized in the Statement of Profit & 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.
Revenue Recognition:
Revenue from sale are recognized on transfer of significant risk &
rewards of ownership to the buyer that usually takes place on dispatch
of goods in accordance with the terms of sale and is inclusive of
excise duty but excluding sales returns, trade discount, CST and VAT.
In case of export sales, revenue is recognized as on the date of bill
of lading, being the effective date of transfer of significant risks
and rewards to the customer. Export benefits are accounted for on
accrual basis.
Revenue arising due to price escalation claim is recognized in the
period when such claim is made in accordance with terms of sale.
Inter-division transfers of materials and services for captive
consumption are eliminated from Sales and other operative income of the
respective division.
Revenue from services is recognized in accordance with the specific
terms of contract on performance.
Dividend Income on investment is accounted for, as and when the right
to receive the payment is established.
Interest is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Government grants and subsidies are accounted for on receipt basis.
Employee benefit:
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages and bonus, etc, are recognized in the statement
of profit and loss in the period in which the employee renders the
related service.
Defined contribution plans:
The employee's provident fund scheme, employees' state insurance fund
and contribution to superannuation fund are defined contribution plans.
The company's contribution paid/payable under these schemes is
recognized as an expense in the statement of profit & loss during the
period in which the employee renders the related service.
Defined benefit plans:
The company's gratuity plan is a defined benefit plan. The present
value of gratuity obligation under such defined benefit plan is
determined based on an actuarial valuation carried out by an
independent actuary using the Projected Unit Credit Method, which
recognizes each period of current and past service as giving rise to
additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation. The obligation is
measured at the present value of the estimated future cash flows. The
discount rate used for determining the present value of the obligation
under defined benefit plans, is based on the market yields on
Government securities as at the valuation date having maturity periods
approximating to the terms of related obligations. Actuarial gains and
losses are recognized immediately in the statement of profit and loss.
Gains or losses on the curtailment or settlement of any defined benefit
plan are recognized when the curtailment or settlement occurs.
Provisions, Contingent Liabilities and Contingent assets:
A provision is created when there is a present obligation as a result
of a past event that probably requires an outflow or resources and a
reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow or resources. When there is a possible
obligation or a present obligation in respect of which the likelihood
of outflow of resources is remote, no provision or disclosure is made.
The company does not recognize assets which are of contingent nature
until there is virtual certainty of realisability of such assets.
However, if it has become virtually certain than an inflow of economic
benefits will arise, asset and related income is recognized in the
financial statements of the period in which the change occurs.
Provision for Taxation:
Tax expense comprises of current tax (i.e. amount of tax for the period
determined in accordance with the Income Tax Act, 1961) and deferred
tax charge or credit (reflecting the tax effects of timing differences
between accounting income and taxable income for the period).
The deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates 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, where there is unabsorbed depreciation or carry forward loss
under taxation laws, deferred tax assets are recognised only if there
is a virtual certainty of realization of such assets. Deferred tax
assets are reviewed as at each Balance Sheet Date to reassess
realization.
Minimum Alternate Tax (MAT) paid in excess of normal income tax is
recognised as asset (MAT Credit entitlement) only to the extent, there
is reasonable certainty that company shall be liable to pay tax as per
the normal provisions of the Income Tax Act, 1961 in future.
Borrowing Cost:
Borrowing costs that are directly attributable to the acquisition or
construction of a qualifying asset are capitalized as a part of the
cost of such asset. The qualifying asset is one that necessarily takes
a substantial period of time to get ready for its intended use. All
other borrowing cost is recognized as expense in the period in which
they are incurred.
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