Accounting Policies of CLC Industries Ltd. Company
Mar 31, 2023
Background
CLC Industries Limited (the Company) is a company limited by shares, incorporated and domiciled in India. The Company is engaged in the manufacturing and trading of Yarn etc. The Company sells its products in India as well as various other global markets.
The corporate Insolvency resolution process (ââCIRPââ) was initiated in case of the Company vide an order of the Honourable Principal Bench of the National Company Law Tribunal (NCLT) dated January 03, 2020 under the provisions of the Insolvency and Bankruptcy Code, 2016 (âââInsolvency Codeââ) in case no CP(IB)933/PB/2019 and Mr Subhash Kumar Kundra was appointed as the Interim Resolution Professional (IRP). Subsequently, the Committee of Creditors (CoC) confirmed Mr Subhash Kumar Kundra as the Resolution Professional (RP) which was also intimated to the Ld. NCLT . Consequent to initiation of the CIRP, the management of the affairs of the Company and powers of board of directors of the Company were vested with the IRP/RP. The Committee of Creditors conducted their 16th meeting on April 02, 2021 and had approved the resolution Plan submitted by the Consortium of M/s Manjeet Cotton Private Limited and M/s Vitthal Corporation Limited ( Successful Resolution Applicant/ âSRAâ and authorised the Resolution Professional to submit the resolution plan to the Adjudicating Authority as per provisions of IBC 2016 and regulations thereto. Subsequently, on 20th April, 2021 the application for approval of the Resolution Plan under section 30(6) and section 31(1) of the Insolvency and Bankruptcy Code, 2016 read with regulation 39 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 was filed by the Resolution professional with the Honourable Principal Bench of the NCLT for its approval .The Honourable Principal Bench of the NCLT approved the said resolution plan vide its order dated 12th May 2023.
As per the provisions of the approved resolution plan, an Implementation and Monitoring Committee has been constituted which is currently overseeing the implementation of the Plan and has authorised the erstwhile resolution professional to sign these financial statements.
The financial statements are authorised for issue by the secured financial creditors and Implementation and Monitoring Committee members of the company at their meeting held on 8th August, 2023.
Pusuant to the approved Resolution plan, the total consideration payable by the Successful Resolution Applicant (SRA) is Rs. 15000.00 Lakhs to be distributed as under in accordance with the provisions of the approved resolution plan and the Honourable NCLT order dated 12th May 2023.
|
Particulars |
Admitted Claim as per updated sheet (In Lakhs) |
Payments as per the Resolution Plan (in Lakhs) |
|
CIRP Cost |
- |
275.00 |
|
Secured Financial Creditors |
89,059.00 |
14,015.00 |
|
Unsecured Financial Creditors |
2,149.00 |
10.00 |
|
Unsecured Financial Creditors -Related Parties |
3,690.00 |
- |
|
Other Operational Creditors - MPAKVN/MPIDS |
2,546.00 |
30.00 |
|
Other Operational Creditors - EPF/ESIC Dues |
3,332.00 |
30.00 |
|
Operational Creditors - Electricity Dues |
95.00 |
30.00 |
|
Other Operational Creditors |
19,049.00 |
35.00 |
|
Workers |
3,954.00 |
265.00 |
|
Employees |
10.00 |
|
|
Contingency Reserve for Workmen / Employees or SFCs $ |
300.00 |
|
|
Total |
123,874.00 |
15,000.00 |
|
Equity Shareholders- Public (by way of issue of shares) |
89.77 |
5% of share Capital |
Note: The amount provided for secured financial creditors in the plan would get reduced as under:
1. By the full amount of provident fund and gratuity till the date of commencement of the insolvency after considering the contingency reserve for workers/employees as directed by the Honourable NCLT in the order dated 12th May 2023.
2. By the amount of excess CIRP cost as per the provisions of the approved resolution plan.
Note 1 : Significant Accounting Policies1.01 Statement of Compliance
The standalone Ind AS financial statements (âfinancial statementsâ) of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (âthe Actâ) and other relevant provisions of the Act.
The Company, has incurred substantial losses, its net worth has been completely eroded, has defaulted in repayment of its loans and related interest, has negative working capital and A corporate insolvency resolution process (âCIRPâ) has been initiated in case of the Company vide an order of the Principal Bench of the National Company Law Tribunal (âNCLTâ) dated January 03, 2020 in case of the Company.
The Committee of Creditors had conducted their 16th meeting on dated April 02, 2021 in which CoC had approved the resolution Plan and authorised Resolution Professional to submit resolution plan to the Adjusting authority as per provisions of IBC 2016 and regulations thereto.
The Resolution Plan has been approved by the Adjudicating authority (the Honourable NCLT) vide its order dated 12th May 2023. The approval of plan is considered as non adjusting event for the purpose of financial satements for the year ended 2022-23 and will be considered in preparing the financial statements for the Financial Year 2023-24. Pursuant to the approved Resolution plan, the standalone financial statements are prepared on going concern basis.
1.03 Current versus non-current classification
The entity presents assets and liabilities in the Balance Sheet based on current/non-current classification. An asset is treated as current when it is:
- expected to be realised or intended to be sold or consumed in normal operating cycle,
- held primarily for the purpose of trading,
- expected to be realised within twelve months after the reporting period, or
- cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
- it is expected to be settled in normal operating cycle,
- it is held primarily for the purpose of trading,
- it is due to be settled within twelve months after the reporting period, or
- there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The entity classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The entity has identified twelve months as its operating cycle.
The Company measures financial instruments, such as investments (other than equity investments in Subsidiaries, Joint Ventures and Associates) and derivatives at fair values at each Balance Sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- in the principal market for the asset or liability, or
- in the absence of a principal market, in the most advantageous market for the asset or liability The principal market or the most advantageous market must be accessible by the entity.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The entity uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
- Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities,
- Level 2âValuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable,
- Level 3âValuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable,
For assets and liabilities that are recognised in the financial statements on a recurring basis, the entity determines whether transfers have occurred between levels in the hierarchy by re-assessing 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.
For the purpose of fair value disclosures, the entity has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
1.05 Foreign Currency Transactions
The separate financial statements are presented in Rupee, which is also its functional currency.
Transactions in foreign currencies are accounted for at the exchange rate prevailing on the day of transaction. The outstanding liabilities/ receivables are translated at the year end rates.
Exchange differences arising on settlement or translation of monetary items are recognised in the Statement of Profit and Loss .
Non-monetary items denominated in foreign currency, are valued at the exchange rate prevailing on the date of transaction. Any gain or losses arising on translation or settlement are recognized in the Statement of Profit and Loss as per the requirements of Ind AS 21.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government with an exception to excise duty.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.
For all debt instruments measured at amortised cost, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. When calculating the effective interest rate, the entity estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. Interest income is included in finance income in the Statement of Profit and Loss.
Income from export incentives such as duty drawback etc. are recognised on accrual basis.
Dividend is recognised when the right to receive the payment is established, which is generally when shareholders approve the dividend.
Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all attached conditions are complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
When the entity receives grants of non-monetary assets, the asset and the grant are recorded at fair value amounts and released to the Statement of Profit and Loss over the expected useful life in a pattern of consumption of the benefit of the underlying asset i.e. by equal annual instalments. When loans or similar assistance are provided by Governments or related institutions, with an interest rate below the current applicable market rate, the effect of this favourable interest is regarded as a government grant. The loan or assistance is initially recognised and measured at fair value and the government grant is measured as the difference between the initial carrying value of the loan and the proceeds received. The loan is subsequently measured as per the accounting policy applicable to financial instruments.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the India.
Current income tax relating to items recognised outside Statement of profit and loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. The Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting nor taxable profit or loss.
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:
- When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
- In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
1.09 Property, plant and equipment
Property, plant and equipment have been measured at cost at the date of transition to Ind AS.
Assets are carried at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the items.
Capital work in progress is stated at cost, less accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. When significant parts of plant and equipment are required to be replaced at intervals, the entity depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the Statement of Profit and Loss as incurred. Refer to note 1.24 regarding significant accounting judgements, estimates and assumptions.
Depreciation on all fixed assets situated at manufacturing locations is provided on the straight line method on a pro-rata basis at the rates determined on the basis of useful lives of the respective assets as provided by Schedule II to the Companies Act, 2013. The useful lives for the various fixed assets situated at manufacturing locations are as follows:
|
Description - Manufacturing locations |
Useful lives (in years) |
|
Factory Building |
30 |
|
Building (Other than factory building) RCC frame structure |
60 |
|
Building (Other than factory building) other than RCC frame structure |
30 |
|
Plant and Machinery |
25 |
|
Office Equipments |
5 |
|
Computers |
3 |
|
Furniture and Fixtures |
10 |
|
Vehicles |
8 |
Depreciation for all fixed assets at locations other than at manufacturing units is provided on written down value method. Cost of leasehold land and leasehold improvements are amortised over the period of lease.
On additions costing less than Rs.5000, depreciation is provided at 100% in the year of addition.
The determination of the useful economic life and residual values of property, plant and equipment is subject to management estimation. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.
Goodwill is not amortised but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.
Software are amortised over a period of five years on straight line method.
1.11 Non-current Assets Classified as Held for Disposal:
Assets which are available for immediate sale and its sale must be highly probable are classified as âAssets held for Disposalâ. Such assets or group of assets are presented separately in the Balance Sheet, in the line âAssets held for Disposalâ. Once classified as held for disposal, such assets are no longer amortised or depreciated. Such assets are stated at the lower of carrying amount and fair value less costs to sell.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and assessing performance. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
Inventories are valued at the lower of cost and net realisable value.
Cost of finished goods and work -in- process includes cost of conversion and other expenses incurred in bringing the goods to their location and condition. The cost in respect of raw materials is determined under the specific identification of cost method.
The cost in respect of work-in-progress, finished goods and stores and spares is determined using the weighted average cost method and includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity, where applicable.
Waste is valued at estimated net realizable value.
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the entity is classified as a finance lease.
Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the Statement of Profit and Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the entity''s general policy on the borrowing costs (See note 1.12). Contingent rentals are recognised as expenses in the periods in which they are incurred.
Leased assets are depreciated over the useful life of the asset. However, if there is no reasonable certainty that the entity will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease rentals are charged off to the Statement of Profit and Loss.
1.16 Impairment of non-financial assets
At each reporting date, the entity reviews the carrying amount of it''s assets to determine whether there are any indication that those assets have suffered an impairment loss. If any such indication exists, recoverable amount of the assets is estimated in order to determine the extent of impairment loss.
An asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or entity''s of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
1.17 Provisions, Contingent Liabilities and Contingent Assets Provisions
Provisions are recognized when the entity has a present obligation (legal or constructive) as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the entity expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingent liability and Contingent Assets
Contingent liabilities are not recognized but are disclosed where possibility of any outflow in settlement is remote. Contingent assets are not recognised but disclosed where an inflow of economic benefits is probable.
1.18 Employee benefits Short-term obligations
Liabilities for salaries and wages, including non-monetary benefits, that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized up to the end of the reporting period and are measured at the amounts expected to be paid on settlement of such liabilities. The liabilities are presented as current employee benefit obligations in the Balance Sheet.
Other long-term employee benefit obligations
The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Re-measurements as a result of experience adjustments and changes in actuarial assumptions are recognized in the Statement of Profit and Loss.
The obligations are presented as current liabilities in the Balance Sheet since the Company does not have an unconditional right to defer the settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
The Company operates the following post-employment schemes:
- Defined benefit plans in the form of gratuity, and
- Defined contribution plans such as provident fund and pension fund
The Company operates a defined benefit gratuity plan for employees. The Company has obtained group gratuity scheme policies from Life Insurance Corporation of India to cover the gratuity liability of these employees. No information available for the year inrespect. The difference in the present value of the defined benefit obligation and the fair value of plan assets at the end of the reporting period is recognized as a liability or asset, as the case may be, in the Balance Sheet. The defined benefit obligation is calculated annually on the basis of actuarial valuation using the projected unit credit method.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in the employee benefit expense in the Statement of Profit and Loss.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in OCI.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss as past service cost.
The Company makes contribution to statutory provident fund and pension funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.
Employees of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions). The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. The fair value of the options granted is recognized as an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the option granted:
- including any market performance conditions (e.g., the Company''s share price),
- excluding the impact of any service and non-market performance vesting conditions (e.g., profitability, sales growth targets and remaining and employee of the entity over a specified time period), and
- including the impact of any non-vesting conditions (e.g. the requirement for employees to save or holding shares for a specific period of time).
The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
Basic earnings per share is computed by dividing the net profit/(loss) for the period attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit/(loss) for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Initial recognition and measurement
Financial assets and financial 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 those designated as fair value through profit or loss (FVTPL), are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in Statement of Profit and Loss.
A. Financial AssetsSubsequent measurement
Financial assets are subsequently classified as measured at:
- amortised cost
- fair value through other comprehensive income (FVTOCI)
- fair value through profit or loss (FVTPL)
Trade receivables are initially recognised at fair value. Subsequently, these assets are held at amortised cost, using the effective interest rate (EIR) method net of any expected credit losses (ECL). The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.
Financial assets measured at amortised cost:
A financial asset is measured at amortised cost if both the following conditions are met:
a) . The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows,
and
b) . Contractual terms of the instruments give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. EIR is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the EIR, transaction costs and other premiums or discounts) through the expected life of the debt instrument or where appropriate, a shorter period, to the net carrying amount on initial recognition.
The EIR amortisation is included in other income in the statement of profit and loss. The losses arising from impairment are recognised in the statement of profit and loss. This category generally applies to trade and other receivables, loans, etc.
Measured at fair value through other comprehensive income:
Financial assets that are held within a business model whose objective is achieved by both, selling financial assets and collecting contractual cash flows that are solely payments of principal and interest, are subsequently measured at fair value through other comprehensive income. Fair value movements are recognized in the other comprehensive income (OCI). Interest income measured using the EIR method and impairment losses, if any are recognized in the Statement of Profit and Loss. On derecognition, cumulative gain or loss previously recognised in OCI is reclassified from the equity to ''other income'' in the Statement of Profit and Loss.
Measured at fair value through profit or loss:
A financial asset not classified as either amortised cost or FVOCI, is classified as FVTPL. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognised as ''other income'' in the Statement of Profit and Loss.
Equity investments in Subsidiaries, Associates and Joint ventures are out of scope of Ind AS 109 and hence, the Company has accounted for its investment in Subsidiaries, Associates and Joint Ventures at cost. All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS 103 applies are classified as at FVTPL. For all other equity instruments, the entity may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The entity makes such election on an instrument-byinstrument basis. The classification is made on initial recognition and is irrevocable.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or the same are transferred.
Impairment of financial assets
Expected credit losses (ECL) are recognized for all financial assets subsequent to initial recognition other than financials assets in FVTPL category.
For financial assets, as per Ind AS 109, the Company recognises 12-month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition.
The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition.
The impairment losses and reversals are recognised in Statement of Profit and Loss.
B. Financial liabilities Subsequent measurement
- Financial liabilities are subsequently measured at amortised cost using the EIR method.
- Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. Reclassification of financial assets
The entity 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. The entity''s senior management determines change in the business model as a result of external or internal changes which are significant to the entity''s operations. Such changes are evident to external parties. A change in the business model occurs when the entity either begins or ceases to perform an activity that is significant to its operations. If the entity 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 entity does not restate any previously recognised gains, losses (including impairment gains or losses).
C. Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the separate 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.
1.22 Derivative financial instruments
The entity uses derivative financial instruments, such as forward currency contracts, interest rate swaps and to hedge its foreign currency risks, interest rate risks and commodity price risks, respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
1.23 Cash and cash equivalents
Cash and cash equivalent in the Balance Sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
1.24 Significant accounting judgements, estimates and assumptions
The preparation of the separate financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, contingent liabilites, and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The key assumptions concerning the future and other key sources of estimation and uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The entity based its assumptions and estimates on parameters available when the separate financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the entity. Such changes are reflected in the assumptions when they occur.
At each reporting date, the entity reviews the carrying amount of its non-financial assets to determine whether there are any indication that those assets have suffered an impairment loss. If any such indication exists, recoverable amount of the assets is estimated in order to determine the extent of impairment loss.
Impairment reviews in respect of the relevant CGUs are performed at least annually or more regularly if events indicate that this is necessary.
Impairment reviews are based on discounted future cash flows. The future cash flows which are based on business forecasts, the long-term growth rates and the pre-tax discount rates, that reflects the current market assessment of the time value of money and the risk specific to the asset or CGU, used are dependent on management estimates and judgements. Future events could cause the assumptions used in these impairment reviews to change.
b) Allowance for uncollectible accounts receivable and advances
Trade receivables and certain financial assets do not carry any interest unlike other interest bearing financials assets viz intercorporate deposits. Such financial assets are stated at their carrying value as reduced by impairment losses determined in accordance with expected credit loss. Allowance as per expected credit loss model is based on simplified approach which is based on historicals observed default rates and changes as per forward-looking estimates. In case of trade receivables entity uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables which is also based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. The actual loss could differ from the estimate made by the management.
The entity is subject to income tax laws as applicable in India. Significant judgement is required in determining the provision for taxes as the tax treatment is often by its nature complex, and cannot be finally determined until a formal resolution has been reached with the relevant tax authority which may take several years to conclude. Amounts provided are accrued based on management''s interpretation of country specific tax laws and the likelihood of settlement. The entity recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. Actual liabilities could differ from the amount provided which could have a consequent adverse impact on the results and net position of the entity.
d) Pension and post-retirement benefits
The cost of defined benefit plans viz. gratuity, provident fund, leave encashment, etc. are determined using actuarial assumptions. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.
The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.Further details about defined benefit plans are given in note no. 37.
e ) Useful Lives of Property, Plant and Equipment:
The Company uses its technical expertise along with historical and industry trends for determining the economic life of an asset/component of an asset. The useful lives are reviewed by the management periodically and revised, if appropriate. In case of a revision, the unamortised depreciable amount is charged over the remaining useful life of the assets.
f) Recognition and measurement of provisions and contingencies:
Key assumptions about the likelihood and magnitude of an outflow of resources.
1.25 Recent Accounting Pronouncements
Ministry of Corporate affairs (âMCAâ) notifies new standard or amendments to the existing standards. There is no such notification which would have been applicable from April 01,2023.
Mar 31, 2016
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation of Financial Statement
These financial statements are prepared on accrual basis under the historical cost convention to comply in all material aspects with all the applicable accounting principles in India, the applicable Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) in accordance with section 133 of the Companies Act, 2013, read with rule 7 of Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 and guidelines issued by the Securities and Exchange Board of India.
(b ) Use of Estimates
The preparation of the financial statements in conformity with Indian generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provisions for doubtful receivables, future obligations under employee retirement benefit plans, income taxes and the useful lives of fixed assets and intangible assets.
(c) Fixed Assets
Fixed assets are stated at their original cost less accumulated depreciation including freight, duties (net of CENVAT), taxes and other incidental expenses relating to acquisition and installation.
(d) Depreciation / Amortization
Depreciation on all fixed assets situated at manufacturing locations is provided on the straight line method on a pro-rata basis at the rates determined on the basis of useful lives of the respective assets as provided by Schedule II to the Companies Act, 2013. The useful lives for the various fixed assets situated at manufacturing locations are as follows:
Depreciation for all fixed assets at locations other than at manufacturing locations is provided on the written down value method at the rates determined on the basis of useful lives of the respective assets as provided by Schedule II to the Companies Act, 2013
Leasehold land is amortized over the lease period on a straight line basis.
Capitalized enterprise resource planning software (SAP) is amortized over a period of five years on straight line basis.
Acquired goodwill is amortized using the straight-line method over a period of 10 years.
(e) Inventories
Inventories have been valued at lower of cost and net realizable value.
The cost in respect of raw materials is determined under the specific identification of cost method.
Cost includes customs duty, wherever paid, and are net of credit under CENVAT scheme, wherever applicable.
The cost in respect of work-in-progress, finished goods and stores and spares is determined using the weighted average cost method and includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity, where applicable.
Waste is valued at estimated net realizable value.
(f) Revenue Recognition
Sale of goods: Revenue on sale of goods is recognized on transfer of significant risk and rewards of ownership to the buyer and on reasonable certainty of the ultimate collection. Sales are inclusive of excise duty and net off sales tax, trade discounts and sales returns.
Interest: Income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rates. Commission and insurance claim: Income is recognized when no significant uncertainty as to measurability or recoverability exists.
(g) Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments (non -current investment). Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.
(h) Foreign Currency Transactions
Transactions in foreign currency are accounted for at the exchange rates prevailing on the date of transaction. All monetary items denominated in foreign currency are translated at year end rates. Exchange differences arising on such transactions and also exchange differences arising on the settlement of such transactions are adjusted in the statement of profit and loss.
In case of forward contracts, the premium or discount on all such contracts arising at the inception of each contract is recognized / amortized as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of such contracts is recognized as income or expense for the period.
In respect of foreign branch, all revenues, expenses, monetary assets/liabilities and fixed assets are accounted at the exchange rate prevailing on the date of the transaction. Monetary assets and liabilities are restated at the year end rates and resultant gains or losses are recognized in the statement of profit and loss.
(i) Employee Benefits
The Company''s contributions to recognized provident funds are charged to revenue on an accrual basis.
The Company has defined benefit plans namely leave encashment and gratuity for all employees, the liability for which is determined on the basis of an actuarial valuation at the end of the year. Gratuity Fund (for other than Synthetic division) is administered through Life Insurance Corporation of India. Short term compensated absences are recognized at the undiscounted amount of benefit for services rendered during the year.
Termination benefits are recognized as an expense immediately. Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognized immediately in the statement of profit and loss as income or expense.
(j) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as a part of the cost of that asset. Other borrowing costs are recognized as expenses in the period in which they are incurred. (k) Taxation
Tax expenses for the year, comprising current tax and deferred tax is included in determining the net profit/(loss) for the year. A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws. Deferred tax assets are recognized for all deductible timing differences and carried forward to the extent it is reasonably / virtually certain that future taxable profit will be available against which such deferred tax assets can be realized.
Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted by the balance sheet date.
(l) Leases
Assets acquired under long term finance lease are capitalized and depreciated in accordance with company''s policy for assets situated at manufacturing and other locations. The associated obligations are included in other loans under "Long Term Borrowings".
The company has taken premises on lease. Lease rental in respect of operating lease arrangement are charged to statement of profit and loss.
(m) Impairment of Assets
At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If such indication exists, the company estimates the recoverable amount and where carrying amount of the asset exceeds such recoverable amount, an impairment loss is recognized in the statement of profit and loss to the extent the carrying amount exceeds recoverable amount. Where there is any indication that an impairment loss recognized for an asset in prior accounting periods may no longer exist or may have decreased, the company books a reversal of the impairment loss not exceeding the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset in prior accounting periods.
(n) Government Grants Recognition
Government grants are recognized where:
i) There is reasonable assurance of complying with the conditions attached to the grant.
ii) Such grant / benefit has been earned and it is reasonably certain that the ultimate collection will be made.
Presentation in Financial Statement:
i) Government grants relating to specific fixed assets are adjusted with the value of the fixed assets.
ii) Government grants in the nature of promoters'' contribution, i.e. which have reference to the total investment in an undertaking or by way of contribution towards total capital outlay, are credited to capital reserve.
iii) Government grants related to revenue items are either adjusted with the related expenditure / revenue or shown under "Other Income", in case direct linkage with cost /income is not determinable.
(o) Provisions and contingencies
The company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.
Mar 31, 2015
(a) Basis of preparation of Financial Statement
These financial statements are prepared on accrual basis under the
historical cost convention to comply in all material aspects with all
the applicable accounting principles in India, the applicable
Accounting Standards notified under the Companies (Accounting
Standards) Rules, 2006 (as amended) in accordance with section 133 of
the Companies Act, 2013, read with rule 7 of Companies (Accounts)
Rules, 2014 and the relevant provisions of the Companies Act, 2013 and
guidelines issued by the Securities and Exchange Board of India.
(b ) Use of Estimates
The preparation of the financial statements in conformity with Indian
generally accepted accounting principles requires the management to
make estimates and assumptions that affect the reported balances of
assets and liabilities and disclosures relating to contingent assets
and liabilities as at the date of the financial statements and reported
amounts of income and expenses during the period. Examples of such
estimates include provisions for doubtful receivables, future
obligations under employee retirement benefit plans, income taxes and
the useful lives of fixed assets and intangible assets.
(c) Fixed Assets
Fixed assets are stated at their original cost less accumulated
depreciation including freight, duties (net of CENVAT), taxes and other
incidental expenses relating to acquisition and installation.
(d) Depreciation / Amortization
Depreciation on all fixed assets situated at manufacturing locations is
provided on the straight line method on a pro-rata basis at the rates
determined on the basis of useful lives of the respective assets as
provided by Schedule II to the Companies Act, 2013. The useful lives
for the various fixed assets situated at manufacturing locations are as
follows :
Description - Manufacturing locations Useful lives (in years)
Factory Building 30
Building (Other than factory building)
RCC frame structure 60
Building (Other than factory building)
other than RCC frame structure 30
Plant and Machinery 25
Office Equipments 5
Computers 3
Furniture and Fixtures 10
Vehicles 8
Depreciation for all fixed assets at locations other than at
manufacturing locations is provided on the written down value method at
the rates determined on the basis of useful lives of the respective
assets as provided by schedule II to the Companies Act, 2013.
Leasehold land is amortized over the lease period on a straight line
basis.
Capitalised enterprise resource planning software (SAP) is amortised
over a period of five years on straight line basis.
Acquired goodwill is amortized using the straight-line method over a
period of 10 years.
(e) Inventories
Inventories have been valued at lower of cost and net realizable value.
The cost in respect of raw materials is determined under the specific
identification of cost method.
Cost includes customs duty, wherever paid, and are net of credit under
CENVAT scheme, wherever applicable.
The cost in respect of work-in-progress, finished goods and stores and
spares is determined using the weighted average cost method and
includes direct materials and labour and a proportion of manufacturing
overheads based on normal operating capacity, where applicable.
Waste is valued at estimated net realizable value.
(f) Revenue Recognition
Sale of goods: Revenue on sale of goods is recognized on transfer of
significant risk and rewards of ownership to the buyer and on
reasonable certainty of the ultimate collection. Sales are inclusive of
excise duty and net off sales tax, trade discounts and sales returns.
Interest: Income is recognised on a time proportion basis taking into
account the amount outstanding and the applicable rates. Commission
and insurance claim: Income is recognized when no significant
uncertainty as to measurability or recoverability exists.
(g) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments(non -current
investment). Current investments are carried at lower of cost and fair
value determined on an individual investment basis. Long-term
investments are carried at cost. However, provision for diminution in
value is made to recognise a decline other than temporary in the value
of the investments.
(h) Foreign Currency Transactions
Transactions in foreign currency are accounted for at the exchange
rates prevailing on the date of transaction. All monetary items
denominated in foreign currency are translated at year end rates.
Exchange differences arising on such transactions and also exchange
differences arising on the settlement of such transactions are adjusted
in the statement of profit and loss. In case of forward contracts, the
premium or discount on all such contracts arising at the inception of
each contract is recognized / amortized as income or expense over the
life of the contract. Any profit or loss arising on the cancellation or
renewal of such contracts is recognized as income or expense for the
period.
In respect of foreign branch, all revenues, expenses, monetary
assets/liabilities and fixed assets are accounted at the exchange rate
prevailing on the date of the transaction. Monetary assets and
liabilities are restated at the year end rates and resultant gains or
losses are recognized in the statement of profit and loss.
(i) Employee Benefits
The Company's contributions to recognized provident funds are charged
to revenue on an accrual basis. The Company has defined benefit plans
namely leave encashment and gratuity for all employees, the liability
for which is determined on the basis of an actuarial valuation at the
end of the year. Gratuity Fund (for other than Synthetic division) is
administered through Life Insurance Corporation of India. Short term
compensated absences are recognized at the undiscounted amount of
benefit for services rendered during the year.
Termination benefits are recognized as an expense immediately.
Actuarial gains and losses comprise experience adjustments and the
effects of changes in actuarial assumptions and are recognised
immediately in the statement of profit and loss as income or expense.
(j) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised as a
part of the cost of that asset. Other borrowing costs are recognised as
an expenses in the period in which they are incurred.
(k) Taxation
Tax expenses for the year, comprising current tax and deferred tax is
included in determining the net profit/(loss) for the year. A
provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. Deferred tax
assets are recognised for all deductible timing differences and carried
forward to the extent it is reasonably / virtually certain that future
taxable profit will be available against which such deferred tax assets
can be realised.
Deferred tax assets and liabilities are measured at the tax rates that
have been enacted or substantively enacted by the balance sheet date.
(l) Leases
Assets acquired under long term finance lease are capitalised and
depreciated in accordance with company's policy for assets situated at
manufacturing and other locations. The associated obligations are
included in other loans under "Long Term Borrowings".
The company has taken premises on lease. Lease rental in respect of
operating lease arrangement are charged to statement of profit and
loss.
(m) Impairment of Assets
At each balance sheet date, the Company assesses whether there is any
indication that an asset may be impaired. If such indication exists,
the company estimates the recoverable amount and where carrying amount
of the asset exceeds such recoverable amount, an impairment loss is
recognized in the statement of profit and loss to the extent the
carrying amount exceeds recoverable amount. Where there is any
indication that an impairment loss recognized for an asset in prior
accounting periods may no longer exist or may have decreased, the
company books a reversal of the impairment loss not exceeding the
carrying amount that would have been determined (net of amortization or
depreciation) had no impairment loss been recognized for the asset in
prior accounting periods.
(n) Government Grants Recognition
Government grants are recognized where:
i) There is reasonable assurance of complying with the conditions
attached to the grant.
ii) Such grant / benefit has been earned and it is reasonably certain
that the ultimate collection will be made.
Presentation in Financial Statement:
i) Government grants relating to specific fixed assets are adjusted
with the value of the fixed assets.
ii) Government grants in the nature of promoters' contribution, i.e.
which have reference to the total investment in an undertaking or by
way of contribution towards total capital outlay, are credited to
capital reserve.
iii) Government grants related to revenue items are either adjusted
with the related expenditure / revenue or shown under "Other Income",
in case direct linkage with cost /income is not determinable.
(o) Provisions and contingencies
The company creates a provision when there is present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation. A
disclosure for a contingent liability is made when there is possible
obligation or a present obligation that probably will not require an
outflow of resources or where a reliable estimate of the obligation
cannot be made.
Mar 31, 2014
(a) Basis of preparation of Financial Statement
These financial statements are prepared on accrual basis under the
historical cost convention to comply in all material aspects with all
the applicable accounting principles in India, the applicable
Accounting Standards notified u/s 211(3C) of the Companies Act, 1956
and the relevant provisions of the Companies Act, 1956 and guidelines
issued by the Securities and Exchange Board of India.
(b ) Use of Estimates
The preparation of the financial statements in conformity with Indian
generally accepted accounting principles requires the management to
make estimates and assumptions that affect the reported balances of
assets and liabilities and disclosures relating to contingent assets
and liabilities as at the date of the financial statements and reported
amounts of income and expenses during the period. Examples of such
estimates include provisions for doubtful receivables, future
obligations under employee retirement benefit plans, income taxes and
the useful lives of fixed assets and intangible assets.
(c) Fixed Assets
Fixed assets are stated at their original cost less accumulated
depreciation including freight, duties (net of CENVAT), taxes and other
incidental expenses relating to acquisition and installation.
(d) Depreciation / Amortization
Depreciation on all fixed assets situated at manufacturing locations is
provided on the straight line method on a pro-rata basis at the rates
determined on the basis of useful lives of the respective assets.
Management estimates the useful lives for the various fixed assets
situated at manufacturing locations as follows:
The rates derived from the above useful lives are higher than the
minimum rates specified in Schedule XIV to the Companies Act, 1956
(''Act'').
Depreciation for all fixed assets at locations other than at
manufacturing locations is provided on the written down value method at
the rates specified in Schedule XIV to the Act.
Leasehold land is amortized over the lease period on a straight line
basis.
Capitalised enterprise resource planning software (SAP) is amortised
over a period of five years on straight line basis.
Acquired goodwill is amortized using the straight-line method over a
period of 10 years.
(e) Inventories
Inventories have been valued at lower of cost and net realizable value.
The cost in respect of raw materials is determined under the specific
identification of cost method.
Cost includes customs duty, wherever paid, and are net of credit under
CENVAT scheme, wherever applicable.
The cost in respect of work-in-progress, finished goods and stores and
spares is determined using the weighted average cost method and
includes direct materials and labour and a proportion of manufacturing
overheads based on normal operating capacity, where applicable.
Waste is valued at estimated net realizable value.
(f) Revenue Recognition
Sale of goods: Revenue on sale of goods is recognized on transfer of
significant risk and rewards of ownership to the buyer and on
reasonable certainty of the ultimate collection. Sales are inclusive of
excise duty and net off sales tax, trade discounts and sales returns.
Interest: Income is recognised on a time proportion basis taking into
account the amount outstanding and the applicable rates. Commission
and insurance claim: Income is recognized when no significant
uncertainty as to measurability or recoverability exists.
(g) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments(non -current
investment). Current investments are carried at lower of cost and fair
value determined on an individual investment basis. Long-term
investments are carried at cost. However, provision for diminution in
value is made to recognise a decline other than temporary in the value
of the investments.
(h) Foreign Currency Transactions
Transactions in foreign currency are accounted for at the exchange
rates prevailing on the date of transaction. All monetary items
denominated in foreign currency are translated at year end rates.
Exchange differences arising on such transactions and also exchange
differences arising on the settlement of such transactions are adjusted
in the statement of profit and loss.
In case of forward contracts, the premium or discount on all such
contracts arising at the inception of each contract is recognized /
amortized as income or expense over the life of the contract. Any
profit or loss arising on the cancellation or renewal of such contracts
is recognized as income or expense for the period.
In respect of foreign branch, all revenues, expenses, monetary
assets/liabilities and fixed assets are accounted at the exchange rate
prevailing on the date of the transaction. Monetary assets and
liabilities are restated at the year end rates and resultant gains or
losses are recognized in the statement of profit and loss.
(i) Employee Benefits
The Company''s contributions to recognized provident funds are charged
to revenue on an accrual basis.
The Company has defined benefit plans namely leave encashment and
gratuity for all employees, the liability for which is determined on
the basis of an actuarial valuation at the end of the year. Gratuity
Fund (for other than Synthetic division) is administered through Life
Insurance Corporation of India. Short term compensated absences are
recognized at the undiscounted amount of benefit for services rendered
during the year.
Termination benefits are recognized as an expense immediately.
Actuarial gains and losses comprise experience adjustments and the
effects of changes in actuarial assumptions and are recognised
immediately in the statement of profit and loss as income or expense.
(j) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised as a
part of the cost of that asset. Other borrowing costs are recognised as
an expenses in the period in which they are incurred.
(k) Taxation
Tax expenses for the year, comprising current tax and deferred tax is
included in determining the net profit/(loss) for the year.
A provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. Deferred tax
assets are recognised for all deductible timing differences and carried
forward to the extent it is reasonably / virtually certain that future
taxable profit will be available against which such deferred tax assets
can be realised.
Deferred tax assets and liabilities are measured at the tax rates that
have been enacted or substantively enacted by the balance sheet date.
(l) Leases
Assets acquired under long term finance lease are capitalised and
depreciated in accordance with company''s policy for assets situated at
manufacturing and other locations. The associated obligations are
included in other loans under "Long Term Borrowings".
The company has taken premises on lease. Lease rental in respect of
operating lease arrangement are charged to statement of profit and
loss.
(m) Impairment of Assets
At each balance sheet date, the Company assesses whether there is any
indication that an asset may be impaired. If such indication exists,
the company estimates the recoverable amount and where carrying amount
of the asset exceeds such recoverable amount, an impairment loss is
recognized in the statement of profit and loss to the extent the
carrying amount exceeds recoverable amount. Where there is any
indication that an impairment loss recognized for an asset in prior
accounting
periods may no longer exist or may have decreased, the company books a
reversal of the impairment loss not exceeding the carrying amount that
would have been determined (net of amortization or depreciation) had no
impairment loss been recognized for the asset in prior accounting
periods.
(n) Government Grants Recognition
Government grants are recognized where:
i) There is reasonable assurance of complying with the conditions
attached to the grant.
ii) Such grant / benefit has been earned and it is reasonably certain
that the ultimate collection will be made.
Presentation in Financial Statement:
i) Government grants relating to specific fixed assets are adjusted
with the value of the fixed assets.
ii) Government grants in the nature of promoters'' contribution, i.e.
which have reference to the total investment in an undertaking or by
way of contribution towards total capital outlay, are credited to
capital reserve.
iii) Government grants related to revenue items are either adjusted
with the related expenditure / revenue or shown under "Other
Income", in case direct linkage with cost /income is not
determinable.
(o) Provisions and contingencies
The company creates a provision when there is present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation. A
disclosure for a contingent liability is made when there is possible
obligation or a present obligation that probably will not require an
outflow of resources or where a reliable estimate of the obligation
cannot be made.
Mar 31, 2013
(a) Basis of Accounting
These financial statements are prepared on accrual basis under the
historical cost convention to comply in all material aspects with all
the applicable accounting principles in India, the applicable
Accounting Standards notified u/s 211(3C) of the Companies Act, 1956
and the relevant provisions of the Companies Act, 1956 and guidelines
issued by the Securities and Exchange Board of India.
(b ) Use of Estimates
The preparation of the financial statements in conformity with Indian
Generally Accepted Accounting Principles requires the management to
make estimates and assumptions that affect the reported balances of
assets and liabilities and disclosures relating to contingent assets
and liabilities as at the date of the financial statements and reported
amounts of income and expenses during the period. Examples of such
estimates include provisions for doubtful receivables, future
obligations under employee retirement benefit plans, income taxes and
the useful lives of fixed assets and intangible assets.
(c) Fixed Assets
Fixed assets are stated at their original cost less accumulated
depreciation including freight, duties (net of CENVAT), taxes and other
incidental expenses relating to acquisition and installation.
(d) Depreciation / Amortization
Depreciation on all fixed assets situated at manufacturing locations is
provided on the straight line method on a pro-rata basis at the rates
determined on the basis of useful lives of the respective assets.
Management estimates the useful lives for the various fixed assets
situated at manufacturing locations as follows:
The rates derived from the above useful lives are higher than the
minimum rates specified in Schedule XIV to the Companies Act, 1956
(ÂActÂ).
Depreciation for all fixed assets at locations other than at
manufacturing locations is provided on the written down value method at
the rates specified in Schedule XIV to the Act.
Leasehold land is amortized over the lease period on a straight line
basis.
Capitalised enterprise resource planning software (SAP) is amortised
over a period of five years on straight line basis.
Acquired goodwill is amortized using the straight-line method over a
period of 10 years.
(e) Inventories
Inventories have been valued at lower of cost and net realizable value.
The cost in respect of raw materials is determined under the specific
identification of cost method.
Cost includes customs duty, wherever paid, and are net of credit under
CENVAT scheme, wherever applicable.
The cost in respect of work-in-progress, finished goods and stores and
spares is determined using the weighted average cost method and
includes direct materials and labour and a proportion of manufacturing
overheads based on normal operating capacity, where applicable.
Waste is valued at estimated net realizable value.
(f) Revenue Recognition
Sale of goods: Revenue on sale of goods is recognized on transfer of
significant risk and rewards of ownership to the buyer and on
reasonable certainty of the ultimate collection. Sales are inclusive of
excise duty and net off sales tax, trade discounts and sales returns.
Interest: Income is recognised on a time proportion basis taking into
account the amount outstanding and the applicable rates.
Commission and insurance claim: Income is recognized when no
significant uncertainty as to measurability or recoverability exists.
(g) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments(non -current
investment). Current investments are carried at lower of cost and fair
value determined on an individual investment basis. Long-term
investments are carried at cost. However, provision for diminution in
value is made to recognise a decline other than temporary in the value
of the investments.
(h) Foreign Currency Transactions
Transactions in foreign currency are accounted for at the exchange
rates prevailing on the date of transaction. All monetary items
denominated in foreign currency are translated at year end rates.
Exchange differences arising on such transactions and also exchange
differences arising on the settlement of such transactions are adjusted
in the statement of profit and loss.
In case of forward contracts, the premium or discount on all such
contracts arising at the inception of each contract is recognized /
amortized as income or expense over the life of the contract. Any
profit or loss arising on the cancellation or renewal of such contracts
is recognized as income or expense for the period.
In respect of foreign branch, all revenues, expenses, monetary
assets/liabilities and fixed assets are accounted at the exchange rate
prevailing on the date of the transaction. Monetary assets and
liabilities are restated at the year end rates and resultant gains or
losses are recognized in the statement of profit and loss.
(i) Employee Benefits
The Company''s contributions to recognized provident funds are charged
to revenue on an accrual basis.
The Company has defined benefit plans namely leave encashment and
gratuity for all employees, the liability for which is determined on
the basis of an actuarial valuation at the end of the year. Gratuity
Fund (for other than Synthetic division) is administered through Life
Insurance Corporation of India. Short term compensated absences are
recognized at the undiscounted amount of benefit for services rendered
during the year.
Termination benefits are recognized as an expense immediately.
Actuarial gains and losses comprise experience adjustments and the
effects of changes in actuarial assumptions and are recognised
immediately in the statement of profit and loss as income or expense.
(j) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised as a
part of the cost of that asset. Other borrowing costs are recognised as
an expenses in the period in which they are incurred.
(k) Taxation
Tax expenses for the year, comprising current tax and deferred tax is
included in determining the net profit/(loss) for the year.
A provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. Deferred tax
assets are recognised for all deductible timing differences and carried
forward to the extent it is reasonably / virtually certain that future
taxable profit will be available against which such deferred tax assets
can be realised.
Deferred tax assets and liabilities are measured at the tax rates that
have been enacted or substantively enacted by the balance sheet date.
(l) Leases
Assets acquired under long term finance lease are capitalised and
depreciated in accordance with companyÂs policy for assets situated at
manufacturing and other locations. The associated obligations are
included in other loans under "Long Term Borrowings".
The company has taken premises on lease. Lease rental in respect of
operating lease arrangement are charged to statement of profit and
loss.
(m) Impairment of Assets
At each balance sheet date, the Company assesses whether there is any
indication that an asset may be impaired. If such indication exists,
the company estimates the recoverable amount and where carrying amount
of the asset exceeds such recoverable amount, an impairment loss is
recognized in the statement of profit and loss to the extent the
carrying amount exceeds recoverable amount. Where there is any
indication that an impairment loss recognized for an asset in prior
accounting periods may no longer exist or may have decreased, the
company books a reversal of the impairment loss not exceeding the
carrying amount that would have been determined (net of amortization or
depreciation) had no impairment loss been recognized for the asset in
prior accounting periods.
(n) Government Grants Recognition
Government grants are recognized where:
i) There is reasonable assurance of complying with the conditions
attached to the grant.
ii) Such grant / benefit has been earned and it is reasonably certain
that the ultimate collection will be made.
Presentation in Financial Statement:
i) Government grants relating to specific fixed assets are adjusted
with the value of the fixed assets.
ii) Government grants in the nature of promoters contribution, i.e.
which have reference to the total investment in an undertaking or by
way of contribution towards total capital outlay, are credited to
capital reserve.
iii) Government grants related to revenue items are either adjusted
with the related expenditure / revenue or shown under "Other Income",
in case direct linkage with cost /income is not determinable.
(o) Provisions and contingencies
The company creates a provision when there is present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation. A
disclosure for a contingent liability is made when there is possible
obligation or a present obligation that probably will not require an
out flow of resources or where a reliable estimate of the obligation
cannot be made.
Mar 31, 2012
(a) Basis of Accounting
These financial statements are prepared on accrual basis under the
historical cost convention to comply in all material aspects with all
the applicable accounting principles in India, the applicable
accounting standards notified u/s 211(3C) of the Companies Act, 1956
and the relevant provisions of the Companies Act, 1956 and guidelines
issued by the Securities and Exchange Board of India.
(b) Adoption of Revised Schedule VI of the Companies Act, 1956
For the year ended 31st March, 2012, the revised Schedule VI, notified
under the Companies Act, 1956 has become applicable to the Company for
preparation and presentation of its financial statements. The adoption
of Schedule VI does not impact recognition and measurement principles
followed for preparation of its financial statements. However, it has
significant impact on presentation and disclosures made in the
financial statements. The Company has also reclassified the previous
year figures in accordance with the requirements applicable in the
current year. All assets and liabilities have been classified as
current and non-current as per the criteria set out in the revised
Schedule VI. Based on the nature of products and the time between the
acquisition of assets for processing and their realisation in cash and
cash equivalents, the company has ascertained its operating cycle being
a period within 12 months for the purpose of classification of assets
and liabilities as current and non current.
(c ) Use of Estimates
The preparation of the financial statements in conformity with Indian
Generally Accepted Accounting Principles requires the management to
make estimates and assumptions that affect the reported balances of
assets and liabilities and disclosures relating to contingent assets
and liabilities as at the date of the financial statements and reported
amounts of income and expenses during the period. Examples of such
estimates include provisions for doubtful receivables, future
obligations under employee retirement benefit plans, income taxes and
the useful lives of fixed assets and intangible assets.
(d) Fixed Assets
Fixed assets are stated at their original cost less accumulated
depreciation including freight, duties (net of CENVAT), taxes and other
incidental expenses relating to acquisition and installation.
(e) Depreciation / Amortization
Depreciation on all fixed assets situated at manufacturing locations is
provided on the straight line method on a pro-rata basis at the rates
determined on the basis of useful lives of the respective assets.
Management estimates the useful lives for the various fixed assets
situated at manufacturing locations as follows:
The rates derived from the above useful lives are higher than the
minimum rates specified in Schedule XIV to the Companies Act, 1956
('Act').
Depreciation for all fixed assets at locations other than at
manufacturing locations is provided on the written down value method at
the rates specified in Schedule XIV to the Act.
Leasehold land is amortized over the lease period on a straight line
basis.
Capitalised enterprise resource planning software (SAP) is amortised
over a period of five years on straight line basis.
Acquired goodwill is amortized using the straight-line method over a
period of 10 years.
(f) Inventories
Inventories have been valued at lower of cost and net realizable value.
The cost in respect of raw materials is determined under the specific
identification of cost method.
Cost includes customs duty, wherever paid, and are net of credit under
CENVAT scheme, wherever applicable.
The cost in respect of work-in-progress, finished goods and stores and
spares is determined using the weighted average cost method and
includes direct materials and labour and a proportion of manufacturing
overheads based on normal operating capacity, where applicable.
Waste is valued at estimated net realizable value.
(g) Revenue Recognition
Sale of goods: Revenue on sale of goods is recognized on transfer of
significant risk and rewards of ownership to the buyer and on
reasonable certainty of the ultimate collection. Sales are inclusive of
excise duty and net off sales tax, trade discounts and sales returns.
Interest: Income is recognised on a time proportion basis taking into
account the amount outstanding and the applicable rates. Commission
and insurance claim: Income is recognized when no significant
uncertainty as to measurability or recoverability exists.
(h) Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognise a
decline other than temporary in the value of the investments.
(i) Foreign Currency Transactions
Transactions in foreign currency are accounted for at the exchange
rates prevailing on the date of transaction. All monetary items
denominated in foreign currency are translated at year end rates.
Exchange differences arising on such transactions and also exchange
differences arising on the settlement of such transactions are adjusted
in the statement of profit and loss.
In case of forward contracts, the premium or discount on all such
contracts arising at the inception of each contract is recognized /
amortized as income or expenses over the life of the contract. Any
profit or loss arising on the cancellation or renewal of such contracts
is recognized as income or expenses for the period.
In respect of foreign branch, all revenues, expenses, monetary
assets/liabilities and fixed assets are accounted at the exchange rate
prevailing on the date of the transaction. Monetary assets and
liabilities are restated at the year end rates and resultant gains or
losses are recognized in the statement of profit and loss.
(j) Employee Benefits
The company's contributions to recognized provident funds are charged
to revenue on an accrual basis.
The Company has defined benefit plans namely leave encashment and
gratuity for all employees, the liability for which is determined on
the basis of an actuarial valuation at the end of the year. Gratuity
Fund (for other than Synthetic division) is administered through Life
Insurance Corporation of India. Short term compensated absences are
recognized at the undiscounted amount of benefit for services rendered
during the year.
Termination benefits are recognized as an expenses immediately.
Actuarial gains and losses comprise experience adjustments and the
effects of changes in actuarial assumptions and are recognised
immediately in the statement of profit and loss as income or expenses.
(k) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised as a
part of the cost of that asset. Other borrowing costs are recognised as
an expenses in the period in which they are incurred. (l) Taxation
Tax expenses for the year, comprising current tax and deferred tax is
included in determining the net profit/(loss) for the year.
A provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. Deferred tax
assets are recognised for all deductible timing differences and carried
forward to the extent it is reasonably / virtually certain that future
taxable profit will be available against which such deferred tax assets
can be realised.
Deferred tax assets and liabilities are measured at the tax rates that
have been enacted or substantively enacted by the balance sheet date.
(m) Leases
Assets acquired under long term finance lease are capitalised and
depreciated in accordance with company's policy for assets situated
at manufacturing and other locations. The associated obligations are
included in other loans under "Secured Loans". The company has
taken premises on lease. Lease rental in respect of operating lease
arrangement are charged to statement of profit and loss.
(n) Impairment of Assets
At each balance sheet date, the company assesses whether there is any
indication that an asset may be impaired. If such indication exists,
the company estimates the recoverable amount and where carrying amount
of the asset exceeds such recoverable amount, an impairment loss is
recognized in the statement of profit and loss to the extent the
carrying amount exceeds recoverable amount. Where there is any
indication that an impairment loss recognized for an asset in prior
accounting periods may no longer exist or may have decreased, the
company books a reversal of the impairment loss not exceeding the
carrying amount that would have been determined (net of amortization or
depreciation) had no impairment loss been recognized for the asset in
prior accounting periods.
(o) Government Grants Recognition
Government grants are recognized where:
i) There is reasonable assurance of complying with the conditions
attached to the grant.
ii) Such grant / benefit has been earned and it is reasonably certain
that the ultimate collection will be made.
Presentation in Financial Statement:
i) Government grants relating to specific fixed assets are adjusted
with the value of the fixed assets.
ii) Government grants in the nature of promoters' contribution, i.e.
which have reference to the total investment in an undertaking or by
way of contribution towards total capital outlay, are credited to
capital reserve.
iii) Government grants related to revenue items are either adjusted
with the related expenditure / revenue or shown under "Other
Income", in case direct linkage with cost /income is not
determinable.
(p) Provisions and contingencies
The company creates a provision when there is present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation. A
disclosure for a contingent liability is made when there is possible
obligation or a present obligation that probably will not require an
outflow of resources or where a reliable estimate of the obligation
cannot be made.
Mar 31, 2011
1. Basis of Accounting
These Financial Statements are prepared to comply in all material
aspects with all the applicable accounting principles in India, the
applicable accounting standards notified u/s 211(3C) of the Companies
Act, 1956 and the relevant provisions of the Companies Act, 1956 and
guidelines issued by the Securities and Exchange Board of India.
2. Use of Estimates
The preparation of the financial statements in conformity with Indian
Generally Accepted Accounting Principles requires the management to
make estimates and assumptions that affect the reported balances of
assets and liabilities and disclosures relating to contingent assets
and liabilities as at the date of the financial statements and reported
amounts of income and expenses during the period. Examples of such
estimates include provisions for doubtful debts, future obligations
under employee retirement benefit plans, income taxes and the useful
lives of fixed assets and intangible assets.
3. Fixed Assets
Fixed Assets are stated at their original cost including freight,
duties (net of CENVAT), taxes and other incidental expenses relating to
acquisition and installation.
4. Depreciation / Amortization
Depreciation on all fixed assets situated at manufacturing locations is
provided on the straight line method on a pro-rata basis at the rates
determined on the basis of useful lives of the respective assets.
Management estimates the useful lives for the various fixed assets
situated at manufacturing locations as follows
Description à Manufacturing locations Useful lives(in years)
Factory Building 17-29
Building (Other than factory building) 58
Plant and Machinery 2-18
Office Equipments 10-20
Computers 1-6
Furniture and Fixtures 2-15
Vehicles 10-12
The rates derived from the above useful lives are higher than the
minimum rates specified in Schedule XIV to the Companies Act, 1956
(Act).
Depreciation for all fixed assets at locations other than at
manufacturing locations is provided on the written down value method at
the rates specified in Schedule XIV to the Act.
Leasehold land is amortized over the lease period on a straight line
basis.
Capitalised enterprise resource planning software (SAP) is amortised
over a period of five years on straight line basis.
Acquired goodwill is amortized using the straight-line method over a
period of 10 years.
5. Inventories
Inventories have been valued at lower of cost and net realizable value.
The cost in respect of raw materials is determined under the Specific
identification of cost method.
Cost includes customs duty, wherever paid, and are net of credit under
CENVAT scheme, wherever applicable.
The cost in respect of work-in-progress, finished goods and stores and
spares is determined using the weighted average cost method and
includes direct materials and labour and a proportion of manufacturing
overheads based on normal operating capacity, where applicable.
Waste is valued at estimated net realizable value.
6. Revenue recognition
Sale of goods: Revenue on sale of goods is recognized on transfer of
significant risk and rewards of ownership to the buyer and on
reasonable certainty of the ultimate collection. Sales are inclusive of
excise duty and net off sales tax, trade discounts and sales returns.
Interest: Income is recognised on a time proportion basis taking into
account the amount outstanding and the applicable rates. Commission
and Insurance claim: Income is recognized when no significant
uncertainty as to measurability or recoverability exists.
7. Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognise a
decline other than temporary in the value of the investments.
8. Foreign currency transactions
Transactions in foreign currency are accounted for at the exchange
rates prevailing on the date of transaction. All monetary items
denominated in foreign currency are translated at year end rates.
Exchange differences arising on such transactions and also exchange
differences arising on the settlement of such transactions are adjusted
in the Profit and Loss Account.
In case of forward contracts, the premium or discount on all such
contracts arising at the inception of each contract is recognized /
amortized as income or expense over the life of the contract. Any
profit or loss arising on the cancellation or renewal of such contracts
is recognized as income or expense for the period.
In respect of foreign branch, all revenues, expenses, monetary
assets/liabilities and fixed assets are accounted at the exchange rate
prevailing on the date of the transaction. Monetary assets and
liabilities are restated at the year end rates and resultant gains or
losses are recognized in the Profit and Loss Account.
9. Employee benefits
The Companys contributions to recognized Provident Funds are charged
to revenue on an accrual basis.
The Company has Defined Benefit plans namely Leave Encashment and
Gratuity for all employees, the liability for which is determined on
the basis of an actuarial valuation at the end of the year. Gratuity
Fund (for other than Synthetic division) is administered through Life
Insurance Corporation of India. Short term compensated absences are
recognized at the undiscounted amount of benefit for services rendered
during the year.
Termination benefits are recognized as an expense immediately.
Actuarial gains and losses comprise experience adjustments and the
effects of changes in actuarial assumptions and are recognised
immediately in the Profit and Loss Account as income or expense.
10. Borrowing Costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised as a
part of the cost of that asset. Other borrowing costs are recognised as
an expense in the period in which they are incurred.
11. Taxation
Tax expense for the year, comprising current tax and deferred tax is
included in determining the net profit/(loss) for the year.
A provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. Deferred tax assets
are recognised for all deductible timing differences and carried
forward to the extent it is reasonably / virtually certain that future
taxable profit will be available against which such deferred tax assets
can be realised.
Deferred tax assets and liabilities are measured at the tax rates that
have been enacted or substantively enacted by the Balance Sheet date.
12. Leases
Assets acquired under long term finance lease are capitalised and
depreciated in accordance with Companys policy for assets situated at
manufacturing and other locations. The associated obligations are
included in other loans under ÃSecured LoansÃ.
The company has taken premises on lease. Lease rental in respect of
operating lease arrangement are charged to Profit and Loss Account.
13. Impairment of Assets
At each balance sheet date, the Company assesses whether there is any
indication that an asset may be impaired. If such indication exists,
the Company estimates the recoverable amount and where carrying amount
of the asset exceeds such recoverable amount, an impairment loss is
recognized in the profit and loss account to the extent the carrying
amount exceeds recoverable amount. Where there is any indication that
an impairment loss recognized for an asset in prior accounting periods
may no longer exist or may have decreased, the Company books a reversal
of the impairment loss not exceeding the carrying amount that would
have been determined (net of amortization or depreciation) had no
impairment loss been recognized for the asset in prior accounting
periods.
14. Government Grants
Recognition
Government grants are recognized where:
i) There is reasonable assurance of complying with the conditions
attached to the grant.
ii) Such grant / benefit has been earned and it is reasonably certain
that the ultimate collection will be made. Presentation in Financial
Statement:
i) Government grants relating to specific fixed assets are adjusted
with the value of the fixed assets.
ii) Government grants in the nature of promoters contribution, i.e.
which have reference to the total investment in an undertaking or by
way of contribution towards total capital outlay, are credited to
capital reserve.
iii) Government grants related to revenue items are either adjusted
with the related expenditure / revenue or shown under ÃOther IncomeÃ,
in case direct linkage with cost /income is not determinable.
15. Provisions and contingencies
The company creates a provision when there is present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation. A
disclosure for a contingent liability is made when there is possible
obligation or a present obligation that probably will not require an
outflow of resources or where a reliable estimate of the obligation
cannot be made
Mar 31, 2010
1. Basis of Accounting
These Financial Statements are prepared to comply in all material
aspects with all the applicable accounting principles in India, the
applicable accounting standards notified u/s 211(3C) of the Companies
Act, 1956 and the relevant provisions of the Companies Act, 1956 and
guidelines issued by the Securities and Exchange Board of India.
2. Use of Estimates
The preparation of the financial statements in conformity with Indian
Generally Accepted Accounting Principles requires the management to
make estimates and assumptions that affect the reported balances of
assets and liabilities and disclosures relating to contingent assets
and liabilities as at the date of the financial statements and reported
amounts of income and expenses during the period. Examples of such
estimates include provisions for doubtful debts, future obligations
under employee retirement benefit plans, income taxes and the useful
lives of fixed assets and intangible assets.
3. Fixed Assets
Fixed Assets are stated at their original cost including freight,
duties (net of CENVAT), taxes and other incidental expenses relating to
acquisition and installation.
4. Depreciation / Amortization
Depreciation on all fixed assets situated at manufacturing locations is
provided on the straight line method on a pro-rata basis at the rates
determined on the basis of useful lives of the respective assets.
Management estimates the useful lives for the various fixed assets
situated at manufacturing locations as follows
The rates derived from the above useful lives are higher than the
minimum rates specified in Schedule XIV to the Companies Act, 1956
(Act).
Depreciation for all fixed assets at locations other than at
manufacturing locations is provided on the written down value method at
the rates specified in Schedule XIV to the Act.
Leasehold land is amortized over the lease period on a straight line
basis.
Capitalised enterprise resource planning software (SAP) is amortised
over a period of five years on straight line basis.
Acquired goodwill is amortized using the straight-line method over a
period of 10 years.
5. Inventories
Inventories have been valued at lower of cost and net realizable value.
The cost in respect of raw materials is determined under the Specific
identification of cost method.
Cost includes customs duty, wherever paid, and are net of credit under
CENVAT scheme, wherever applicable.
The cost in respect of work-in-progress, finished goods and stores and
spares is determined using the weighted average cost method
and includes direct materials and labour and a proportion of
manufacturing overheads based on normal operating capacity, where
applicable.
Waste is valued at estimated net realizable value.
6. Revenue recognition
Sale of goods: Revenue on sale of goods is recognized on transfer of
significant risk and rewards of ownership to the buyer and on
reasonable certainty of the ultimate collection. Sales are inclusive of
excise duty and net off sales tax, trade discounts and sales returns.
Interest: Income is recognised on a time proportion basis taking into
account the amount outstanding and the applicable rates. Commission
and Insurance claim: Income is recognized when no significant
uncertainty as to measurability or recoverability exists.
7. Investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognise a
decline other than temporary in the value of the investments.
8. Foreign currency transactions
Transactions in foreign currency are accounted for at the exchange
rates prevailing on the date of transaction. All monetary
itemsdenominated in foreign currency are translated at year end rates.
Exchange differences arising on such transactions and also
exchangedifferences arising on the settlement of such transactions are
adjusted in the Profit and Loss Account.
In case of forward contracts, the premium or discount on all such
contracts arising at the inception of each contract is recognized /
amortized as income or expense over the life of the contract. Any
profit or loss arising on the cancellation or renewal of such contracts
isrecognized as income or expense for the period.
In respect of foreign branch, all revenues, expenses, monetary
assets/liabilities and fixed assets are accounted at the exchange
rateprevailing on the date of the transaction. Monetary assets and
liabilities are restated at the year end rates and resultant gains or
losses are recognized in the Profit and Loss Account.
9. Employee benefits
The Companys contributions to recognized Provident Funds are charged
to revenue on an accrual basis.The Company has Defined Benefit plans
namely Leave Encashment and Gratuity for all employees, the liability
for which is determinedon the basis of an actuarial valuation at the
end of the year. Gratuity Fund (for other than Synthetic division) is
administered through LifeInsurance Corporation of India. Short term
compensated absences are recognized at the undiscounted amount of
benefit for services rendered during the year
Termination benefits are recognized as an expense immediately.
Actuarial gains and losses comprise experience adjustments and
theeffects of changes in actuarial assumptions and are recognised
immediately in the Profit and Loss Account as income or expense.
10. Borrowing Costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised as a
part of the cost of that asset. Other borrowing costs are recognised as
an expense in the period in which they are incurred.
11. Taxation
Tax expense for the year, comprising current tax and deferred tax is
included in determining the net profit/(loss) for the year.A provision
is made for the current tax based on tax liability computed in
accordance with relevant tax rates and tax laws. Deferred taxassets are
recognised for all deductible timing differences and carried forward to
the extent it is reasonably / virtually certain that futuretaxable
profit will be available against which such deferred tax assets can be
realised.
Deferred tax assets and liabilities are measured at the tax rates that
have been enacted or substantively enacted by the Balance Sheet date.
12. Leases
Assets acquired under long term finance lease are capitalised and
depreciated in accordance with Companys policy for assets situatedat
manufacturing and other locations. The associated obligations are
included in other loans under "Secured Loans".
The company has taken premises on lease. Lease rental in respect of
operating lease arrangement are charged to Profit and Loss Account.
13. Impairment of Assets
At each balance sheet date, the Company assesses whether there is any
indication that an asset may be impaired. If such indication exists,
the Company estimates the recoverable amount and where carrying amount
of the asset exceeds such recoverable amount, an impairment loss is
recognized in the profit and loss account to the extent the carrying
amount exceeds recoverable amount. Where there is any indication that
an impairment loss recognized for an asset in prior accounting periods
may no longer exist or may have decreased, the Company books a reversal
of the impairment loss not exceeding the carrying amount that would
have been determined (net of amortization or depreciation) had no
impairment loss been recognized for the asset in prior accounting
periods.
14. Government Grants
Recognition
Government grants are recognized where:
i) There is reasonable assurance of complying with the conditions
attached to the grant.
ii) Such grant / benefit has been earned and it is reasonably certain
that the ultimate collection will be made.
Presentation in Financial Statement:
i) Government grants relating to specific fixed assets are adjusted
with the value of the fixed assets.
ii) Government grants in the nature of promoters contribution, i.e.
which have reference to the total investment in an undertaking or by
way of contribution towards total capital outlay, are credited to
capital reserve.
iii) Government grants related to revenue items areeither adjusted with
the related expenditure / revenue or shown under "Other
Income", in case direct linkage with cost /income is not determinable.
15. Provisions and contingencies
The company creates a provision when there is present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation. A
disclosure for a contingent liability is made when there is possible
obligation or a present obligation that probably will not require an
outflow of resources or where a reliable estimate of the obligation
cannot be made .
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- NSE Price History
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CLC Industries Ltd. Key Financial Ratios
- Ratios
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CLC Industries Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
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CLC Industries Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
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CLC Industries Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
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CLC Industries Ltd. Corporate Announcements
- Book Closure
- Board Meetings
- Change of Name
