Mar 31, 2018
NOTE 1 : SIGNIFICANT ACCOUNTING POLICIES
1.1 Basis of preparation
a) Statement of Compliance:
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time). For all periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).
The financial statements are prepared in accordance with the historical cost convention except for certain items that are measured at fair values at the end of each reporting period, as explained in the accounting policies. The financial statements are prepared on a âgoing concernâ basis under accrual method except for the cash flow information.
b) Classification of Assets and Liabilities as Current and Non-Current:
All Assets and Liabilities have been classified as Current or Non-Current as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of product & activities of the Company and their realisation in cash and cash equivalent, the Company has determined its operating cycle as twelve months for the purpose of Current and Non-Current classification of assets and liabilities. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
c) Functional and Presentation Currency:
The financial statements are presented in Indian Rupees (?) and all values are rounded to the nearest two decimal of lakhs (''00,000), except when otherwise indicated.
1.2 First-time adoption of Ind AS
Company has prepared the financial statements under Ind AS for the first time for the year ending 31st March 2018. The date of transition to Ind AS is 01.04.2016.
For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with generally accepted accounting principle in India (Indian GAAP). Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for period ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017. For the purpose, the Company prepared the opening balance sheet as of April 1, 2016 (the transition date), as per Ind AS. Company has applied the Standards only to items / transactions which are material.
1.3 Property, plant and equipment (PPE)
The Company has elected to continue with the carrying value for all of its PPE as recognised in its Indian GAAP financial statements as deemed cost at the transition date, viz., April 01, 2016.
PPE are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost of PPE includes interest on borrowings attributable to acquisition of qualifying PPE up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Any trade discounts and rebates are deducted in arriving at the purchase price. The cost is net of input tax credit availed. The Company identifies and determines the cost of each part of an item of PPE separately, if the part has a cost which is significant to the total cost of that item of PPE and has useful life that is materially different from that of the remaining item. Subsequent expenditure relating to PPE is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance. All other costs are recognised in the statement of Profit and Loss as and when incurred as repairs and maintenance. Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest (if any). Advances given towards acquisition of PPE outstanding at each Balance Sheet date are disclosed as Other Non-Current Assets. An item of PPE is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any profit or loss arising on derecognition of the asset is included in the statement of profit and loss when the asset is derecognised.
1.4 Intangible Assets
Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its purchase price and any directly attributable expenditure on making the asset ready for its intended use. Subsequent expenditure on an intangible asset after its purchase or completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of asset.
1.5 Depreciation and amortization of property, plant and equipment and intangible assets
Depreciation is provided on straight line method based on the following useful lives / residual values as prescribed in Part C of Schedule II of the Companies Act, 2013. Depreciation is charged on a proportionate basis for all assets purchased and sold during the year. Extra Shift Depreciation has been charged, where applicable.
Consideration is given at each balance sheet date to determine whether there is any indication of an impairment to a tangible / intangible asset. If any indication exists, an assetâs recoverable amount is estimated. An asset is treated as impaired when the carrying amount of asset exceeds its recoverable value. The impairment loss is charged to statement of profit and loss in the year in which an asset is identified as impaired.
1.6 Inventories
Inventories are valued at the lower of cost and the net realisable value after providing for obsolescence and other losses, where considered necessary. However, materials and other supplies held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.
Cost is determined on a weighted average basis. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges.
Work-in-progress and finished goods include an appropriate proportion of freight, overheads, direct costs and excise duty (where applicable).
1.7 Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
1.8 Financial Instruments
Financial assets and liabilities are recognised when the Company becomes a party to the contract that gives rise to financial assets and financial liabilities. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability.
a) Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
b) Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets at fair value through profit or loss are immediately recognised in statement of profit and loss.
De-recognition
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized when the obligation specified in the contract is discharged or cancelled or expires.
Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
Reclassification of Financial Instruments
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.
Offsetting of Financial Instruments
Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
1.9 Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses following hierarchy and assumptions that are based on market conditions and risks existing at each reporting date.
Fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, as described hereunder:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2 - Other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 - Unobservable inputs for the asset or liability.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
1.10 Provisions and Contingencies
a) Provisions:
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.
b) Contingencies:
Claims against the Company not acknowledged as debts are treated as Contingent Liabilities. Provision in respect of contingent liabilities if any, is made when it is probable that a liability may be incurred and the amount can be reasonably estimated. Show cause notices issued by various Government authorities are not considered as contingent liabilities. However, when the demands are raised against such show cause notices after considering the Companyâs views, these demands are either paid or treated as liabilities, if accepted by the company, and are treated as contingent liability, if disputed by the Company. Contingent liabilities are disclosed by way of a note. Contingent assets are not recognised but are disclosed in notes.
1.11 Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable for supply of goods or services net of returns, discounts, rebates and allowances.
a) Sale of Goods:
Sales of goods are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the despatch of goods to customers. Sales include excise duty (where applicable), but exclude GST and Value Added Tax. Income from sale of electricity is recognized as and when electricity is generated and supplied to the grid.
b) Dividend Income and Interest Income:
Dividend income is accounted for when the right to receive it is established. Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis.
c) Insurance claims:
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.
1.12 Foreign Currency Transactions and Translations
Foreign exchange transactions are recorded at the rate prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognised in the Statement of Profit and Loss of the year.
Monetary items denominated in foreign currencies as at the Balance Sheet date are translated at the exchange rates on that date; the resultant exchange differences are recognised in the Statement of Profit and Loss as income or expense.
Non-monetary items are recorded at the rate prevailing on 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 is measured.
Premium / discount on forward exchange contracts if any are amortised over the period of the contracts if such contracts relate to monetary items as at the Balance Sheet date.
1.13 Employee benefits
Employee benefits include provident fund, superannuation fund, gratuity fund and compensated absences.
a) Defined contribution plans:
The Companyâs contribution to provident fund and superannuation fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made and when services are rendered by the employees.
b) Defined benefit plans:
For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.
c) Others:
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service.
Re-measurements of the net defined benefit liability / (asset) comprising of actuarial gains and losses and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability, based on actuarial valuation made by an independent actuary, at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled.
1.14 Borrowing cost
Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily takes a substantial period of time to get ready for their intended use are capitalised. Borrowing costs on general borrowings are determined using a capitalisation rate which is computed as the weighted average of the borrowing costs applicable to the borrowings of the enterprise that are outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. Other borrowing costs are accounted as an expense in the period in which they are incurred.
1.15 Leases
Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such assets are capitalised at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments under operating leases are recognised as an expense on a straight line basis in net profit in the Statement of Profit & Loss over lease term.
1.16 Taxes on income
a) Current Tax:
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961 and at the rates enacted by the statute on the Balance Sheet date. Assets and liabilities representing current tax are disclosed on a net basis where there is a legally enforceable right to set off and where the Management intends to settle the asset and liability on a net basis.
b) Deferred Tax:
The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is reasonably/ virtually certain (as the case may be) to be realised.
Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. MAT is recognised as deferred tax assets in the Balance Sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised.
Current and deferred tax are recognised in the Statement of Profit and Loss, except when they relate to items that are recognised in Other Comprehensive Income or directly in equity, in which case, the current and deferred tax are also recognised in Other Comprehensive Income or directly in equity respectively.
1.17 Earnings Per Share
Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.
1.18 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
1.19 Segment reporting
The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organization and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.
Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors.
Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under âunallocated revenue / expenses / assets / liabilitiesâ.
1.20 Cash dividend to equity shareholders of the Company
The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Companyâs Board of Directors.
1.21 Standards issued but not yet effective
The standards issued, but not yet effective up to the date of issuance of the Companyâs financial statements are disclosed below. The Company intends to adopt these standards as and when they become effective.
a) Ind AS 115 - Revenue from Contracts with Customers:
Ind AS 115 introduces a five step model for the analysis of revenue transactions. The model specifies that revenue should be recognised when an entity transfer control of goods or services to a customer at the amount to which the entity expects to be entitled. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers. The standard is notified on 28.03.2018 and it is applicable for the accounting periods commencing on or after 01.04.2018. Accordingly, this Standard is not applicable for preparation of the financial statements for the year ended 31.03.2018. However, application of this standard from 01.04.2018 does not have any impact in the revenue recognition and measurement for the Company.
b) Appendix B to Ind AS 21 Foreign Currency Transactions and Advance Consideration:
The Appendix clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The Appendix is effective for accounting periods beginning on or after 1 April 2018. The Company does not anticipate that the application of the new standard in future will have significant impact on the financial statement.
Mar 31, 2016
CORPORATE INFORMATION
The South India Paper Mills Ltd is a public limited Company, incorporated under the provisions of the Companies Act,1956. The Company is engaged in the manufacture of Paper, Paperboards, Cartons and Power Generation. Corporate Identity No. (CIN) of the Company is L85110KA1959PLC001352. Equity Shares of the Company are listed on the BSE (Bombay Stock Exchange) in India.
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 Basis of preparation of financial statements
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
1.2 Use of estimates
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts of income and expenditure during the year. Examples include provisions for doubtful debts, provision for employee benefits, provision for taxation, useful lives of depreciable assets, provisions for impairment, provision for contingencies, provision for warranties / discounts etc. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable.
Future results could differ from those estimates. The effects of changes in accounting estimates are reflected in the financial statements in the period in which results are known and, if material, their effects are disclosed in the financial statements.
1.3 Inventories
Inventories are valued at the lower of cost and the net realizable value after providing for obsolescence and other losses, where considered necessary. However, materials and other supplies held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.
Cost is determined on a weighted average basis. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges.
Work-in-progress and finished goods include an appropriate proportion of freight, overheads, direct costs and excise duty (where applicable).
1.4 Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
1.5 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
1.6 Depreciation & amortization
Depreciation on fixed assets is provided on straight line method based on the following useful lives / residual values as prescribed in Part C of Schedule II of the Companies Act, 2013. Depreciation is charged on a
Note 1: Intangible Asset - Software is amortized over 6 years, based on managementâs estimate of useful life
1.7 Revenue Recognition
Sales of goods are recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the dispatch of goods to customers. Sales include excise duty (where applicable), but exclude sales tax and Value Added Tax.
Income from sale of electricity is recognized as and when electricity is generated and supplied to the grid. Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.
1.8 Fixed assets
Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. The cost is net of VAT and CENVAT credit availed.
Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.
Land acquired on lease for 99 years or less is treated as leasehold land.
Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises its purchase price and any directly attributable expenditure on making the asset ready for its intended use. Subsequent expenditure on an intangible asset after its purchase or completion is recognized as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of asset. Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest (if any).
1.9 Foreign Currency Transactions and Translations
Foreign exchange transactions are recorded at the rate prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss of the year.
Monetary assets and liabilities denominated in foreign currencies as at the Balance Sheet date are translated at the exchange rates on that date; the resultant exchange differences are recognized in the Statement of Profit and Loss as income or expense.
Premium / discount on forward exchange contracts if any are amortized over the period of the contracts if such contracts relate to monetary items as at the Balance Sheet date.
1.10 Investments
Investments are either classified as current or long-term based on Managementâs intent at the time of making the investment. Current investments are carried individually, at the lower of cost and fair value. Long-term investments (excluding investment properties) are carried individually at cost less provision made to recognize any diminution, other than temporary, in the value of such investment. Cost of investments include acquisition charges such as brokerage, fees and duties. Provision is made to recognize any reduction in the carrying value of long-term investments and any reversal of such reduction is credited to the Statement of Profit and Loss.
1.11 Employee benefits
Employee benefits include provident fund, superannuation fund, gratuity fund and compensated absences. Defined contribution _plans
The Companyâs contribution to provident fund and superannuation fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made and when services are rendered by the employees.
Defined benefit plans
For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognized in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested and otherwise is amortized on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognized in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.
Others
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service.
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognized as a liability, based on actuarial valuation made by an independent actuary, at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled.
1.12 Borrowing cost
Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily takes a substantial period of time to get ready for their intended use are capitalized. Borrowing costs on general borrowings are determined using a capitalization rate which is computed as the weighted average of the borrowing costs applicable to the borrowings of the enterprise that are outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. Other borrowing costs are accounted as an expense in the period in which they are incurred.
1.13 Segment reporting
The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organization and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.
Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors.
Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under âunallocated revenue / expenses / assets / liabilitiesâ.
1.14 Leases
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the less or are recognized as operating leases. Lease rentals under operating leases are recognized in the Statement of Profit and Loss on a straight-line basis. The Company has not entered into any finance lease arrangements.
1.15 Earnings Per Share
Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.
1.16 Taxes on income
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961 and at the rates enacted by the statute on the Balance Sheet date. Assets and liabilities representing current tax are disclosed on a net basis where there is a legally enforceable right to set off and where the Management intends to settle the asset and liability on a net basis.
The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is reasonably/ virtually certain (as the case may be) to be realized.
1.17 Impairment
Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the companyâs fixed asset. If any indication exists, an assetâs recoverable amount is estimated. An asset is treated as impaired when the carrying amount of asset exceeds its recoverable value. The impairment loss is charged to Statement of profit and loss in the year in which an asset is identified as impaired.
1.18 Provisions and contingencies
A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.
Show cause notices issued by various Government authorities are not considered as contingent liabilities. However, when the demands are raised against such show cause notices after considering the Companyâs views, these demands are either paid or treated as liabilities, if accepted by the company, and are treated as contingent liability, if disputed by the Company.
Contingent liabilities are disclosed by way of a note. Contingent assets are neither recognized nor disclosed in the financial statements.
1.19 Insurance claims
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.
As per the records of the Company, including its register of members/shareholders, the above shareholding represents both legal and beneficial ownership of the shares.
Mar 31, 2015
1.1 Basis of preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 2013. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year.
1.2 Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities and
disclosures relating to contingent liabilities as at the date of the
financial statements and the reported amounts of income and expenditure
during the year. Examples include provisions for doubtful debts,
provision for employee benefits, provision for taxation, useful lives
of depreciable assets, provisions for impairment, provision for
contingencies, provision for warranties / discounts etc. The management
believes that the estimates used in preparation of the financial
statements are prudent and reasonable.
Future results could differ from those estimates. The effects of
changes in accounting estimates are reflected in the financial
statements in the period in which results are known and, if material,
their effects are disclosed in the financial statements.
1.3 Inventories
Inventories are valued at the lower of cost and the net realisable
value after providing for obsolescence and other losses, where
considered necessary. However, materials and other supplies held for
use in the production of inventories are not written down below cost if
the finished products in which they will be incorporated are expected
to be sold at or above cost.
Cost is determined on a weighted average basis. Cost includes all
charges in bringing the goods to the point of sale, including octroi
and other levies, transit insurance and receiving charges.
Work-in-progress and finished goods include an appropriate proportion
of freight, overheads, direct costs and excise duty (where applicable).
1.4 Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
1.5 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
1.6 Depreciation & amortisation
Depreciation on fixed assets is provided on straight line method based
on the following useful lives / residual values as prescribed in Part C
of Schedule II of the Companies Act, 2013. Depreciation is charged on a
proportionate basis for all fixed assets purchased and sold during the
year. Extra Shift Depreciation has been charged, where applicable.
1.7 Revenue Recognition
Sales of goods are recognised, net of returns and trade discounts, on
transfer of significant risks and rewards of ownership to the buyer,
which generally coincides with the despatch of goods to customers.
Sales include excise duty (where applicable), but exclude sales tax and
Value Added Tax.
Income from sale of electricity is recognized as and when electricity
is generated and supplied to the grid.
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established.
1.8 Fixed assets
Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date. The cost is net of VAT
and CENVAT credit availed.
Subsequent expenditure relating to fixed assets is capitalised only if
such expenditure results in an increase in the future benefits from
such asset beyond its previously assessed standard of performance.
Intangible assets are carried at cost less accumulated amortisation and
impairment losses, if any. The cost of an intangible asset comprises
its purchase price and any directly attributable expenditure on making
the asset ready for its intended use. Subsequent expenditure on an
intangible asset after its purchase or completion is recognised as an
expense when incurred unless it is probable that such expenditure will
enable the asset to generate future economic benefits in excess of its
originally assessed standards of performance and such expenditure can
be measured and attributed to the asset reliably, in which case such
expenditure is added to the cost of asset.
Projects under which assets are not ready for their intended use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest (if any).
1.9 Foreign Currency Transactions and Translations
Foreign exchange transactions are recorded at the rate prevailing on
the date of the transaction. Exchange differences arising on foreign
exchange transactions settled during the year are recognised in the
Statement of Profit and Loss of the year.
Monetary assets and liabilities denominated in foreign currencies as at
the Balance Sheet date are translated at the exchange rates on that
date; the resultant exchange differences are recognised in the
Statement of Profit and Loss as income or expense.
Premium / discount on forward exchange contracts are amortised over the
period of the contracts if such contracts relate to monetary items as
at the Balance Sheet date.
1.10 Investments
Investments are either classified as current or long-term based on
Management's intent at the time of making the investment. Current
investments are carried individually, at the lower of cost and fair
value. Long-term investments (excluding investment properties) are
carried individually at cost less provision made to recognise any
diminution, other than temporary, in the value of such investment. Cost
of investments include acquisition charges such as brokerage, fees and
duties. Provision is made to recognise any reduction in the carrying
value of long-term investments and any reversal of such reduction is
credited to the Statement of Profit and Loss.
1.11 Employee benefits
Employee benefits include provident fund, superannuation fund, gratuity
fund and compensated absences. Defined contribution _plans
The Company's contribution to provident fund and superannuation fund
are considered as defined contribution plans and are charged as an
expense as they fall due based on the amount of contribution required
to be made and when services are rendered by the employees.
Defined benefit plans
For defined benefit plans in the form of gratuity fund, the cost of
providing benefits is determined using the Projected Unit Credit
method, with actuarial valuations being carried out at each Balance
Sheet date. Actuarial gains and losses are recognised in the Statement
of Profit and Loss in the period in which they occur. Past service cost
is recognised immediately to the extent that the benefits are already
vested and otherwise is amortised on a straight-line basis over the
average period until the benefits become vested. The retirement benefit
obligation recognised in the Balance Sheet represents the present value
of the defined benefit obligation as adjusted for unrecognized past
service cost, as reduced by the fair value of scheme assets. Any asset
resulting from this calculation is limited to past service cost, plus
the present value of available refunds and reductions in future
contributions to the schemes.
Others
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
include performance incentive and compensated absences which are
expected to occur within twelve months after the end of the period in
which the employee renders the related service.
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related service are recognised as a liability, based on actuarial
valuation made by an independent actuary, at the present value of the
defined benefit obligation as at the Balance Sheet date less the fair
value of the plan assets out of which the obligations are expected to
be settled.
1.12 Borrowing cost
Borrowing costs directly attributable to acquisition or construction of
those fixed assets which necessarily takes a substantial period of time
to get ready for their intended use are capitalised. Borrowing costs on
general borrowings are determined using a capitalisation rate which is
computed as the weighted average of the borrowing costs applicable to
the borrowings of the enterprise that are outstanding during the
period, other than borrowings made specifically for the purpose of
obtaining a qualifying asset. Other borrowing costs are accounted as an
expense in the period in which they are incurred.
1.13 Segment reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organization and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive Management
in deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company.
Segment revenue, segment expenses, segment assets and segment
liabilities have been identified to segments on the basis of their
relationship to the operating activities of the segment.
Inter-segment revenue is accounted on the basis of transactions which
are primarily determined based on market / fair value factors.
Revenue, expenses, assets and liabilities which relate to the Company
as a whole and are not allocable to segments on reasonable basis have
been included under "unallocated revenue / expenses / assets /
liabilities".
1.14 Leases
Lease arrangements where the risks and rewards incidental to ownership
of an asset substantially vest with the lessor are recognised as
operating leases. Lease rentals under operating leases are recognised
in the Statement of Profit and Loss on a straight-line basis. The
Company has not entered into any finance lease arrangements.
1.15 Earnings Per Share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year.
1.16 Taxes on income
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961
and at the rates enacted by the statute on the Balance Sheet date.
Assets and liabilities representing current tax are disclosed on a net
basis where there is a legally enforceable right to set off and where
the Management intends to settle the asset and liability on a net
basis.
The deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates that have been
enacted or substantively enacted by the balance sheet date. Deferred
tax assets are recognised only to the extent there is reasonable
certainty that the assets can be realised in future; however where
there is unabsorbed depreciation or carried forward loss under taxation
laws, deferred tax assets are recognised only if there is a virtual
certainty of realisation of such assets. Deferred tax assets are
reviewed as at each balance sheet date and written down or written-up
to reflect the amount that is reasonably/ virtually certain (as the
case may be) to be realised.
1.17 Impairment
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the company's fixed asset.
If any indication exists, an asset's recoverable amount is estimated.
An asset is treated as impaired when the carrying amount of asset
exceeds its recoverable value. The impairment loss is charged to
Statement of profit and loss in the year in which an asset is
identified as impaired.
1.18 Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates.
Show cause notices issued by various Government authorities are not
considered as contingent liabilities. However, when the demands are
raised against such show cause notices after considering the
Company's views, these demands are either paid or treated as
liabilities, if accepted by the company, and are treated as contingent
liability, if disputed by the Company.
Contingent liabilities are disclosed by way of a note. Contingent
assets are neither recognised nor disclosed in the financial
statements.
1.19 Insurance claims
Insurance claims are accounted for on the basis of claims admitted /
expected to be admitted and to the extent that there is no uncertainty
in receiving the claims.
Mar 31, 2014
1.1 Basis of preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year.
1.2 Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialise.
1.3 Inventories
Inventories are valued at the lower of cost and the net realisable
value after providing for obsolescence and other losses, where
considered necessary. However, materials and other supplies held for
use in the production of inventories are not written down below cost if
the finished products in which they will be incorporated are expected
to be sold at or above cost.
Cost is determined on a weighted average basis. Cost includes all
charges in bringing the goods to the point of sale, including octroi
and other levies, transit insurance and receiving charges.
Work-in-progress and finished goods include an appropriate proportion
of freight, overheads, direct costs and excise duty (where applicable).
1.4 Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
1.5 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
1.6 Depreciation
Depreciation is provided on straight line method over the estimated
useful lives of fixed assets. The rates of depreciation prescribed in
Schedule XIV to the Companies Act, 1956 are considered as the minimum
rates. If
Management''s estimate of the useful life of a fixed asset at the time
of acquisition of the asset or of the remaining useful life on a
subsequent review is shorter than envisaged in the aforesaid schedule,
depreciation is provided at a higher rate based on the Management''s
estimate of the useful life or remaining useful life.
Pursuant to this policy, depreciation on fixed assets has been provided
at the rates prescribed in Schedule XIV to the Companies Act, 1956 as
the Management expects these rates to reflect the useful lives of these
fixed assets. As required by Schedule XIV of the Companies Act, 1956,
Extra Shift Depreciation has been charged, where applicable.
Assets individually costing Rs.5,000 or less are fully depreciated in the
year of purchase. Depreciation is charged on a proportionate basis for
all fixed assets purchased and sold during the year.
1.7 Revenue Recognition
Sales of goods are recognised, net of returns and trade discounts, on
transfer of significant risks and rewards of ownership to the buyer,
which generally coincides with the despatch of goods to customers.
Sales include excise duty (where applicable), but exclude sales tax and
Value Added Tax.
Income from sale of electricity is recognized as and when electricity
is generated and supplied to the grid.
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established. Income from
sale of shares is recognized when the title to the shares is legally
transferred to the buyer.
1.8 Fixed assets and depreciation
Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date. The cost is net of VAT
and CENVAT credit availed.
Subsequent expenditure relating to fixed assets is capitalised only if
such expenditure results in an increase in the future benefits from
such asset beyond its previously assessed standard of performance.
Projects under which assets are not ready for their intended use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest (if any).
1.9 Foreign Currency Transactions and Translations
Foreign exchange transactions are recorded at the rate prevailing on
the date of the transaction. Exchange differences arising on foreign
exchange transactions settled during the year are recognised in the
Statement of Profit and Loss of the year.
Monetary assets and liabilities denominated in foreign currencies as at
the Balance Sheet date are translated at the exchange rates on that
date; the resultant exchange differences are recognised in the
Statement of Profit and Loss as income or expense.
Premium / discount on forward exchange contracts, are amortised over
the period of the contracts if such contracts relate to monetary items
as at the Balance Sheet date.
1.10 Investments
Long-term investments (excluding investment properties), are carried
individually at cost less provision for diminution, other than
temporary, in the value of such investments. Current investments are
carried individually, at the lower of cost and fair value. The cost of
investments includes acquisition charges such as brokerage, fees and
duties.
1.11 Employee benefits
Employee benefits include provident fund, superannuation fund, gratuity
fund and compensated absences. Defined contribution plans
The Company''s contribution to provident fund and superannuation fund
are considered as defined contribution plans and are charged as an
expense as they fall due based on the amount of contribution required
to be made.
Defined benefit plans
For defined benefit plans in the form of gratuity fund, the cost of
providing benefits is determined using the Projected Unit Credit
method, with actuarial valuations being carried out at each Balance
Sheet date. Actuarial gains and losses are recognised in the Statement
of Profit and Loss in the period in which they occur. Past service cost
is recognised immediately to the extent that the benefits are already
vested and otherwise is amortised on a straight-line basis over the
average period until the benefits become vested. The retirement benefit
obligation recognised in the Balance Sheet represents the present value
of the defined benefit obligation as adjusted for unrecognized past
service cost, as reduced by the fair value of scheme assets. Any asset
resulting from this calculation is limited to past service cost, plus
the present value of available refunds and reductions in future
contributions to the schemes.
Others
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
include performance incentive and compensated absences which are
expected to occur within twelve months after the end of the period in
which the employee renders the related service.
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related service are recognised as a liability at the present value of
the defined benefit obligation as at the Balance Sheet date less the
fair value of the plan assets out of which the obligations are expected
to be settled.
1.12 Borrowing cost
Borrowing costs directly attributable to acquisition or construction of
those fixed assets which necessarily takes a substantial period of time
to get ready for their intended use are capitalised. Borrowing costs on
general borrowings are determined using a capitalisation rate which is
computed as the weighted average of the borrowing costs applicable to
the borrowings of the enterprise that are outstanding during the
period, other than borrowings made specifically for the purpose of
obtaining a qualifying asset. Other borrowing costs are accounted as an
expense in the period in which they are incurred.
1.13 Segment reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organization and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive Management
in deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of their relationship to the operating
activities of the segment.
Inter-segment revenue is accounted on the basis of transactions which
are primarily determined based on market/ fair value factors.
Revenue, expenses, assets and liabilities which relate to the Company
as a whole and are not allocable to segments on reasonable basis have
been included under "unallocated revenue / expenses / assets /
liabilities.
1.14 Leases
Lease arrangements where the risks and rewards incidental to ownership
of an asset substantially vest with the lessor are recognised as
operating leases. Lease rentals under operating leases are recognised
in the Statement of Profit and Loss on a straight-line basis.
The Company has not entered into any finance lease arrangements.
1.15 Earnings Per Share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year.
1.16 Taxes on income
The deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates that have been
enacted or substantively enacted by the balance sheet date. Deferred
tax assets are recognised only to the extent there is reasonable
certainty that the assets can be realised in future; however where
there is unabsorbed depreciation or carried forward loss under taxation
laws, deferred tax assets are recognised only if there is a virtual
certainty of realisation of such assets. Deferred tax assets are
reviewed as at each balance sheet date and written down or written-up
to reflect the amount that is reasonably/ virtually certain (as the
case may be) to be realised.
Assets and liabilities representing current tax are disclosed on a net
basis where there is a legally enforceable right to set off and where
the Management intends to settle the asset and liability on a net
basis.
1.17 Impairment
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of
impairment exists, the recoverable amount of such assets is estimated
and impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognised for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognised in the Statement of Profit and Loss,
except in case of revalued assets.
1.18 Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates.
Show cause notices issued by various Government authorities are not
considered as contingent liabilities. However, when the demands are
raised against such show cause notices after considering the
Company''s views, these demands are either paid or treated as
liabilities, if accepted by the company, and are treated as contingent
liability, if disputed by the Company. Contingent liabilities are
disclosed by way of a note.
1.19 Insurance claims
Insurance claims are accounted for on the basis of claims admitted /
expected to be admitted and to the extent that there is no uncertainty
in receiving the claims.
As per the records of the Company, including its register of
members/shareholders, the above shareholding represents both legal and
beneficial ownership of the shares.
E. Terms / Rights attached to Equity Shares
1. The company has only one class of equity shares having a par value
of Rs.10/- per share. Each holder of equity shares 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.
2. During the year ended 31st March 2014, the amount of per share
dividend recommended by the Directors for distribution to equity
shareholders is Rs.1.50 (Previous Yr.: Rs.2.20).
3. In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
Mar 31, 2013
1.1 Basis of preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year.
1.2 Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialise.
1.3 Inventories
Inventories are valued at the lower of cost and the net realisable
value after providing for obsolescence and other losses, where
considered necessary. However, materials and other supplies held for
use in the production of inventories are not written down below cost if
the finished products in which they will be incorporated are expected
to be sold at or above cost.
Cost is determined on a weighted average basis. Cost includes all
charges in bringing the goods to the point of sale, including octroi
and other levies, transit insurance and receiving charges.
Work-in-progress and finished goods include an appropriate proportion
of freight, overheads, direct costs and excise duty (where applicable).
1.4 Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
1.5 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information
1.6 Depreciation
Depreciation is provided on straight line method over the estimated
useful lives of fixed assets. The rates of depreciation prescribed in
Schedule XIV to the Companies Act, 1956 are considered as the minimum
rates. If Management''s estimate of the useful life of a fixed asset at
the time of acquisition of the asset or of the remaining useful life on
a subsequent review is shorter than envisaged in the aforesaid
schedule, depreciation is provided at a higher rate based on the
Management''s estimate of the useful life or remaining useful life.
Pursuant to this policy, depreciation on fixed assets has been provided
at the rates prescribed in Schedule XIV to the Companies Act, 1956 as
the Management expects these rates to reflect the useful lives of these
fixed assets. As required by Schedule XIV of the Companies Act, 1956,
Extra Shift Depreciation has been charged, where applicable.
Assets individually costing Rs 5,000 or less are fully depreciated in
the year of purchase. Depreciation is charged on a proportionate basis
for all fixed assets purchased and sold during the year.
1.7 Revenue Recognition
Sales of goods are recognised, net of returns and trade discounts, on
transfer of significant risks and rewards of ownership to the buyer,
which generally coincides with the despatch of goods to customers.
Sales include excise duty (where applicable), but exclude sales tax and
Value Added Tax.
Income from sale of electricity is recognized as and when electricity
is generated and supplied to the grid.
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established. Income from
sale of shares is recognized when the title to the shares is legally
transferred to the buyer.
1.8 Fixed assets and depreciation
Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date. The cost is net of VAT
and CENVAT credit availed.
Subsequent expenditure relating to fixed assets is capitalised only if
such expenditure results in an increase in the future benefits from
such asset beyond its previously assessed standard of performance.
Projects under which assets are not ready for their intended use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest (if any).
1.9 Foreign Currency Transactions and Translations
Foreign exchange transactions are recorded at the rate prevailing on
the date of the transaction. Exchange differences arising on foreign
exchange transactions settled during the year are recognised in the
Statement of Profit and Loss of the year.
Monetary assets and liabilities denominated in foreign currencies as at
the Balance Sheet date are translated at the exchange rates on that
date; the resultant exchange differences are recognised in the
Statement of Profit and Loss as income or expense.
Premium / discount on forward exchange contracts, are amortised over
the period of the contracts if such contracts relate to monetary items
as at the Balance Sheet date.
1.10 Investments
Long-term investments (excluding investment properties), are carried
individually at cost less provision for diminution, other than
temporary, in the value of such investments. Current investments are
carried individually, at the lower of cost and fair value. The cost of
investments includes acquisition charges such as brokerage, fees and
duties.
1.11 Employee benefits
Employee benefits include provident fund, superannuation fund, gratuity
fund and compensated absences.
Defined contribution plans
The Company''s contribution to provident fund and superannuation fund
are considered as defined contribution plans and are charged as an
expense as they fall due based on the amount of contribution required
to be made.
Defined benefit plans
For defined benefit plans in the form of gratuity fund, the cost of
providing benefits is determined using the Projected Unit Credit
method, with actuarial valuations being carried out at each Balance
Sheet date. Actuarial gains and losses are recognised in the Statement
of Profit and Loss in the period in which they occur. Past service cost
is recognised immediately to the extent that the benefits are already
vested and otherwise is amortised on a straight-line basis over the
average period until the benefits become vested. The retirement benefit
obligation recognised in the Balance Sheet represents the present value
of the defined benefit obligation as adjusted for unrecognized past
service cost, as reduced by the fair value of scheme assets. Any asset
resulting from this calculation is limited to past service cost, plus
the present value of available refunds and reductions in future
contributions to the schemes.
Others
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
include performance incentive and compensated absences which are
expected to occur within twelve months after the end of the period in
which the employee renders the related service.
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related service are recognised as a liability at the present value of
the defined benefit obligation as at the Balance Sheet date less the
fair value of the plan assets out of which the obligations are expected
to be settled.
1.12 Borrowing cost
Borrowing costs directly attributable to acquisition or construction of
those fixed assets which necessarily takes a substantial period of time
to get ready for their intended use are capitalised. Borrowing costs on
general borrowings are determined using a capitalisation rate which is
computed as the weighted average of the borrowing costs applicable to
the borrowings of the enterprise that are outstanding during the
period, other than borrowings made specifically for the purpose of
obtaining a qualifying asset. Other borrowing costs are accounted as an
expense in the period in which they are incurred.
1.13 Segment reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organization and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive Management
in deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of their relationship to the operating
activities of the segment.
Inter-segment revenue is accounted on the basis of transactions which
are primarily determined based on market / fair value factors.
Revenue, expenses, assets and liabilities which relate to the Company
as a whole and are not allocable to segments on reasonable basis have
been included under "unallocated revenue / expenses / assets /
liabilities".
1.14 Leases
Lease arrangements where the risks and rewards incidental to ownership
of an asset substantially vest with the lessor are recognised as
operating leases. Lease rentals under operating leases are recognised
in the Statement of Profit and Loss on a straight-line basis.
The Company has not entered into any finance lease arrangements.
1.15 Earnings Per Share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year.
1.16 Taxes on income
The deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates that have been
enacted or substantively enacted by the balance sheet date. Deferred
tax assets are recognised only to the extent there is reasonable
certainty that the assets can be realised in future; however where
there is unabsorbed depreciation or carried forward loss under taxation
laws, deferred tax assets are recognised only if there is a virtual
certainty of realisation of such assets. Deferred tax assets are
reviewed as at each balance sheet date and written down or written-up
to reflect the amount that is reasonably/ virtually certain (as the
case may be) to be realised.
Assets and liabilities representing current tax are disclosed on a net
basis where there is a legally enforceable right to set off and where
the Management intends to settle the asset and liability on a net
basis.
1.17 Impairment
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognised for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognised in the Statement of Profit and Loss,
except in case of revalued assets.
1.18 Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed by way of a note.
1.19 Insurance claims
Insurance claims are accounted for on the basis of claims admitted /
expected to be admitted and to the extent that there is no uncertainty
in receiving the claims.
Mar 31, 2011
1. AS - 1 : Disclosure of Accounting Policies -
The Financial statements are prepared under historical cost convention
on accrual basis and on the basis of going concern and comply with the
Accounting Standards referred to in Section 211 (3C) of the Companies
Act, 1956.
2. AS - 2 : Valuation of Inventories -
Inventories are valued in accordance with the method of valuation
prescribed under the Accounting Standard and are as under:
i) Raw Materials & Consumables - At Cost comprising of purchase price,
freight, duty, taxes and other direct costs in accordance with AS-2.
ii) Work in Process & Finished Goods - At Cost or Net Realisable Value
whichever is less.
Material Cost is determined on a weighted average basis. Net realizable
value is the expected price that it would fetch at the time of sale.
3. AS - 3: Cash Flow Statement-
Cash Flow Statement is prepared under the "Indirect Method" and is
annexed
4. AS - 4 : Contingencies & events occurring after Balance Sheet Date
-
All material events occurring after the Balance Sheet date but which
has a bearing on the conditions that existed on the balance sheet date
are taken into cognizance.
5. AS - 5 : Prior period items -
Significant items of Extra - ordinary items, prior period incomes &
expenses are accounted as per AS- 5
6. AS - 6 : Depreciation Accounting -
Depreciation has been charged in the following manner:
A. In respect of assets acquired i) WDV method at the rates prescr
upto the year ending 31.3.89 -ibed under the Income tax Rules
ii) WDV method under Schedule
XIV to the Companies Act, 1956
B. On assets acquired during the WDV method under Schedule XIV to
period from 1.4.89 to 31.3.91 the Companies Act, 1956
C. On assets acquired during 91- SLM method under Schedule XIV to
-92 & onwards the Companies Act, 1956
A. In respect of assets acquired Upto the year ended 31.3.93
upto the year ending 31.3.89 From the year 1993-94
B. On assets acquired during the From the year 1989-90
period from 1.4.89 to 31.3.91
C. On assets acquired during 91- From the year 91-92 &
-92 & onwards onwards
In respect of assets added / assets sold during the year pro-rata
depreciation has been provided at the rates prescribed under Schedule
XIV.
7. AS - 9 : Revenue Recognition -
i) Sales are recognised when products are dispatched, and are recorded
at invoice value including Excise Duty & net of VAT/ Sales Tax. Excise
Duty collected is separately deducted from Gross Sales to arrive at Net
Sales as per ASI - 14.
ii) Interest in recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
8. AS - 10 : Fixed Assets -
i) Fixed assets are recorded at cost net of VAT / Cenvat availed,
including expenditure incurred in bringing them to usable condition
less depreciation. Attributable costs are capitalized until fixed
assets are ready for use. Interest on borrowed money allocated to and
utilized for fixed assets, pertaining to the period up to the date of
use is capitalized.
ii) Capital work-in-progress comprises of the cost of fixed assets that
are not yet ready for their intended use as at the Balance Sheet date.
9. AS -11 : Accounting for effects of changes in foreign exchange
rates -
The transactions in foreign exchange are accounted at the Average mean
rate. Assets and Liabilities denominated in foreign currency are
restated at the year end adopting the contracted/year end rates as
applicable. Any exchange gains or losses arising out of subsequent
fluctuations are accounted in the Profit & Loss Account. Exchange
differences, arising on forward contracts are recognised over the life
of the contract. Translation of foreign exchange transaction : Company
follows AS - 11 ( revised) in respect of foreign currency transaction
applying the principle of most likely realisable / disbursable amount.
10. AS - 13 : Accounting for Investments -
Investments are stated at Cost.
11. AS - 15 : Accounting for employee benefits -
i) Company's contributions paid / payable during the year to Provident
Fund & Super Annuation Fund, being Defined Contribution Plans, are
charged to Profit and Loss Account.
ii) Liability towards gratuity is provided on the basis of an actuarial
valuation in accordance with Accounting Standard - 15 ( Revised) issued
by the Institute of Chartered Accountants of India.
iii) Liability towards Earned Leave Encashment i.e. paid annual leave
is charged to Profit & Loss A/c on an undiscounted basis.
12. AS - 16 : Borrowing Costs -
Borrowing Costs, which are directly attributable to acquisition of
qualifying assets, are capitalized as a part of the cost of that asset.
Other borrowing costs are recognized as an expense in the period in
which they are incurred.
13. AS - 17 : Segment Reporting -
The Company manufactures "Paper & Paper Products" as well as generates
"Power" and has accordingly identified "Paper and Paper Products" as a
reportable business segment & "Power" as another reportable business
segment, accordingly disclosures are made.
14. AS - 22 : Accounting for Taxes on Income -
i) Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961
and at the rates enacted by the statute on the Balance Sheet date.
ii) Deferred tax resulting from timing difference between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the balance sheet date.
iii) Deferred tax labilities are reviewed at each balance sheet date.
15. AS - 28 : Impairment of Assets -
i) Consideration is given at each balance sheet date to determine
whether there is any indication of impairment of the company's asset.
ii) If any indication exists, an asset's recoverable amount is estimated.
iii) An asset is treated as impaired when the carrying amount of asset
exceeds its recoverable value.
iv) The impairment loss is charged to Profit and Loss Account in the
year which an asset is identified as impaired.
16. AS- 29 : Provisions, Contingent Labilities and Contingent Assets -
i) Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
ii) Contingent liabilities are not recognised but are disclosed in the
notes.
iii) Show cause notices issued by various Government authorities are
not considered as contingent liabilities. However, when the demands
are raised against such show cause notices after considering the
company's views, these demands are either paid or treated as
liabilities, if accepted by the company, and are treated as contingent
liability, if disputed by the company.
iv) Contingent assets are neither recognised nor disclosed in the
financial statements.
Mar 31, 2010
1. AS -1 : Disclosure of Accounting Policies -
The Financial statements are prepared under historical cost convention
on accrual basis and on the basis oi going concern and comply with the
Accounting Standards referred to in Section 211 (3C) of the Companies
Act, 1956.
2. AS - 2 : Valuation of Inventories -
Inventories are valued in accordance with the method of valuation
prescribed under the Accounting Standard and are as under:
i) Raw Materials & Consumables - At Cost comprising of purchase price,
freight, duty, taxes and other direct costs in accordance with AS-2.
ii) Work in Process & Finished Goods - At Cost or Net Realisable Value
whichever is less.
Material Cost is determined on a weighted average basis. Net realizable
value is the expected price that ii would fetch at the time of sale.
3. AS - 3: Cash Flow Statement-
Cash Flow Statement is prepared under the "Indirect Method" and is
annexed
4. AS - 4 : Contingencies & events occurring after Balance Sheet Date
-
All material events occurring after the Balance Sheet date but which
has a bearing on the conditions tha existed on the balance sheet date
are taken into cognizance.
5. AS - 5 : Prior period items -
Significant items of Extra - ordinary items, prior period incomes &
expenses are accounted as per AS- 5
6. AS - 6 : Depreciation Accounting -
Depreciation has been charged in the following manner:
A. In respect of assets acquired upto the year ending 31.3.89
i) WDV method at the rates prescribed under the Income tax Rules
ii) WDV method under Schedule XIV to the Companies Act, 1956
Upto the year ended 31.3.93
From the year 1993-94
B. On assets acquired during the period from 1.4.89 to 31.3.91
WDV method under Schedule XIV to the Companies Act, 1956
From the year 1989-90
C. On assets acquired during 91 - 92 & onwards
SLM method under Schedule XIV to the Companies Act, 1956
From the year 91-92 & onwards
7. AS - 9 : Revenue Recognition -
i) Sales are recognised when products are dispatched, and are recorded
at invoice value including Excise Duty & net of VAT/ Sales Tax. Excise
Duty collected is separately deducted from Gross Sales to arrive at Net
Sales as per ASI - 14.
ii) Interest in recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
8. AS -10 : Fixed Assets -
i) Fixed assets are recorded at cost net of VAT / Cenvat availed,
including expenditure incurred in bringing them to usable condition
less depreciation. Attributable costs are capitalized until fixed
assets are ready for use. Interest on borrowed money allocated to and
utilized for fixed assets, pertaining to the period up to the date of
use is capitalized.
ii) Capital work-in-progress comprises of the cost of fixed assets that
are not yet ready for their intended use as at the Balance Sheet date.
9. AS -11 : Accounting for effects of changes in foreign exchange
rates -
The transactions in foreign exchange are accounted at the Average mean
rate. Assets and Liabilities denominated in foreign currency are
restated at the year end adopting the contracted/year end rates as
applicable. Any exchange gains or losses arising out of subsequent
fluctuations are accounted in the Profit & Loss Account. Exchange
differences, arising on forward contracts are recognised over the life
of the contract. Translation of foreign exchange transaction : Company
follows AS - 11 (revised) in respect of foreign currency transaction
applying the principle of most likely realisable / disbursable amount.
10. AS - 13 : Accounting for Investments -
Investments are stated at Cost.
11. AS - 15 : Accounting for employee benefits -
i) Companys contributions paid / payable during the year to Provident
Fund & Super Annuation Fund, being Defined Contribution Plans, are
charged to Profit and Loss Account.
ii) Liability towards gratuity is provided on the basis of an actuarial
valuation in accordance with Accounting Standard - 15 (Revised) issued
by the Institute of Chartered Accountants of India.
iii) Liability towards Earned Leave Encashment i.e. paid annual leave
is charged to Profit & Loss A/c on an undiscounted basis.
12. AS - 16 : Borrowing Costs -
Borrowing Costs, which are directly attributable to acquisition of
qualifying assets, are capitalized as a part of the cost of that asset.
Other borrowing costs are recognized as an expense in the period in
which they are incurred.
13. AS - 17 ; Segment Reporting -
The Company manufactures "Paper & Paper Products" as well as generates
"Power" and has accordingly identified "Paper and Paper Products" as a
reportable business segment & "Power" as another reportable business
segment, accordingly disclosures are made.
14. AS - 22 : Accounting for Taxes on Income -
i) Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961
and at the rates enacted by the statute on the Balance Sheet date.
ii) Deferred tax resulting from timing difference between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the balance sheet date.
iii) Deferred tax labilities are reviewed at each balance sheet date.
15. AS - 28 : Impairment of Assets -
i) Consideration is given at each balance sheet date to determine
whether there is any indication of impairment of the companys asset.
ii) If any indication exists, an assets recoverable amount is estimated.
iii) An asset is treated as impaired when the carrying amount of asset
exceeds its recoverable value. iv) The impairment loss is charged to
Profit and Loss Account in the year which an asset is identified as
impaired.
16. AS- 29 : Provisions, Contingent Labilities and Contingent Assets -
i) Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
ii) Contingent liabilities are not recognised but are disclosed in the
notes.
iii) Show cause notices issued by various Government authorities are
not considered as contingent liabilities. However, when the demands
are raised against such show cause notices after considering the
companys views, these demands are either paid or treated as
liabilities, if accepted by the company, and are treated as contingent
liability, if disputed by the company.
iv) Contingent assets are neither recognised nor disclosed in the
financial statements.