Accounting Policies of RIR Power Electronics Ltd. Company
Mar 31, 2023
NOTE 1 :GENERAL INFORMATION
RIR POWER ELECTRONICS LTD. (Formerly known as Ruttonsha International Rectifier Limited) ("the Company") (CIN : L31109MH1969PLC014322) is a Public Limited Company incorporated and domiciled in India. The address of the registered office and principal office is at 139/141, Solaris-1, ''B'' Wing, 1st Floor, Saki Vihar Road, Powai, Andheri-(East), Mumbai-400072. The Company is in the business of Manufacturing industry. The Company''s manufacturing facilities are located in Baska, Halol, Gujarat and has its registered office in Mumbai. The equity shares of the Company are listed on the Bombay Stock Exchange (BSE).
Company engaged in the manufacturing of Semiconductor devices like Diodes, Thyristors, Power Modules, Bridge Rectifiers and High Power Equipments like High Current Rectifiers, Battery Chargers, Rectifier Panels, High Power Stacks and Assembly. The Company''s products are used for Industrial applications in diverse sectors such as Railways, Induction Furnace, Electricity and Power Generation, Engineering, Water Treatment, Metals, Defence, Automobiles, Oil and Gas plants, Welding Equipments, Aviation etc.
The Registrar of Companies, Mumbai has approved the change of name of the Company from âRUTTONSHA INTERNATIONAL RECTIFIER LIMITED" to âRIR POWER ELECTRONICS LIMITED" with effect from 17th November, 2022. Accordingly the name of the Company has been changed to RIR POWER ELECTRONICS LIMITED.
NOTE 2 : SIGNIFICANT ACCOUNTING POLICIES
A. Basis of presentation of Financial Statements
The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended). These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 (Act) (to the extent notified). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
The financial statements are presented in I NR, the functional currency of the Company.
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements. Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
C. Critical accounting judgements and key source of estimation uncertainty
The Company is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. The estimates and underlying assumptions are reviewed on an on-going basis.
(a) Recognition and measurement of defined benefit obligations, key actuarial assumptions
(b) Estimation of current tax expenses and payable
D. Property, plant and equipment
Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is de-recognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Depreciation methods, estimated useful lives and residual value are as follows :
|
Asset Category |
Factory Buildings |
Plant & Equipment |
Furniture & Fixtures |
Vehicles |
Office Equipment |
|
No. of Years |
30 |
15 |
10 |
8 |
5 |
Depreciation for the year ended March 31,2023 has been provided on the basis of useful lives as prescribed in the Schedule II of the Companies Act, 2013.Depreciation on Property, Plant and Equipments purchased / sold during the year is provided for pro-rata basis, for period during which the assets are put to use. Where there is a revision of the estimated useful life of an asset, the unamortized depreciable amount is charged over the revised remaining useful life of the said asset. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss. Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as âCapital working-progress".
Costs associated with maintaining software programs are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Company are recognised as intangible assets when the following criteria are met :
(i) it is technically feasible to complete the software so that it will be available for use
(ii) management intends to complete the software and use or sell it
(iii) there is an ability to use or sell the software
(iv) it can be demonstrated how the software will generate probable future economic benefits
(v) adequate technical, financial and other resources to complete the development and to use or sell the software are available, and
(vi) the expenditure attributable to the software during its development can be reliably measured. Directly attributable costs that are capitalised as part of the software cost includes employee costs and an appropriate portion of relevant overheads. Intangible Assets are stated at cost less accumulated amortisation and impairment loss, if any. Computer Software is amortised over a period of ten years, as per revised useful lives prescribed in the Schedule II.
F. Impairment of Assets
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the assetâs carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an assetâs fair value less costs of disposal and value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an armâs length transaction between knowledgeable, willing parties, less the costs of disposal.
The company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, companyâs incremental borrowing rate. Generally, the company uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following: -
- Fixed payments, including in-substance fixed payments;
- Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
- Amounts expected to be payable under a residual value guarantee; and
- The exercise price under a purchase option that the company is reasonably certain to exercise, lease payments in an optional renewal period if the company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the company is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the companyâs estimate of the amount expected to be payable under a residual value guarantee, or if company changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-ofuse asset has been reduced to zero.
The company presents right-of-use assets that do not meet the definition of investment property in âproperty, plant and equipmentâ and lease liabilities in âloans and borrowingsâ in the statement of financial position.
Short-term leases and leases of low-value assets.
An underlying asset can be of low value only if
- The company can benefit from use of the underlying asset on its own or together with other resources that are readily available to the lessee; and
- the underlying asset is not highly dependent on, or highly interrelated with, other assets
The company has elected not to recognise right-of use assets and lease liabilities for short term leases of real estate properties that have a lease term of 12 months. The company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
H. Inventory
Inventories are valued at the lower of cost and net realisable value. Cost is computed on a FIFO basis. Cost of finished goods and work-in-progress include all costs of purchases, conversion costs and other costs incurred in bringing the inventories to their present location and condition. The net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale.
I. Cash and Cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, other short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
(i) Classification of Financial Assets
The Company classifies its financial assets in the following measurement categories:
⢠those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
⢠those measured at amortised cost.
The classification depends on the entityâs business model for managing the financial assets and the contractual terms of the cash flows.For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.The Company reclassifies debt investments when and only when its business model for managing those assets changes.
(ii) Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
(iii) Debt Instruments
Subsequent measurement of debt instruments depends on the Companyâs business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the group classifies its debt instruments:
⢠Amortised Cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is de-recognised or impaired. Interest income from these financial assets is included in finance income using the effective interest rate method.
⢠Fair Value through Other Comprehensive Income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assetsâ cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in profit and loss. When the financial asset is de-recognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/ (losses). Interest income from these financial assets is included in other income using the effective interest rate method.
⢠Fair Value through Profit or Loss (FVTPL): Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in profit or loss and presented net in the statement of profit and loss within other gains/(losses) in the period in which it arises. Interest income from these financial assets is included in other income.
(iv) Equity Instruments
The Company subsequently measures all equity investments at fair value. Where the Companyâs management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss. Dividends from such investments continue to be recognised in profit or loss as other income when the Companyâs right to receive payments is established.Changes in the fair value of financial assets at fair value through profit or loss are recognised in other gain/ (losses) in the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.
(v) Impairment of Financial Assets
The Company recognises a loss allowance for Expected Credit Losses (ECL) on financial assets that are measured at amortised cost and at FVOCI. The credit loss is difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate. This is assessed on an individual or collective basis after considering all reasonable and supportable including that which is forward looking.
The Companyâs trade receivables or contract revenue receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall, being simplified approach for recognition of impairment loss allowance.
Under simplified approach, the Company does not track changes in credit risk. Rather it recognizes impairment loss allowance based on the lifetime ECL at each reporting date right from its initial recognition. The Company uses a provision matrix to determine impairment loss allowance on the portfolio of trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.
For financial assets other than trade receivables, the Company recognises 12-months expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. If, in a subsequent period, credit quality of the instrument improves such that there is no longer significant increase in credit risks since initial recognition, then the Company reverts to recognizing impairment loss allowance based on 12 months ECL. The impairment losses and reversals are recognised in Statement of Profit and Loss. For equity instruments and financial assets measured at FVTPL, there is no requirement of impairment testing.
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
(vi) De-recognition of financial assets
A financial asset is de-recognised only when:
⢠The Company has transferred the rights to receive cash flows from the financial asset or;
⢠Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is de-recognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not de-recognised.Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is de-recognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
(vii) Income recognition
Interest income from debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial assets to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
(i) Initial recognition and measurement
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortised cost unless at initial recognition, they are classified as fair value through profit and loss.
(ii) Subsequent measurement
Financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the statement of profit and loss.
(iii) De-recognition
A financial liability is de-recognised when the obligation specified in the contract is discharged, cancelled or expires.
(iv) 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. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
Fair Value Hierarchy - The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consist of following three levels:
Level 1: Inputs are quoted prices in active markets for identical assets or liabilities.
Level 2: Inputs are other than quoted prices included within Level 1 that are observable asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Inputs are unobservable inputs for the asset or liability.
M. Borrowing Cost
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of Cost of that assets, during the period till all the activities necessary to prepare the Qualifying assets for its intended use or sale are complete during the period of time that is required to complete and prepare the assets for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.Other borrowing costs are recognized as an expense in the period in which they are incurred.
N. Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of allowances, incentives, service taxes and amounts collected on behalf of third parties.The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Companyâs activities as described below.Revenue is recognised in the period when the service is provided as per arrangements/agreements with the customers.
Revenue from sale of goods is recognised when all the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, there is no continuing managerial involvement with the goods and the amount of revenue can be measured reliably. The performance obligation in case of sale of goods is satisfied at the point of time i.e. when the material is shift to the customer on delivery to the customer as may be specified in the contract.
Rendering of Services
Revenue from services rendered are generally recognized in proportion to the stage of completion of the transaction at reporting date. The stage of the completion of the contract is determined based on the actual service provided as a proportion to the total service provided. Revenue from contracts priced on a time and material basis are recognised when services are rendered and related costs are incurred.
Export Incentives
Duty Drawaback, MEIS benefits are recognized at the time and exports and benefits in respect of licenses received by the company against exports made by it are recognized as and when goods are imported against them.
Dividend are recognized as Income when shareholder''s right to receive payment has been established
Interest Income is recognised on accrued basis on proportion basis taking into account the amount outstanding and the interest rate applicable and based on effective interest rate method.
O. Employee Benefits
(i) Gratuity Obligations
The Company has maintained a Group Gratuity Cum Life Assurance Scheme with the Life Insurance Corporation of India (LIC) towards which it annually contributes a sum determined by LIC. The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. Defined benefit costs are categorised as follows:
⢠Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
⢠Net interest expense or income; and
⢠Re-measurement - The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
(ii) Defined Contribution Plans Provident fund and Family Pension Fund
The Company contributes towards Provident Fund and Family Pension Fund. Liability in respect thereof is determined on the basis of contribution as required under the Statute/ Rules.
The Company does not have a policy of encashing unavailed leave for its employees. The provision is based on an independent external actuarial valuation at the balance sheet date, which includes assumptions about demographics, early retirement, salary increases and interest rates.
P. Foreign Currency Transactions:
Initial Recognition
Transactions in foreign currency are recorded at the exchange rate 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 of the year.
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 transactions are charged to the Statement of Profit and Loss.
The income tax expense or credit for the period is the tax payable on the current periodâs taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Income tax provision is made based on the estimated tax liability as computed after taking credit for allowances and exemptions in accordance with the Income Tax Laws prevalent at the time of the relevant assessment year. Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.
Provisions for legal claims and discounts / incentives are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of managementâs best estimate of the expenditure required to settle the present obligation at the end of the reporting period. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
S. Contingent Liabilities
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
T. Treasury Shares
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from Equity. No gain or loss is recognised in profit & loss on purchase, sale, issue or cancellation of the Company''s own shares. Any difference in between the carrying amount and the consideration is shown separately as part of Other equity.
U. Segmental Information
The Company is engaged in the business of Power Electronics which is considered as the primary reportable business segment as per Ind AS 108 âSegment Reportingâ issued by the Institute of Chartered Accountants of India.
V. Earnings per share
Earnings per share is calculated by dividing the profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. There is no dilution to basic EPS as there are no outstanding dilutive potential equity shares.
Mar 31, 2018
Note 1 : SIGNIFICANTACCOUNTING POLICIES A. CORPORATE INFORMATION:
Ruttonsha International Rectifier Ltd. is a Company engaged in manufacturing of Semiconductor devices like Diodes, Thyristors, Power Modules, Bridge Rectifiers and High Power Equipmentâs like High Current Rectifiers, Battery Chargers, Rectifier Panels, High Power Stacks and Assembly. The Company''s products are used for Industrial applications in diverse sectors such as Railways, Induction Furnace, Electricity and Power Generation, Engineering, Water Treatment, Metals, Defence, Automobiles, Oil and Gas plants, Welding Equipmentâs, Aviation etc. The Company''s manufacturing facilities are located in Baska, Halol, Gujarat and has its registered office in Mumbai. The shares of the Company are listed on the Bombay Stock Exchange (BSE).
B. ACCOUNTINGPOLICIES:
1. Basis of Preparation of Financial Statements:
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (âthe Actâ) read with the Companies (Indian Accounting standards) Rules as amended from time to time and other related provisions of the Act.
These financial statements for the year ended 31st March, 2018 are the first financials with comparatives, prepared under Ind AS. For all previous periods including the year ended 31st March, 2017, the Company had prepared its financial statements in accordance with the accounting standards notified under companies (Accounting Standard) Rule, 2006 (as amended) and other relevant provisions of the Act (hereinafter referred to as âPrevious GAAPâ) used for its statutory reporting requirement in India.
Refer Note 39 for the details of significant first-time adoption exemptions availed by the Company and an explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, performance and cash flows.
The financial statements of the Company are prepared on the accrual basis of accounting and Historical cost convention except for the following material items that have been measured at fair value as required by the relevant Ind AS:
(i) Certain financial assets and liabilities are measured at Fair value (Refer Point No.5 of note no. 1B)
(ii) Defined benefit employee plan (Refer Point No.11 of note no. 1B)
The accounting policies are applied consistently to all the periods presented in the financial statements. All assets and liabilities have been classified as current or noncurrent as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013.
The financial statements are presented in INR, the functional currency of the Company.
2. Use of Estimates and judgments:
The preparation of the financial statements requires the Management to make, judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The recognition, measurement, classification or disclosure of an item or information in the financial statements is made relying on these estimates. The estimates and judgments used in the preparation of the financial statements are continuously evaluated by the management and are based on historical experience and various other assumptions and factors (including expectations of future events) that the management believes to be reasonable under the existing circumstances. Actual results may differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.
Critical accounting judgments and key source of estimation uncertainty
The Company is required to make judgments, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. The estimates and underlying assumptions are reviewed on an on-going basis.
(a) Recognition and measurement of defined benefit obligations, key actuarial assumptions-(Refer Point No.11 of Note no. 1B).
(b) Estimation of current tax expenses and payable - (Refer Point No.12 of note no. 1B).
3. Property, plant and equipment (PPE):
Property, plant and equipment is stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, ifany. The cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable costs of bringing the asset to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the item and restoring the site on which it is located.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Subsequent expenditure Subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate only if it is probable that the future economic benefits associated with the item will flow to the Company and that the cost of the item can be reliably measured.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss.
Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as âCapital working-progressâ.
4. Depreciation and Amortization:
(a) Property plant and equipment (PPE)
Depreciation is provided on a pro-rata basis on the straight line method based on estimated useful life prescribed under Schedule II to the Companies Act, 2013.
The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end and adjusted prospectively, if appropriate.
5. Financial Instruments:
Financial assets - Initial recognition:
Financial assets are recognized when the Company becomes a party to the contractual provisions of the instruments. On initial recognition, a financial asset is recognized at fair value, in case of Financial assets which are recognized at fair value through profit and loss (FVTPL), its transaction costare recognized in the statement of profit and loss. In other cases, the transaction cost are attributed to the acquisition value of the financial asset.
Subsequent measurement:
Financial assets are subsequently classified as measured at:
- amortized cost
- fair value through profit & loss (FVTPL)
- fair value through other comprehensive income (FVTOCI)
The above classification is being determined considering the:
(a) the entityâs business model for managing the financial assets and
(b) the contractual cash flow characteristics of the financial asset.
Financial assets are not reclassified subsequent to their recognition, except if and in the period the group changes its business model for managing financial assets.
(i) Measured at amortized cost:
Financial assets are subsequently measured at amortized cost, if these financial assets are held within a business module whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified date to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) Measured at fair value through other comprehensive income (FVTOCI):
Financial assets are measured at FVTOCI, if these financial assets are held within a business model whose objective is achieved by both collecting contractual cash flows that give rise on specified dates to solely payments of principal and interest on the principal amount outstanding and by selling financial assets. Fair value movements are recognized in the other comprehensive income (OCI). Interest income measured using the EIR method and impairment losses, if any are recognized in the Statement of Profit and Loss. On derecognition, cumulative gain or loss previously recognized in OCI is reclassified from the equity to âother incomeâ in the Statement of Profit and Loss.
(iii) Measured at fair value through profit or loss (FVTPL):
Financial assets other than equity instrument are measured at FVTPL unless it is measured at amortized cost or at FVTOCI on initial recognition. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognized in the Statement of Profit and Loss.
Equity instruments:
On initial recognition, the Company can make an irrevocable election (on an instrument-by instrument basis) to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments. This election is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in the âReserve for equity instruments through other comprehensive incomeâ. The cumulative gain or loss is not reclassified to Statement of Profit and Loss on disposal of the investments. Dividends on these investments in equity instruments are recognized in Statement of Profit and Loss when the Companyâs right to receive the dividends is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably. Dividends recognized in Statement of Profit and Loss are included in the âOther incomeâ line item.
Impairment
The Company recognizes a loss allowance for Expected Credit Losses (ECL) on financial assets that are measured at amortized cost and at FVOCI. The credit loss is difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate. This is assessed on an individual or collective basis after considering all reasonable and supportable including that which is forward looking.
The Companyâs trade receivables or contract revenue receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall, being simplified approach for recognition of impairment loss allowance.
Under simplified approach, the Company does not track changes in credit risk. Rather it recognizes impairment loss allowance based on the lifetime ECL at each reporting date right from its initial recognition. The Company uses a provision matrix to determine impairment loss allowance on the portfolio of trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.
For financial assets other than trade receivables, the Company recognizes 12-months expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. If, in a subsequent period, credit quality of the instrument improves such that there is no longer significant increase in credit risks since initial recognition, then the Company reverts to recognizing impairment loss allowance based on 12 months ECL. The impairment losses and reversals are recognized in Statement of Profit and Loss. For equity instruments and financial assets measured at FVTPL, there is no requirement of impairment testing.
Derecognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers rights to receive cash flows from an asset, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Companyâs continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Financial Liabilities
Initial Recognition and measurement
Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments. Financial liabilities are initially recognized at fair value net of transaction costs for all financial liabilities not carried at fair value through profit or loss.
The Companyâs financial liabilities includes trade and other payables, loans and borrowings including bank overdrafts. Subsequent measurement Financial liabilities measured at amortized cost are subsequently measured at using EIR method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognized in the Statement of Profit and Loss. Loans & Borrowings : After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using EIR method. Gains and losses are recognized in profit & loss when the liabilities are derecognized as well as through EIR amortization process. Financial Guarantee Contracts Financial guarantee contracts issued by the Company are those contracts that requires a payment to be made or to reimburse the holder for a loss it incurs because the specified debtors fails to make payment when due in accordance with the term of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee.
De-recognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss. Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
6. Fair Value Measurement:
The Company measures financial instruments, such as, derivatives, investments at fair value at each balance sheet date. 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:(a) In the principal market for the asset or liability, or(b) 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 Company. The fair value of an asset ora 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 Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
(i) Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities (ii) Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable(iii) Level 3 â 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 financial statements on a recurring basis, the Company 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. For the purpose of fair value disclosures, the Company 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.
7. Inventories:
Inventories are valued at the lower of cost and net realizable value. Cost is computed on a FIFO basis. Cost of finished goods and work-in-progress include all costs of purchases, conversion costs and other costs incurred in bringing the inventories to their present location and condition. The net realizable value is the estimated selling price in the ordinary course of business less. the estimated costs of completion and estimated costs necessary to make the sale.
8. Cash and Cash Equivalents:
Cash and Cash equivalents include cash and Cheque in hand, bank balances, demand deposits with banks and other short-term highly liquid investments that are readily convertible to known amounts of cash & which are subject to an insignificant risk of changes in value where original maturity is three months or less.
9. Foreign Currency Transactions:
a) Initial Recognition - Transactions in foreign currency are recorded at the exchange rate 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 of the year.
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 transactions are charged to the Statement of Profit and Loss.
10. Revenue Recognition:
Revenue is measured at the value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty and net of returns, trade allowances, rebates, discounts, loyalty discount, value added taxes and amounts collected on behalf of third parties. The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Company and specific criteria have been met for each of the Companyâs activities as described below.
Sale of Goods
Revenue from sale of goods is recognized when all the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, there is no continuing managerial involvement with the goods and the amount of revenue can be measured reliably.
Rendering of Services
Income from services rendered is recognized based on agreements/ arrangements with the customers as the service is performed/rendered.
Export Benefits
Export benefits under duty drawback scheme is estimated and accounted for in the year of export.
Interest
Revenue is recognized on a time proportion basis taking into account the amount outstanding and the interest rate applicable and based on Effective interest rate method.
11. Employee Benefits:
The Company has provides following post-employment plans:
(a) Defined benefit plans such a gratuity and (b) Defined contribution plans such as Provident fund
(a) Defined-benefit plan:
The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plan is the present value of defined benefit obligations at the end of the reporting period less fair value of plan assets. The defined benefit obligations is calculated annually by actuaries through actuarial valuation using the projected unit credit method. The Company recognizes the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:(a) Service costs comprising current service costs, past-service costs, gains and losses on curtailment and non-routine settlements; and (b) Net interest expense or income.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and fair value of plan assets. This cost is included in employee benefit expenses in the statement of the profit & loss .Re-measurement comprising of actuarial gains and losses arising from (a) Re-measurement of Actuarial(gains)/losses(b) Return on plan assets, excluding amount recognized in effect of asset ceiling(c) Re-measurement arising because of change in effect of asset ceiling are recognized in the period in which they occur directly in Other comprehensive income. Re-measurement are not reclassified to profit or loss in subsequent periods .Id AS 19 requires the exercise of judgment in relation to various assumptions including future pay rises, inflation and discount rates and employee and pensioner demographics. The Company determines the assumptions in conjunction with its actuaries, and believes these assumptions to be in line with best practice, but the application of different assumptions could have a significant effect on the amounts reflected in the income statement, other comprehensive income and balance sheet. There may be also interdependency between some of the assumptions.
(b) Defined-contribution plan:
Under defined contribution plans, provident fund, the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. Defined Contribution plan comprise of contributions to the employeesâ provident fund with the government, superannuation fund and certain state plans like Employeesâ State Insurance and Employeesâ Pension Scheme. The Companyâs payments to the defined contribution plans are recognized as expenses during the period in which the employees perform the services that the payment covers.
(c) Other employee benefits:
(i) Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the obligation as at the Balance sheet date determined based on an actuarial valuation.
(ii) Undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized during the period when the employee renders the related services.
12. Taxes on Income:
Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and loss except to the extent it relates to items directly recognized in equity or in other comprehensive income. Current tax is based on taxable profit for the year. Taxable profit is different from accounting profit due to temporary differences between accounting and tax treatments, and due to items that are never taxable or tax deductible. Tax provisions are included in current liabilities. Interest and penalties on tax liabilities are provided for in the tax charge. The Company offsets, the current tax assets and liabilities (on a year on year basis) where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis or to realize the assets and liabilities on net basis.
Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in financial statements. Deferred income tax asset are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized. Deferred tax assets are not recognized where it is more likely than not that the assets will not be realized in the future. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. Minimum Alternative Tax (âMATâ) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income-tax during the specified period. 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 Company will pay normal income-tax during the specified period.
13. Borrowing Cost:
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of Cost of that assets, during the period till all the activities necessary to prepare the Qualifying assets for its intended use or sale are complete during the period of time that is required to complete and prepare the assets for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale .Other borrowing costs are recognized as an expense in the period in which they are incurred.
14. Earnings Per Share:
Basic earnings per shares are calculated by dividing the net profit or loss after tax for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to the equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
15. Treasury Shares:
Own equity instruments that are reacquired (treasury shares) are recognized at cost and deducted from Equity. No gain or loss is recognized in profit & loss on purchase, sale, issue or cancellation of the Company''s own shares. Any difference in between the carrying amount and the consideration is shown separately as part of Other equity.
16. Provisions, Contingent Liabilities and Contingent Assets:
A provision is recognized if, as a result of a past event, the group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. Disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that may probably not require an outflow of resources or an obligation for which the future outcome cannot be ascertained with reasonable certainty. When there is a possible or a present obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made.
Contingent assets are neither recognized nor disclosed in financial statements.
Mar 31, 2015
(a) Basis of Preparation of Financial Statements :
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section 129 and 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant provisions of the
Companies Act, 1956, as applicable. The financial statements have been
prepared on accrual basis under the historical cost convention. The
accounting policies adopted in the preparation of the financial
statements are consistent with those followed in the previous year
except for change in the accounting policy for depreciation.
All assets and liabilities have been classified as current or
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 the time between the acquisition of
materials and their realisation in cash and cash equivalents, the
Company has ascertained its operating cycle to be less than 12 months.
As a result, current assets comprise elements that are expected to be
realised within 12 months after the reporting date and current
liabilities comprise elements that are due for settlement within 12
months after the reporting date.
(b) Use of Estimates :
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known /materialised.
(c) Fixed Assets :
Fixed assets are stated at the cost of acquisition less accumulated
depreciation and impairment loss, if any (except for Land, Building and
Machinery which had been revalued on 30th May, 1986). Cost of fixed
assets includes taxes (other than those subsequently recoverable from
tax authorities), duties, freight and any other costs directly
attributable for bringing the asset to its working condition and other
indirect costs specifically attributable to the acquisition or
construction of the respective assets.
Projects under which assets are not ready for their intended use are
disclosed under Capital Work-in-Progress.
(d) Depreciation :
Depreciation in respect of fixed assets acquired during the year is
charged on a straight line method so as to write-off the cost of the
assets over the useful lives.
With respect to the existing class of assets acquired prior to 1s'
April, 2014 the management has estimated useful life which differs from
the useful life prescribed under the Act on the basis of internal
assessment and as per chartered engineer's technical evaluation. The
management believes that the useful lives provided for assets acquired
prior to 01/04/2014 best represents the period over which management
expects to use these assets. Hence the useful lives for these assets
are different from the useful lives as prescribed under Part C of
Schedule II of the Companies Act, 2013.
Depreciation method, useful life and residual value are reviewed
periodically.
(e) Borrowing Costs :
Interest and other costs incurred in connection with the borrowing of
funds are charged to revenue on accrual basis.
(f) Inventories :
Inventories of Raw Materials, Work in Progress and Finished Goods are
stated at cost or net realizable value, whichever is lower. Cost of
inventories comprises of cost of purchase, cost of conversion and other
costs including overheads incurred in bringing them to their respective
present location and condition. Cost of Inventory is determined on
First-in-First-out basis. The excise duty in respect of closing
inventory of finished goods is included as part of finished goods.
(g) Revenue Recognition :
Gross Sales are inclusive of Excise Duty, VAT, and Net of returns,
Claims, and Discount etc. The Company recognizes sale of goods when all
the obligations connected with the transfer of risks and rewards to the
buyer have been fulfilled after the price has been determined and
collection of the receivable is reasonably certain.
Interest income is recognized on time proportion basis taking into
account the amount outstanding and rate applicable.
(h) Employee Benefits :
(i) Short term employee benefits are recognised as an expense at the
undiscounted amount expected to be paid over the period of services
rendered by the employees to the Company.
(ii) Post employment and other long term employee benefits are
recognised as an expense in the statement of profit and loss for the
year in which the employee has rendered services. The expense is
recognised at the present value of the amounts payable, determined
using actuarial valuation techniques. Actuarial gains and losses in
respect of post employment and other long term benefits are charged to
the statement of profit and loss.
(i) Foreign Currency Transactions :
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of transaction. Exchange difference arising on
foreign currency transactions settled during the year are recognised as
income or expenses in the statement of profit and loss for the year.
Monetary items in the form of Current/Non Current Assets and
Current/Non Current Liabilities in foreign currency, outstanding at the
end of the year, are converted in Indian Currency at the appropriate
rate of exchange prevailing on the date of Balance Sheet and resultant
gain or loss is accounted during the year.
(j) Taxation :
Tax expense comprises of current tax and deferred tax. Current tax is
measured at the amount expected to be paid to the tax authorities,
using applicable tax rates. Deferred income tax reflects the current
period timing differences between taxable income and accounting income
for the period and reversal of timing differences of earlier
years/period. Deferred tax assets are recognised only to the extent
that there is a reasonable certainty that sufficient future income will
be available. In case there are unabsorbed depreciation or losses, it
is recognised if there is virtual certainty that sufficient future
taxable income will be available to realize the same.
Deferred tax assets and liabilities are measured using the tax rates
and tax laws that have been enacted or substantively enacted by the
Balance Sheet date.
(k) Provisions, Contingent Liabilities and Contingent Assets :
Provisions is recognized in the accounts when there is a present
obligation as a result of past events and it is probable that an
outflow of resources will be required to settle the obligation and a
reliable estimate can be made. Provisions are not discounted to their
present value and are determined based on the best estimate required to
settle the obligation at the reporting date. These estimates are
reviewed at each reporting date and adjusted to reflect the current
best estimates.
Contingent liabilities are disclosed unless the possibility of outflow
of resources is remote.
Contingent assets are neither recognised nor disclosed in the financial
statements.
(l) Segment Accounting :
The segment of the Company has been identified in line with the
Accounting Standard 17 on "Segment Reporting" issued by the Institute
of Chartered Accountants of India. However during the year under review
the Company was operating in single segment of Power Electronics
business, hence Segment reporting is not applicable.
(m) Impairment of Assets :
The carrying amounts of assets are reviewed periodically for any
indication of impairment based on internal/external factors. An
impairment loss is recognised wherever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is the greater
of the asset's net selling price and value in use.
(n) Investments :
Non current investments are stated at cost. Provision for diminution in
the value of Non Current Investments is made only if such a decline is
other than temporary.
Mar 31, 2014
(a) Basis of Preparation of Financial Statements :
The Financial Statements have been prepared under the historical cost
convention on accrual basis. The mandatory applicable accounting
standards in India and the provisions of the Companies Act, 1956 have
been followed in preparation of these financial statements.
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in Schedule VI to the Companies Act, 1956. Based on
the nature of products and the time between the acquisition of
materials for processing and their realization in cash and cash
equivalent, the Company has ascertained its operating cycle to be less
than 12 months.
(b) Fixed Assets :
Fixed assets are stated at the cost of acquisition less accumulated
depreciation and impairment loss, if any (except for Land, Building and
Machinery which had been revalued on 30th May, 1986). Cost of fixed
assets includes taxes (other than those subsequently recoverable from
tax authorities), duties, freight and any other costs directly
attributable for bringing the asset to its working condition and other
indirect costs specifically attributable to the acquisition or
construction of the respective assets. Interest on borrowed funds
directly attributable to the qualifying assets up to the period such
assets are put to use, are included in the cost.
Projects under which assets are not ready for their intended use are
shown as Capital Work-in-Progress.
(c) Depreciation:
Depreciation for the year is provided on written down value method, at
the rates specified under Schedule XIV to the Companies Act, 1956, over
their useful life, except for depreciation on the fixed assets acquired
on amalgamation, which are provided on straight line method basis in
accordance with section 205(2)(b) of the Companies Act, 1956.
Depreciation on revalued assets has been adjusted against Capital
Reserves on Revaluation of Assets.
Individual fixed assets having cost of Rs. 5,000/- or below have been
written off during the year.
(d) Borrowing Costs :
Interest and other costs incurred in connection with the borrowing of
funds are charged to revenue on accrual basis.
(e) Inventories :
Inventories of Raw Materials, Work in Progress and Finished Goods are
stated at cost or net realizable value, whichever is lower. Cost of
inventories comprises of cost of purchase, cost of conversion and other
costs including overheads incurred in bringing them to their respective
present location and condition. Cost is determined on
First-in-First-out basis. The excise duty in respect of closing
inventory of finished goods is included as part of finished goods.
(f) Revenue Recognition
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. Revenue from operations
includes sale of goods, services, sales tax, service tax, excise duty,
VAT etc. Interest income is recognized on time proportion basis taking
into account the amount outstanding and rate applicable.
(g) Employee Benefits
(i) Short term employee benefits are recognised as an expense at the
undiscounted amount in the statement of profit and loss for the year in
which the related service is rendered.
(ii) Post employment and other long term employee benefits are
recognised as an expense in the statement of profit and loss for the
year in which the employee has rendered services. The expense is
recognised at the present value of the amounts payable, determined
using actuarial valuation techniques. Actuarial gains and losses in
respect of post employment and other long term benefits are charged to
the statement of profit and loss.
(h) Foreign Currency Transactions:
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of transaction. Exchange difference arising on
foreign currency transactions settled during the year are recognised in
the statement of profit and loss for the year.
Monetary items in the form of Current/Non Current Assets and
Current/Non Current Liabilities in foreign currency, outstanding at the
end of the year, are converted in Indian Currency at the appropriate
rate of exchange prevailing on the date of Balance Sheet and resultant
gain or loss is accounted during the year.
(i) Taxation :
(1) Current Tax: Provision for current income tax is made on the
taxable income using the applicable tax rates and tax laws.
(2) Deferred Tax: Deferred tax arising on account of timing differences
and which are capable of reversal in one or more subsequent periods is
recognised using the tax rates and tax laws that have been enacted or
substantively enacted. Deferred tax assets are not recognised unless
there is virtual certainty with respect to the reversal of the same in
future years.
(3) Minimum Alternative Tax : Minimum Alternative Tax (MAT) credit is
recognised as an asset only when and to the extent there is convincing
evidence that the Company will pay normal income tax during the
specified period.
(j) Provisions, Contingent Liabilities and Contingent Assets :
Provisions are recognized when the Company has a present obligation as
a result of past events; it is more likely than not, that an outflow of
resources will be required to settle the obligation and the amount has
been reliably estimated. A contingent liability is disclosed where
there is a possible obligation or a present obligation that may, but
probably will not, require an outflow. Contingent assets are neither
recognized nor disclosed in the financial statements.
(k) Segment Accounting :
The segment of the Company has been identified in line with the
Accounting Standard 17 on "Segment Reporting" issued by the Institute
of Chartered Accountants of India. However during the year under review
the Company was operating in single segment of Power Electronics
business, hence segment reporting is not applicable.
(l) 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 treated as impaired when the carrying cost 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.
Mar 31, 2013
(a) Basis of Preparation of Financial Statements :
The Financial Statements have been prepared under the historical cost
convention on accrual basis. The mandatory applicable accounting
standards in India and the provisions of the Companies Act, 1956 have
been followed in preparation of these financial statements.
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in Schedule VI to the Companies Act, 1956. Based on
the nature of products and the time between the acquisition of
materials for processing and their realization in cash and cash
equivalent, the Company has ascertained its operating cycle to be less
than 12 months.
(b) Fixed Assets :
Fixed assets are stated at the cost of acquisition less accumulated
depreciation and impairment loss, if any (except for Land, Building and
Machinery which had been revalued on 30th May, 1986). Cost of fixed
assets includes taxes (other than those subsequently recoverable from
tax authorities), duties, freight and any other costs directly
attributable for bringing the asset to its working condition and other
indirect costs specifically attributable to the acquisition or
construction of the respective assets. Interest on borrowed funds
directly attributable to the qualifying assets up to the period such
assets are put to use, are included in the cost.
(c) Depreciation :
Depreciation for the year is provided on written down value method, at
the rates specified under Schedule XIV to the Companies Act, 1956, over
their useful life, except for depreciation on the fixed assets acquired
on amalgamation, which are provided on straight line method basis in
accordance with section 205(2)(b) of the Companies Act, 1956.
Depreciation on revalued assets has been adjusted against Capital
Reserves on Revaluation of Assets.
Individual fixed assets having cost of f 5,000/- or below have been
written off during the year.
(d) Borrowing Costs :
Interest and other costs incurred in connection with the borrowing of
funds are charged to revenue on accrual basis.
(e) Inventories :
Inventories of Raw Materials, Work in Progress and Finished Goods are
stated at cost or net realizable value, whichever is lower. Cost of
Inventories comprises of cost of purchase, cost of conversion and other
costs including overheads incurred in bringing them to their respective
present location and condition. Cost is determined on
First-in-First-out basis. The excise duty in respect of closing
inventory of finished goods is included as part of finished goods.
(f) Revenue Recognition :
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. Revenue from operations
includes sale of goods, services, sales tax, service tax, excise duty,
VAT etc. Interest income is recognized on time proportion basis taking
into account the amount outstanding and rate applicable.
(g) Employee Benefits :
(i) Short-term employee benefits are recognised as an expense at the
undiscounted amount in the statement of profit and loss for the year in
which the related service is rendered.
(ii) Post employment and other long term employee benefits are
recognised as an expense in the statement of profit and loss for the
year in which the employee has rendered services. The expense is
recognised at the present value of the amounts payable, determined
using actuarial valuation techniques. Actuarial gains and losses in
respect of post employment and other long term benefits are charged to
the statement of profit and loss.
(h) Foreign Currency Transactions :
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of transaction. Exchange difference arising on
foreign currency transactions settled during the year are recognised in
the statement of profit and loss for the year.
Monetary items in the form of Current/Non Current Assets and
Current/Non Current Liabilities in foreign currency, outstanding at the
end of the year, are converted in Indian Currency at the appropriate
rate of exchange prevailing on the date of Balance Sheet and resultant
gain or loss is accounted during the year.
(i) Taxation :
(1) Current Tax : Provision for current income tax is made on the
taxable income using the applicable tax rates and tax laws.
(2) Deferred Tax : Deferred tax arising on account of timing
differences and which are capable of reversal in one or more subsequent
periods is recognised using the tax rates and tax laws that have been
enacted or substantively enacted. Deferred tax assets are not
recognised unless there is virtual certainty with respect to the
reversal of the same in future years.
(3) Minimum Alternative Tax : Minimum Alternative Tax (MAT) credit is
recognised as an asset only when and to the extent there is convincing
evidence that the Company will pay normal income tax during the
specified period.
(j) Provisions, Contingent Liabilities and Contingent Assets :
Provisions are recognized when the Company has a present obligation as
a result of past events; it is more likely than not, that an outflow of
resources will be required to settle the obligation; and the amount has
been reliably estimated. A contingent liability is disclosed where
there is a possible obligation or a present obligation that may, but
probably will not, require an outflow. Contingent assets are neither
recognized nor disclosed in the financial statements.
(k) Segment Accounting :
The segment of the Company has been identified in line with the
Accounting Standard 17 on "Segment Reporting" issued by the Institute
of Chartered Accountants of India. However during the year under review
the Company was operating in single segment of Power Electronics
business, hence Segment reporting is not applicable.
(I) 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 treated as impaired when the carrying cost 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.
Mar 31, 2012
(a) Basis of Preparation of Financial Statements:
The Financial Statements have been prepared under the historical cost
convention on accrual basis. The mandatory applicable accounting
standards in India and the provisions of the Companies Act, 1956 have
been followed in preparation of these financial statements.
All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in Schedule VI to the Companies Act, 1956. Based on
the nature of products and the time between the acquisition of
materials for processing and their realization in cash and cash
equivalent, the Company has ascertained its operating cycle to be less
than 12 months.
(b) Fixed Assets :
Fixed assets are stated at the cost of acquisition less accumulated
depreciation and impairment loss, if any (except for Land, Building and
Machinery which had been revalued on 30th May, 1986). Cost of fixed
assets include taxes (other than those subsequently recoverable from
tax authorities), duties, freight and any other costs directly
attributable for bringing the asset to its working condition and other
indirect costs specifically attributable to the acquisition or
construction of the respective assets. Interest on borrowed funds
directly attributable to the qualifying assets up to the period such
assets are put to use, are included in the cost.
(c) Depreciation:
Depreciation for the year is provided on written down value method, at
the rates specified under Schedule XIV to the Companies Act, 1956, over
their useful life, except for depreciation on the fixed assets acquired
on amalgamation, which are provided on straight line method basis in
accordance with section 205(2)(b) of the Companies Act, 1956.
Depreciation on revalued assets has been adjusted against Capital
Reserves on Revaluation of Assets.
Individual fixed assets having cost of Rs. 5,000/- or below have been
written off during the year.
(d) Borrowing Costs:
Interest and other costs incurred in connection with the borrowing of
funds are charged to revenue on accrual basis.
(e) Inventories:
Inventories of Raw Materials, Work in Progress and Finished Goods are
stated at cost or net realizable value, whichever is lower. Cost of
Inventories comprises of cost of purchase, cost of conversion and other
costs including overheads incurred in bringing them to their respective
present location and condition. Cost is determined on
First-in-First-out basis. The excise duty in respect of closing
inventory of finished goods is included as part of finished goods.
(f) Revenue Recognition
Revenue is recognised only when it can be reliably measured and it is
reasonable to expect ultimate collection. Revenue from operations
includes sale of goods, services, sales tax, service tax, excise duty,
VAT etc. Interest income is recognised on time proportion basis taking
into account the amount outstanding and rate applicable.
(g) Employee Benefits
(i) Short-term employee benefits are recognised as an expense at the
undiscounted amount in the statement of profit and loss for the year in
which the related service is rendered.
(ii) Post employment and other long term employee benefits are
recognised as an expense in the statement of profit and loss for the
year in which the employee has rendered services. The expense is
recognised at the present value of the amounts payable, determined
using actuarial valuation techniques. Actuarial gains and losses in
respect of post employment and other long term benefits are charged to
the statement of profit and loss.
(h) Foreign Currency Transactions :
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of transaction. Exchange difference arising on
foreign currency transactions settled during the year are recognised in
the statement of profit and loss for the year.
Monetary items in the form of Current/Non Current Assets and
Current/Non Current Liabilities in foreign currency, outstanding at the
end of the year, are converted in Indian Currency at the appropriate
rate of exchange prevailing on the date of Balance Sheet and resultant
gain or loss is accounted during the year.
(i) Taxation :
(1) Current Tax: Provision for current income tax is made on the
taxable income using the applicable tax rates and tax laws.
(2) Deferred Tax: Deferred tax arising on account of timing differences
and which are capable of reversal in one or more subsequent periods is
recognised using the tax rates and tax laws that have been enacted or
substantively enacted. Deferred tax assets are not recognised unless
there is virtual certainty with respect to the reversal of the same in
future years.
(3) Minimum Alternative Tax : Minimum Alternative Tax (MAT) credit is
recognised as an asset only when and to the extent there is convincing
evidence that the Company will pay normal income tax during the
specified period.
(j) Provisions, Contingent Liabilities and Contingent Assets :
Provisions are recognized when the Company has a present obligation as
a result of past events; it is more likely than not, that an outflow of
resources will be required to settle the obligation; and the amount has
been reliably estimated. A contingent liability is disclosed where
there is a possible obligation or a present obligation that may, but
probably will not, require an outflow. Contingent assets are neither
recognized nor disclosed in the financial statements.
(k) Segment Accounting:
The segment of the Company has been identified in line with the
Accounting Standard 17 on "Segment Reporting" issued by the
Institute of Chartered Accountants of India. However, during the year
under review the Company was operating in single segment of Power
Electronics business, hence Segment reporting is not applicable.
(I) 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 treated as impaired when the carrying cost 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.
Mar 31, 2011
(i) Basis of Preparation of Financial Statements
a. The financial statements have been prepared and presented under the
historical cost convention on accrual basis of accounting to comply
with the accounting standards prescribed in the Companies (Accounting
Standards) Rules, 2006 and with the relevant provisions of the
Companies Act, 1956.
b. The preparation of financial statements is in conformity with
Generally Accepted Accounting Principles (GAAP) in India and requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosures of contingent
liabilities on the date of financial statements.
(ii) Fixed Assets :
a. Fixed assets are carried at the cost of acquisition or
construction, less accumulated depreciation and impairment (except for
Land, Building and Machinery of erstwhile Orient Semiconductors Private
Limited which have been revalued on 30th May, 1986).The cost of fixed
assets includes taxes (other than those subsequently recoverable from
tax authorities), duties, freight and any other costs directly
attributable for bringing the asset to its working condition and other
indirect costs specifically attributable to the acquisition or
construction of the respective assets. Interest on borrowed funds
directly attributable to the qualifying assets up to the period such
assets are put to use, is included in the cost.
b. Depreciation for the year is provided on written down value method,
at the rates specified under Schedule XIV to the Companies Act, 1956,
as amended vide Notification No. GSR 756 (E) dt.16.12.1993 except for
depreciation on the fixed assets acquired on amalgamation, which is
provided on straight line method basis in accordance with section
205(2)(b) of the Companies Act, 1956.
c. Depreciation on revalued assets has been adjusted against Capital
Reserves on Revaluation of Assets.
d. Individual fixed assets having cost of Rs. 5,000/- or below have been
written off during the year. (iii) Borrowing Costs: Borrowing costs
are charged to revenue.
(iv) Inventories:
a. Raw materials, stores and spares are valued at cost on weighted
average basis. Stock in the case of work in process is determined on
the basis of cost of manufacturing, which includes material, labour,
and overhead cost on an average basis as certified by the management.
There has been no significant variation in the method of valuation
during the year.
b. Finished Goods are valued at lower of cost or net realisable value.
c. The method of valuation is in line with Accounting Standard 2
regarding Valuation of Inventory, issued by the Institute of Chartered
Accountants of India.
(v) Sundry Debtors, Loans and Advances :
All sundry debtors, loans and advances are considered good and
realisable at the value stated in the normal course of business,
though, unconfirmed except in cases where legal proceedings for
recovery have been initiated. Adequate provision is made for debts
considered doubtful.
(vi) Sales and Service :
Sales are recognised when goods are supplied and are net of trade
discounts, rebates, sales tax and excise duty. Sales tax liability and
set off are accounted on mercantile basis.
(vii) Interest Income :
Interest income is accounted for on accrual basis. (viii) Retirement
Benefits :
Defined Contribution Plans
a. Provident Fund
In accordance with law, all the eligible employees of the Company are
entitled to receive benefits under the provident fund. The CompanyÃs
contribution to provident fund is charged to profit and loss account
each year.
b. Leave Encashment
The Company provides for the leave encashment based on actuarial
valuation at the balance sheet date, determined every year.
c. Gratuity
The Company provides for the Gratuity liability on actuarial valuation
at the balance sheet date and contributes to Life Insurance Corporation
(LIC) under LICÃs Group Gratuity Scheme determined every year using the
projected Unit Credit Method. The Company has created a Trust
administered by the trustees and managed under the Scheme of Group
Gratuity with LIC.
(ix) Foreign Currency Transactions:
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of transaction.
Exchange difference arising on foreign currency transactions settled
during the year are recognised in the Profit and Loss account for the
year.
Monetary items in the form of Current Assets and Current liabilities in
foreign currency, outstanding at the end of the year, are converted in
Indian Currency at the appropriate rate of exchange prevailing on the
date of Balance Sheet and resultant gain or loss is accounted during
the year.
(x) Taxation :
(a) Tax expense comprises of current tax (i.e. amount of tax for the
period determined in accordance with applicable taxation laws), and
deferred tax charge or credit (reflecting the tax effects of timing
differences between accounting income and taxable income for the
period).
(b) 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 applicable taxation laws, deferred tax assets are recognised only
if there is a virtual certainty of realisation of such assets.
Deferred tax assets are reviewed as at each Balance Sheet date to
reassess realisation.
(xi) Provisions, Contingent Liabilities and Contingent Assets :
Provisions are recognized only when there exists a present obligation
as a result of past events that probably requires an outflow of
resources and a reliable estimate can be made of the amount of
obligation. A disclosure for contingent liability is made when there is
:
(a) Possible obligation which will be confirmed by future events not
wholly within the control of the Company or
(b) Present obligations arising from past events where it is not
probable that an outflow of resources will be required to settle the
obligation or where a reliable estimate of the amount of the obligation
cannot be made. Contingent assets are not recognized in the financial
statements since this may result in the recognition of income that may
never be realized.
(xii) Segment Accounting:
The segment of the Company has been identified in line with the
Accounting Standard 17 on "Segment Reportingà issued by the Institute
of Chartered Accountants of India. However during the year under review
the company was operating in single segment of Semi-conductors
manufacturing business, hence Segment reporting is not applicable.
(xiii) Impairment of Assets
The Company makes an assessment of any indicators (based on internal or
external factors) that may lead to impairment of assets on an annual
basis. An asset is treated as impaired when the carrying cost of the
asset exceeds its recoverable value, which is higher of net selling
price and value in use. Any impairment loss is charged to profit and
loss account in the year in which it is identified as impaired.
Mar 31, 2010
(i) Basis of Preparation of Financial Statements
a. The financial statements have been prepared under the historical
cost convention in accordance with the generally accepted accounting
principles and the provisions of the Companies Act, 1956, as adopted
consistently by the Company, except for certain fixed assets, which
have been revalued in the past.
b. The Company generally follows mercantile system of accounting and
recognises all significant items of income and expenditure on accrual
basis.
(ii) Fixed Assets :
a. Fixed assets are stated at cost except land, building and
machineries at Baska, (other than Land, Bldg, Machinery, except those
of erstwhile Orient Semiconductors Pvt. Ltd., ) which had been revalued
on 30th May, 1986.
b. Depreciation:
Depreciation for the year is provided on written down value method, at
the rates specified under Schedule XIV of the Companies Act, 1956, as
amended vide Notification No. GSR 756 (E) dt. 16.12.1993 except for
depreciation on the fixed assets acquired on amalgamation, which is
provided on straight line method basis in accordance with section
205(2)(b) of the Companies Act, 1956.
Depreciation on revalued assets has been adjusted against Capital
Reserves on Revaluation of Assets. Individual fixed assets having cost
of Rs.5,000/- or below have been written off during the year.
(iii) Borrowing Costs: Borrowing costs are charged to revenue.
(iv) Inventories :
a. Raw materials, stores and spares are valued at cost on first in
first out method basis. Stock in the case of work in process is
determined on the basis of cost of manufacturing, which includes
material, labour, and overhead cost on an average basis as certified by
the management. There has been no significant variation in the method
of valuation during the year.
b. Finished Goods are valued at lower of cost or net realisable value.
c. The method of valuation is in line with Accounting Standard 2
regarding Valuation of Inventory, issued by the Institute of Chartered
Accountants of India.
(v) Sundry Debtors, Loans and Advances :
All sundry debtors, loans and advances are considered good and
realisable at the value stated in the normal course of business though
unconfirmed excepting cases where legal proceedings for recovery have
been initiated.
(vi) Sales and Service :
Sales are recognised when goods are supplied and are net of trade
discounts, rebates, sales tax and excise duty. Sales tax liability and
set off are accounted on mercantile basis.
(vii) Interest Income :
Interest income is accounted for on accrual basis.
(viii) Retirement Benefits :
(also refer note no.2(v) below)
Defined Contribution Plans
a. Provident Fund
In accordance with law, all the eligible employees of the Company are
entitled to receive benefits under the provident fund. The Companys
contribution to provident fund is charged to profit and loss account
each year.
b. Leave Encashment
The Company provides for the leave encashment based on actuarial
valuation at the balance sheet date determined every year by Life
Insurance Corporation of India (LIC).
c. Gratuity
The Company provides for the gratuity liability on actuarial valuation
at the balance sheet date and contributes to Life Insurance
Corporation(LIC) under LICs Group Gratuity Scheme determined every
year using the projected Unit Credit Method. The Company has created a
Trust administered by the trustees and managed under the Scheme of
Group Gratuity with LIC.
(ix) Foreign Currency Transactions:
a. Transaction in Foreign Currencies are recognized at the original
rate of exchange in force at the time of occurrence of transactions.
b. Transactions in foreign currency are accounted for at the rates
prevailing on the date of transaction. Monetary items denominated in
foreign currencies at the year end are translated at the relevant
exchange rates prevailing at the year end and are recognized in the
Profit and Loss account and reflected in the Balance Sheet.
(x) Taxation :
a. Provision for Income Tax is made on the basis of taxable income for
the current accounting year in accordance with the Income Tax Act, 1961
and the Rules framed there under.
b. Deferred Tax asset/liability is recognised at the applicable rate of
tax on the basis of timing differences between book profits and taxable
income.
(xi) Provisions, Contingent Liabilities and Contingent Assets :
Provisions are recognized only when there is a present obligation as a
result of past events and when a reliable estimate of the amount of
obligation can be made. Contingent liability is disclosed for
a. possible obligation which will be confirmed by future events not
wholly within the control of the Company or
b. Present obligations arising from past events where it is not
probable that an outflow of resources will be required to settle the
obligation or where a reliable estimate of the amount of the obligation
cannot be made. Contingent assets are not recognized in the financial
statements since this may result in the recognition of income that may
never be realized.
(xii) Segment Accounting :
The segment of the Company has been identified in line with the
Accounting Standard 17 on "Segment Reporting" issued by The Institute
of Chartered Accountants of India. However, during the year under
review the company was operating in single segment of manufacturing
Power Semi-conductors related business, hence Segment reporting is not
applicable.
(xiii) Impairment of Assets :
The carrying amounts of assets are reviewed at each Balance Sheet date
to determine whether there is any indication of impairment of the
carrying amounts of the Companys fixed assets. An impairment loss is
recognized whenever the carrying amount of the asset exceeds the
recoverable amount, if any indication of impairment exists.
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RIR Power Electronics Ltd. Key Financial Ratios
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RIR Power Electronics Ltd. Financial Data
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RIR Power Electronics Ltd. Reports
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RIR Power Electronics Ltd. Corporate Announcements
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