Mar 31, 2015
1. Corporate Information
Shree Precoated Steels Limited is a public company domiciled in India
and incorporated under the provisions of the Companies Act, 1956. Its
shares are listed on one stock exchanges in India. The company engaged
in the Manufacturing, Processing, Trading of Steel Products and Real
Estate business.
a. Basis of Preparation
The financial statements of the company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respects with the accounting standards as
prescribed under Section 133 of the Companies Act, 2013 read with Rule
7 of Companies (Accounts) Rule 2014 and the relevant provisions of the
Companies Act, 2013. The financial statements have been prepared on an
accrual basis and under the historical cost convention.
b. Use of Estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these adjustments are based on the
management's best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
c. Current and Non Current Classification
An asset is classified as current when it satisfies any of the
following criteria :
i. It is expected to be realized/ settled, or is intended for sale or
consumption, in the companies normal operating cycle or
ii. It is held primarily for the purpose of being traded or
iii. It is expected to be realized/ due to be settled within 12 months
after the reporting date or
iv. It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least 12 months after
the reporting date or
v. The company does not have an unconditional right to defer settlement
of the liability for at least 12 months after the reporting date.
All other assets and liabilities are classified as non current
d. Tangible Fixed Assets:
Fixed assets, are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any The cost comprises purchase
price, borrowing costs if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for
the intended use. Any trade discount and rebates are deducted in
arriving at the purchase price. Subsequent expenditure related to an
item of fixed is added to its book value only if it increases the
future benefits from the existing asset beyond its previously assessed
standard of performance. All other expenses on existing fixed assets,
including day-to-day repair and maintenance expenditure and cost of
replacing parts, are charged to the statement of profit and loss for
the period during which such expenses are incurred. Gains or losses
arising from de- recognition of fixed assets are measured as the
difference between the net disposal proceeds and the carrying amount of
the asset and are recognized in the statement of profit and loss when
the asset is derecognized.
e. Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated impairment losses, if any.
Internally generated intangible assets, excluding capitalized
development costs, are not capitalized and expenditure is reflected in
the statement of profit and loss in the year in which the expenditure
is incurred. Cost comprises the purchase price and any attributable
cost of bringing the assets to its working condition for its intended
use. Gains or losses arising from de-recognition of an intangible asset
are measured as the difference between the net disposal proceeds and
the carrying amount of the asset and are recognized in the statement of
profit and loss when the asset is derecognized.
f. Depreciation and Amortization
The Company has provided for depreciation on straight line method over
the useful life of assets as prescribed under Part C of Schedule II of
Companies Act, 2013.
g. Impairment of Tangible and Intangible Assets
The company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the company
estimates the asset's recoverable amount. An asset's recoverable amount
is the higher of an asset's or cash- generated units (CGU) net selling
price and its value in use. The recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other asset or groups of assets.
Where the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessment of the time value
of money and the risks specific to the asset. In determining net
selling price, recent market transaction is taken into account, if
available. If no such transactions can be identified, an appropriate
valuation model is used.
h. Revenue Recognition
Revenue is recognized to the extent that is probable that the economic
benefits will flow to the Company and the revenue can be reliable
measured. The following specific recognition criteria must be met
before revenue is recognized
Sale of Goods:
Revenue from sale of goods is recognized when all the risks and rewards
of ownership of the goods have been passed to the buyer, usually on
delivery of the goods. If the company collects sales taxes and value
added taxes (VAT) on behalf of the government and, therefore, these are
not economic benefits flowing to the company. Hence they are excluded
from revenue. Excise duty deducted from revenue (gross) is the amount
that is included in the revenue (gross) and not the entire amount of
liability arising during the year.
Income from Services:
Revenues from maintenance contracts are recognized pro-rata over the
period of the contract as and when the services are rendered.
i. Revenue from Real estate projects is recognized when it is
reasonably certain that the ultimate collection will be made and that
there is buyers commitment to make the complete payment.
Revenue from real estate under development is recognized upon transfer
of all significant risks and rewards of ownership of such real estate,
as per the terms of the contracts entered into with buyers, which
generally coincides with the firming of the sales contracts/ agreement,
except for the contracts where the company still has obligations to
perform substantial acts even after the transfer of all significant
risks and rewards. In such cases, the revenue is recognized on
percentage of completion method, when the stage of completion of each
project reaches a reasonable level of progress. The revenue is
recognized in proportion that the contract cost incurred for work
performed up to the reporting date bear to the estimated total contract
cost.
ii. Interest Income
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the
statement of profit and loss.
iii. Dividend Income
Dividend income is recognized with the company's right to receive
dividend is established by the reporting date.
iv. Other Income
Other Income is accounted on accrual basis.
i. Foreign currency transactions
Foreign currency transaction are recorded in the reporting currency, by
applying to the foreign currency amount the exchange rate between the
reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items, which are
measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction.
Non-monetary items, which are measured at fair value or other similar
valuation denominated in a foreign currency, are translated using the
exchange rate at the date when such value was determined.
Exchange differences
i. Exchange difference arising on a monetary item that, in substance
forms part of the company's net investment in a non- integral foreign
operation is accumulated in the foreign currency translation reserve
until the disposal of the net investment. On the disposal of such net
investment, the cumulative amount of the exchange differences which
have been deferred and which relates to that investment is recognized
as income or as expenses in the same period in which the gain or loss
on disposal is recognized.
ii. Exchange difference arising on long-term foreign currency monetary
items related to acquisition of a fixed asset are capitalized and
depreciated over the remaining useful life of the asset. For this
purpose, the company treats a foreign monetary item as "long-term
foreign currency monetary items", if it has a term of 12 months or more
at the date of its origination.
iii. Exchange differences arising on other long-term foreign currency
monetary items are accumulated in the "Foreign Currency Monetary
Translation Difference Account' and amortized over the remaining life
of the concerned monetary item.
iv. All other exchange differences are recognized as income or as
expenses in the period in which they arise.
j. Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contribution to the provident fund is charged
to the statement of profit and loss for the year when the contributions
are due. The company has no obligation, other than the contribution
payable to the provident fund.
The company operates two defined benefit plans for its employee, viz.,
gratuity and post employment medical benefit liability. The costs of
providing benefits under these plans are determined on the basis
actuarial valuation at each year-end. Separate actuarial valuation is
carried out for each plan using the projected unit credit method.
Actuarial gains and losses for both defined plans are recognized in
full in the period in which they occur in the statement of profit and
loss.
Accumulated leave, which is expected to be utilized within the next 12
months, is treated as short - term employee benefit. The company
measures the expected cost of such absences as the additional amount
that is except to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The company treats accumulated leave excepted to be carried forward
beyond twelve months, as long-term employee benefit for measurement
purposes. Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year-end. Actuarial gains/losses are immediately taken to the
statement of profit and loss and are not deferred. The company presents
the entire leave as a current liability in the balance sheet, since it
does not have an unconditional right to defer its settlement for 12
months after the reporting date.
k. Income Taxes
Tax expenses comprise current and deferred tax. Current income-tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the income-tax Act, 1961 enacted in India and tax laws
prevailing in the respective tax jurisdiction where the company
operates. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
Deferred income taxes reflect the impact of timing differences between
taxable income and accounting income originating during the current
year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax laws enacted or
substantively enacted at the reporting date. Deferred income tax
relating to items recognized in equity and not in the statement of
profit and loss.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
differences only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. In situation where the company has
unabsorbed or carry forward tax losses, all deferred tax assets are
recognized only if there is virtual certainty supported by convincing
evidence that they can be realized against future taxable profits.
In the situation where the company is entitled to a tax holiday under
the income-tax Act, 1961 enacted in India or tax laws prevailing in the
respective tax jurisdiction where it operates, no deferred tax (asset
or liability) is recognized in respect of timing differences which
reverse during the tax holiday period, to the extent the company's
gross total income is subject to the deduction during the tax holiday
period. Deferred tax in respect of timing differences which after the
tax holiday is recognized in the year in which the timing differences
originate. However , the restrict recognition of deferred tax assets to
the extent that it has become reasonable certain or virtually certain,
as the case may be, that sufficient future taxable income will be
available against which such deferred tax can be realized. For
recognition of deferred taxes, the timing difference which originates
first is considered to reverse first.
At each reporting date, the company re-assesses unrecognized deferred
tax assets. It recognized unrecognized deferred asset to the extent
that it has become reasonably certain or virtually certain, as the case
may be, that sufficient future taxable income will be available against
which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The company writes-down the carrying amount of deferred
tax asset to the extent that is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realized. Any such written-down is reserved to the extent that it
becomes reasonably certain or virtually certain, as the case may be,
that sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset, if a
legally enforceable right exists to set-off current tax assets against
current tax liabilities and the deferred tax assets and deferred taxes
relate to the same taxable entity and the same taxation authority.
Minimum alternate tax (MAT) paid in a year is charged to the statement
of profit and loss tax. The company recognizes MAT credit available as
an asset only to the extent that there is convincing evidence that the
company will pay normal income tax during the specific period, i. e,
the period for which MAT credit is allowed to be carried forward. In
the year in which the company recognize MAT credit as an asset in
accordance with the Guidance Note on Accounting for Credit Available in
respect of Minimum Alternative Tax under the Income Tax Act, 1961, the
said is created by way of credit to the statement of profit and loss
and shown as "MAT Credit Entitlement." The company reviews the "MAT
credit entitlement "asset at each reporting date and writes down the
asset to the extent the company does not have convincing evidence that
it will pay normal tax during the specified period.
I. Earnings per share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they are entitled to participate in dividends relative to a
fully paid equity share during the reporting period. The weighted
average number of equity shares outstanding during the period is
adjusted for events such as bonus issue, bonus element in a right
issue, share split, and reserve share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a
corresponding change in resources.
m. Provisions
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefit will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
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.
n. Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The company does not
recognize a contingent liability but discloses its existence in the
financial statement.
o. Cash and cash equivalents
Cash and cash an equivalent for the purposes of cash flow statement
comprises cash at bank and in hand and short-term investments with an
original maturity of three months or less.
Mar 31, 2014
A Basis of Preparation
The financial statements of the company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under the Companies (Accounting Standards) Rules, 2006, (as amended)
and the relevant provisions of the Companies Act, 1956 read with the
general circular 15/2013 dated September 13, 2013 of the ministry of
corporate affairs in respect of section 133 of the Companies Act, 2013.
The financial statements have been prepared on an accrual basis and
under the historical cost convention.
b. Use of Estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these adjustments are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
c. Current and Non Current Classification
An asset is classified as current when it satisfies any of the
following criteria :
i. It is expected to be realized/ settled, or is intended for sale or
consumption, in the companies normal operating cycle or
ii. It is held primarily for the purpose of being traded or
iii. It is expected to be realized/ due to be settled within
12 months after the reporting date or
iv. It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least 12 months after
the reporting date or
v. The company does not have an unconditional right to defer
settlement of the liability for at least 12 months after the reporting
date.
All other assets and liabilities are classified as non current
d Tangible Fixed Assets:
Fixed assets, are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any .The cost comprises purchase
price, borrowing costs if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for
the intended use. Any trade discount and rebates are deducted in
arriving at the purchase price. Subsequent expenditure related to an
item of fixed is added to its book value only if it increases the
future benefits from the existing asset beyond its previously assessed
standard of performance. All other expenses on existing fixed assets,
including day-to-day repair and maintenance expenditure and cost of
replacing parts, are charged to the statement of profit and loss for
the period during which such expenses are incurred. Gains or losses
arising from de recognition of fixed assets are measured as the
difference between the net disposal proceeds and the carrying amount of
the asset and are recognized in the statement of profit and loss when
the asset is derecognized.
e. Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated impairment losses, if any.
Internally generated intangible assets, excluding capitalized
development costs, are not capitalized and expenditure is reflected in
the statement of profit and loss in the year in which the expenditure
is incurred. Cost comprises the purchase price and any attributable
cost of bringing the assets to its working condition for its intended
use. Gains or losses arising from de recognition of an intangible asset
are measured as the difference between the net disposal proceeds and
the carrying amount of the asset and are recognized in the statement of
profit and loss when the asset is derecognized.
f. Depreciation and Amortization
Depreciation on fixed assets is calculated on a straight-line basis
using the rates arrived at based on the useful lives estimated by the
management, or those prescribed under the schedule XIV to the companies
Act, 1956, whichever is higher.
Intangible assets are amortized on a straight line basis over the
estimated useful economics life
g. Impairment of Tangible and Intangible Assets
The company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the
company estimates the asset''s recoverable amount. An asset''s
recoverable amount is the higher of an asset''s or cash-generated units
(CGU) net selling price and its value in use. The recoverable amount is
determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other asset or
groups of assets. Where the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessment of the
time value of money and the risks specific to the asset. In determining
net selling price, recent market transaction is taken into account, if
available. If no such transactions can be identified, an appropriate
valuation model is used.
h Revenue Recognition
Revenue is recognized to the extent that is probable that the economic
benefits will flow to the Company and the revenue can be reliable
measured. The following specific recognition criteria must be met
before revenue is recognized
Sale of Goods:
Revenue from sale of goods is recognized when all the risks and rewards
of ownership of the goods have been passed to the buyer, usually on
delivery of the goods. If the company collects sales taxes and value
added taxes (VAT) on behalf of the government and , therefore ,these
arenot economic benefits flowing to the company . Hence they are
excluded from revenue . Exciseduty deducted from revenue (gross) is
the amount that is included in the revenue (gross) andnot the entire
amount of liability arising during the year.
Income from Services:
Revenues from maintenance contracts are recognized pro-rata over the
period of the contract as and when the services are rendered.
i. Revenue from Real estate projects is recognized when it is
reasonably certain that the ultimate collection will be made and that
there is buyers commitment to make the complete payment.
Revenue from real estate under development is recognized upon transfer
of all significant risks and rewards of ownership of such real estate,
as per the terms of the contracts entered into with buyers, which
generally coincides with the firming of the sales contracts/ agreement,
except for the contracts where the company still has obligations to
perform substantial acts even after the transfer of all significant
risks and rewards. In such cases, the revenue is recognized on
percentage of completion method, when the stage of completion of each
project reaches a reasonable level of progress. The revenue is
recognized in proportion that the contract cost incurred for work
performed up to the reporting date bear to the estimated total contract
cost.
ii. Interest Income
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the
statement of profit and loss.
iii.Dividend Income
Dividend income is recognized with the company''s right to receive
dividend is established by the reporting date.
iv.Other Income
Other Income is accounted on accrual basis
i. Foreign currency transactions
Foreign currency transaction are recorded in the reporting currency, by
applying to the foreign currency amount the exchange rate between the
reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items, which are
measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction.
Non-monetary items, which are measured at fair value or other similar
valuation denominated in a foreign currency, are translated using the
exchange rate at the date when such value was determined.
Exchange differences
i. Exchange difference arising on a monetary item that, in substance
forms part of the company''s net investment in a non-integral foreign
operation is accumulated in the foreign currency translation reserve
until the disposal of the net investment. On the disposal of such net
investment, the cumulative amount of the exchange differences which
have been deferred and which relates to that investment is recognized
as income or as expenses in the same period in which the gain or loss
on disposal is recognized.
ii. Exchange difference arising on long-term foreign currency monetary
items related to acquisition of a fixed asset are capitalized and
depreciated over the remaining useful life of the asset. For this
purpose, the company treats a foreign monetary item as "long-term
foreign currency monetary items", if it has a term of 12 months or more
at the date of its origination.
iii. Exchange differences arising on other long-term foreign currency
monetary items are accumulated in the "Foreign Currency Monetary
Translation Difference Account'' and amortized over the remaining life
of the concerned monetary item.
iv. All other exchange differences are recognized as income or as
expenses in the period in which they arise.
j. Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contribution to the provident fund is charged
to the statement of profit and loss for the year when the contributions
are due. The company has no obligation, other than the contribution
payable to the provident fund.
The company operates two defined benefit plans for its employee, viz.,
gratuity and post employment medical benefit liability. The costs of
providing benefits under these plans are determined on the basis
actuarial valuation at each year-end. Separate actuarial valuation is
carried out for each plan using the projected unit credit method.
Actuarial gains and losses for both defined plans are recognized in
full in the period in which they occur in the statement of profit and
loss.
Accumulated leave, which is expected to be utilized within the next 12
months, is treated as short  term employee benefit. The company
measures the expected cost of such absences as the additional amount
that is except to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The company treats accumulated leave excepted to be carried forward
beyond twelve months, as long-term employee benefit for measurement
purposes. Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year-end. Actuarial gains/losses are immediately taken to the statement
of profit and loss and are not deferred. The company presents the
entire leave as a current liability in the balance sheet, since it does
not have an unconditional right to defer its settlement for 12 months
after the reporting date.
k. Income Taxes
Tax expenses comprise current and deferred tax. Current income-tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the income-tax Act, 1961 enacted in India and tax laws
prevailing in the respective tax jurisdiction where the company
operates. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
Deferred income taxes reflect the impact of timing differences between
taxable income and accounting income originating during the current
year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax laws enacted or
substantively enacted ay the reporting date. Deferred income tax
relating to items recognized in equity and not in the statement of
profit and loss.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
differences only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. In situation where the company has
unabsorbed or carry forward tax losses, all deferred tax assets are
recognized only if there is virtual certainty supported by convincing
evidence that they can be realized against future taxable profits.
In the situation where the company is entitled to a tax holiday under
the income-tax Act, 1961 enacted in India or tax laws prevailing in the
respective tax jurisdiction where it operates, no deferred tax (asset
or liability) is recognized in respect of timing differences which
reverse during the tax holiday period, to the extent the company''s
gross total income is subject to the deduction during the tax holiday
period. Deferred tax in respect of timing differences which after the
tax holiday is recognized in the year in which the timing differences
originate. However , the restrict recognition of deferred tax assets to
the extent that it has become reasonable certain or virtually certain,
as the case may be, that sufficient future taxable income will be
available against which such deferred tax can be realized. For
recognition of deferred taxes, the timing difference which originates
first is considered to reverse first.
At each reporting date, the company re-assesses unrecognized deferred
tax assets. It recognized unrecognized deferred asset to the extent
that it has become reasonably certain or virtually certain, as the case
may be, that sufficient future taxable income will be available against
which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The company writes- down the carrying amount of
deferred tax asset to the extent that is no longer reasonably certain
or virtually certain , as the case may be , that sufficient future
taxable income will be available against which deferred tax asset can
be realized. Any such written- down is reserved to the extent that it
becomes reasonably certain or virtually certain, as the case may be,
that sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset, if a
legally enforceable right exists to set-off current tax assets against
current tax liabilities and the deferred tax assets and deferred taxes
relate to the same taxable entity and the same taxation authority.
Minimum alternate tax (MAT) paid in a year is charged to the statement
of profit and loss tax. The company recognizes MAT credit available as
an asset only to the extent that there is convincing evidence that the
company will pay normal income tax during the specific period, i. e,
the period for which MAT credit is allowed to be carried forward. In
the year in which the company recognize MAT credit as an asset in
accordance with the Guidance Note on Accounting for Credit Available in
respect of Minimum Alternative Tax under the Income Tax Act,1961,the
said is created by way of credit to the statement of profit and loss
and shown as "MAT Credit Entitlement." The company reviews the "MAT
credit entitlement "asset at each reporting date and writes down the
asset to the extent the company does not have convincing evidence that
it will pay normal tax during the specified period.
l. Earnings per share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are shares are treated as a fraction of an equity
share to the extent that they are entitled to participate in dividends
relative to a fully paid equity share during the reporting period. The
weighted average number of equity shares outstanding during the period
is adjusted for events such as bonus issue, bonus element in a right
issue, share split, and reserve share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a
corresponding change in resources.
m. Provisions
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefit will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
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.
n. Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The company does not
recognize a contingent liability but discloses its existence in the
financial statement.
o. Cash and cash equivalents
Cash and cash an equivalent for the purposes of cash flow statement
comprises cash at bank and in hand and short-term investments with an
original maturity of three months or less.
b. Term/rights attached to equity shares
The company has only one class of equity shares having a par value of
Rs. 10 per share. Each holder of equity share is entitled to one vote
per share. The company declares and pays dividends in Indian rupees.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting.
During the year ended 31st March, 2014, the amount of per share
dividend recognised as distributions to equity shareholders was Rs. NIL
(Previous year Rs. NIL).
c. Aggregate numbers of bonus shares issued, share issued for
consideration other than cash and shares brought back during the period
of five years immediately preceding the reporting date:
Equity shares allotted as fully paid bonus shares by
capitalisation of securities premium. Nil Nil
Equity shares allotted as fully paid-up pursuant to
contracts for considerations other than cash. Nil Nil
Equity shares bought back by the company Nil Nil
Mar 31, 2012
A Change in Accounting Policy
Presentation and Disclosure of Financial Statements
During the year ended 31st March, 2012, the revised schedule VI
notified under the Companies Act, 1956, has become applicable to the
company, for preparation and presentation of its financial statements.
Except accounting for dividend on investments in subsidiary companies,
the adoption of revised schedule VI does not impact recognition and
measurement principles followed for preparation However it has
significant impact on presentation and disclosures made in the
financial statements. The company has also reclassified the previous
period figure in accordance with the requirements applicable in the
current year.
b. Use of Estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these adjustments are based on the
management's best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
c. Current and Non Current Classification
An asset is classified as current when it satisfies any of the
following criteria:
i. It is expected to be realized/settled, or is intended for sale or
consumption, in the companies normal operating cycle or
ii. It is held primarily for the purpose of being traded or
iii. It is expected to be realized/due to be settled within 12 months
after the reporting date or
iv. It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least 12 months after
the reporting date or
v. The company does not have an unconditional right to defer settlement
of the liability for at least 12 months after the reporting date.AII
other assets and liabilities are classified as non current
d. Tangible Fixed Assets:
Fixed assets, are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any The cost comprises purchase
price, borrowing costs if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for
the intended use. Any trade discount and rebates are deducted in
arriving at the purchase price. Subsequent expenditure related to an
item of fixed is added to its book value only if it increases the
future benefits from the existing asset beyond its previously assessed
standard of performance. All other expenses on existing fixed assets,
including day-to-day repair and maintenance expenditure and cost of
replacing parts, are charged to the statement of profit and loss for
the period during which such expenses are incurred. Gains or losses
arising from de recognition of fixed assets are measured as the
difference between the net disposal proceeds and the carrying amount of
the asset and are recognized in the statement of profit and loss when
the asset is derecognized.
e. Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated impairment losses, if any.
Internally generated intangible assets, excluding capitalized
development costs, are not capitalized and expenditure is reflected in
the statement of profit and loss in the year in which the expenditure
is incurred. Cost comprises the purchase price and any attributable
cost of bringing the assets to its working condition for its intended
use. Gains or losses arising from de recognition of an intangible asset
are measured as the difference between the net disposal proceeds and
the carrying amount of the asset and are recognized in the statement of
profit and loss when the asset is derecognized.
f. Depreciation and Amortization
Depreciation on fixed assets is calculated on a straight-line basis
using the rates arrived at based on the useful lives estimated by the
management, or those prescribed under the schedule XIV to the companies
Act 1956, whichever is higher.
Intangible assets are amortized on a straight line basis over the
estimated useful economics life
g. Impairment of Tangible and Intangible Assets
The company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the company
estimates the asset's recoverable amount. An asset's recoverable
amount is the higher of an asset's or cash-generated units (CGU) net
selling price and its value in use. The recoverable amount is
determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other asset or
groups of assets. Where the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessment of the
time value of money and the risks specific to the asset. In determining
net selling price, recent market transaction is taken into account, if
available. If no such transactions can be identified, an appropriate
valuation model is used.
h. Revenue Recognition
Revenue is recognized to the extent that is probable that the economic
benefits will flow to the Company and the revenue can be reliable
measured. The following specific recognition criteria must be met
before revenue is recognized
Sale of Goods:
Revenue from sale of goods is recognized when all the risks and rewards
of ownership of the goods have been passed to the buyer, usually on
delivery of the goods. If the company collects sales taxes and value
added taxes (VAT) on behalf of the government and, therefore.these are
not economic benefits flowing to the company. Hence they are excluded
from revenue. Excise duty deducted from revenue (gross) is the amount
that is included in the revenue (gross) and not the entire amount of
liability arising during the year.
Income from Services:
Revenues from maintenance contracts are recognized pro-rata over the
period of the contract as and when the services are rendered.
i. Revenue from Real estate projects is recognized when it is
reasonably certain that the ultimate collection will be made and that
there is buyers commitment to make the complete payment.
Revenue from real estate under development is recognized upon transfer
of all significant risks and rewards of ownership of such real estate,
as per the terms of the contracts entered into with buyers, which
generally coincides with the firming of the sales contracts/agreement,
except for the contracts where the company still has obligations to
perform substantial acts even after the transfer of all significant
risks and rewards. In such cases, the revenue is recognized on
percentage of completion method, when the stage of completion of each
project reaches a reasonable level of progress. The revenue is
recognized in proportion that the contract cost incurred for work
performed up to the reporting date bear to the estimated total contract
cost.
ii. Interest Income
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the
statement of profit and loss.
iii. Dividend Income
Dividend income is recognized with the company's right to receive
dividend is established by the reporting date.
iv. Other Income
Other Income is accounted on accrual basis
I. Foreign currency transactions
Foreign currency transaction are recorded in the reporting currency, by
applying to the foreign currency amount the exchange rate between the
reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items, which are
measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction.
Non-monetary items, which are measured at fair value or other similar
valuation denominated in a foreign currency, are translated using the
exchange rate at the date when such value was determined.
Exchange differences
i. Exchange difference arising on a monetary item that, in substance
forms part of the company's net investment in a non-integral foreign
operation is accumulated in the foreign currency translation reserve
until the disposal of the net investment. On the disposal of such net
investment, the cumulative amount of the exchange differences which
have been deferred and which relates to that investment is recognized
as income or as expenses in the same period in which the gain or loss
on disposal is recognized.
ii. Exchange difference arising on long-term foreign currency monetary
items related to acquisition of a fixed asset are capitalized and
depreciated over the remaining useful life of the asset. For this
purpose, the company treats a foreign monetary item as "long-term
foreign currency monetary items", if it has a term of 12 months or more
at the date of its origination.
iii. Exchange differences arising on other long-term foreign currency
monetary items are accumulated in the "Foreign Currency Monetary
Translation Difference Account' and amortized over the remaining life
of the concerned monetary item.
iv. All other exchange differences are recognized as income or as
expenses in the period in which they arise.
j. Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contribution to the provident fund is charged
to the statement of profit and loss for the year when the contributions
are due. The company has no obligation, other than the contribution
payable to the provident fund.
The company operates two defined benefit plans for its employee, viz.,
gratuity and post employment medical benefit liability. The costs of
providing benefits under these plans are determined on the basis
actuarial valuation at each year-end. Separate actuarial valuation is
carried out for each plan using the projected unit credit method.
Actuarial gains and losses for both defined plans are recognized in
full in the period in which they occur in the statement of profit and
loss.
Accumulated leave, which is expected to be utilized within the next 12
months, is treated as short - term employee benefit. The company
measures the expected cost of such absences as the additional amount
that is except to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The company treats accumulated leave excepted to be carried forward
beyond twelve months, as long-term employee benefit for measurement
purposes. Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year-end. Actuarial gains/losses are immediately taken to the statement
of profit and loss and are not deferred. The company presents the
entire leave as a current liability in the balance sheet, since it does
not have an unconditional right to defer its settlement for 12 months
after the reporting date.
k. Income Taxes
Tax expenses comprise current and deferred tax. Current income-tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the income-tax Act, 1961 enacted in India and tax laws
prevailing in the respective tax jurisdiction where the company
operates. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
Deferred income taxes reflect the impact of timing differences between
taxable income and accounting income originating during the current
year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax laws enacted or
substantively enacted ay the reporting date. Deferred income tax
relating to items recognized in equity and not in the statement of
profit and loss.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
differences only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. In situation where the company has
unabsorbed or carry forward tax losses, all deferred tax assets are
recognized only if there is virtual certainty supported by convincing
evidence that they can be realized against future taxable profits.
In the situation where the company is entitled to a tax holiday under
the income-tax Act, 1961 enacted in India or tax laws prevailing in the
respective tax jurisdiction where it operates, no deferred tax (asset
or liability) is recognized in respect of timing differences which
reverse during the tax holiday period, to the extent the company's
gross total income is subject to the deduction during the tax holiday
period. Deferred tax in respect of timing differences which after the
tax holiday is recognized in the year in which the timing differences
originate. However, the restrict recognition of deferred tax assets to
the extent that it has become reasonable certain or virtually certain,
as the case may be, that sufficient future taxable income will be
available against which such deferred tax can be realized. For
recognition of deferred taxes, the timing difference which originates
first is considered to reverse first.
At each reporting date, the company re-assesses unrecognized deferred
tax assets. It recognized unrecognized deferred asset to the extent
that it has become reasonably certain or virtually certain, as the case
may be, that sufficient future taxable income will be available against
which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The company writes- down the carrying amount of
deferred tax asset to the extent that is no longer reasonably certain
or virtually certain, as the case may be, that sufficient future
taxable income will be available against which deferred tax asset can
be realized. Any such written- down is reserved to the extent that it
becomes reasonably certain or virtually certain, as the case may be,
that sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset, if a
legally enforceable right exists to set-off current tax assets against
current tax liabilities and the deferred tax assets and deferred taxes
relate to the same taxable entity and the same taxation authority.
Minimum alternate tax (MAT) paid in a year is charged to the statement
of profit and loss tax. The company recognizes MAT credit available as
an asset only to the extent that there is convincing evidence that the
company will pay normal income tax during the specific period, i. e,
the period for which MAT credit is allowed to be carried forward. In
the year in which the company recognize MAT credit as an asset in
accordance with the Guidance Note on Accounting for Credit Available in
respect of Minimum Alternative Tax under the Income Tax Act, 1961, the
said is created by way of credit to the statement of profit and loss
and shown as "MAT Credit Entitlement." The company reviews the "MAT
credit entitlement "asset at each reporting date and writes down the
asset to the extent the company does not have convincing evidence that
it will pay normal tax during the specified period.
l. Earnings per share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are shares are treated as a
fraction of an equity share to the extent that they are entitled to
participate in dividends relative to a fully paid equity share during
the reporting period. The weighted average number of equity shares
outstanding during the period is adjusted for events such as bonus
issue, bonus element in a right issue, share split, and reserve share
split (consolidation of shares) that have changed the number of equity
shares outstanding, without a corresponding change in resources.
m. Provisions
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefit will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
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.
n. Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The company does not
recognize a contingent liability but discloses its existence in the
financial statement.
o. Cash and cash equivalents
Cash and cash an equivalent for the purposes of cash flow statement
comprises cash at bank and in hand and short-term investments with an
original maturity of three months or less.
Mar 31, 2011
A Basis of Accounting:
i. The financial statements are prepared under Historical Cost
Convention and on accrual basis and are in accordance with the
requirements of the Companies Act, 1956 of India (the "Act").
ii. The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
I Fixed Assets:
Fixed Assets are stated at historical cost less accumulated
depreciation. Cost is inclusive of inward freight, duties, taxes, and
installation expenses; Allocable Pre-operative expenses including trial
run expenses, net of cenvat credit and value added tax are capitalized.
Interest on borrowing and financing cost during the period of
construction is added to the cost of fixed assets.
c Depreciation:
Depreciation has been provided on all the Assets on Straight Line
Method, at the rates specified under ScheduleHPXIVHPtoHPtheHPAct.
d Transaction in Foreign Currency:
i. Transactions denominated in foreign currencies are normally recorded
at the exchange rate prevailing at the time of the transaction.
ii. Monetary items denominated in foreign currencies at the year end
and not covered by forward exchange contracts are translated at the
year end rates and those covered by forward exchange contracts are
translated at the rate ruling at the date of transaction as increased
or decreased by the proportionate difference between the forward rate
and exchange rate on the date of transaction, such difference having
been recognized over the life of the contract.
iii. Any income or expenses on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
account.
EC Expenditure Pending Allocation:
All the revenue expenses up to the date ofHPcommercial production are
capitalized and allocated proportionately to the Fixed Assets.
f Inventories:
Items of Inventories are measured at lower of cost or net realizable
value. Cost of Inventories comprise of all cost of purchase, cost of
conversion and other cost incurred in bringing them to their present
location and condition.
i. Raw Materials
At cost including incidental expenses.
ii. Finished Goods
Finished Goods includes saleable Work-in- Process, and is valued at
cost inclusive of excise duty or net realizable value whichever is
lower
iii. Stores and Spares
At cost including incidental expenses.
iv Scrap
At realizable value.
v Goods in Transit
At actual cost incurred up to the date of Balance Sheet.
g Borrowing Cost:
Borrowing costs that are attributable to the acquisition or
continuation of qualifying assets are capitalized as partHPofHPthe
cost of such assets. A qualifying asset is one that necessarily
takes substantial period of time to get ready for intended use. All
other borrowings cost are charged to revenue.
h. Sales:
Sales include excise duty, insurance, sales tax, freight outward,
exchange rate fluctuation on exports and export incentives.
i. Retirement benefit:
In compliance with the Accounting Standard 15 Liability in respect of
leave encashment and gratuity is provided on accrual basis. Companys
contribution to statutory welfare funds is charged to Profit and Loss
Account.
j. Impairment of Assets:
If the carrying amount of Fixed Assets exceeds the recoverable amount
on the reporting date, the carrying amount is reduced to the
recoverable amount. The recoverable amount is measured as the higher of
the net selling price and the value in use determined by the present
value of estimated future cash flows.
The carrying amounts of the fixed assets are reviewed at each Balance
Sheet date. If the carrying amount exceeds the recoverable amount on
the reporting date, the. carrying amount is reduced to the recoverable
amount. The recoverable amount is measured as the higher of the net
selling price and the value in use determined by the present value of
estimated future cash flows.
k. Contingent Liabilities:
Contingencies, which are likely to materialize into till the date of
approval of Accounts by the Board of Directors and having liabilities
material effect, are being provided for. Other contingencies are shown
as Contingent Liabilities byway of Notes to Accounts.
Sep 30, 2009
A Basis of Accounting:
i. The financial statements are prepared under Historical Cost
Convention and on accrual basis and are in accordance with the
requirements of the Companies Act, 1956 of India (the "Act").
ii. The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
b Fixed Assets:
Fixed Assets are stated at historical cost less accumulated
depreciation. Cost is inclusive of inward freight, duties, taxes, and
installation expenses; Allocable Pre-operative expenses including trial
run expenses, net of cenvat credit and value added tax are capitalized.
Interest on borrowing and financing cost during the period of
construction is added to the cost of fixed assets.
c Depreciation:
Depreciation has been provided on all the Assets on Straight Line
Method, at the rates specified under Schedule XIV to the Act.
d Transaction in Foreign Currency:
i. Transactions denominated in foreign currencies are normally recorded
at the exchange rate prevailing at the time of the transaction.
ii. Monetary items denominated in foreign currencies at the period end
and not covered by forward exchange contracts are translated at the
period end rates and those covered by forward exchange contracts are
translated at the rate ruling at the date of transaction as increased
or decreased by the proportionate difference between the forward rate
and exchange rate on the date of transaction, such difference having
been recognized over the life of the contract.
iii.Any income or expenses on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
account.
e Expenditure Pending Allocation:
All the revenue expenses up to the date of commercial production are
capitalized and allocated proportionately to the Fixed Assets.
f Inventories:
Items of Inventories are measured at lower of cost or net realizable
value. Cost of Inventories comprise of all cost of purchase, cost of
conversion and other cost incurred in bringing them to their present
location and condition.
i. Raw Materials
At cost including incidental expenses.
ii. Finished Goods
Finished Goods includes saleable Work-in- Process, and is valued at
cost inclusive of excise duty or net realizable value whichever is
lower
iii. Stores and Spares
At cost including incidental expenses.
iv. Scrap At realizable value.
v. Goods in Transit
At actual cost incurred up to the date of Balance Sheet.
g. Borrowing Cost:
Borrowing costs that are attributable to the acquisition or
continuation of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowings cost are charged to revenue.
h. Sales:
Sales include excise duty, insurance, sales tax, freight outward,
exchange rate fluctuation on exports and export incentives.
1. Retirement benefit:
In compliance with the Accounting Standard 15 Liability in respect of
leave encashment and gratuity is provided on accrual basis. Companys
contribution to statutory welfare funds is charged to Profit and Loss
Account.
j. Impairment of Assets:
If the carrying amount of Fixed Assets exceeds the recoverable amount
on the reporting date, the carrying amount is reduced to the
recoverable amount. The recoverable amount is measured as the higher of
the net selling price and the value in use determined by the present
value of estimated future cash flows.
The carrying amounts of the fixed assets are reviewed at each Balance
Sheet date. If the carrying amount exceeds the recoverable amount on
the reporting date, the carrying amount is reduced to the recoverable
amount. The recoverable amount is measured as the higher of the net
selling price and the value in use determined by the present value of
estimated future cash flows.
k. Contingent Liabilities:
Contingencies, which are likely to materialize into till the date of
approval of Accounts by the Board of Directors and having liabilities
material effect, are being provided for. Other contingencies are shown
as Contingent Liabilities by way of Notes to Accounts.