Home  »  Company  »  Smruthi Organics  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Smruthi Organics Ltd. Company

Mar 31, 2018

1. Significant accounting policies

System of Accounting:

First-time adoption of Ind AS Pursuant to the Companies (India Accounting Standard) Rules, 2015,

The Company has adopted 31st March 2018 as reporting date for first time adoption of India Accounting Standard (Ind AS) and consequently 1st April 2015 as the transition date for preparation of financial statements. The financial statements for the year ended 31st March 2018, are the first financials, prepared in accordance with Ind AS. Upto the Financial year ended 31st March 2017, the Group prepared its financial statements in accordance with the Accounting Standards notified under the Section 133 of the Companies Act 2013, read together with Companies (Accounts) Rules 2014 (Previous GAAP).

For preparing these financial statements, opening balance sheet was prepared as at 1st April 2016 i.e., the date of transition to Ind AS. The figures for the previous periods and for the year ended 31st March 2017 have been restated, regrouped and reclassified, wherever required to comply with Ind AS and Schedule III to the Companies Act 2013 and to make them comparable.

This note explains the principal adjustments made by the Group in restating its financial statements prepared in accordance with Previous GAAP, including the balance sheet as at 1st April 2016 and the financial statements as at and for the year ended 31st March 2017.

Exemptions:

Ind AS 101 allows first time adopters certain exemptions from the retrospective application of certain requirements under Ind AS.

On transition to Ind AS, the group has applied the following exemptions:

1. Group has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 1st April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

2. Group has elected to continue with the carrying value of all of its intangible assets recognised as at 1st April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of intangible assets.

3. Ind AS 102 Share based payment has not been applied to equity instruments in share based

ii. Historical cost convention

The financial statements have been prepared on a historical cost basis, except for the followings:

- Certain financial assets and liabilities that are measured at fair value; (refer accounting policy regarding financial instruments)

- Defined benefit plans - plan assets measured at fair value iii Current and non-current classification

An asset is classified as current if:

I It is expected to be realized or sold or consumed in the Company’s normal operating cycle;

ii It is held primarily for the purpose of trading;

iii It is expected to be realized within twelve months after the reporting period; or

iv It is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A Liability is classified as current if:

i It is expected to be settled in normal operating cycle;

ii It is held primarily for the purpose of trading;

iii It is expected to be settled within twelve months after the reporting period;

iv It has no unconditional right to defer the settlement of the liability for at least twelve months after reporting period.

All other liabilities are classified as non-current.

The operating cycle is the time between acquisition of assets for processing and their realization in cash and cash equivalents. Based on the nature of products and time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities

2.2 Segment Reporting :

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker. The chairman and Managing Director has been identified as being the Chief Operating Decision Maker.

2.3 Foreign Currency Transactions:

i. Functional and presentation currency

Item included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’) The financial statements are presented in Indian rupee (r), which is Smruthi Organics functional and presentation currency.

ii Transactions and balances

Foreign Exchange Transactions are translated into the functional currency using the exchange rates at the dates of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary liabilities denominated in foreign currencies at year end exchanges rate are generally recognized in statement of profit and loss.

Non-monetary items that are measured in items of historical cost in a foreign currency, using the exchange rate at the date of the transaction. Non- monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation difference on liabilities carried at fair value are reported as part of the fair value gain or loss.

2.4 Revenue recognition :

i) Revenue from Sale of Goods

Revenue from Sale of Goods is recognized when all the significant risk and rewards of ownership have been transferred to the buyer, revenue can be measured reliably, the costs incurred can be measured reliably, it is probable that the economic benefits associated to the transaction will flow to the entity and there is no continuing management involvement with the goods. Transfer or risks and rewards vary depending on the individual terms of contract of sale. Revenue from sale if goods is stated inclusive of excise duty and net of returns, trade allowances, rebates, sales tax, GST and amounts collected on behalf of third parties.

ii) Interest Incomes:

For all financial instruments measured at amortizes cost, interest income recognized using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period where appropriate, to the net carrying amount of the financial asset. Interest income is included in Other Income in the Statement of Profit and Loss.

2.5 Income Taxes:

The income tax expense or credit for the period is the tax payable on the current period taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is not calculated as the company is in operating loss.

Income Tax is computed after adjustments of Other Comprehensive income ( Foreign Exchange fluctuation amount).

Deferred income tax is provided in full, using the liability method, on temporal difference arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses

Deferred tax liabilities are not recognized for temporary differences between the carrying amount and tax bases of investments in subsidiaries where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets are not recognized for temporary difference between the carrying amount and tax bases of investments in subsidiaries where it is not probable that the differences will reverse in the foreseeable future and taxable profit will not be available against which the temporary difference can be utilized.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balance relate to the same taxation, authority. Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the assets and settle the liability simultaneously.

Current and deferred tax is recognized in profit or loss. Except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively

Deferred Tax Assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly MAT is recognized as deferent tax asset in the Balance sheet when the asset can be measured reliably and it is probable that the future entomic benefit associated with the asset will be realized.

2.6 Impairment

Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss will be recognized for the amounts by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset’s fair value less costs of disposal and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (cash- generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

2.7 Cash and cash equivalents:

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with financial institutions, other short-term , highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowing in current liabilities in the balance sheet.

2.8 Trade receivables:

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment.

During the year, the company has written off as bad of Rs. 79703285 to the Profit and Loss account.

2.9 Inventories:

Raw materials and stores, work -in-progress, traded and finished goods are stated at the lower of cost and net realizable value. Cost of raw materials and stores comprise of cost of purchase. Cost of work-in-progress and finished goods comprises direct materials labour and an appropriate preparation of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Cost of inventories also include all other cost incurred in bringing the inventories to their present location and condition. Costs of purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated costs of completion and the estimated necessary to make the sale. Items held for use in production of inventory are not written below cost if the finished product in which there will be incorporated are expected to be sold at or above cost.

2.10 Investments and other financial assets.

I) Classification :

The company classifies its financial assets in the following measurements categories:

- Those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

- Those measured at amortized cost.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair values, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instrument, this will depend on the business model in which the investment is held. For investment in equity instruments, this will depend on whether the company has 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 at its 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) Impairment of financial assets

For trade receivable only, the company applies the simplified approach permitted by Ind AS 109Financial Instruments, which requires expected lifetime losses to be recognized from initial recognition of the receivables.

2.11 Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet where there is a legally enforceable right to offset the recognized amount and there is an intention to settle on a net bas are realize the assets and settle the liabilities simultaneously. The legally enforceable right the most not be contingent on further events and most be enforceable in the normal courses of business and in the event of default, insolvency or bankruptcy of the company or the counterparty.

2.12 Property, Plant and Equipment

Property, Plant and Equipment Leasehold land is carried at historical costs. All other items of property, plant and equipment are stated at cost less accumulated depreciation and impairment loss, if any.

Cost includes cost of acquisition, installation or construction, other direct expenses incurred to bring the assets to its working condition and finance costs incurred up to the date the asset is ready for its intended use and excludes cenvat / value added tax eligible for credit / setoff.

Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of plant and equipment are required to be replaced at intervals, the same are depreciated separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the statement of profit or loss as incurred.

Capital work-in-progress in respect of assets which are not ready for their intended use are carried at cost, comprising of direct costs, related incidental expenses and attributable interest. All identifiable Revenue expenses including interest incurred in respect of various projects / expansion, net of income earned during the project development stage prior to its intended use, are considered as pre - operative expenses and disclosed under Capital Work-in-Progress. Capital expenditure on tangible assets for research and development is classified under property, plant and equipment and is depreciated on the same basis as other property, plant and equipment.

Property, plant and equipment are eliminated from financial statements, either on disposal or when retired from active use. Losses arising in the case of the retirement of property, plant and equipment and gains or losses arising from disposal of property, plant and equipment are recognised in the statement of profit and loss in the year of occurrence.

Depreciation for Company

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Property, plant and equipment is provided on written down value method, over the useful life of the assets, as specified in Schedule II to the Companies Act, 2013. Property, plant and equipment which are added / disposed off during the year, depreciation is provided on pro-rata basis. Building constructed on leasehold land are depreciated based on the useful life specified in Schedule II to the Companies Act, 2013, where the lease period of the land is beyond the life of the building. In other cases, building constructed on leasehold lands are amortised over the primary lease period of the lands. The asset’s residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

During the year, the PPE is reduced from Gross amount of Rs. 240498 as materials received are not in as per specification and rejected and debited to the respective accounts by the company.

2.13 Trade and Other Payables:

These amounts represents liabilities for goods provided to the company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.

2.14 Borrowings:

Borrowings are initially recognized at fair value, net of transaction cost incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds(net of transaction costs)and the redemption amount is recognized in profit or loss over the period of the borrowings using the effectives interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In the case the fee is deferred until the draw down occurs.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

2.15 Provision

Provision are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to the determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the liability. The increase in the provisions due to the passage of time is recognized as interest expenses. Provision for litigation related obligation represents liabilities that are expected to materialize in respect of matters in app

2.16 Employee benefits:

- Short-terms obligations

Liabilities for wages and salaries, bonus, ex-gratia etc. that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related services are recognized in respect of employee’s services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefits obligations in the balance sheet.

- Other Long-term employee benefit obligations

The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are to be measured as the present value of expected future payments to be made in respect of service provided by employees up to the end of the reporting period using the projected unit credit method. The benefit are discounted using the market yields at the end of the reporting period that have terms approximating to the terms related obligations.

The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.

The company has not measured the details of earned leave for the year.

Defined benefit liability and employer contributions:

The company has purchased insurance policy to provide for payment of gratuity to the employees. For the year the insurance company carries out a funding valuation based on the latest employee data provided by the company. Balance fund of gratuity is to be payable by the company for Nil further payment obligations. The company has to be provide actuarial amount of gratuity fund.

The provision for Leave encashment is to be provided for the year Indian Accounting Standard subject to this loss changes.

- Post-employment obligations:

The company operates the following post-employment schemes:

a) Defined benefit plans such as gratuity and;

b) Defined contribution plans such as provident fund

Defined contribution plans

The company pays provident fund contributions to publicly administered funds as per local regulations. The company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognized as employee benefit expense when they are due.

2.17 Dividend: During the year, the company has not declared the dividend on its shares.

2.18 Contribution to Equity :

Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.19 Earnings per share:

1. Basic earnings per share is calculated by dividing:

- The profit attributable to owners of the company

- By the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year.

2. Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

- The after ‘income Tax’ effect of interest and other financing costs associated with dilutive potential equity shares, and

The weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares

2.20 Excise Duty and GST:

Excise duty collected on sales is included in Gross Sales. Excise duty paid/payable on sales is shown as an item of expense. Value of closing stock of finished goods include excise duty paid/payable on such stock wherever applicable.

GST collected on sales is excluded in Gross Sales. . Value of closing stock of finished goods include GST paid/payable on such stock wherever applicable.

2.21 Research and Development :

Revenue Expenditure on research and development is expensed in the period in which it is incurred. Capital expenditure on research and development is shown as additional fixed assets.


Mar 31, 2016

Note : 1. Accounting Policies and Other information

A. Significant accounting policies

1. System of Accounting:

i. The company follows mercantile system of accounting and recognizes income and expenditure on accrual basis.

ii. The financial statements have been prepared in all material respects with Accounting Standards as relevant and notified by the Central Government.

iii. The financial statements are prepared on historical cost basis and as a going concern.

2. Revenue recognition :

Revenue from Sale of Goods is recognized when all the significant risk and rewards of ownership of the goods have been part to the buyer. The company collect the Sales Tax and value added taxes (VAT) on behalf of the Government and therefore these are not economic benefits flowing to the company. Hence there are excluded from the revenue. Excise duty deducted from revenue (Gross) is the amount i.e. included in the revenue (gross) and not the entire amount of liability arising during the year.

3. Tangible Fixed Assets and Depreciation :

Depreciation on tangible fixed assets is provided on written down value basis at the rates derived from the useful lives prescribed in Schedule II of the Companies Act, 2013 after considering the residual value at 5% of the original costs thereof except in case of reactors & distillation columns and the related equipments, electrical installations/equipments and plant and machinery used for research and development where the useful lives are considered at 23 years based on internal assessment.

Pursuant to Schedule II to the Companies Act, 2013, the Company has re-determined the written down values of the tangible assets as per the useful lives of the tangible assets as prescribed in Schedule II to the Companies Act, 2013 or, as the case may be, as per internal assessment.

4. Investments: Investments are stated at cost.

5. Inventories:

a) Finished goods are valued at cost or net realizable value whichever is the lower.

b) Stock in process is valued at cost.

c) Stock of raw materials, stores and spares and packing materials are valued at lower of cost or net realizable value.

6. Staff Benefits :

a) Contribution to Provident Fund are funded as a Percentage of Salary / Wages.

b) Provision for leave encashment salary is to be provided for the year as per Accounting Standard subject to this amount, the profit changes.

c) Provision for Gratuity is to be made of as per Payment of Gratuity Act, as per Accounting Standard 15. The gratuity provision amount is not provided separately as per Accounting Standard . Subject to this amount, profit changes.

7. Research and Development:

Revenue expenditure on research and development is charged to Statement of profit and loss in the year in which it is incurred. Capital expenditure on research and development is added to the cost of fixed assets.

8. Deferred Taxation :

Accounting treatment in respect of deferred taxation is in accordance with Accounting Standard 22 -"Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India.

9. Sales Tax Benefits:

Shortfall / increase in sales tax benefits accruing to the company are accounted for in the year in which the final assessment by the concerned authorities is completed.

10. Borrowing Costs:

Costs in respect of borrowings for the purpose of expansion / additional fixed investments including R & D projects are capitalized to such investments.

Borrowing costs relating to period after the commencement of operations of the project are charged to revenue.

11. Foreign Currency Transactions:

Foreign Exchange Transactions are recorded at pre-determined standard exchange rates which are reviewed periodically. Gains or losses arising out of such periodic revisions of such standard rates and also on realization/settlement are accounted for accordingly.

None of the fixed assets have been acquired out of these foreign currency loans and as such the carrying cost of these assets is not affected by fluctuations. Therefore gain/loss arising on account of fluctuation of foreign exchange rates are debited to the fixed assets and credited to Term Loan liability account.

12. 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 impairment loss will be recognized wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the asset''s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value using the weighted average cost of capital. In carrying out such exercise, due effect is given to the requirements of Schedule 11 of the Companies Act, 2013.

13. Corporate Social Responsibility

The average operating profit of three years is in negative profit, so the company not required to spent on Corporate Social Responsibility in accordance with the provisions of Section 135 of the Companies Act, 2013.

14. Segment Reporting :

The company operates in only one segments viz. Bulk Drugs & Drug Intermediates.

15. Contingent Liabilities:

Cenvat set-off of EOU unit appeal is pending with Additional Commissioner of Central Excise, Pune for 2007 to 2011 four years amounting to Rs. 57.44 lacs and with Tribunal Mumbai for F Y 2009-10 for Rs. 1.09 lacs till the date of audit.

16. The company computed the expenditure on Corporate Social Responsibility at Rs. 22.14 lacs in accordance with the provisions of Section 135 of the Companies Act, 2013 for 31st March 2015. Till the date of audit company has not incurred any such expenditure. For the year company is not liable to compute expenditure on Corporate Social Responsibility.


Mar 31, 2015

1. System of Accounting:

i. The company follows mercantile system of accounting and recognizes income and expenditure on accrual basis.

ii. The financial statements have been prepared in all material respects with Accounting Standards as relevant and notified by tte Central Government.

iii. The financial statements are prepared on historical cost basis and as a going concern.

2. Revenue recognition :

Revenue from Sale of Goods is recognized when all the significant risk and rewards of ownership of the goods have been part to the buyer. The company collect the Sales Tax and value added taxes (VAT) on behalf of the Government and therefore these are not economic benefits flowing to the company. Hence there are excluded from the revenue. Excise duty deducted from revenue (Gross) is the amount i.e. included in the revenue (gross) and not the entire amount of liability arising during the year.

3. Tangible Fixed Assets and Depreciation :

Depreciation on tangible fixed assets is provided on written down value basis at the rates derived from the useful lives prescribed in Schedule II of the Companies Act, 2013 after considering the residual value at 5% of the original costs thereof except in case of reactors & distillation columns and the related equipments, electrical installations/equipments and plant and machinery used for research and development where the useful lives are considered at 23 years based on internal assessment.

4. Investments: Investments are stated at cost.

5. Inventories:

a) Finished goods are valued at cost or net realizable value whichever is the lower.

b) Stock in process is valued at cost.

c) Stock of raw materials, stores and spares and packing materials are valued at lower of cost or net realizable value.

d) Imported Raw material is lying with Nava Sheva Port, Mumbai is valued at cost..

6. Staff Benefits :

a) Contribution to Provident Fund are funded as a Percentage of Salary / Wages.

b) Provision for leave encashment salary is not made on the basis of actuarial valuation at the year ended of Rs. 994674/- subject to this amount, the loss changes.

c) Provision for Gratuity is to be made of as per Payment of Gratuity Act, as per Accounting Standard 15. The gratuity provision amount is not provided separately as per Accounting Standard . Subject to this amount, loss changes.

7. Research and Development:

Revenue expenditure on research and development is charged to Statement of profit and loss in the year in which it is incurred. Capital expenditure on research and development is treated at par with fixed assets and depreciated as such.

8. Deferred Taxation :

Accounting treatment in respect of deferred taxation is in accordance with Accounting Standard 22 - "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India.

9. Sales Tax Benefits:

Shortfall / increase in sales tax benefits accruing to the company are accounted for in the year in which the final assessment by the concerned authorities is completed.

10. Borrowing Costs:

Costs in respect of borrowings for the purpose of expansion / additional fixed investments including R & D projects are capitalized to such investments.

Borrowing costs relating to period after the commencement of operations of the project are charged to revenue.

11. Foreign Currency Transactions:

Foreign Exchange Transactions are recorded at pre-determined standard exchange rates which are reviewed periodically. Gains or losses arising out of such periodic revisions of such standard rates and also on realization/settlement are accounted for accordingly.

12. 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 impairment loss will be recognized wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the asset's net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value using the weighted average cost of capital. In carrying out such exercise, due effect is given to the requirements of Schedule 11 of the Companies Act, 2013.

13. Depreciation

Pursuant to Schedule II to the Companies Act, 2013, the Company has re-determined the written down values of the tangible assets as per the useful lives of the tangible assets as prescribed in Schedule II to the Companies Act, 2013 or, as the case may be, as per internal assessment. To the extent the existing written down values as on 1st April, 2014 are in excess of such re-determined written down values, the excess thereof, net of deferred tax, is adjusted against the retained earnings in the amount of Rs.173 lacs

The charge of depreciation, on these assets, for the year ended 31st March, 2015 is lower by Rs. 67 Lacs as compared to the position that would have obtained if estimates of useful lives adopted up to the preceding financial year were to be have been applied in this year as well.

14. Corporate Social Responsibility

The company computes the amount of Rs. 22.14 lacs required to be spent on Corporate Social Responsibility in accordance with the provisions of Section 135 of the Companies Act, 2013. The amounts are spent on the eligible projects prescribed under Schedule VII of the Act. Provision is made in the books for the amounts unspent, if material and the same is carried forward to be spent in the subsequent year.


Mar 31, 2014

(A) Accounting Convention : The financial statements are prepared on Historical Cost basis on the assumption of going concern concept.

(B) Fixed Assets and Depreciation.

a) Fixed Assets stated at cost of acquisition / constructions less depreciation.

b) Depreciation on Assets is provided on Written Down Value Method at the rates and in the manner, specified in Schedule XIV of the Companies Act 1956.

c) Continuous Process Plants as defined in Schedule XIV to the Companies Act, 1956 have been considered on Technical Assessment and Depreciation provided accordingly.

(C) Inventories :

a) Finished goods are valued at cost or net realizable value whichever is the lower.

b) Stock in process is valued at cost.

c) Stock of raw materials, stores and spares and packing materials are valued at lower of cost or net realizable value.

d) Finished Goods in transit is valued at cost or net realizable value whichever is lower.

e) Imported Raw material is lying with Nava Sheva Port, Balaji Warehouse, Mumbai is valued at cost.

(D) Sale of Goods :

Revenue from Sale of Goods is recognized when all the significant risk and rewards of ownership of the goods have been part to the buyer. The company collects the Sales Tax and Value Added Taxes (VAT) on behalf of the Government and therefore these are not economic benefits flowing to the company. Hence there are excluded from the revenue. Excise duty deducted from revenue (Gross) is the amount i.e. included in the revenue (gross) and not the entire amount of liability arising during the year.

(E) Staff Retirement Benefits :

a) Contribution to Provident Fund are funded as a Percentage of Salary / Wages.

b) Provision for leave encashment salary is not made on the basis of actuarial valuation at the year ended of Rs. 926053.00, subject to this amount, the loss changes.

c) Provision for Gratuity is to be made of as per Payment of Gratuity Act, as per Accounting Standard

15. The gratuity provision amount is not provided separately as per Accounting Standard , subject to this amount, loss changes.

(F) Provision for Income Tax is not provided as the net loss as per books of accounts.

(G) Borrowing Costs : Cost in respective the loss in foreign exchange difference on Foreign Currency Term Loan of Axis Bank Ltd, is credited to the Term Loan account and debited to the respective fixed assets at proportionately.

(H) Foreign Currency Transactions : Transactions in foreign exchange are translated in Indian Rupees at the Exchange Rates prevailing at the year end as notified by Foreign Exchange Dealers Association of India (FEDAI). Items of profit and loss account are accounted for at the exchange rates prevailing on the date of transaction. Gains and losses arising on account of periodic revisions of such standard exchange rates and also on realization are accounted to profit and loss account.

None of the fixed assets have been acquired out these foreign currency loans and as such the carrying cost of these assets is not affected by fluctuations. Therefore gain/loss arising on account of fluctuation of foreign exchange rates are credited to the fixed assets and debited to Term Loan liability account.

(I) Research and Development Expenditure :

Revenue expenditure is charged to Profit and Loss Account and Capital Expenditure added to Cost of Fixed Assets.

Expenditure details on R&D for 2013-14 and 2012-13 (Rs.In Lacs)

Particulars 2013-14 2012-13

a) Capital 00.00 00.67

b) Recurring 63.96 83.55

Total Rs.63.96 84.22

Total as 0.70% 0.47% R&D expenditure

a percentage of total turnover :

(J) Provisions, Contingent Liabilities and Contingent Assets :

A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent Liabilities, if material are disclosed by way of notes to accounts. Contingent Assets are not disclosed or recognized in the financial statements.

(K) Recognition of Income and Expenditure :

a) The revenue is recognized when no significant uncertainty as regards reliability exist. In case of claims, revenue is recognized on admittance of the claim.

b) Sales Tax Benefits: Shortfall / Increase in the sales tax refund receivable by the company is accounted in the year in which the final assessment by sales tax authorities is completed. The Sales Tax amount of Rs. 83.58 Lacs is due under PSI1993 Scheme is paid during the year.

(L) Investment: Investments are stated at cost.

(M) Deferred Revenue Expenditure: Nil

(N) Impairment of Assets: AS-28

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired. The impaired loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.


Mar 31, 2013

A) Accounting Convention : The financial statements are prepared on Historical Cost basis on the assumption of going concern concept.

B) Fixed Assets and Depreciation

i) Fixed Assets stated at cost of acquisition / constructions less depreciation.

ii) Depreciation on Assets is provided on Written Down Value Method at the rates and in the manner, specified in Schedule XIV of the Companies Act 1956.

iii) Continuous Process Plants as defined in Schedule XIV to the Companies Act, 1956 have been considered on Technical Assessment and Depreciation provided accordingly.

C) Inventories

a) Finished goods are valued at cost or net realizable value whichever is the lower.

b) Stock in process is valued at cost.

c) Stock of raw materials, stores and spares and packing materials are valued at lower of cost or net realizable value.

d) Finished Goods in transit is valued at cost or net realizable value whichever is lower.

e) Imported Raw material is lying with Nava Sheva Port, Balaji Warehouse, Mumbai is valued at cost..

D) Sale of Goods : Revenue from Sale of Goods is recognized when all the significant risk and rewards of ownership of the goods have been part to the buyer. The company collects the Sales Tax and value added taxes (VAT) on behalf of the Government and therefore these are not economic benefits flowing to the company. Hence there are excluded from the revenue. Excise duty deducted from revenue (Gross) is the amount i.e. included in the revenue (gross) and not the entire amount of liability arising during the year.

E) Staff Retirement Benefits

a) Contribution to Provident Fund are funded as a Percentage of Salary / Wages.

b) Provision for leave encashment salary is not made on the basis of actuarial valuation at the year ended of Rs.625232/- . Subject to this amount, the profit changes.

c) Provision for Gratuity is made of as per payment of Gratuity Act. As per Accounting Standard 15, the gratuity amount is not provided separately.

F) Provision for Current Tax is made on the basis of relevant provisions of Income-Tax Act, 1961 considering the benefit of Exemption of R & D u/s 35 (2AB) of Income Tax Act. The Deferred Tax for timing differences between the Book and Tax Profits for the year is accounted for using the Tax Rates and Laws that have been substantively enacted as at the Balance Sheet.

G) Borrowing Costs : Costs in respect of borrowing for the purpose of expansion project have been capitalized in accordance with Accounting Standard-16 issued by The Institute of Chartered Accountants of India. During the year, the company has availed the term loan from AXIS Bank Limited, Pune towards construction of factory shed and purchase of plant and machinery and others of Rs. 700.00 lacs.and interest of Rs. 47.00 lacs as on 31.3.2013 is capitalized during the period.

H) Foreign Currency Transactions : Transactions in foreign exchange are translated in Indian Rupees at the Exchange Rates prevailing at the year end as notified by Foreign Exchange Dealers Association of India (FEDAI). Items of profit and loss account are accounted for at the exchange rates prevailing on the date of transaction. Gains and losses arising on account of periodic revisions of such standard exchange rates and also on realization are accounted to profit and loss account.

None of the fixed assets have been acquired out these foreign currency loans and as such the carrying cost of these assets is not affected by fluctuations. Therefore gain/loss arising on account of fluctuation of foreign exchange rates are credited to the fixed assets and debited to Term loan liability account.

I) Research and Development Expenditure : Revenue expenditure is charged to Profit and Loss Account and Capital Expenditure added to Cost of Fixed Assets.

J) Provisions, Contingent Liabilities and Contingent Assets : A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent Liabilities, if material are disclosed by way of notes to accounts. Contingent Assets are not disclosed or recognized in the financial statements.

K) Recognition of Income and Expenditure

i) The revenue is recognized when no significant uncertainty as regards reliability exist. In case of claims, revenue is recognized on admittance of the claim.

ii) Sales Tax Benefits: Shortfall / increase in the sales tax refund receivable by the company is accounted in the year in which the final assessment by sales tax authorities is completed. The Sales Tax amount of Rs. 71.39 Lacs is due under PSI1993 Scheme is paid during the year.

L) Investment : Investments are stated at cost.

M) Deferred Revenue Expenditure : Nil

N) Impairment of Assets : AS-28

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired. The impaired loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.


Mar 31, 2012

A) Accounting Convention : The Financial statements are prepared on Historical Cost basis on the assumption of going concern concept.

B) Fixed Assets and Depreciation

i) Fixed Assets stated at cost of acquisition / constructions less depreciation.

ii) Depreciation on Assets is provided on Written Down Value Method at the rates and in the manner, specified in Schedule XIV of the Companies Act, 1956.

iii) Continuous Process Plants as defined in Schedule XIV to the Companies Act, 1956 have been considered on Technical Assessment and Depreciation provided accordingly.

C) Inventories

a) Finished goods are valued at cost or net realizable value which ever is the lower.

b) Stock in process is valued at cost.

c) Stock of raw materials, stores and spares and packing materials are valued at lower of cost or net realizable value.

D) Sale of Goods : Revenue from Sale of Goods is recognized when all the significant risk and rewards of ownership of the goods have been part to the buyer. The Company collect the Sales Tax and Value Added Taxes (VAT) on behalf of the Government and therefore these are not economic benefits flowing to the Company . Hence there are excluded from the revenue. Excise duty deducted from revenue (Gross) is the amount i.e. included in the revenue (gross) and not the entire amount of liability arising during the year.

E) Staff Retirement Benefits

a) Contribution to Provident Fund are funded as a Percentage of Salary / Wages.

b) Provision for leave encashment salary is made on the basis of actuarial valuation at the yearend.

c) Provision for Gratuity is made of as per payment of Gratuity Act. As per Accounting Standards it is not funded.

F) Provision for Current Tax is made on the basis of relevant provisions of Income Tax Act, 1961 considering the benefit of Exemption of R & D u/s 35 (2AB) of Income Tax Act. The Deferred Tax for timing differences between the Book and Tax Profits for the year is accounted for using the Tax Rates and Laws that have been substantively enacted as at the Balance Sheet.

G) Borrowing Costs : Costs in respect of borrowing for the purpose of expansion project have been capitalized in accordance with Accounting Standard-16 issued by The Institute of Chartered Accountants of India. During the year, the Company has availed the term loan from AXIS Bank Limited , Pune towards construction of factory shed and purchase of plant and machinery and others of Rs. 4.99 Crores. Interest of Rs. 11.95 Lacs as on 31.3.2012 is added to various fixed assets.

H) Foreign Currency Transactions : Transactions in foreign exchange are translated in Indian Rupees at the Exchange Rates prevailing at the year end as notified by Foreign Exchange Dealers Association of India (FEDAI). Items of profit and loss account are accounted for at the exchange rates prevailing on the date of transaction. Gains and losses arising on account of periodic revisions of such standard exchange rates and also on realization are accounted to profit and loss account.

None of the fixed assets have been acquired out of these foreign currency loans and as such the carrying cost of these assets is not affected by fluctuations. Therefore gain/loss arising on account of fluctuation of foreign exchange rates are credited to the fixed assets and debited to Term loan liability account.

I) Research and Development Expenditure : Revenue expenditure is charged to Profit and Loss Account and Capital Expenditure added to Cost of Fixed Assets.

J) Provisions, Contingent Liabilities and Contingent Assets : A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent Liabilities , if material are disclosed by way of notes to accounts. Contingent Assets are not disclosed or recognized in the Financial statements.

K) Recognition of Income and Expenditure

i) The revenue is recognized when no significant uncertainty as regards reliability exist. In case of claims, revenue is recognized on admittance of the claim.

ii) Sales Tax Benefits : Shortfall / increase in the sales tax refund receivable by the Company is accounted in the year in which the final assessment by sales tax authorities is completed. The Sales Tax amount of Rs. 50.56 Lacs is due under PSI1993 Scheme is paid during the year.

L) Investment : Investments are stated at cost.

M) Deferred Revenue Expenditure : Nil

N) Impairment of Assets : AS-28

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable

value. An impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired. The impaired loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.


Mar 31, 2011

(A) Accounting Convention : The financial statements are prepared on Historical Cost basis on the assumption of going concern concept.

(B) Fixed Assets and Depreciation.

i) Fixed Assets stated at cost of acquisition / constructions less depreciation.

ii) Depreciation on Assets is provided on Written Down Value Method at the rates and in the manner, specified in Schedule XIV of the Companies Act 1956. iii) Continues Process Plants as defined in Schedule XIV to the Companies Act, 1956 have been considered on Technical Assessment & Depreciation provided accordingly.

(C) Inventories :

a) Finished goods are valued at cost or net realizable value which ever is the lower.

b) Stock in process is valued at cost.

c) Stock of raw materials, stores and spares and packing materials are valued at lower of cost or net realizable value.

(D) Sale of Products :

a) Sales includes excise duty and sales tax arising on sale transactions but trade discount are separately booked as a expenditure.

b) Excise duty is chargeable on production but is payable on clearance of goods. Excise duty on the goods manufactured by the company is accounted for at the time of their clearance. Duty on finished goods, lying in the bonded warehouse as on the balance sheet date, is not provided for.

(E) Staff Retirement Benefits :

a) Contribution to Provident Fund are funded as a Percentage of Salary/ Wages.

b) Provision for leave encashment salary is made on the basis of actuarial valuation at theyearend.

c) Provision for Gratuity is made of as per payment of Gratuity Act.

(F) Provision for Current Tax is made on the basis of relevant provisions of Income-Tax Act, 1961 considering the benefit of Exemption of EOU u/s 10B of Income Tax Act. The Deferred Tax for timing differences between the Book and Tax Profits for the year is accounted for using the Tax Rates and Laws that have been substantively enacted as at the Balance Sheet.

(G) Borrowing Costs : Costs in respect of borrowing for the purpose of expansion project have been capitalized in accordance with Accounting Standard 16 issued by The Institute of Chartered Accountants of India- No loan is obtained during the year.

(H) Foreign Currency Transactions : Transactions in foreign exchange are translated in Indian Rupees at the Exchange Rates prevailing at the year end as notified by Foreign Exchange Dealers Association of India (FEDAI). Items of profit and loss account are accounted for at the exchange rates prevailing on the date of transaction. Gains and losses arising on account of periodic revisions of such standard exchange rates and also on realization are accounted to profit and loss account.

None of the fixed assets have been acquired out these foreign currency loans and as such the carrying cost of these assets is not affected by fluctuations. Therefore gain/loss arising on account of fluctuation of foreign exchange rates are credited to the fixed assets and debited to Term loan liability account.

(I) Research and Development Expenditure :

Revenue expenditure is charged to Profit and Loss Account and Capital Expenditure added to Cost of Fixed Assets.

Expenditure details on R & D for 2010-11 and 2009-10 (Rs. in Lacs)

Particulars 2010-11 2009-10

a) Capital 26.60 42.28

b) Recurring 77.36 82.82

Total Rs. 103.96 125.10

Total R&D expenditure as 0.66% 1.04% a percentage of total turnover

(J) Provisions, Contingent Liabilities and Contingent Assets :

A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent Liabilities, if material are disclosed by way of notes to accounts. Contingent Assets are not disclosed or recognized in the financial statements.

(K) Recognition of Income and Expenditure.:

i) The revenue is recognized when no significant uncertainty as regards reliability exist. In case of claims, revenue is recognized on admittance of the claim.

ii) Sales Tax Benefits : Shortfall / increase in the sales tax refund receivable by the company is accounted in the year in which the final assessment by sales tax authorities is completed. The Sales Tax amount of Rs. 25.16 lacs is due under PSI1993 Scheme is paid during the year.

(L) Investment: Investments are stated at cost.

(M) Deferred Revenue Expenditure : Out of the total expenditure of Rs. 25.21 lacs, the company has transferred Rs.8.40 lacs to Profit and Loss Account during the year.

(N ) Impairment of Assets : AS-28

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired. The impaired loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.


Mar 31, 2010

(A) Accounting Convention : The financial statements are prepared on Historical Cost basis on the assumption of going concern concept.

(B) Fixed Assets and Depreciation.

i) Fixed Assets stated at cost of acquisition / constructions less depreciation.

ii) Depreciation on Assets is provided on Written Down Value Method at the rates and in the manner, specified in Schedule XIV of the Companies Act 1956.

iii) Continues Process Plants as defined in Schedule XIV to the Companies Act, 1956 have been considered on Technical Assessment and Depreciation provided accordingly.

(C) Inventories :

a) Finished goods are valued at cost or net realizable value which ever is the lower.

b) Stock in process is valued at cost.

c) Stock of raw materials, stores and spares and packing materials are valued at lower of cost or net realizable value.

(D) Sale of Products :

a) Sales includes excise duty and sales tax arising on sale transactions but trade discount are separately booked as a expenditure.

b) Excise duty is chargeable on production but is payable on clearance of goods. Excise duty on the goods manufactured by the company is accounted for at the time of their clearance. Duty on finished goods, lying in the bonded warehouse as on the balance sheet date, is not provided for.

(E) Staff Retirement Benefits :

a. Contribution to Provident Fund are funded as a Percentage of Salary / Wages.

b. Provision for leave encashment salary is made on the basis of actuarial valuation attheyearend.

c. Provision for Gratuity is made of as per payment of Gratuity Act.

(F) Provision for Current Tax is made on the basis of relevant provisions of Income-Tax Act, 1961 considering the benefit of Exemption of EOU u/s 10 B of Income Tax Act. The Deferred Tax for timing differences between the Book and Tax Profits for the year is accounted for using the Tax Rates and Laws that have been substantively enacted as at the Balance Sheet.

(G) Borrowing Costs : Costs in respect of borrowing for the purpose of expansion project have been capitalized in accordance with Accounting Standard 16 issued by The Institute of Chartered Accountants of India.

(H) Foreign Currency Transactions : Transactions in foreign exchange are translated in Indian Rupees at the Exchange Rates prevailing at the year end as notified by Foreign

Exchange Dealers Association of India (FEDAI). Items of profit and loss account are accounted for at the exchange rates prevailing on the date of transaction. Gains and losses arising on account of periodic revisions of such standard exchange rates and also on realization are accounted to profit and loss account. None of the fixed assets have been acquired out these foreign currency loans and as such the carrying cost of these assets is not affected by fluctuations. Therefore the gain / loss arising on account of fluctuation of foreign exchange rates is taken to profit and loss account as per AS-11.

(I) Research and Development Expenditure :

Revenue expenditure is charged to Profit and Loss Account and Capital Expenditure added to Cost of Fixed Assets.

(]) Provisions, Contingent Liabilities and Contingent Assets :

A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent Liabilities, if material are disclosed by way of notes to accounts. Contingent Assets are not disclosed or recognized in the financial statements.

(K) Recognition of Income and Expenditure.:

i) The revenue is recognized when no significant uncertainty as regards reliability exist. In case of claims, revenue is recognized on admittance of the claim.

ii) Sales Tax Benefits : Shortfall / increase in the sales tax refund receivable by the company is accounted in the year in which the final assessment by sales tax authorities is completed. Company has repaid Sales tax loan amount payable under PSI 1988 Scheme. The sales tax amount of Rs. 19.55 lacs is due under PSI 1993 scheme for the year.

(L) Investment: Investments are stated at cost.

(M) Deferred Revenue Expenditure : During the year Rs. 25.21 lacs has paid against Foreign Technical consulting charges which is deferred for three years. Out of which Rs 8.40 lacs is transferred to Profit & Loss account. Out of existing Deferral Revenue Expenditure Rs. 8.31 lacs is transferred to Profit and Loss Account.

(N) Impairment of Assets : AS-28

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired. The impaired loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.


Mar 31, 2000

1. GENERAL :

a) The accounts have been prepared under the historical cost convention and on the basis of a going concern.

b) Accounting policies not specifically referred to are consistent and in consonance with generally accepted accounting principles.

c) Expenses and income to the extent considered payable and receivable respectively are accounted for on accrual basis.

d) Contingencies which can be reasonably ascertained are provided for it, in opinion of the Company

2. SALES :

a) Sales includes Excise Duty, Sales Tax and foreign exchange differences arising on sale transaction, but trade discount are separately booked as a expenditure.

b) Excise duty is chargeable on production but is payable on clearance of goods. Excise duty on the goods manufactured by the Company is accounted for at the time of their clearance. Duty on finished goods, lying in the Bonded Warehouse as on the Balance Sheet date, is not provided for.

3. VALUATION OF INVENTORIES :

a) Raw Materials, Consumable, Work in Process, Stores, Packing Material and Spares are valued at cost.

b) Finished goods are valued at lower of cost and net realisable value. Cost for this purpose inlcludes direct materials, direct labour, factory administration and other overheads.

4. FIXED ASSETS :

Fixed Assets are stated at cost of acquisition or construction less depreciation.

5. INVESTMENTS :

Long term investments are valued at cost.

6. MISCELLANEOUS EXPANDER :

Preliminary expenses are written off over a period of ten years from the year of commencement of commercial production.

7. RETIREMENT BENEFITS :

i) No provision is made for accrued gratuity liability by the Company. The amount is uncertained. the necessary provision will be made in the respective year of payment.

ii) Provision is made for the value of unutilised leave due to employees at the end of the year.

8. RECOGNITION OF INCOME & EXPENDITURE :

The Revenue is recognised when no significant uncertainty as regards realisability exist. In case of claims revenue is recognised on admittance of the claim.

9. FOREIGH EXCHANGE TRANSACTIONS :-

Foreign Exchange transactions are recorded at the exchange rates prevailing on the date of transaction.

10. EXPORT BENEFITS :

Export benefits arising on account of entitlement of duty free import under Duty Entitlement Pass Book Scheme is accounted in the year of exports.

Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X