Mar 31, 2018
a) SIGNIFICANT ACCOUNTING POLICIES
1) Statement of compliance
The financial statements have been prepared in accordance with Ind ASs notified under the Companies (Indian Accounting Standards) Rules, 2015. Up to the year ended March 31, 2017, the company prepared its financial statements in accordance with the requirements of previous GAAP, which includes Standards notified under the Companies (Accounting Standards) Rules, 2006. These are the Companyâs first Ind AS financial statements. The date of transition to Ind AS is April 1, 2016. Refer Note 1.20 for the details of first-time adoption exemptions availed by the Company.
2) Basis of preparation and presentation
The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.âHistorical cost is generally based on the fair value of the consideration given in exchange for goods and services.
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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
- Level 3 inputs are unobservable inputs for the asset or liability.
The principal accounting policies are set out below.
3) Critical accounting judgements and key sources of estimation and certainity
a) Use of estimates
The preparation of financial statements in conformity with Ind AS requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and notes thereto. The management believes that these estimates and assumptions are reasonable and prudent. However, future results could differ from these estimates and the differences between actual results and estimates are recognised in the period in which results are known / materialised.
Estimates and underlying assumptions are reviewed on an ongoing basis and any revision to accounting estimates is recognised prospectively in the current and future period.
This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included in the relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
b) Significant Estimates and judgements
The areas involving critical estimates or judgments are:
i) Fair valuation measurement & valuation process
Some of the Companyâs assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company engages third party valuers, where required, to perform the valuation. Information about the valuation techniques and inputs used in determining the fair value of various assets, liabilities and share based payments are disclosed in the notes to the financial statements.
ii) Actuarial Valuation
The determination of Companyâs liability towards defined benefit obligation to employees is made through independent actuarial valuation including determination of amounts to be recognised in the Statement of Profit and Loss and in other comprehensive income. Such valuation depend upon assumptions determined after taking into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. Information about such valuation is provided in notes to the financial statements.
iii) Useful life of Property, Plant and Equipment & Intangible assets
As described in the significant accounting policies, the Company reviews the estimated useful lives of property, plant and equipment and intangible assets at the end of each reporting period.
c) Control over Benani Foods Private Limited
Benani Foods Private Limited is considered as a subsidiary of the Company, even though the company has only a 41% ownership (March 2017 - 34%; March 2016 - 30%) interest. The directors of the Company assessed whether the Company has control over Benani Foods Private Limited based on whether the Company has the practical ability to direct the relavant activities of Benani Foods Private Limited. In making the judgement, the directors considered the Companyâs absolute size of holding in Benani Foods Private Limited and other relative size of and dispersion of the share holdings owned by the other shareholders. After assessment, the directors concluded that the Company has a sufficiently dominant voting interest to direct the relevant activities of Benani Foods Private Limited and therefore the Company has Control over Benani Foods Private Limited.
4) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty and net of returns, trade allowances, rebates and goods and service tax.
i. Sale of Products
Revenue from sale of products is recognised, when significant risks and rewards of ownership pass to the dealer / customer, as per terms of contract and it is probable that the economic benefits associated with the transaction will flow to the Company. Revenue from Distribution services is recognised on delivery of goods to customers.
ii. Rendering of services
Revenue from Services is recognised in the accounting period in which the services are rendered.
iii. Dividend & Interest income
Dividend income from investments is recognised when the shareholderâs right to receive payment has been established (Provided it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably)
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assets net carrying amount on initial recognition.
5) Property, Plant and Equipment
Land and building held for use in the production or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses. Free hold land is not depreciated.ââProperties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalized in accordance with the Companyâs accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
The estimate useful life adopted by the company are as follows:
Capital work-in-progress: Projects under which plant, property and equipment are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
6) Intangible assets
a. Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.
b. Derecognition of intangible assets
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognized.
c. Useful lives of intangible assets
Estimated useful lives of the intangible assets are as follows:
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognised as of 1st April, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
7) Impairment of Tangible and Intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal and value in use. 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 for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.âWhen an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
8) Inventories
Inventories are stated at lower of cost or net realisable value. The cost is calculated on weighted average method. Cost comprises expenditure incurred in normal course of business in brining such inventory to its present location and condition and includes where applicable, appropriate overheads based on the normal level of activity.
Net realisable value is the estimated selling price less estimated cost for completion of sale.
Obsolete, slow moving and defective inventories are identified from time to time and where necessary, a provision is made for such inventories.
9) Employee benefits
(i) Short term Employee Benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries in the period the related service is rendered.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
(ii) Retirement benefit costs and termination benefits
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period.
Defined benefit costs are categorized as follows:
- Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
- net interest expense or income; and
- Remeasurement
The company presents the first two components of defined benefit costs in profit or loss in the line item âEmployee benefits expenseâ.
Past service cost is recognised in profit or loss in the period of a plan amendment.
Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.
Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Curtailment gains and losses are accounted for as past service costs. The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Companyâs defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
Contributions paid/payable to defined contribution plans comprising of Superannuation (under a scheme of Life Insurance Corporation of India) and Provident Funds for certain employees covered under the respective Schemes are recognised in the Statement of Profit and Loss each year.
A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.
Gratuity for employees is covered under a Scheme of Life Insurance Corporation of India (LIC) and contributions in respect of such scheme are recognized in the Statement of Profit and Loss. The liability as at the Balance Sheet date is provided for based on the actuarial valuation carried out as at the end of the year.
10) Taxes on income
Tax expense comprises of current and deferred taxes.
Current tax:
The current tax payable is based on the taxable profit for the year. Taxable profit differs from Profit before tax as reported in the statement of profit and loss account because of items of income or expenditure that are taxable or deductible in other years and items that are never taxable or deductible. Company computes current tax using tax rate that have been enacted by the end of the reporting period.
Deferred Tax:
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current and deferred tax for the year:
Current and deferred tax are recognised in profit or loss account, except when they relate to items that are recognised in other comprehensive income or directly in equity respectively
11) Provisions and contingent liabilities
(i) Provision:
A provision is recorded when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated.
The amount recognised as provision is the best estimate of the consideration required to settle the present obligation at the end of reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is present value of those cash flows(when the effect of time value of money is material)
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
Provision for expected cost of warranty obligations under the local sale of goods legislation are recognised at the date of sale of relevant products, at managementâs best estimate of expenditure required to settle the companyâs obligation.
(ii) Contingent liabilities:
Wherever there is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognised because
(a) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
(b) the amount of the obligation cannot be measured with sufficient reliability.
12) Operating Segment
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decisionmaker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Corporate Management Committee.
Segments are organised based on business which have similar economic characteristics as well as exhibit similarities in nature of products and services offered, the nature of production processes, the type and class of customer and distribution methods.
ââUnallocated Corporate Expensesâ include revenue and expenses that relate to initiatives/costs attributable to the enterprise as a whole and are not attributable to segments.
13) Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Company as a Lessee
Assets used under finance leases are recognised as property, plant and equipment in the Balance Sheet for an amount that corresponds to the lower of fair value and the present value of minimum lease payments determined at the inception of the lease and a liability is recognised for an equivalent amount.
The minimum 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 the Statement of Profit and Loss.
Rentals payable under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the term of the relevant lease unless the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases.
14) Share-based payment arrangements
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 33.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Companyâs estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.âUnder the previous GAAP, share based payment costs were accrued on a intrinsic value method. Upon transition to Ind AS, the company has availed the exemption to apply the fair value to only unvested options.
15) Financial instruments
Financial assets and financial liabilities are recognised when a company becomes a party to the contractual provisions of the instruments.
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 financial assets and financial liabilities at fair value through profit or loss) 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 fair value through profit or loss are recognised immediately in profit or loss.
15.1 Financial assets
Initial recognition and measurement:
All regular way purchases or sales of financial assets are recognised and derecognized on a trade date basis. Subsequent measurement:
All recognised financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.
a. Classification of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortized cost (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):
- the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
- the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Investment in subsidiaries / associates are accounted at cost.
All other financial assets are subsequently measured at fair value.
For the impairment policy on financial assets measured at amortized cost, refer Note 1(15)(d)
b. Investment in equity instruments at FVTOCI
On initial recognition, company can make an irrevocable election(on a instrument by instrument basis) to present the subsequent change in fair value in other comprehensive income pertaining to investment in equity instruments. This election is not permitted if the equity instrument is held for trading. These elected investment are initially measured at fair value plus transaction cost. Subsequently, they are measured at fair value with gains and losses arising from change in fair value recognised in other comprehensive income and accumlated in âReserve for equity instruments through other comprehensive incomeâ. The cumulative gain / (loss) is not reclassified to profit or loss on disposal of investment.
A financial asset is held for trading if :
- it has been acquired principally for the purpose of selling it in near term; or
- on initial recognition it is part of portfolio of identified financial instrument that the company manages together and has recent actual pattern of short term profit taking or
- it is a derivative that is not designated and effective as a hedging instrument or a financial guarantee.
The company has equity investments in one entity which are not held for trading nor a subsidiary. The company has elected FVTOCI irrevocable option for this investments. Fair value is determined in the manner described in note 1(b)(2).
Dividends on these investment in equity instrument, if any will be recognised in profit or loss when the companyâs right to receive the dividend is established, it is probable that economic benefit associated with the dividend will flow to the entity, the dividend does not represent a recover of part of cost of investment and the amount of dividend can be measured reliably.
c. Financial assets at fair value through profit or loss (FVTPL)
Financial assets that do not meet the amortised cost criteria or Fair value through other comprehensive income (FVTOCI) criteria are measured at FVTPL
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the âOther incomeâ line item.
d. Impairment of financial assets
The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, lease receivables, trade receivables, other contractual rights to receive cash or other financial asset, and financial guarantees not designated as at FVTPL.
Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Company estimates cash flows by considering all contractual terms of the financial instrument through the expected life of that financial instrument.
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 11 and Ind AS 18, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information or case to case basis.
e. Derecognition of financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the assetâs carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.
f. Foreign exchange gains and losses
The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period.
- For foreign currency denominated financial assets measured at amortised cost and FVTPL, the exchange differences are recognised in profit or loss.
15.2Financial liabilities and equity instruments
a. Classification as debt or equity
Debt and equity instruments issued by the company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
b. Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a company entity are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Companyâs own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Companyâs own equity instruments.
c. Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
c.1. Financialliabilities at FVTPL
Financial liabilities are recognised at fair value through profit or loss (FVTPL) if it includes derivative liabilities. Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the âOther incomeâ line item.
Fair value is determined in the manner described in note 1(b)(2) c.2. Financial liabilities measured at amortised cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortized cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortized cost are determined based on the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Trade and other payables are recognised at the transaction cost, which is its fair value, and subsequently measured at amortised cost.
c.3. Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortized cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortized cost of the instruments and are recognised in âOther incomeâ.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss.
c.4. Derecognition of financial liabilities
The Company derecognizes financial liabilities when, and only when, the Companyâs obligations are discharged, cancelled or have expired. An exchange between with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognised in profit or loss.
15.3Derivative financial instruments
The Company enters into forward contracts to manage its exposure to foreign exchange rate risks.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately.
16) Foreign Currency Transactions
The functional and presentation currency of the company is Indian Rupee.
In preparing the financial statements of the company, transactions in currencies other than the entityâs functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
17) Operating cycle for current and non-current classification
Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
18) Insurance claims
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.
19) Standards issued but not yet effective
i) Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.
ii) Ind AS 115, Revenue from Contract with Customers:
On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers. The standard permits two possible methods of transition:
- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach)The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.
The Company will adopt the standard on April 1, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The effect on adoption of Ind AS 115 is expected to be insignificant.
(iii) Standards yet to be notified: Ind AS 116 - âLeasesâ
On 18 July 2017, the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI) issued an Exposure Draft (ED) of Ind AS 116, Leases. Ind AS 116 is largely converged with IFRS 16. When notified, Ind AS 116 will replace Ind AS 17 Leases.
Ind AS 116 sets out a comprehensive model for identification of lease arrangements and their treatment in the financial statements of the lessor and lessee. Ind AS 116 applies a control model for the identification of leases, distinguishing between leases and service contracts on the basis of whether there is an identified asset controlled by the customer. The Company is evaluating the requirement of the standard and the effect on the financial statements upon notification.
20) First-time adoption - mandatory exceptions, optional exemptions
a. Overall principle
The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to the certain exception and certain optional exemptions availed by the Company as detailed below.
b. Derecognition of financial assets and financial liabilities
The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2016 (the transition date).â
c. Classification of debt instruments
The Company has determined the classification of debt instruments in terms of whether they meet the amortized cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the transition date.
d. Impairment of financial assets
The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101. The Company has determined the classification of debt instruments in terms of whether they meet the amortized cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the transition date.
e. Deemed cost for property, plant and equipment
The Company has elected to continue with the carrying value of all of its plant and equipment and investment property recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
f. Determining whether an arrangement contains a lease
The Company has applied Appendix C of Ind AS 17 Determining whether an Arrangement contains a Lease to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date.
g. Equity investments at FVTOCI
The Company has designated investment in equity shares as at FVTOCI on the basis of facts and circumstances that existed at the transition date.
h. Unvested Employee Stock Options at Fair value
The Company has elected the option to account only unvested options at the transition date under fair value method.
i. Past business combinations
The Company has elected not to apply Ind AS 103 Business Combinations retrospectively to past business combinations that occurred before the transition date of April 1, 2016. Consequently,
- The Company has kept the same classification for the past business combinations as in its previous GAAP financial statements;
- The Company has not recognised assets and liabilities that were not recognised in accordance with previous GAAP in the balance sheet of the acquirer and would also not qualify for recognition in accordance with Ind AS in the separate balance sheet of the acquiree;
- The Company has excluded from its opening balance sheet those items recognised in accordance with previous GAAP that do not qualify for recognition as an asset or liability under Ind AS;
- The effects of the above adjustments have been given to the measurement of non-controlling interests and deferred tax.
Mar 31, 2017
26 - Notes to Accounts
1 ACCOUNTING STANDARDS COMPLIANCE
The financial statements have been prepared in accordance with the norms and principles prescribed in the Accounting Standards issued by the Institute of Chartered Accountants of India which are itemized below :
As the net worth of the Company is less than Rs.500 Cr (net worth as on 31st March, 2014, Rs.35.51 Cr), the Company is required to comply with Ind AS for the accounting period beginning on or after 1st April, 2017 as per Rule 4 of the Companies (Indian Accounting Standards) Rules, 2015.
AS - 1 Disclosure of accounting policies
The Company is following accrual basis of accounting on a going concern concept and the policies applied are consistent with those applied in the previous year.
AS - 2 Valuation of inventories
a Raw materials, components, stores and spares and other trading products are valued at cost determined on weighted average basis. Finished goods and traded goods are valued at the aggregate of material cost, applicable duties and overheads or net realizable value whichever is lower. b Excise Duty in respect of finished goods lying within the factory are included in the valuation of inventories.
c Goods-In-Transit, both Raw materials and Traded items sent by supplier on FOB basis are recognized based on Confirmation received from the Vendor regarding the dispatch of goods. Goods-in-Transit available at Bonded Warehouses are recognized based on Bond Statement / Confirmation from authorities.
d As per practice consistently followed, Customs Duty and Countervailing Duty payable on raw materials, components and finished goods lying in customs bonded warehouses is accounted for on deboning. Non-provision of this duty will not affect the profit for the year.
AS - 3 Cash Flow Statement
Cash Flow Statement has been prepared under âIndirect Methodâ.
AS - 4 Contingencies and Events occurring after the Balance Sheet date
The Board of Directors have recommended a dividend of fifty paise per equity share of face value of ''10 each for the financial year ended 31.03.2017. The dividend will be paid / dispatched to the shareholders within 30 days from the date of approval in the ensuing Annual General Meeting.
AS - 9 Revenue Recognition
a Income and Expenditure are accounted on a going concern basis.
b The Companyâs income consists of
i) sale of manufactured equipments,
ii) traded goods
iii) after sales service
iv) warranty management & repair services
v) information technology (IT) related consultancy services
vi) e-auction services; and
vii) distribution services
c Sale is accounted net of Excise Duty, Service Tax and Sales Tax / Value Added Tax
i) Income from consultancy services and annual maintenance contracts are considered on accrual basis.
ii) Income from services is recognized after rendering services.
iii) Income from Information Technology solutions are recognized depending upon the stage of completion of the project. d Other income includes realised exchange fluctuation gain on Sale of products, Sale of services of Rs63.41 lakhs (Previous year Rs117.99 lakhs).
e Interest income is recognized on a time proportion basis taking into account the amount of outstanding and the rate applicable.
f In respect of domestic sale of manufactured and traded goods, income is recognized once the goods are delivered to the designated transporters of the customer or to transporters usually contracted by the Company. In respect of export sales income is recognized on the basis of âLET Exportâ certificate issued by Customs Authorities. g As regards Income from distribution services, the income is recognized on delivery of goods to customers.
AS - 10 Property, Plant and Equipment
Fixed Assets are stated at cost of acquisition or construction cost net of CENVAT and includes expenditure incurred upto the date the asset is put to use, less accumulated depreciation.
Depreciation has been provided on Straight Line Method on the basis of useful life of the assets as prescribed by Schedule II to the Companies Act, 2013.
During the year, cost of certain plant and equipment which were fully depreciated in earlier years and carried at NIL value in the books were removed with corresponding debit to accumulated depreciation reserve.
The useful life of the assets are arrived at by retaining 5% of the cost of asset as residual value except in the following where the residual value is arrived at on the basis of valuation. In respect of some unusable assets, depreciation has been accelerated and such unusable assets were written off retiming 5% of the cost. The accelerated depreciation so written off amounts to Rs. 93.12 Lakhs
On assets whose actual cost does not exceed Rs5,000 individually, depreciation has been provided at 100%.
Useful life of Tools & Moulds and Office Equipments are estimated at 3 years based on technical valuation.
In respect of Software, the useful life is estimated at 2 years.
Computers, Office Equipments, Furniture & Fixtures, Electrical Installations and Improvement to building taken on lease used in walk-in centreâs are depreciated over three years while the same category of assets in factory, branches, etc. are depreciated as per Schedule II of the Companies Act, 2013.
Component Accounting
Useful life of the whole asset and part of the asset :
In respect of all depreciable assets, it was ascertained that useful life of part of the asset is not significantly different from the âwhole of assetsâ. Accordingly, measurement of depreciation is same for component asset and whole of the asset.
Lease hold land represents Rs,199.15 lakhs (Previous year Rs199.15 Lakhs) paid to State Industrial Promotion Corporation of Tamil Nadu Limited (SIPCOT), Chennai for 6.16 acres of land in their Oragadam Special Economic Zone (SEZ), Tamil Nadu. The lease period is 99 years and accordingly the cost is amortized effective 1st April 2013.
AS - 11 Effects of Changes in foreign exchange rates
a Purchase of imported raw materials, components, spare parts and capital goods are accounted based on retirement memos from banks. In respect of liabilities on import of raw materials, components, spare parts and capital goods which are in transit and where invoices / bills are yet to be received, the liability is accounted based on the market exchange rate prevailing on the date of the Balance Sheet.
b Yearend foreign currency denominated liabilities and receivables are translated at exchange rates prevailing as at Balance Sheet date, the difference being charged / credited to respective revenue or capital account. Any difference between the forward rate and the exchange rate on the date of inception of forward contract is recognized as discount or premium over the period of the contract.
c Other income includes realized exchange fluctuation gain on Sale of products, Sale of services of Rs63.41 lakhs (Previous year Rs117.99 lakhs).
d Derivative transactions :
The Company uses forward exchange contracts to hedge its exposure in foreign currency in respect of Imports of Inputs. a) Forward exchange contracts outstanding as at 31st March, 2017
The company has not availed any External Commercial Borrowings.
AS - 12 Government Grants
The Company has not received any Government grants during the year. Investment subsidy received from Karnataka Industrial Area Development Board (KIADB) for its Tumkur factory related investment in the year 1993-94 is now transferred to General Reserve after Statutory retention period.
AS - 13 Accounting for Investments
All Investments are long term investments and are stated at cost.
Cost of investments held in TVS Shriram Growth Fund, Chennai as on 31st March 2017 - Rs30.53 lakhs (3053.52 units at Face Value of Rs1,000/-). The market value (NAV) of these units is Rs1,015/- as on 31st March 2017, as per the account statement provided by the Investee.
Share of expenses apportioned by the investee, amounting to Rs4.2 Lakhs (419.64 units) has been debited to the Statement of Profit & Loss, based on account statement.
As on 31st March 2017, the balance number of units is 2634 amounting to Rs26.34 Lakhs.
AS - 14 Accounting for Amalgamation
This Standard is not applicable to the Company for the year under review.
AS - 15 Employee benefits
As per Accounting Standard 15 on âEmployee Benefitsâ, the disclosures of Employee benefits as defined in the Accounting Standard are furnished below :
(a) Short term Employee Benefits
Short term employee benefits payable within twelve months of rendering the service including accumulated leave encashment, at the Balance Sheet date, are recognized as an expense as per the Company''s scheme based on expected obligations on undiscounted basis.
(b) Long term Employee Benefits
In case of long term compensated absences i.e. long term leave encashment, the same is provided for based on actuarial valuation as at the Balance Sheet date, using the Projected Unit Credit Method.
Post retirement benefits comprising of employees Provident Fund and Gratuity Fund are accounted for as follows :
(a) Provident Fund : This is a defined contribution plan and contributions paid to the Regional Provident Fund Commissioner, Tambaram, Chennai-600 045, are charged to revenue during the period. The Company has no further obligations for future provident fund benefits other than regular contributions.
(b) Gratuity : This is a defined benefit plan and the Companyâs Scheme is administered by Trustees and funds managed by the Life Insurance Corporation of India (LIC). The liability for Gratuity to employees as at the Balance Sheet date is determined based on the actuarial valuation and on the basis of demand from Life Insurance Corporation of India. The contribution paid thereof is charged in the books of accounts.
AS - 16 Borrowing costs
All borrowing costs are charged to revenue except to the extent they are attributable to qualifying assets which are capitalized. During the year under review there was no borrowing attributable to qualifying assets and hence no borrowing cost was capitalized.
AS - 17 Segment Reporting
The Company operates in two segments from 1st April, 2015 namely a) Information Technology related products and technical services and b) Distribution services. (Refer Note 26 (20)).
AS - 18 Related Party disclosure
Disclosure is made as prescribed by the Institute of Chartered Accountants of India. (Refer Note No. 26 (8)).
AS - 19 Accounting for Leases
This Standard is not applicable as the Company does not have any lease transaction during the year.
AS - 20 - Earnings Per Share
Earnings per share (Basic and Diluted) has been calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period and disclosed on the face of statement of Profit and Loss in accordance with the Standard.
AS - 26 Intangible Assets
The Company owns Intellectual Property Rights & Business Rights relating to its service business and the same is amortized over a period of ten years @ 9.5% per annum.
AS - 27 Financial Reporting of Interest in Joint Ventures
This Standard is not applicable to the Company for the year under review.
AS - 28 Impairment of Assets
As on the Balance Sheet date the carrying amounts of the assets net of accumulated depreciation is not less than the recoverable amount of such assets. Hence there is no impairment loss on the assets of the Company.
AS - 29 Provisions, Contingent Liabilities and Contingent Assets
Warranty cost on sale of products has been determined based on management estimates / historical data and provided for - Rs525.89 Lakhs (Previous Year - Rs354.84 Lakhs).
Contingent liabilities are disclosed in Note No.4 and Contested liabilities are disclosed in Note No. 5.
Contingent assets are neither recognised nor disclosed.
AS - 30 Financial Instruments : Recognition and Measurement
This Standard is not applicable.
AS - 31 Financial Instruments: Presentation
This Standard is not applicable.
AS - 32 Financial Instruments : Disclosures
This Standard is not applicable.
7 Employee Stock Option Scheme 2011 (ESOP - 2011)
In accordance with Board resolution dated 23rd July, 2011 and Shareholdersâ special resolution dated 21st September,
2011 the ESOP-2011 was instituted and following are the details
i) During the year, 60,000 options granted earlier to the then Managing Director of the Company on 6th May, 2015 have been allotted on 6th May 2016. ESOP reserve of Rs1.7 Lakhs has been created during the year. Cumulative ESOP Reserve in the books of Rs17.25 Lakhs has been transferred to Securities premium on allotment of shares.
ii) Further, 3,00,000 options has been granted on 14th October, 2015 to the Chief Operating Officer of the Company, redesignated as Chief Executive Officer effective 04th May 2016 and ESOP Reserve of Rs76.00 Lakhs has been created during the year (Cumulative provision created Rs111.39 Lakhs).
Mar 31, 2016
1 ACCOUNTING STANDARDS COMPLIANCE
The financial statements have been prepared in accordance with the norms and principles prescribed in the Accounting Standards issued by the Institute of Chartered Accountants of India which are itemized below.
AS - 1 Disclosure of accounting policies
The Company is following accrual basis of accounting on a going concern concept and the policies applied are consistent with those applied in the previous year.
AS - 2 Valuation of inventories
a Raw materials, components, stores and spares and other trading products are valued at cost determined on weighted average basis. Finished goods and traded goods are valued at the aggregate of material cost, applicable duties and overheads or net realizable value whichever is lower.
b Excise Duty in respect of finished goods lying within the factory are included in the valuation of inventories.
c Goods-In-Transit, both Raw materials and Traded items sent by supplier on FOB basis are recognized based on Confirmation received from the Vendor regarding the dispatch of goods. Goods-in-Transit available at Bonded Warehouses are recognized based on Bond Statement / Confirmation from authorities.
d As per practice consistently followed, Customs Duty and Countervailing Duty payable on raw materials, components and finished goods lying in customs bonded warehouses is accounted for on deboning. Non-provision of this duty will not affect the profit for the year.
AS - 3 Cash Flow Statement
Cash Flow Statement has been prepared under âIndirect Methodâ.
AS - 4 Contingencies and Events occurring after the Balance Sheet date
There are no contingencies and events after the Balance Sheet date that affect the financial position of the Company. Contested liabilities and outstanding bank guarantees are disclosed by way of a note.
AS - 9 Revenue Recognition
a Income and Expenditure are accounted on a going concern basis. b The Company''s income consists of income from;
i) sale of manufactured equipments,
ii) traded goods
iii) after sales service
iv) warranty management & repair services
v) information technology (IT) related consultancy services
vi) e-auction services
vii) distribution services
c Sale is accounted net of Excise Duty, Service Tax and Sales Tax / Value Added Tax.
i) Income from consultancy services and annual maintenance contracts are considered on accrual basis.
ii) Income from services is recognized after rendering services.
iii) Income from Information Technology solutions are recognized depending upon the stage of completion of the project. d Other income includes realized exchange fluctuation gain on Sale of products, Sale of services of Rs.117.99 lakhs (Previous years. 81.80 lakhs).
e Interest income is recognized on a time proportion basis taking into account the amount of outstanding and the rate applicable.
f Dividend Income will be recognized when the Company in which shares are held, declares the dividend and when the right to receive the same is established. g In respect of domestic sale of manufactured and traded goods, income is recognized once the goods are delivered to the designated transporters of the customer or to transporters usually contracted by the Company. In respect of export sales income is recognized on the basis of "LET Export" certificate issued by Customs Authorities. h As regards Income from distribution services, the income is recognized on delivery of goods to customers.
AS - 10 Property, Plant and Equipment
Fixed Assets are stated at cost of acquisition or construction cost net of CENVAT and includes expenditure incurred up to the date the asset is put to use, less accumulated depreciation.
Depreciation has been provided on Straight Line Method on the basis of useful life of the assets as prescribed by Schedule II to the Companies Act, 2013.
The useful life of the assets are arrived at by retaining 5% of the cost of asset as residual value except in the following where the residual value is arrived at on the basis of valuation:
On assets whose actual cost does not exceed Rs. 5,000 individually, depreciation has been provided at 100%.
Useful life of Tools & Moulds and Office Equipments are estimated at 3 years based on technical valuation.
In respect of Software, the useful life is estimated at 2 years.
Computers, Office Equipments, Furniture & Fixtures, Electrical Installations and Improvement to building taken on lease used in walk-in centres are depreciated over three years while the same category of assets in factory, branches, etc are depreciated as per Schedule II of the Companies Act, 2013.
Component Accounting
Useful life of the whole asset and part of the asset:
In respect of all depreciable assets, it was ascertained that useful life of part of the asset is not significantly different from the "whole of assets". Accordingly, measurement of depreciation is same for component asset and whole of the asset. Lease hold land represents Rs. 199.15 lakhs(Previous year Rs. 199.15 Lakhs) paid to State Industrial Promotion Corporation of Tamil Nadu Limited (SIPCOT), Chennai for 6.16 acres of land in their Oragadam Special Economic Zone (SEZ), Tamil Nadu. The lease period is 99 years and accordingly the cost is amortized effective 1st April 2013.
During the year, cost of certain plant and equipment which were fully depreciated in earlier years and carried at NIL value in the books were removed with corresponding debit to accumulated depreciation reserve.
AS - 11 Effects of Changes in foreign exchange rates
a Purchase of imported raw materials, components, spare parts and capital goods are accounted based on retirement memos from banks. In respect of liabilities on import of raw materials, components, spare parts and capital goods which are in transit and where invoices / bills are yet to be received, the liability is accounted based on the market exchange rate prevailing on the date of the Balance Sheet.
b Yearend foreign currency denominated liabilities and receivables are translated at exchange rates prevailing as at Balance Sheet date, the difference being charged/credited to respective revenue or capital account. Any difference between the forward rate and the exchange rate on the date of inception of forward contract is recognized as discount or premium over the period of the contract .
c Other income includes realized exchange fluctuation gain on Sale of products, Sale of services of Rs. 117.99 lakhs (Previous year '' 81.80 lakhs). d Derivative transactions :
The Company uses forward exchange contracts to hedge its exposure in foreign currency in respect of Imports of Inputs. a) Forward exchange contracts outstanding as at 31st March, 2016
AS - 12 Government Grants
The Company has not received any Government grants.
AS - 13 Accounting for Investments
All Investments are long term investments and are stated at cost.
Cost of investments held in TVS Shriram Growth Fund, Chennai as on 31st March 2016 - Rs.36.34 lakhs (3634.345 units). The market value (NAV) of these units is Rs.46.77 lakhs as on 31st December, 2015, as per the Account Statement provided by the Investee.
During the year, the company divested its entire shareholding of Rs.90.73 Lakhs held in Modular Infotech Private Ltd., Pune, forRs.280.16 Lakhs realising a gain of Rs.189.43 Lakhs, which has been reported as an exceptional income.
AS - 14 Accounting for Amalgamation
This Standard is not applicable to the Company for the year under review.
AS - 15 Employee benefits
As per Accounting Standard 15 on âEmployee Benefitsâ, the disclosures of Employee benefits as defined in the Accounting Standard are furnished below :
(a) Short term Employee Benefits
Short term employee benefits payable within twelve months of rendering the service including accumulated leave encashment, at the Balance Sheet date, are recognized as an expense as per the Company''s scheme based on expected obligations on undiscounted basis.
(b) Long term Employee Benefits
In case of long term compensated absences i.e. long term leave encashment, the same is provided for based on actuarial valuation as at the Balance Sheet date, using the Projected Unit Credit Method.
Post retirement benefits comprising of employees Provident Fund and Gratuity Fund are accounted for as follows:
(a) Provident Fund : This is a defined contribution plan and contributions paid to the Regional Provident Fund Commissioner, Tambaram, Chennai-600045, are charged to revenue during the period. The Company has no further obligations for future provident fund benefits other than regular contributions.
(b) Gratuity : This is a defined benefit plan and the Company''s Scheme is administered by Trustees and funds managed by the Life Insurance Corporation of India(LIC). The liability for Gratuity to employees as at the Balance Sheet date is determined based on the actuarial valuation and on the basis of demand from Life Insurance Corporation of India. The contribution paid thereof is charged in the books of accounts.
AS - 16 Borrowing costs
All borrowing costs are charged to revenue except to the extent they are attributable to qualifying assets which are capitalized. During the year under review there was no borrowing attributable to qualifying assets and hence no borrowing cost was capitalized.
AS - 17 Segment Reporting
The Company operates in two segments from 1st April, 2015 namely a) Information Technology related products and technical services and b) Distribution services. (Refer Note 26(20)).
AS - 18 Related Party disclosure
Disclosure is made as prescribed by the Institute of Chartered Accountants of India.
AS - 19 Accounting for Leases
This Standard is not applicable as the Company does not have any lease transaction during the year.
AS - 20 - Earnings Per Share
Earnings per share (Basic and Diluted) has been calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period and disclosed on the face of statement of Profit and Loss in accordance with the Standard.
AS - 26 Intangible Assets
The Company owns Intellectual Property Rights & Business Rights relating to its service business and the same is amortized over a period of ten years @ 9.5% per annum.
AS - 27 Financial Reporting of Interest in Joint Ventures
This Standard is not applicable to the Company for the year under review.
AS - 28 Impairment of Assets
As on the Balance Sheet date the carrying amounts of the assets net of accumulated depreciation is not less than the recoverable amount of such assets. Hence there is no impairment loss on the assets of the Company.
AS - 29 Provisions, Contingent Liabilities and Contingent Assets
Warranty cost on sale of products has been determined based on management estimates/ historical data and provided for - Rs.354.84 Lakhs ( Previous Year - Rs.280.08 Lakhs)
Contingent liabilities are disclosed in Note No. 4 and Contested liabilities are disclosed in Note No. 5 Contingent assets are neither recognized nor disclosed.
AS - 30 Financial Instruments : Recognition and Measurement
This Standard is not applicable.
AS - 31 Financial Instruments: Presentation
This Standard is not applicable.
AS - 32 Financial Instruments : Disclosures
This Standard is not applicable.
Mar 31, 2015
1 ACCOUNTING STANDARDS COMPLIANCE
The financial statements have been prepared in accordance with the
norms and principles prescribed in the Accounting Standards issued by
the Institute of Chartered Accountants of India which are itemised
below.
AS - 1 Disclosure of accounting policies
The Company is following accrual basis of accounting on a going concern
concept and the policies applied are consistent with those applied in
the previous year.
AS - 2 Valuation of inventories
a Raw materials,components, stores and spares and other trading
products are valued at cost determined on weighted average basis.
Finished goods and traded goods are valued at the aggregate of material
cost and applicable direct and indirect overheads or net realisable
value whichever is lower.
b Excise Duty in respect of finished goods lying within the factory are
included in the valuation of inventories.
c Goods-In-Transit, both Raw materials and Traded items sent by
supplier on FOB basis are recognized based on Confirmation received
from the Vendor regarding the despatch of goods. Goods-in-Transit
available at Bonded Warehouses are recognized based on Bond Statement /
Confirmation from authorities.
d As per practice consistently followed, Customs Duty and
Countervailing Duty payable on raw materials, components and finished
goods lying in customs bonded warehouses is accounted for on debonding.
Non-provision of this duty will not affect the profit for the year.
AS - 3 Cash Flow Statement
Cash Flow Statement has been prepared under "Indirect Method".
AS - 4 Contingencies and Events occurring after the Balance Sheet date
There are no contingencies and events after the Balance Sheet date that
affect the financial position of the Company. Contested liabilities
and outstanding bank guarantees are disclosed by way of a note.
AS - 5 Net Profit or Loss for the year, prior period items and changes
in accounting policies
Details of prior period items in the Statement of Profit and Loss :
as - 6 Depreciation Accounting
Depreciation has been provided on Straight Line Method on the basis of
useful life of the assets as prescribed by Schedule II to the Companies
Act, 2013.
i) Depreciation for the year is higher by Rs. 43.64 Lakhs on the
implementation of the rates prescribed in Schedule II to the Companies
Act, 2013.
ii) Based on the transitional provisions as per Note 7(b) of Schedule
II, an amount of Rs. 122.52 Lakhs (net of Deferred Tax of Rs. 82.77 Lakhs)
has been deducted from retained earnings, without retaining 5% residual
value, pertaining to assets whose balance useful life as on 1st April,
2014 was NIL. The residual value of sucsh assets are NIL based on
technical valuation.
iii) The useful life of the assets are arrived at by retaining 5% of
the cost of asset as residual value except in the following where the
residual value is arrived at on the basis of valuation :
a) On assets whose actual cost does not exceed Rs. 5,000 individually,
depreciation has been provided at 100%.
b) In respect of Leasehold Land with a lease period of 99 years,
depreciation has been amortised over the tenure of lease, effective 1st
April, 2013.
c) Useful life of Tools & Moulds and Office Equipments are estimated at
3 years based on technical valuation.
d) In respect of Software, the useful life is estimated at 2 years.
e) Computers, Office Equipments, Furniture & Fixtures, Electrical
Installations and Improvement to building taken on lease used in
walk-in centres are depreciated over three years while the same
category of assets in factory, branches, etc are depreciated as per
Schedule II of the Companies Act, 2013.
AS - 7 Construction Contracts
This Accounting Standard is not applicable.
AS - 8 Research and Development
This Accounting Standard is withdrawn.
AS - 9 Revenue Recognition
a Income and Expenditure are accounted on a going concern basis.
b The Company's income consists of income from sale of manufactured
equipments, traded goods, after sales service, warranty management &
repair services, income from Information Technology (IT) related
consultancy services and e-auction services.
c Sale is accounted net of Excise Duty, Service Tax and Sales Tax /
Value Added Tax.
i) Income from consultancy services and annual maintenance contracts
are considered on accrual basis.
ii) Income from services is recognised after rendering services.
iii) Income from InformationTechnology solutions are recognised
depending upon the stage of completion of the project.
d Other income includes realised exchange fluctuation gain on Sale of
products, Sale of services of Rs. 81.80 lakhs (Previous year Rs. 110.65
lakhs).
e Interest income is recognised on a time proportion basis taking into
account the amount of outstanding and the rate applicable.
f Dividend Income is recognised when the Company in which shares are
held, declares the dividend and when the right to receive the same is
established.
g In respect of domestic sale of manufactured and traded items, the
recognition is on the basis of delivery of goods to the designated
transporters of the Customer, while in respect of export sales the
recognition is on the basis of "LET Export" certificate issued by
Customs Authorities
AS - 10 Fixed Assets
Fixed Assets are stated at cost of acquisition or construction cost net
of CENVAT and includes expenditure incurred upto the date the asset is
put to use, less accumulated depreciation.
Technical know-how fees paid is capitalised under Plant and Equipment.
Temporary constructions / alteration costs are charged off in the same
year.
Lease hold land represents Rs. 199.15 lakhs(Previous year Rs. 199.15 Lakhs)
paid to State Industrial Promotion Corporation of Tamil Nadu Limited
(SIPCOT), Chennai for 6.16 acres of land in their Oragadam Special
Economic Zone( SEZ),Tamil Nadu. The lease period is 99 years and
accordingly the cost is amortised effective 1st April 2013.
During the year, cost of certain office equipments which were fully
depreciated in earlier years and carried at NIL value in the books were
removed with corresponding debit to accumulated depreciation reserve.
AS - 11 Effects of Changes in foreign exchange rates
a Purchase of imported raw materials, components, spare parts and
capital goods are accounted based on retirement memos from banks. In
respect of liabilities on import of raw materials, components, spare
parts and capital goods which are in transit and where invoices / bills
are yet to be received, the liability is accounted based on the market
exchange rate prevailing on the date of the Balance Sheet.
b Year end foreign currency denominated liabilities and receivables are
translated at exchange rates prevailing as at Balance Sheet date, the
difference being charged/credited to respective revenue or capital
account . Any difference between the forward rate and the exchange rate
on the date of inception of forward contract is recognised as discount
or premium over the period of the contract.
c Other income includes realised exchange fluctuation gain on Sale of
products, Sale of services of Rs. 81.80 lakhs (Previous year Rs. 110.65
lakhs).
d Derivative transactions :
The Company uses forward exchange contracts to hedge its exposure in
foreign currency in respect of Imports of Inputs. a) Forward exchange
contracts outstanding as at 31st March, 2015
The company has not availed any External Commercial Borrowings.
AS - 12 Government Grants
The Company has not received any Government grants.
AS - 13 Accounting for Investments
All Investments are long term investments and are stated at cost.
Provision for diminution in value is made only if such a decline is
other than temporary in the opinion of the Management.
Cost of investments held in TVS Shriram Growth Fund, Chennai as on 31st
March 2015 - Rs. 38.66 lakhs (3866.18 units). The market value (NAV) of
these units is Rs. 46.32 lakhs as on 31st December, 2014, as per Account
Statement from Investee.
AS - 14 Accounting for Amalgamation
This Standard is not applicable to the Company for the year under
review.
AS - 15 Employee benefits
As per Accounting Standard 15 on "Employee Benefits", the
disclosures of Employee benefits as defined in the Accounting Standard
are furnished below :
(a) Short term Employee Benefits
Short term employee benefits payable within twelve months of rendering
the service including accumulated leave encashment, at the Balance
Sheet date, are recognised as an expense as per the Company's scheme
based on expected obligations on undiscounted basis.
(b) Long term Employee Benefits
In case of long term compensated absences i.e. long term leave
encashment, the same is provided for based on actuarial valuation as at
the Balance Sheet date, using the Projected Unit Credit Method.
Post retirement benefits comprising of employees Provident Fund and
Gratuity Fund are accounted for as follows :
(a) Provident Fund : This is a defined contribution plan and
contributions paid to the Regional Provident Fund Commissioner,
Tambaram, Chennai - 600 045, are charged to revenue during the period.
The Company has no further obligations for future provident fund
benefits other than regular contributions.
(b) Gratuity : This is a defined benefit plan and the Company's Scheme
is administered by Trustees and funds managed by the Life Insurance
Corporation of India (LIC). The liability for Gratuity to employees as
at the Balance Sheet date is determined based on the actuarial
valuation and on the basis of demand from Life Insurance Corporation of
India.The contribution paid thereof is charged in the books of
accounts.
AS - 16 Borrowing costs
All borrowing costs are charged to revenue except to the extent they
are attributable to qualifying assets which are capitalised. During
the year under review there was no borrowing attributable to qualifying
assets and hence no borrowing cost was capitalised.
AS - 17 Segment Reporting
Since the group of products sold and services rendered by the Company
pertains to Information Technology related products and services, the
operations of the Company relate to a single reportable segment.
AS - 18 Related Party disclosure
Disclosure is made as prescribed by the Institute of Chartered
Accountants of India.
AS - 19 Accounting for Leases
This Standard is not applicable as the Company does not have any lease
transaction during the year.
AS - 20 - Earnings Per Share
Earnings per share (Basic and Diluted) has been calculated by dividing
the net profit for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the
period and disclosed on the face of statement of Profit and Loss in
accordance with the Standard.
AS - 21 Consolidated Financial Statements
Consolidated Financial Statements of the Company and its wholly owned
subsidiary, viz., Prime Property Holdings Limited, Chennai is enclosed.
AS - 22 Taxes on income
Income Tax payable under the normal computation of taxable income is
NIL. However, tax is payable under the provisions of Section 115JB of
the Income Tax Act, 1961, viz., Minimum Alternate Tax.
Deferred tax liability and asset are recognised based on timing
differences using the tax rates substantively enacted on the Balance
Sheet date.
AS - 23 Accounting for Investments in Associates in Consolidated
Financial Statements
This Standard is not applicable to the Company for the year under
review.
AS - 25 Interim Financial Reporting
Quarterly financial results are published in accordance with the
requirement of Listing Agreement with Stock Exchanges. The recognition
and measurement principles as laid down in the Standard have been
followed in the preparation of these results.
AS - 26 Intangible Assets
The Company owns Intellectual Property Rights & Business Rights
relating to its service business and the same is amortised over a
period of ten years @ 9.5% per annum.
AS - 27 Financial Reporting of Interest in Joint Ventures
This Standard is not applicable to the Company for the year under
review.
AS - 28 Impairment of Assets
As on the Balance Sheet date the carrying amounts of the assets net of
accumulated depreciation is not less than the recoverable amount of
such assets. Hence there is no impairment loss on the assets of the
Company.
AS - 29 Provisions, Contingent Liabilities and Contingent Assets
Warranty cost on sale of products has been determined based on
management estimates/ historical data and provided for - Rs. 280.08 lakhs
(Previous Year - Rs. 227.46 Lakhs).
Contingent liabilities are disclosed in Note No.4 and Contested
liabilities are disclosed in Note No. 5.
Contingent assets are neither recognised nor disclosed.
AS - 30 Financial Instruments : Recognition and Measurement
This Standard is not applicable.
AS - 31 Financial Instruments: Presentation
This Standard is not applicable.
AS - 32 Financial Instruments : Disclosures
This Standard is not applicable.
Mar 31, 2014
The financial statements have been prepared in accordance with the
norms and principles prescribed in the Accounting Standards issued by
the Institute of Chartered Accountants of India which are itemised
below.
AS - 1 Disclosure of accounting policies
The Company is following accrual basis of accounting on a going concern
concept and the policies applied are consistent with those applied in
the previous year.
AS - 2 Valuation of inventories
a Raw materials,components, stores and spares and other trading
products are valued at cost determined on weighted average basis. Work
in process includes material cost and applicable direct overheads.
Finished goods and traded goods are valued at the aggregate of material
cost and applicable direct and indirect overheads or net realisable
value whichever is lower.
b Excise Duty in respect of finished goods lying within the factory are
included in the valuation of inventories.
c As per practice consistently followed, Customs Duty and
Countervailing Duty payable on raw materials, components and finished
goods lying in customs bonded warehouses is accounted for on debonding.
Non-provision of this duty will not affect the profit for the year.
AS - 3 Cash Flow Statement
Cash Flow Statement has been prepared under "Indirect Method".
AS - 4 Contingencies and Events occurring after the Balance Sheet date
There are no contingencies and events after the Balance Sheet date that
affect the financial position of the Company. Contested liabilities
and outstanding bank guarantees are disclosed by way of a note.
AS - 5 Net Profit or Loss for the year, prior period items and changes
in accounting policies
Details of prior period items in the Statement of Profit and Loss :
Rs. in Lakhs
As at / Year ended As at / Year ended
31.03.2014 31.03.2013
i) Expenses
Welfare 0.73 0.33
Repairs and Maintenance-
Plant and Equipment 0.06 0.21
Repairs and Maintenance-
Office Equipments 0.02 0.41
Other expenses 0.01 2.99
Consultancy - 1.07
0.82 5.01
ii) Income
Power & Fuel - 0.44
Repairs & Maintenance -
Building - 0.61
Rent - 0.70
Lease rental - Computers - 0.84
Repairs & Maintenance -
Assets - 0.15
- 2.74
AS - 6 Depreciation Accounting
a Depreciation on Fixed Assets is provided on straight line method at
the rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956 with applicable shift allowance except:
i) On computers (including printers, uninterruptible power supply
systems and computer accessories) and vehicles acquired on or after
01-04-1998, depreciation has been charged at 30% and 18% respectively
on Straight Line Method (SLM), which are higher than the rates
prescribed in Schedule XIV.
ii) In respect of Improvements to Buildings taken on lease,
depreciation has been charged at 20% on straight line method which is
higher than the rate prescribed in Schedule XIV to the Companies
Act,1956.
iii) On Intellectual Property Rights, depreciation has been charged at
9.5% per annum under straight line method for ten years.
iv) On Business Rights, depreciation has been charged at 9.5% per annum
under straight line method for 10 years.
v) On Software, depreciation has been charged at 50% per annum on
pro-rata basis under straight line method.
vi) On assets whose actual cost does not exceed Rs. 5,000 individually,
depreciation has been provided at 100%.
vii) Moulds has been subject to depreciation @ 31.67% per annum as
against normal rate of 16.21% per annum prescribed in Schedule XIV of
the Companies Act, 1956.
viii) On certain class of assets, depreciation has been charged at 99%
of its original cost on pro-rata basis, considering the useful life of
asset as one year as against rate prescribed in Schedule XIV of the
Companies Act, 1956.
AS - 7 Construction Contracts
This Accounting Standard is not applicable.
AS - 8 Research and Development
This Accounting Standard is withdrawn.
AS - 9 Revenue Recognition
a Income and Expenditure are accounted on a going concern basis.
b The Company''s income consists of income from sale of manufactured
equipments, traded goods, after sales service, warranty management &
repair services, income from Information Technology (IT) related
consultancy services and e-auction services.
c Sales is accounted net of Excise Duty, Service Tax and Sales Tax /
Value Added Tax.
i) Income from consultancy services and annual maintenance contracts
are considered on accrual basis.
ii) Income from services is recognised after rendering services.
iii) Income from Information Technology solutions are recognised
depending upon the stage of completion of the project. d Other income
includes realised exchange fluctuation gain on Sale of products, Sale
of services of Rs. 110.65 lakhs
(Previous year Rs. 96.30 lakhs).
e Interest income is recognised on a time proportion basis taking into
account the amount of outstanding and the rate applicable.
f Dividend Income is recognised when the Company in which shares are
held, declares the dividend and when the right to receive the same is
established.
g In respect of domestic sale of manufactured and traded items, the
recognition is on the basis of delivery of goods to the designated
transporters of the Customer, while in respect of export sales the
recognition is on the basis of "LET Export " certificate issued by
Customs Authorities
AS - 10 Fixed Assets
Fixed Assets are stated at cost of acquisition or construction cost net
of CENVAT and includes expenditure incurred upto the date the asset is
put to use, less accumulated depreciation.
Technical know-how fees paid is capitalised under Plant and Equipment.
Temporary constructions / alteration costs are charged off in the same
year.
Lease hold land represents Rs. 199.15 lakhs(Previous year Rs. 199.15
Lakhs) paid to State Industrial Promotion Corporation of Tamil Nadu
Limited (SIPCOT), Chennai for 6.16 acres of land in their Oragadam
Special Economic Zone (SEZ), Tamil Nadu. The lease period is 99 years
and accordingly the cost is amortised effective 1st April 2013.
AS - 11 Effects of Changes in foreign exchange rates
a Purchase of imported raw materials, components, spare parts and
capital goods are accounted based on retirement memos from banks. In
respect of liabilities on import of raw materials, components, spare
parts and capital goods which are in transit and where invoices / bills
are yet to be received, the liability is accounted based on the market
exchange rate prevailing on the date of the Balance Sheet.
b Year end foreign currency denominated liabilities and receivables are
translated at exchange rates prevailing as at Balance Sheet date, the
difference being charged/credited to respective revenue or capital
account . Any difference between the forward rate and the exchange rate
on the date of inception of forward contract is recognised as discount
or premium over the period of the contract .
c Other income includes realised exchange fluctuation gain on Sale of
products, Sale of services of Rs. 110.65 lakhs (Previous year Rs. 96.30
lakhs). d Derivative transactions :
The Company uses forward exchange contracts to hedge its exposure in
foreign currency in respect of Imports of Inputs.
a) Forward exchange contracts outstanding as at 31st March, 2014
Rs. in Lakhs
As at / Year As at / Year
ended ended
31.03.2014 31.03.2013
- Euro
2,74,562 (LY - 4,39,795) equivalent
to Rs. 226.72 321.52
- JPY
17,94,450 (LY - 31,22,768) equivalent
to Rs. 10.55 19.50
- USD
18,89,551 (LY - 17,63,961) equivalent
to Rs. 1,199.49 982.31
b) Foreign currency exposures not covered by Forward exchange contracts
as at 31st March, 2014
Rs. in Lakhs
As at / Year As at / Year
ended ended
31.03.2014 31.03.2013
- Euro NIL (LY - 2,62,874) equivalent
to Rs. - 192.33
- JPY NIL (LY - NIL) equivalent
to Rs. - -
- USD NIL (LY - 6,62,408) equivalent
to Rs. - 368.88
The company has not availed any External Commercial Borrowings.
AS - 12 Government Grants
The Company has not received any Government grants.
AS - 13 Accounting for Investments
All Investments are long term investments and are stated at cost.
Provision for diminution in value is made only if such a decline is
other than temporary in the opinion of the Management.
The cost of investments of 50,000 equity Shares in wholly owned
subsidiary Tumkur Property Holdings Limited, Chennai is Rs. 5 lakhs and
its net worth was Rs. (5.39) Lakhs as of 31st March 2013. Hence a
provision for diminution in value of Rs. 5 lakhs had been made in the
Statement of Profit and Loss for the financial year ended 31st March
2013.
Consequent to the dissolution of Tumkur Property Holdings Limited,
Chennai effective 1st November 2013, the cost of investment of 50,000
equity shares in wholly owned subsidiary Tumkur Property Holdings
Limited, Chennai of Rs. 5 lakhs is written off against the provision
made.
During the year, out of the total cost of investment of Rs. 118.66
lakhs in TVS Shriram Growth Fund, Chennai, investment costing Rs. 80.00
lakhs was sold.The sum realised was Rs. 84.08 lakhs.Thus a profit of
Rs. 4.08 lakhs was made.
Cost of investments held in TVS Shriram Growth Fund, Chennai as on 31st
March 2014 - Rs. 38.66 lakhs (3866.18 units). The market value (NAV)
of these units is Rs. 41.91 lakhs.
AS - 14 Accounting for Amalgamation
This Standard is not applicable to the Company for the year under
review.
AS - 15 Employee benefits
As per Accounting Standard 15 on "Employee Benefits", the disclosures
of Employee benefits as defined in the Accounting Standard are
furnished below :
(a) Short term Employee Benefits
Short term employee benefits payable within twelve months of rendering
the service including accumulated leave encashment, at the Balance
Sheet date, are recognised as an expense as per the Company''s scheme
based on expected obligations on undiscounted basis.
(b) Long term Employee Benefits
In case of long term compensated absences i.e. long term leave
encashment, the same is provided for based on actuarial valuation as at
the Balance Sheet date, using the Projected Unit Credit Method.
Post retirement benefits comprising of employees Provident Fund and
Gratuity Fund are accounted for as follows :
(a) Provident Fund : This is a defined contribution plan and
contributions paid to the Regional Provident Fund Commissioner,
Tambaram, Chennai - 600 045, are charged to revenue during the period.
The Company has no further obligations for future provident fund
benefits other than regular contributions.
(b) Gratuity : This is a defined contribution plan and the Company''s
Scheme is administered by Trustees and funds managed by the Life
Insurance Corporation of India(LIC). The liability for Gratuity to
employees as at the Balance Sheet date is determined based on the
actuarial valuation and on the basis of demand from Life Insurance
Corporation of India.The contribution paid thereof is charged in the
books of accounts.
Disclosure as per AS15 (Revised) - Defined Benefit Plans
Rs. in Lakhs
As at / Year As at / Year
ended ended
31.03.2014 31.03.2013
Past Service benefit 153.31 146.58
Present Value of the obligation as at
the beginning of the year 146.58 155.17
Interest Cost 11.21 11.77
Current Service Cost 22.07 20.83
Benefits Paid (21.52) (41.92)
Acquisitions - -
Plan amendment cost - -
Actuarial Gain/(Loss) on obligation (5.03) 0.73
Present Value of the obligation as
at Balance Sheet date 153.31 146.58
Rs. in Lakhs
As at / Year As at / Year
ended ended
31.03.2014 31.03.2013
Fair value of planned assets as at
the beginning of the year 139.62 157.63
Expected Return on planned assets 13.48 13.51
Contributions 16.00 17.25
Accretion to planned assets 16.17 -
Benefits paid (21.52) (41.92)
Actuarial Gain/(Loss) on planned assets (2.31) (6.85)
Fair value of planned assets as at
Balance Sheet date 161.44 139.62
Amounts recognized in the Balance Sheet
Present Value of the obligation as at
Balance Sheet date 153.31 146.58
Fair value of planned assets as at
Balance Sheet date 161.44 139.62
Funded status of the plan - (assets) /
Liability 8.13 (6.96)
Amounts recognized in the statement of
Profit and Loss
Current Service cost 22.07 20.83
Interest cost 11.21 11.77
Expected Return on planned assets (13.48) (13.51)
Net actuarial gain or loss recognized
in the year (7.34) 7.57
Expenses recognized in the statement
of Profit and Loss 12.46 26.66
Principal actuarial assumptions
Discount Rate 9.21% 8.27%
Salary escalation 5.00% 5.00%
Expected return on planned assets 9.30% 9.30%
AS - 16 Borrowing costs
All borrowing costs are charged to revenue except to the extent they
are attributable to qualifying assets which are capitalised. During
the year under review there was no borrowing attributable to qualifying
assets and hence no borrowing cost was capitalised.
AS - 17 Segment Reporting
Since the group of products sold and services rendered by the Company
pertains to Information Technology related products and services, the
operations of the Company relate to a single reportable segment.
AS - 18 Related Party disclosure
Disclosure is made as per the requirements of the Standard and as per
the clarifications issued by the Institute of Chartered Accountants of
India.
AS - 19 Accounting for Leases
This Standard is not applicable as the Company does not have any lease
transaction during the year.
AS - 20 - Earnings Per Share
Earnings per share (Basic and Diluted) has been calculated by dividing
the net profit for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the
period and disclosed on the face of statement of Profit and Loss in
accordance with the Standard.
Rs. in Lakhs
As at / Year As at / Year
ended ended
31.03.2014 31.03.2013
Profit after tax 40.02 (800.60)
Weighted average number of equity shares 1,79,75,832 1,76,72,818
Nominal value of the shares Rs. 10/- Rs. 10/-
(i) Earnings per share - Basic 0.22 (4.53)
(ii) Earnings per share - Diluted 0.22 (4.48)
AS - 21 Consolidated Financial Statements
Consolidated Financial Statements of the Company and its wholly owned
subsidiary, viz., Prime Property Holdings Limited, Chennai is enclosed.
AS - 22 Taxes on income
Income Tax payable under the normal computation of taxable income is
NIL. However, tax is payable under the provisions of Section 115JB of
the Income Tax Act, 1961, viz., Minimum Alternate Tax.
Deferred tax liability and asset are recognised based on timing
differences using the tax rates substantively enacted on the Balance
Sheet date.
Deferred Tax Liability (Net) consists of :
A) Liabilities:- Tax on Depreciation 389.85 348.46
Less:
B) Assets:- Tax on provisions inadmissible
under the Income Tax Act, 1961 5.07 3.67
Net Deferred Tax Liability 384.78 344.79
AS - 23 Accounting for Investments in Associates
in Consolidated Financial Statements
This Standard is not applicable to the Company
for the year under review.
AS - 24 Discontinuing Operations
In respect of Contract Manufacturing Services
business which was sold during 2007, the details
of liabilities carried over in the financial
statements are furnished below:
Liabilities in respect of discontinued operations
Balance at the beginning of the year 20.46 20.46
Less: Discharged during the year 20.46 -
Balance at the close of the year - 20.46
AS - 25 Interim Financial Reporting
Quarterly financial results are published in accordance with the
requirement of Listing Agreement with Stock Exchanges. The recognition
and measurement principle as laid down in the Standard have been
followed in the preparation of these results.
AS - 26 Intangible Assets
The Company owns Intellectual Property Rights & Business Rights
relating to its service business and the same is amortised over a
period of ten years @ 9.5% per annum.
AS - 27 Financial Reporting of Interest in Joint Ventures
This Standard is not applicable to the Company as there is no Joint
Venture as on 31.03.2014 AS - 28 Impairment of Assets
As on the Balance Sheet date the carrying amounts of the assets net of
accumulated depreciation is not less than the recoverable amount of
such assets. Hence there is no impairment loss on the assets of the
Company.
AS - 29 Provisions, Contingent Liabilities and Contingent Assets
Warranty cost on sale of products has been determined based on
management estimates/ historical data and provided for - Rs. 227.46
lakhs (Previous Year - Rs. 312.90 Lakhs)
Contingent liabilities are disclosed in Note No. 5 and Contested
liabilities are disclosed in Note No. 6.
Contingent assets are neither recognised nor disclosed.
AS - 30 Financial Instruments : Recognition and Measurement
This Standard is not applicable.
AS - 31 Financial Instruments: Presentation
This Standard is not applicable.
AS - 32 Financial Instruments : Disclosures
This Standard is not applicable.
Mar 31, 2013
1 ACCOUNTING STANDARDS COMPLIANCE
The fnancial statements have been prepared in accordance with the norms
and principles prescribed in the Accounting Standards issued by the
Institute of Chartered Accountants of India which are itemised below.
AS - 1 Disclosure of accounting policies
The Company is following accrual basis of accounting on a going concern
concept and the policies applied are consistant with those applied in
the previous year.
AS - 2 Valuation of inventories
a Raw materials,components, stores and spares and other trading
products
are valued at cost determined on weighted average basis. Work in
process includes material cost and applicable direct overheads.
Finished goods and traded goods are valued at the aggregate of material
cost and applicable direct and indirect overheads or net realisable
value whichever is lower.
b Excise Duty in respect of fnished goods lying within the factory are
included in the valuation of inventories.
c As per practice consistently followed, Customs Duty and
Countervailing
Duty payable on raw materials, components and fnished goods lying in
customs bonded warehouses is accounted for on debonding. Non-provision
of this duty will not affect the proft for the year.
AS - 3 Cash Flow Statements
Cash Flow Statement has been prepared under " Indirect Method".
AS - 4 Contingencies and Events occurring after the Balance Sheet date
There are no contingencies and events after the Balance Sheet date that
affect the fnancial position of the Company. Contested liabilities and
outstanding bank guarantees are disclosed by way of a note.
AS - 6 Depreciation accounting
a Depreciation on Fixed Assets is provided on straight line method at
the rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956 with applicable shift allowance except:
i) On computers (including printers, uninterruptible power supply
systems and computer accessories) and vehicles acquired on or after
01-04-1998, depreciation has been charged at 30% and 18% respectively
on Straight Line Method (SLM), which are higher than the rates
prescribed in Schedule XIV.
ii) In respect of Buildings acquired on lease, depreciation has been
charged at 20% on straight line method which is higher than the rate
prescribed in Schedule XIV to the Companies Act,1956.
iii) On Intellectual Property Rights, depreciation has been charged at
9.5% per annum under straight line method for ten years. iv) On
Business Rights, depreciation has been charged at 9.5% per annum under
straight line method for 10 years.
v) On Software, depreciation has been charged at 50% per annum on pro-
rata basis under straight line method.
vi) On assets whose actual cost does not exceed Rs. 5,000 individually,
depreciation has been provided at 100%.
vii) Moulds has been subject to depreciation @ 31.67% per annum as
against normal rate of 16.21% per annum prescribed in Schedule XIV of
the Companies Act, 1956.
viii) On certain class of assets, depreciation has been charged at 99%
of its original cost on pro-rata basis, considering the useful life of
asset as one year as against rate prescribed in Schedule XIV of the
Companies Act, 1956.
b In respect of assets depreciated on straight line method which have
been acquired on amalgamation / business transfer, depreciation is
provided on the original cost of acquisition as appearing in the books
of transferor companies.
AS - 7 Accounting for Construction Contracts
This Accounting Standard is not applicable.
AS - 8 Accounting for Research and Development
This Accounting Standard is withdrawn.
AS - 9 Revenue Recognition
a Income and Expenditure are accounted on a going concern basis.
b The Company''s income consists of income from sale of manufactured
equipments, traded goods, after sales service, warranty management &
repair services and income from Information Technology (IT) related
consultancy services.
c Sales is accounted net of Excise Duty, Service Tax and Sales Tax /
Value
Added Tax.
i) Income from consultancy services and annual maintenance contracts
are considered on accrual basis.
ii) Income from services is recognised after rendering services.
iii) Income from InformationTechnology solutions are recognised
depending upon the stage of completion of the project.
d Other income includes realised exchange fuctuation gain on Sale of
products, Sale of services ofRs. 96.30 lakhs (Previous year Rs.84.56
lakhs).
e Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
f Dividend Income is recognised when the Company in which shares are
held, declares the dividend and when the right to receive the same is
established.
g In respect of domestic sale of manufactured and traded items, the
recognition is on the basis of delivery of goods to the designated
transporters of the Customer, while in respect of export sales the
recognition is on the basis of "LET Export " certifcate issued by
Customs Authorities.
AS - 10 Accounting for Fixed Assets
Fixed Assets are stated at cost of acquisition or construction cost net
of CENVAT and includes expenditure incurred upto the date the asset is
put to use, less accumulated depreciation.
Technical know-how fees paid is capitalised under Plant and Equipment.
Temporary constructions / alteration costs are charged off in the same
year.
Lease hold land represents Rs.199.15 lakhs(Previous year Rs.199.15 Lakhs)
paid to State Industrial Promotion Corporation of Tamil Nadu Limited
(SIPCOT), Chennai for 6.16 acres of land in their Oragadam Special
Economic Zone( SEZ),Tamil Nadu. The lease period is 99 years.The plant
at Oragadam has commenced the commercial production on 31st August
2012.
The full scale production is expected in the next fnancial year from
which the cost of lease hold land will be amortised.
AS - 11 Accounting for effects in foreign exchange rates
a Purchase of imported raw materials, components, spare parts and
capital goods are accounted based on retirement memos from banks. In
respect of liabilities on import of raw materials, components, spare
parts and capital goods which are in transit and where invoices / bills
are yet to be received, the liability is accounted based on the market
exchange rate prevailing on the date of the Balance Sheet.
b Year end foreign currency denominated liabilities and receivables are
translated at exchange rates prevailing as at Balance Sheet date, the
difference being charged/credited to respective revenue or capital
account. Any difference between the forward rate and the exchange rate
on the date of inception of forward contract is recognised as discount
or premium over the period of the contract .
c Other income includes realised exchange fuctuation gain on Sale of
products, Sale of services of Rs. 96.30 lakhs ( Previous year Rs.84.56
lakhs).
d Derivative transactions :
The Company uses forward exchange contracts to hedge its exposure in
foreign currency in respect of Imports of Inputs.
AS - 12 Accounting for Government Grants
The Company has not received any Government grants.
AS - 13 Accounting for Investments
Investments are stated at cost. Provision for diminution in value is
made only if such a decline is other than temporary in the opinion of
the Management.
The cost of investments of 50,000 equity shares in wholly owned
subsidiary Tumkur Property Holdings Limited, Chennai is Rs. 5 lakhs and
its net worth is Rs. (5.39) lakhs as of 31st March, 2013. Hence the
provision for diminution in value of Rs. 5 lakhs has been made in
Statement of Proft & Loss.
During the year, out of the total cost of investment of Rs.710.50 lakhs
in TVS Shriram Growth Fund, Chennai, investment costing Rs.570.00 lakhs
was sold.The sum realised was Rs.599.07 lakhs.
Thus a proft of Rs. 29.07 lakhs was made. Further investment of Rs.21.84
lakhs was redeemed by TVS Shriram Growth Fund for a sum of Rs.37.31
lakhs, resulting a proft of Rs.15.47 lakhs.
Cost of investments held in TVS Shriram Growth Fund as on 31st March
2013 - Rs.118.66 lakhs (11866.18 units). The market value (NAV) of these
units is Rs. 121.63 lakhs.
AS - 14 Accounting for amalgamation
This Standard is not applicable to the Company for the year under
review.
AS - 15 Accounting for Retirement benefts
As per Accounting Standard 15 on "Employee Benefts", the disclosures of
Employee benefts as defned in the Accounting Standard are given below:
(a) Short term Employee Benefts
Short term employee benefts payable within twelve months of rendering
the service including accumulated leave encashment, at the Balance
Sheet date, are recognised as an expense as per the Company''s scheme
based on expected obligations on undiscounted basis.
(b) Long term Employee Benefts
In case of long term compensated absences i.e. long term leave
encashment, the same is provided for based on actuarial valuation as at
the Balance Sheet date, using the Projected Unit Credit Method.
Post retirement benefts comprising of employees Provident Fund and
Gratuity Fund are accounted for as follows:
(a) Provident Fund : This is a defned contribution plan and
contributions are paid to to the Regional Provident Fund Commissioner,
Tambaram, Chennai-600045, are charged to revenue during the period. The
Company has no further obligations for future provident fund benefts
other than regular contributions.
AS - 16 Borrowing cost
All borrowing costs are charged to revenue except to the extent they
are attributable to qualifying assets which are capitalised. During the
year under review there was no borrowing attributable to qualifying
assets and hence no borrowing cost was capitalised.
AS - 17 Segment reporting
Since the group of products sold and services rendered by the Company
pertains to Information Technology related products and services, the
operations of the Company relate to a single reportable segment.
AS - 18 Related Party disclosure
Disclosure is made as per the requirements of the Standard and as per
the clarifcations issued by the Institute of Chartered Accountants of
India.
AS - 19 Leases
This Standard is not applicable as the Company does not have any fnance
lease agreement in force.
AS - 20 - Earnings Per Share
Earnings per share (Basic and Diluted) has been calculated by dividing
the net proft for the period attributable to equity shareholders by the
weighted average number of equity shares outstanding during the period
and disclosed on the face of statement of Proft and Loss in accordance
with the Standard.
AS - 21 Consolidated Financial Statements
Consolidated Financial Statements of the Company and its wholly owned
below mentioned Subsidiaries are enclosed.
(i) Tumkur Property Holdings Limited, Chennai
(ii) Prime Property Holdings Limited, Chennai
AS - 22 Accounting for taxes on income
Income Tax payable under the normal computation of taxable income and
also under the provisions of Section 115JB, viz., Minimum Alternate Tax
is "NIL".
Deferred tax liability resulting from timing differences between book
and taxable proft including depreciation on acquired Business Rights,
is accounted for, using the tax rates in force as on the Balance Sheet
date.
AS - 23 Accounting for Investments in Associates in Consolidated
Financial Statements
This Standard is not applicable to the Company for the year under
review.
AS - 24 Discontinuing Operations
In respect of Contract Manufacturing Services business which was sold
during 2007, the details of liabilities carried over in the fnancial
statements are furnished below:
AS - 25 Interim Financial Reporting
Quarterly fnancial results are published in accordance with the
requirement of Listing Agreement with Stock Exchanges. The recognition
and measurement principle as laid down in the Standard have been
followed in the preparation of these results.
AS - 26 Intangible Assets
The Company owns Intellectual Property Rights & Business Rights
relating to its service business and the same is amortised over a
period of ten years @9.5% per annum.
AS - 27 Financial Reporting of Interest in Joint Ventures
This Standard is not applicable to the Company.
AS - 28 Impairment of Assets
As on the Balance Sheet date the carrying amounts of the assets net of
accumulated depreciation is not less than the recoverable amount of
such assets. Hence there is no impairment loss on the assets of the
Company.
AS - 29 Provisions, Contingent Liabilities and Contingent Assets
Warranty cost on sale of products has been determined based on
management estimates/ historical data and provided for - Rs. 312.90 lakhs
( Previous Year - Rs. 328.17 Lakhs)
Contingent liabilities are disclosed in Note No.5 and Contested
liabilities are disclosed in Note No.6.
Contingent assets are neither recognised nor disclosed.
AS - 30 Financial Instruments: Recognition and Measurement
This Standard is not applicable.
AS - 31 Financial Instruments: Presentation
This Standard is not applicable.
AS - 32 Financial Instruments: Disclosures
This Standard is not applicable.
Mar 31, 2012
AS - 1 Disclosure of accounting policies
The Company is following accrual basis of accounting on a going concern
concept and the policies applied are consistent with those applied in
the previous year.
AS - 2 Valuation of inventories
a Raw materials, components, stores and spares and other trading
products are valued at cost determined on weighted average basis. Work
in process includes material cost and applicable direct overheads.
Finished goods and traded goods are valued at the aggregate of material
cost and applicable direct and indirect overheads or net realisable
value whichever is lower.
b Excise Duty in respect of finished goods lying within the factory are
included in the valuation of inventories, c As per practice
consistently followed, Customs Duty and Countervailing Duty payable on
raw materials, components and finished goods lying in customs bonded
warehouses is accounted for on debonding. Non- provision of this duty
will not affect the profit for the year.
AS - 3 Cash Flow Statements
Cash Flow Statement has been prepared under "Indirect Method".
AS - 4 Contingencies and Events occurring after the Balance Sheet date
There are no contingencies and events after the Balance Sheet date that
affect the financial position of the Company. Contested liabilities and
outstanding bank guarantees are disclosed by way of a note.
AS - 5 Net Profit or Loss for the year, prior period items and changes
in accounting policies
Details of prior period items in Profit and Loss Account
AS - 6 Depreciation accounting
a Depreciation on Fixed Assets is provided on straight line method at
the rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956 with applicable shift allowance except:
i) On computers (including printers, uninterruptible power supply
systems ' and computer accessories) and vehicles acquired on or after
01-04- 1998, depreciation has been charged at 30% and 18% respectively
on straight line method, which are higher than the rates prescribed in
Schedule XIV.
ii) In respect of Buildings acquired on lease, depreciation has been
charged at 20% on straight line method which is higher than the rate
prescribed in Schedule XIV to the Companies Act,1956.
iii) On Intellectual Property Rights , depreciation has been charged at
9.5% per annum under straight line method.
iv) On Business Rights, depreciation has been charged at 9.5% per annum
under straight line method.
v) On Software, depreciation has been charged at 50% per annum on
pro-rata basis under straight line method.
vi) On assets whose actual cost does not exceed Rs 5,000 individually,
depreciation has been provided at 100%.
vi) From financial year 2005-06, Tools and Moulds which are three year
old have been subject to depreciation @ 31.67% as against normal rate
of 16.21%, so as to bring the written down value of such assets to 5%
of original cost.
vii) On certain class of Office Equipments depreciation has been
charged at 99% of its original cost on pro-rata basis, considering the
useful life of asset as one year as against Schedule XIV rates.
b In respect of assets depreciated on straight line method which have
been acquired on amalgamation I business transfer, depreciation is
provided on the original cost of acquisition as appearing in the books
of transferor companies.
AS - 7 Accounting for Construction Contracts
The Company is not engaged in any Construction business covered by this
Standard.
AS - 8 Accounting for Research and Development
This Standard stands withdrawn as Accounting Standard 26 - Intangible
Assets has become mandatory.
AS - 9 Revenue Recognition
a Income and Expenditure are accounted on a going concern basis, b The
Company's income consists of income from sale of manufactured
equipments, traded goods, after sales service, warranty management &
repair services and income from Information Technology (IT) related
consultancy services, c Sales is accounted net of Excise Duty, Service
Tax and Sales Tax I Value Added Tax.
a) Income from consultancy services and annual maintenance contracts
are considered on accrual basis.
b) Income from services is recognised after rendering services.
c) Income from IT solutions are recognised depending upon the stage of
completion of the project.
d Sale of products, income from services and other income include
realised exchange fluctuations on exports of Rs 84.56 lakhs (Previous
year RsNil). e Interest income is recognised on a time proportion basis
taking into account the amount of outstanding and the rate applicable,
f The Company has not derived any income during the current year out of
its investments.
e In respect of domestic sales, the recognition is on the basis of
delivery of goods to customers while in respect of export sales the
recognition is on the basis of ÃÃLET Export" certification issued by
Customs Authorities.
AS -10 Accounting for Fixed Assets Fixed Assets are stated at cost of
acquisition or construction cost net of cenvat and includes expenditure
incurred upto the date the asset is put to use, less accumulated
depreciation.
Technical know-how fees paid is capitalised under Plant and Machinery.
Temporary constructions I alteration costs are charged off in the same
year.
Lease hold land represents Rs 199.15 lakhs(Previous year Rs 199.15 Lakhs)
paid to State Industrial Promotion Corporation of Tamil Nadu Limited
(SIPCOT), Chennai for 6.16 acres of land in their Oragadam Special
Economic Zone( SEZ),Tamil Nadu for which the registration of lease deed
was completed in June 2009. The unit has been approved by the
Development Commissioner, Madras Export Promotion Zone (MEPZ) in March
2009.
AS - 11 Accounting for effects in foreign exchange rates .
a Purchase of imported raw materials, components, spare parts and
capital goods are accounted based on retirement memos from banks. In
respect of liabilities on import of raw materials, components, spare
parts and capital goods which are in transit and where invoices / bills
are yet to be received, the liability is accounted based on the market
exchange rate prevailing on the date of the Balance Sheet.
b Year end foreign currency denominated liabilities and receivables are
translated at exchange rates prevailing as at Balance Sheet date, the
difference being charged/credited to respective revenue or capital
account. Any difference between the forward rate and the exchange rate
on the date of inception of forward contract is recognised as discount
or premium over the period of the contract.
c Derivative transactions:
The Company uses forward exchange contracts to hedge its exposure in
foreign currency: -
The amendment introduced to AS 11 by Government of India on 31st March,
2009 allowing the loss/profit on restatement of External Commercial
Borrowings made for acquisition of capital assets to be deducted from
or added to cost of capital asset is not applicable to the Company as
it has no External Commercial Borrowings for acquisition of capital
assets. Similarly Company has not availed External Commercial
Borrowings for purposes other than acquisition of capital assets also.
AS -12 Accounting for Government Grants
The Company has not received any Government grants during the current
accounting year.
AS -13 Accounting for Investments
Investments are stated at cost. Provision for diminution in value is
made only if such a decline is other than temporary in the opinion of
the Management. Investment in Shriram Growth Fund(Fund), Chennai -
viz., 71,050 units are carried at par value of Rs 1000/- per unit
aggregating to Rs 710.50 lakhs. However the Fund has declared its Net
Asset Value as at 31st March 2012 at Rs 943/- per unit. Thus there is a
diminution in value to the extent of Rs 57/- per unit aggregating to Rs
40.50 lakhs. This diminution is not provided for in the accounts as the
Management opines that the portfolio is relatively younger in its
investment horizon of 4-5 years with life of the Fund of 7 years with
returns commencing from year 4 onwards and hence the fall in value is
only temporary. This opinion is based on the fact that the fund returns
will start to rise steeply and growth fund will make positive returns
soon.
The investment worth of 50,000 equity shares invested in Tumkur
Property Holdings Limited, Chennai aggregates to t 3.14 lakhs against
cost of Rs 5 lakhs. The diminution amounts to X1.86 lakhs. This is also
not provided for as the Management has long term strategy to make this
wholly owned subsidiary profitable.
AS -14 Accounting for amalgamation
This Standard is not applicable to the Company for the year under
review.
AS -15 Accounting for Retirement Benefits
As per Accounting Standard 15 on "Employee Benefits", the disclosures
of Employee benefits as defined in the Accounting Standard are given
below:
(a) Short term Employee Benefits
Short term employee benefits payable within twelve months of rendering
the service including accumulated leave encashment, at the Balance
Sheet date, are recognised as an expense as per the Company's scheme
based on expected obligations on undiscounted basis.
(b) Long term Employee Benefits
In case of long term compensated absences i.e. long term leave
encashment, the same is provided for based on actuarial valuation as at
the Balance Sheet date, using the Projected Unit Credit Method.
Post retirement benefits comprising of employees Provident Fund and
Gratuity Fund are accounted for as follows:
(a) Provident Fund : This is a defined contribution plan and
contributions paid to the fund are charged to revenue during the period
in which the employee renders the related service. The Company has no
further obligations for future provident fund benefits other than
regular contributions.
(b) Gratuity: This is a defined contribution plan and the Company's
Scheme is administered by Trustees and funds managed by the Life
Insurance Corporation of India(LIC). The liability for Gratuity to
employees as at the Balance Sheet date is determined based on the
actuarial valuation using the Projected Unit Credit Method. The
contribution paid thereof is charged in the books of accounts.
AS -16 Borrowing cost
All borrowing costs are charged to revenue except to the extent they
are attributable to qualifying assets which are capitalised. During the
year under review there was no borrowing attributable to qualifying
assets and hence no borrowing cost was capitalised.
AS -17 Segment reporting
Since the group of products sold and services rendered by the Company
pertains to Information Technology related products and services, the
operations of the Company relate to a single reportable segment.
AS -18 Related Party disclosure
Disclosure is made as per the requirements of the Standard and as per
the clarifications issued by the Institute of Chartered Accountants of
India.
AS -19 Leases
This Standard is not applicable as the Company does not have any
finance lease agreement in force.
AS - 20 - Earnings Per Share
Earnings per share (Basic and Diluted) has been calculated by dividing
the net profit for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the
period and disclosed on the face of statement of Profit and Loss in
accordance with the Standard.
AS - 21 Consolidated Financial Statements
Consolidated Financial Statements of the Company and its Wholly owned
Subsidiaries viz., Tumkur Property Holdings Limited, Chennai and Prime
Property Holdings Limited, Chennai are enclosed.
AS - 22 Accounting for taxes on income
Provision for current tax is made after taking into consideration
benefits admissable under the provision of Income Tax Act, 1961.
Current tax is calculated as per provision of Section 115JB viz.,
Minimum Alternate Tax.
Deferred tax liability resulting from timing differences between book
and taxable profit is accounted for, using the tax rates in force as on
the Balance Sheet date.
AS - 23 Accounting for Investments in Associates in Consolidated
Financial Statements
This Standard is not applicable to the Company for the year under
review.
AS - 24 Discontinuing Operations
In respect of Contract Manufacturing Services business which was sold
during 2007, the details of liabilities carried over in the financial
statements are furnished below:
AS - 25 Interim Financial Reporting
Quarterly financial results are published in accordance with the
requirement of Listing Agreement with Stock Exchanges. The recognition
and measurement principle as laid down in the Standard have been
followed in the preparation of these results.
AS - 26 Intangible Assets
The Company owns Intellectual Property Rights & Business Rights
relating to its service business and the same is amortised over a
period of ten years @ 9.5% per annum.
During the year, the Company has acquired from TVS-E Servicetec
Limited, Chennai, its Customer Support Service Business along with
Assets and Liabilities on a going concern basis effective 1SI October
,2011. The assets and liabilities of the acquired business have been
taken over at fair value and the difference between the consideration
and fair value of net assets acquired, aggregating to Rs 3263 Lakhs
represents value of Business Rights.
AS - 27 Financial Reporting of Interest in Joint Ventures
This Standard is not applicable to the Company.
AS - 28 Impairment of Assets
As on the Balance Sheet date the carrying amounts of the assets net of
accumulated depreciation is not less than the recoverable amount of
such assets. Hence there is no impairment loss on the assets of the
Company.
AS - 29 Provisions, Contingent Liabilities and Contingent Assets
Warranty cost on sale of products has been determined based on
management estimates/ historical data and provided for - Rs 328.17 lakhs
(Previous Year - Rs 275.44 Lakhs).
Contingent liabilities are disclosed in Note no.5 and Contested
liabilities are disclosed in Note no.6
AS - 30 Financial Instruments: Recognition and Measurement
This Standard is not applicable for the year under review.
AS - 31 Financial Instruments: Presentation
This Standard is not applicable for the year under review.
Financial instruments: disclosures
This Standard is not applicable for the year under review.
Mar 31, 2011
1 ACCOUNTING STANDARDS COMPLIANCE
The financial statements have been prepared in accordance with the
norms and principles prescribed in the Accounting Standards issued by
the Institute of Chartered Accountants of India which are itemised
below.
AS - 1 Disclosure of accounting policies
The Company is following accrual basis of accounting on a going concern
concept and the policies applied are consistent with those applied in
the previous year.
AS - 2 Valuation of inventories
a Raw materials, components, stores and spares and other trading
products are valued at cost determined on weighted average basis.
Work-in-process includes material cost and applicable direct overheads.
Finished goods are valued at the aggregate of material cost and
applicable direct and indirect overheads or net realisable value
whichever is lower.
b Excise Duty in respect of finished goods lying within the factory are
included in the valuation of inventories.
c As per practice consistently followed, Customs Duty and
Countervailing Duty payable on raw materials, components and finished
goods lying in customs bonded warehouses is accounted for on debonding.
Non-provision of this duty will not affect the profit for the year.
AS - 3 Cash Flow Statements
Cash Flow Statement has been prepared under" Indirect Method".
AS - 4 Contingencies and Events occurring after the Balance Sheet date
There are no contingencies and events after the Balance Sheet date that
affect the financial position of the Company. Contested liabilities and
outstanding bank guarantees are disclosed by way of a note.
AS - 6 Depreciation accounting
a Depreciation on Fixed Assets is provided on straight line method at
the rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956 with applicable shift allowance except:
i) On Computers (including printers, uninterruptible power supply
systems and computer accessories) and vehicles acquired on or after
01-04-1998, depreciation has been charged at 30% and 18% respectively
on straight line method, which are higher than the rates prescribed in
Schedule XIV.
ii) In respect of Buildings acquired on lease, depreciation has been
charged at 20% on straight line method which is higher than the rate
prescribed in Schedule XIV to the Companies Act,1956.
iii) On Intellectual Property Rights acquired on amalgamation,
depreciation has been charged at 9.5% per annum under straight line
method.
iv) On Software acquired, depreciation has been charged at 50% per
annum on pro-rata basis under straight line method.
v) On assets acquired whose actual cost does not exceed Rs. 5,000
individually, depreciation has been provided at 100%.
AS - 6 Depreciation accounting
vi) From financial year 2005-06, Tools and Moulds which are three years
old have been subject to depreciation @ 31.67% as against normal rate
of 16.21%, so as to bring the written down value of such assets to 5%
of original cost. vii) On certain class of Office Equipments
depreciation has been charged at 99% of its original cost on pro-rata
basis, considering the useful life of asset as one year as against
Schedule XIV rates. b In respect of assets depreciated on straight
line method which have
been acquired on amalgamation / business transfer, depreciation is
provided on the original cost of acquisition as appearing in the books
of transferor companies.
AS - 7 Accounting for Construction Contracts
The Company is not engaged in any Construction business covered by this
Standard.
AS - 8 Accounting for Research and Development
This Standard stands withdrawn as Accounting Standard 26 - Intangible
Assets has become mandatory.
AS - 9 Revenue Recognition
a) Income and Expenditure are accounted on a going concern basis.
b) The Company's income consists of income from sale of manufactured
equipments, traded goods and after sales service and income from
Information Technology (IT) related Management services.
c) Sales is accounted net of Excise Duty, Service Tax and Sales Tax /
Value Added Tax. Income from consultancy services and annual
maintenance contracts are considered on accrual basis. Income from IT
solutions are recognised depending upon the stage of completion of the
project.
d) Sale of products, income from services and other income include
realised exchange fluctuations of Exports of Rs. NIL.( Previous year
Rs. 42.26 Lakhs).
e) Interest income is recognised on a time proportion basis taking into
account the amount of outstanding and the rate applicable.
f) The Company has not derived any income during the current year out
of its investments.
g) In respect of domestic sales, the recognition is on the basis of
delivery of goods to customers while in respect of export sales the
recognition is on the basis of " LET Export " certification issued by
Customs Authorities.
AS - 10 Accounting for Fixed Assets
Fixed Assets are stated at cost of acquisition or construction cost net
of cenvat and includes expenditure incurred upto the date the asset is
put to use, less accumulated depreciation. Technical know-how fees paid
is capitalised under Plant and Machinery. Temporary construction /
alteration costs are charged off in the same year.
Land includes Lease hold land of Rs. 199.15 Lakhs(Previous year Rs.
99.15 Lakhs) paid to State Industrial Promotion Corporation of
TamilNadu Limited (SIPCOT), Chennai for 6.16 acres of land in their
Oragadam Special Economic Zone (SEZ), Tamil Nadu for which the
registration of lease deed was completed in June, 2009. The unit has
been approved by the Development Commissioner, Madras Export Promotion
Zone (MEPZ) in March, 2009.
AS - 11 Accounting for effects in foreign exchange rates
a) Purchase of imported raw materials, components, spare parts and
capital goods are accounted based on retirement memos from banks. In
respect of liabilities on import of raw materials, components, spare
parts and capital goods which are in transit and where invoices / bills
are yet to be received, the liability is accounted based on the market
exchange rate prevailing on the date of the Balance Sheet.
b) Year end foreign currency denominated liabilities and receivables
are translated at exchange rates prevailing as at Balance Sheet date,
the difference being charged/credited to respective revenue or capital
account. Any difference between the forward rate and the exchange rate
on the date of inception of forward contract is recognised as discount
or premium over the period of the contract.
c) Derivative transactions :
The Company uses forward exchange contracts to hedge its exposure in
foreign currency : -
The amendment introduced to AS 11 by Government of India on 31st March,
2009 allowing the loss/profit on restatement of External Commercial
Borrowings made for acquisition of capital assets to be deducted from
or added to cost of capital asset is not applicable to the Company as
it has no External Commercial Borrowings for acquisition of capital
assets. Similarly Company has not availed External Commercial
Borrowings for purposes other than acquisition of capital assets also.
AS - 12 Accounting for Government Grants
The Company has not received any Government grants during the current
accounting year.
AS - 13 Accounting for Investments
Investments are stated at cost. Provision for diminution in value is
made only if such a decline is other than temporary in the opinion of
the Management.
AS - 14 Accounting for amalgamation
This Standard is not applicable to the Company for the year under
review.
AS - 15 Accounting for Retirement benefits
As per Accounting Standard 15 on "Employee Benefits", the disclosures
of Employee benefits as defined in the Accounting Standard are given
below:
(a) Short term Employee Benefits
Short term employee benefits payable within twelve months of rendering
the service including accumulated leave encashment as at the Balance
Sheet date, are recognised as an expense as per the Company's scheme
based on expected obligations on undiscounted basis.
(b) Long term Employee Benefits
In case of long term compensated absences i.e. long term leave
encashment, the same is provided for based on actuarial valuation as at
the Balance Sheet date, using the Projected Unit Credit Method.
Post retirement benefits comprising of employees Provident Fund,
Gratuity Fund and Superannuation Funds are accounted for as follows:
(a) Provident Fund : This is a defined contribution plan and
contributions paid to the fund are charged to revenue during the period
in which the employee renders the related service. The Company has no
further obligations for future Provident Fund benefits other than
regular contributions.
(b) Gratuity: This is a defined contribution plan and the Company's
Scheme is administered by Trustees and funds managed by the Life
Insurance Corporation of India (LIC). The liability for Gratuity to
employees as at the Balance Sheet date is determined based on the
actuarial valuation using the Projected Unit Credit Method. The
Contribution paid thereof is charged in the books of accounts.
Actuarial gains or losses arising out of actuarial valuation, if any,
are recognized in the Profit and Loss as Income or expense.
The total employer expense is inclusive of the past service cost (or
plan amendment cost) that has been recognised immediately due to the
amendment in payment of Gratuity Act,1972 raising the ceiling from Rs.
3,50,000 to Rs. 10,00,000 per employee effective 24th May, 2010.
(c) Superannuation : With effect from 1st April, 2010, the Company has
withdrawn the Scheme providing for Superannuation benefits to the
employees of the Company.
AS - 16 Borrowing cost
All borrowing costs are charged to revenue except to the extent they
are attributable to qualifying assets which are capitalised. During the
year under review there was no borrowing attributable to qualifying
assets and hence no borrowing cost was capitalised.
AS - 17 Segment reporting
Since the group of products sold and services rendered by the Company
pertains to Information Technology related products and services, the
operations of the Company relate to a single reportable segment.
AS - 18 Related Party disclosure
Disclosure is made as per the requirements of the Standard and as per
the clarifications issued by the Institute of Chartered Accountants of
India.
AS - 19 Leases
This Standard is not applicable as the Company does not have any
finance lease agreement in force.
AS - 20 Earnings Per Share
Disclosure is made in the Profit and Loss Account as per the
requirement of the Standard.
AS - 21 Consolidated Financial Statements
Consolidated Financial Statements of the Company and its Wholly owned
Subsidiaries viz., Tumkur Property Holdings Limited, Chennai and Prime
Property Holdings Limited, Chennai are enclosed.
AS - 22 Accounting for taxes on income
Provision for current tax is made after taking into consideration
benefits admissable under the provision of Income Tax Act,1961. Current
tax is calculated as per provision of Section 115JB viz Minimum
Alternate Tax.
Deferred tax liability resulting from timing differences between book
and taxable profit is accounted for, using the tax rates in force as on
the Balance Sheet date. Deferred tax asset is recognised and carried
forward only to the extent that there is reasonable certainty that the
asset will be realised in future.
Details of deferred taxation are furnished in Schedule V.
AS - 23 Accounting for Investments in Associates in Consolidated
Financial Statements
This Standard is not applicable to the Company for the year under
review.
AS - 24 Discontinuing Operations
In respect of Contract Manufacturing Services business which was sold
during 2007, the details of liabilities carried over in the financial
statements are furnished below:
AS - 25 Interim Financial Reporting
Quarterly financial results are published in accordance with the
requirement of Listing Agreement with Stock Exchanges. The recognition
and measurement principle as laid down in the Standard have been
followed in the preparation of these results.
AS - 26 Intangible Assets
The Company owns Intellectual Property Rights relating to its service
business and the carrrying amount thereof is disclosed in the schedule
on Fixed Assets. This would be amortised over the remaining period of 1
year and 9 months on a straight line method @ 9.5 % per annum.
AS - 27 Financial Reporting of Interest in Joint Ventures
This Standard is not applicable to the Company as the Company does not
have any Joint Venture.
AS - 28 Impairment of Assets
As on the Balance Sheet date the carrying amounts of the assets net of
accumulated depreciation is not less than the recoverable amount of
such assets. Hence there is no impairment loss on the assets of the
Company.
AS - 29 Provisions, Contingent Liabilities and Contingent Assets
Contingent Liabilities are disclosed in Note No. 7
Contingent Assets which are likely to give rise to the possibility of
inflow of economic benefits - Rs. 117.24 Lakhs.
Contingent Asset Rs.117.24 Lakhs ÃThis is in respect of Karnataka Sales
Tax (KST) and Entry Tax, paid by the Company under protest in respect
of earlier years, on inputs used in sales made to Domestic Tariff Area
(DTA) from its Tumkur Unit. The Karnataka High Court has held in
respect of accounting year 1997-98 vide Order dated 4th March, 2010 in
STRP no 45 of 2006 that KST and Entry Tax are not leviable where the
domestic area sales is within the limits permissible under Notification
No FD32 CSL 96(V) dated 15.11.1996. The Hon'ble High Court Order is on
the basis of appeal filed by the Company. This is also not appealed
against by the Revenue. Earlier in respect of accounting year 2000-01,
the Joint Commissioner(Admin) Appeals and Joint Commissioner Appeals
had also issued favorable Orders vide Orders dated March 2009 and July
2009 respectively. Further based on the favorable Orders of High Court,
the Karnataka Appellate Tribunal had vide Orders dated June 2010 and
August 2010 respectively held that the assessment is remitted back to
the assessing authority with a direction to redo the assessment in the
light of the judgment of the Honorable High Court of Karnataka cited
above. The revised Assessment Orders are expected to be received
shortly. Accordingly this is considered as contingent asset. The
effect of the revised Assessment Orders will be reflected in the next
financial year.
Warranty cost on sale of products has been determined based on
management estimates/historical data and provided for Rs. 275.44 Lakhs
(Previous Year - Rs. 148.45 Lakhs)
Contested liabilities are disclosed in Note No.8
AS - 30 Financial Instruments: Recognition and Measurement
This Standard is not applicable to the Company for the year under
review.
AS - 31 Financial Instruments: Presentation
This Standard is not applicable to the Company for the year under
review.
AS - 32 Financial Instruments: Disclosures
This Standard is not applicable to the Company for the year under
review.
Mar 31, 2010
1 ACCOUNTING STANDARDS COMPLIANCE
The financial statements have been prepared in accordance with the
norms and principles prescribed in the Accounting Standards issued by
the Institute of Chartered Accountants of India which are itemised
below.
AS - 1 Disclosure of accounting policies
The Company is following accrual basis of accounting on a
going concern concept.
AS - 2 Valuation of inventories
a Raw materials,components, stores and spares and other trading
products are valued at cost determined on weighted average basis. Work
in process includes material cost and applicable direct overheads.
Finished goods are valued at the aggregate of material cost and
applicable direct and indirect overheads or market value whichever is
lower.
b Excise duty in respect of finished goods lying within the factory are
included in the valuation of inventories.
c As per practice consistently followed, customs duty and
countervailing duty payable on raw materials, components and finished
goods lying in customs bonded warehouses is accounted for on debonding.
Non-provision of this duty will not affect the profit for the year.
AS - 3 Cash flow statements
Cash flow statement has been prepared under " Indirect
Method".
AS - 4 Contingencies and Events occurring after the Balance Sheet Date
There are no contingencies and events after the Balance Sheet date that
affect the financial position of the company. Contested liabilities
and outstanding bank guarantees are disclosed by way of a note.
AS - 6 Depreciation accounting
a Depreciation on fixed assets is provided on straight line method at
the rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956 with applicable shift allowance except:
i) On computers (including printers, uninterruptible power supply
systems and computer accessories) and vehicles acquired on or after
01-04-1998, depreciation has been charged at 30% and 18% respectively
on straight line method, which are higher than the rates prescribed in
Schedule XIV.
ii) In respect of Buildings acquired on lease, depreciation has been
charged at 20% on straight line method which is higher than the rate
prescribed in Schedule XIV to the Companies Act,1956.
iii) On Intellectual property rights acquired on amalgamation,
depreciation has been charged at 9.5% per annum under straight-line
method.
iv) On Software acquired, depreciation has been charged at 50% per
annum on pro-rata basis under straight line method.
v) On assets acquired whose actual cost does not exceed Rs. 5,000
individually, depreciation has been provided at 100%.
vi) From financial year 2005-06, tools and moulds which are three years
old have been subject to depreciation @ 31.67% as against normal rate
of 16.21%, so as to bring the written down value of such assets to 5%
original cost.
vii) On certain class of office equipments depreciation has been
charged at 99% of its original cost on prorata basis, considering the
useful life of asset as one year as against Schedule XIV rates.
b In respect of assets depreciated on straight line method which have
been acquired on amalgamation / business transfer, depreciation is
provided on the original cost of acquisition as appearing in the books
of transferor companies.
AS - 7 Accounting for Construction contracts
The company is not engaged in any Construction business
covered by this Standard.
AS - 8 Accounting for Research and Development
This standard stands withdrawn as Accounting Standard 26
- Intangible Assets has become mandatory.
AS - 9 Revenue recognition
a Income and expenditure are accounted on a going concern basis.
b The companys income consists of income from sale of manufactured
equipments, traded goods and after sales service and income from
Information technology (IT) related consultancy and services.
c Sales is accounted net of excise duty, service tax and sales tax /
Value Added Tax. Income from consultancy services and annual
maintenence contracts are considered on accrual basis. Income from IT
solutions are recognised depending upon the stage of completion of the
project.
d Sale of products, income from services and other income include
realised exchange fluctuations on exports of Rs 42.26 Lakhs (Previous
year Rs 130.76 Lakhs).
e Interest income is recognised on a time proportion basis taking into
account the amount of outstanding and the rate applicable.
f The company has not derived any income during the current year out of
its investments.
g In respect of domestic sales, the recognition is on the basis of
delivery of goods to customers while in respect of export sales the
recognition is on the basis of "LET Export" certification issued by
customs authorities.
AS - 10 Accounting for fixed assets
Fixed Assets are stated at cost of acquisition or construction cost net
of cenvat and includes expenditure incurred upto the date the asset is
put to use, less accumulated depreciation. Technical know-how fees paid
is capitalised under plant and machinery. Temporary constructions /
alteration costs are charged off in the same year.
Lease hold land represents Rs 198.51 lakhs paid to State Industrial
Promotion Corporation of Tamil Nadu Limited (SIPCOT), Chennai for 6.16
acres of land in their Oragadam SEZ, Tamil Nadu for which the
registration of lease deed has been completed in June 2009. The unit
has been approved by the Development Commissioner, MEPZ in March 2009.
AS - 11 Accounting for effects in foreign exchange rates
a Purchase of imported raw materials, components, spare parts and
capital goods are accounted based on retirement memos from banks. In
respect of liabilities on import of raw materials, components, spare
parts and capital goods which are in transit and where invoices / bills
are yet to be received, the liability is accounted based on the market
exchange rate prevailing on the date of the balance sheet.
b Year end foreign currency denominated liabilities and receivables are
translated at exchange rates prevailing as at Balance Sheet date, the
difference being charged/ credited to respective revenue or capital
account. Any difference between the forward rate and the exchange rate
on the date of inception of forward contract is recognised as discount
or premium over the period of the contract.
c Derivative transactions :
The Company uses forward exchange contracts to hedge its exposure in
foreign currency : -
AS - 12 Accounting for Government Grants
The company has not received any government grants during the current
accounting year.
AS - 13 Accounting for Investments
Investments are stated at cost. Provision for diminution in value is
made only if such a decline is other than temporary in the opinion of
the management.
AS - 14 Accounting for amalgamation
This standard is not applicable to the company for the year under
review.
AS - 15 Accounting for Retirement benefits
As per Accounting Standard 15 on "Employee Benefits", the disclosures
of Employee benefits as defined in the Accounting Standard are given
below:
(a) Short term Employee Benefits:
Short term employee benefits payable within twelve months of rendering
the service including accumulated leave encashment, at the balance
sheet date, are recognized as an expense as per the companys scheme
based on expected obligations on undiscounted basis.
(b)Long term Employee Benefits:
In case of long term compensated absences i.e. long term leave
encashment, the same is provided for based on actuarial
valuation as at the balance sheet date, using the Projected Unit Credit
Method
Post retirement benefits comprising of employees provident fund,
gratuity fund and super annuation funds are accounted for as follows:
(a) Provident Fund : This is a defined contribution plan and
contributions paid to the fund are charged to revenue during the period
in which the employee renders the related service. The company has no
further obligations for future provident fund benefits other than
regular contributions.
(b) Gratuity: This is a defined contribution plan and the companys
scheme is administered by Trustees and funds managed by the Life
Insurance Corporation of India (LIC). The liability for Gratuity to
employees as at the Balance Sheet date is determined based on the
actuarial valuation using the Projected unit credit method. The
contribution paid thereof is charged in the books of accounts.
Actuarial gains or losses arising out of actuarial valuation, if any,
are recognized in the Profit and Loss as income or expense.
c) Superannuation : Fixed contributions are made to the Superannuation
Fund, which is administered by Trustees and managed by LIC, are charged
to the Profit and Loss Account. The Company has no liability for
future Superannuation Fund benefits other than its annual contribution,
which is recognized as an expense in the year incurred.
AS - 16 Borrowing cost
All borrowing costs are charged to revenue except to the extent they
are attributable to qualifying assets which are capitalised. During the
year under review there was no borrowing attributable to qualifying
assets and hence no borrowing cost was capitalised.
AS - 17 Segment reporting
Since the group of products sold and services rendered by the company
pertains to Information Technology related products and services, the
operations of the company relate to a single reportable segment.
AS - 18 Related party disclosure
Disclosure is made as per the requirements of the standard and as per
the clarifications issued by the Institute of Chartered Accountants of
India.
AS - 19 Leases
This standard is not applicable as the company does not have any
finance lease agreement in force.
AS - 20 Earnings per share
Disclosure is made in the Profit and Loss account as per the
requirement of the standard.
AS - 21 Consolidated financial statements
Consolidated Financial Statements of the company and its wholly owned
subsidiaries viz., Tumkur Property Holdings Limited, Chennai and Prime
Property Holdings Limited, Chennai are enclosed.
AS - 22 Accounting for taxes on income
In view of loss incurred during the year, no provision for tax is
required to be made both under normal computation and under Section 115
JB (Minimum Alternate Tax).
Deferred tax liability resulting from timing differences between book
and taxable profit is accounted for, using the tax rates in force as on
the balance sheet date. Deferred tax asset is recognised and carried
forward only to the extent that there is reasonable certainity that the
asset will be realised in future.
Details of deferred taxation are furnished in Schedule V.
AS - 23 Accounting for Investments in Associates in Consolidated
Financial Statements
This standard is not applicable to the company for the year under
review.
AS - 24 Discontinuing Operations:
In respect of Contract Manufacturing Services business which was sold
during 2007, the details of liabilities carried over in the financial
statements are furnished below:
AS - 25 Interim Financial Reporting
Quarterly financial results are published in accordance with the
requirement of listing agreement with stock Exchanges. The recognition
and measurement principle as laid down in the standard have been
followed in the preparation of these results.
AS - 26 Intangible Assets
The company owns Intellectual Property Right relating to its service
business and the carrrying amount thereof is disclosed in the schedule
of Fixed assets. This would be amortised over the remaining period of 2
years and 9 months on a straight line method @ 9.5 % per annum.
AS - 27 Financial Reporting of Interest in Joint ventures
This standard is not applicable to the company as the company does not
have any joint venture.
AS - 28 Impairment of Assets
As on the Balance Sheet date the carrying amounts of the assets net of
accumulated depreciation is not less than the recoverable amount of
such assets. Hence there is no impairment loss on the assets of the
Company.
AS - 29 Provisions, Contingent Liabilities and Contingent Assets
Contingent Liabilities are disclosed in Note No. 7
Contingent Assets which are likely to give rise to the possibility of
inflow of economic benefits - 117.24 lakhs
Contingent Asset Rs 117.24 Lakhs ÃThis is in respect of Karnataka Sales
Tax (KST) and Entry Tax, paid by the company under protest in respect
of earlier years, on inputs used in sales made to DTA from its Tumkur
Unit. The Karnataka High court has held vide order dated 4th March 2010
in STRP no 45 of 2006 that KST and Entry Tax are not leviable where the
domestic area sales is within the limits permissible under Notification
No FD32 CSL 96(V) dated 15.11.1996. The Honble High Court order is on
the basis of appeal filed by the company. This is also not appealed
against by the Revenue. Accordingly this is considered as contingent
asset. The effect of this High Court order will be reflected in next
financial year.
Warranty cost on sale of products has been determined based on
management estimates/historical data and provided for - Rs. 148.46
lakhs (Previous Year - Rs. 91.01 Lakhs)
Contested liabilities are disclosed in Note No. 8
AS - 30 Financial Instruments: Recognition and Measurement
This standard is not applicable to the company for the year under
review.
AS - 31 Financial Instruments: Presentation
This standard is not applicable to the company for the year under
review.
AS - 32 Financial Instruments: Disclosures
This standard is not applicable to the company for the year under
review.