Mar 31, 2015
System of Accounting
These financial statements have been prepared to comply with the
Generally Accepted Accounting principles in India (Indian GAAP),
including the Accounting Standards notified under the relevant
provisions of the Companies Act, 2013.The financial statements have
been prepared on going concern and on and on accrual basis under the
historical cost convention. The accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year.
Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires judgements, estimates and assumptions to be made that affect
the reported amount of assets and liabilities, disclosure of contingent
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known/materialised.
AS-2 Inventories
Inventories are valued at the lower of cost (on FIFO basis) and the net
realisable value after providing for obsolescence and other losses,
where considered necessary. Cost includes all charges in bringing the
goods to the point of sale, including octroi and other levies, transit
insurance and receiving charges. Work-in-progress and finished goods
include appropriate proportion of overheads and, where applicable,
excise duty.
AS-3 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances , highly liquid investments that
are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
AS-6 Depreciation and amortisation
Depreciation on Fixed Assets is provided to the extent of depreciable
amount on the Straight Line Method (SLM). Depreciation is provided
based on useful life of the assets as prescribed in Schedule II to the
Companies Act, 2013 except otherwise mentioned. Depreciation has been
provided in respect of addition to / deletions from fixed assets on
prorata basis with reference to the date of addition /deletion of
assets. Intangible assets are amortised 'over their estimated useful
life. The estimated useful life of the intangible assets and the
amortization period are reviewed at the end of each financial year and
the amortization method is revised to reflect the changed pattern.
AS-7,9 Revenue recognition Sale of goods
Sales are recognised, net of returns and trade discounts, on transfer
of significant risks and rewards of ownership to the buyer, which
generally coincides with the delivery of goods to customers.
Other income
Interest and commission income is accounted on accrual basis. Dividend
income is accounted for when the right to receive it is established.
Interest subsidy under Tufs is accounted on receipt basis.
AS-10 Tangible fixed assets
Tangible Assets are stated at cost net of recoverable taxes, trade
discounts and rebates and include amounts added on revaluation, less
accumulated depreciation and impairment loss, if any. The cost of fixed
assets includes interest on borrowings attributable to acquisition of
qualifying fixed assets up to the date, the asset is ready for its
intended use and other incidental expenses incurred up to that date.
Exchange differences arising on restatement /settlement of long-term
foreign currency borrowings relating to acquisition of depreciable
fixed assets are adjusted to the cost of the respective assets and
depreciated overthe remaining useful life of such assets.
Fixed assets retired from active use and held for sale are stated at
the lower to their net book value and net realizable value and
disclosed separately in the Balance Sheet.
Capital Work-In-Progress:
Projects under which assets are not ready for their intended use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.
AS-11 Foreign currency transactions and translations
Initial recognition
Transactions in foreign currencies entered into by the Company and its
integral foreign operations are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction.
Measurement of foreign currency monetary items at the Balance Sheet
date
Foreign currency monetary items (other than derivative contracts) of
the Company and its net investment in non-integral foreign operations
outstanding at the Balance Sheet date are restated at the year-end
rates. ln the case of integral operations, assets and liabilities
(other than non-monetary items), are translated at the exchange rate
prevailing on the Balance Sheet date. Non-monetary items are carried at
historical cost. Revenue and expenses are translated at the average
exchange rates prevailing during the year.
Treatment of exchange differences
Exchange differences arising on settlement / restatement of short-term
foreign currency monetary assets and liabilities of the Company and its
integral foreign operations are recognised as income or expense in the
Statement of Profit and Loss. The exchange differences on restatement /
settlement of loans to non-integral foreign operations that are
considered as net investment in such operations are accumulated in a
""Foreign currency translation reserve"" until disposal / recovery of
the net investment. The exchange differences arising on restatement /
settlement of long-term foreign currency monetary items are capitalised
as part of the depreciable fixed assets to which the monetary item
relates and depreciated over the remaining useful life of such assets
or amortised on settlement / over the maturity period of such items if
such items do not relate to acquisition of depreciable fixed assets.
The unamortised balance is carried in the Balance Sheet as "Foreign
currency monetary item translation difference account" net of the tax
effect thereon.
Accounting of forward contracts
Premium / discount on forward exchange contracts, which are not
intended for trading or speculation purposes, are amortised over the
period of the contracts if such contracts relate to monetary items as
at the Balance Sheet date.
AS-12 Government grants, subsidies and export incentives
Government grants and subsidies (except mentioned otherwise) are
recognized when there is reasonable assurance that the Company will
comply with the conditions attached to them and the grants/subsidy will
be received. Government grants whose primary condition is that the
Company should purchase, construct or otherwise acquire capital assets
are presented by deducting them from the carrying value of the assets.
The grants are recognized as income over the life of a depreciable
asset by way of reduced depreciation charge.
Export benefits are accounted for in the year of exports based on
eligibility and when there is no uncertainty in receiving the same.
"Government grants in the nature of promoters' contribution like
investment subsidy, where no repayment is ordinarily expected in respect
thereof, are treated as capital reserve. Government grants In the form
of non-monetary asset Is given free of cost, the grant is recorded at a
nominal value, other government grants and subsidies are recognized as
income over the periods necessary to match them with the costs for which
they are intended to compensate, on a systematic basis."
AS-13 Investments
Cost of investment includes acquisition charges such as brokerage, fees
and duties. Current investments are carried at lower of cost and
quoted/fair value, computed category-wise. "Long -term investments/ Non
current investments (excluding investment properties) are stated at
cost. Provision for diminution in the value of Non Current investments
is made only if such a decline is other than temporary. Investment
properties are carried individually at cost less accumulated
depreciation and impairment, if any. Investment properties are
capitalized and depreciated (where applicable) in accordance with the
policy stated for Tangible Fixed Assets. Impairment of investment
property is determined in accordance with the policy stated for
Impairment of Assets. "
AS-15 Employee benefits
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
as an expense during the period when the employees render the services.
These benefits include performance incentive and compensated absences.
Post-Employment Benefits
Employee benefits include provident fund, superannuation fund, gratuity
fund, earned leave, long service awards and post-employment medical
benefits. Provident fund contribution in respect of employees are made
to Government as per the Provident Fund Act. Retirement benefit as to
Gratuity to its employees is accounted in accordance with Accounting
Standard (AS15) on the basis of actuarial valuation. Gratuity payment
scheme is funded with an insurance company. The actuarial gains or
losses are recognized immediately in the profit and loss account.
Contributions towards the defined contribution plans are recognized in
the profit and loss account on accrual basis.
AS-16 Borrowing costs
Borrowing costs include interest, amortisation of ancillary costs
incurred and exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the
loan. Borrowing costs, allocated to and utilised for qualifying assets,
pertaining to the period from commencement of activities relating to
construction / development of the qualifying asset upto the date of
capitalisation of such asset is added to the cost of the assets.
Capitalisation of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
AS-17 Segment reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive Management
in deciding how to allocate resources and in assessing performance.
AS-20 Earnings per share
Basic earnings per share is computed by dividing the profit/ (loss)
after Tax (including the post tax effect of extraordinary item, if any)
by the weighted average number of equity shares outstanding during the
year. Diluted earnings per share is computed by dividing the
profit/(Loss) after tax (including the post tax effect of extraordinary
item, if any )as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive
only if their conversion to equity shares would decrease the net profit
per share from continuing ordinary operations. Potential dilutive
equity shares are deemed to be converted as at beginning of the period,
unless they have been issued at a later date. The dilutive potential
equity shares are adjusted for the proceeds receivable had the shares
been actually issued at fair value (i.e. average market value of the
outstanding shares). Dilutive potential equity shares are determined
independently for each period presented. The number of equity shares
and potentially dilutive equity shares are adjusted for share
splits/reverse splits and bonus shares, as appropriate.
AS-22 Taxes on income
Tax expense comprises of current tax and deferred tax. Current tax is
measured at the amount expected to be paid to the tax authorities,
using the applicable tax rates and laws for the year as determined in
accordance with the provisions of the Income Tax act, 1961.. Deferred
income tax reflect the current period timing differences between
taxable income and accounting income for the period and reversal of
timing differences of earlier years/period. Deferred tax assets are
recognised only to the extent that there is a reasonable certainty that
sufficient future income will be available except that deferred tax
assets, in case there are unabsorbed depreciation or losses, are
recognised if there is virtual certainty that sufficient future taxable
income will be available to realize the same.
Deferred tax assets and liabilities are measured using the tax rates
and tax law that have been enacted or substantively enacted by the
Balance Sheet date. Minimum Alternate Tax (MAT) paid in accordance with
the tax laws, which gives future economic benefits in the form of
adjustment to the future income tax liability, is considered as an
asset if there is convincing evidence that the Company will pay normal
income tax. Accordingly, MAT is recognized as an asset in the Balance
Sheet when it is probable that future economic benefit associated with
it flow to the Company. Current and deferred tax relating to item
directly recognized in equity are recognized in equity and not in the
Statement of Profit and Loss.
AS-26 Intangible assets
Intangible assets are carried at cost less accumulated amortisation and
impairment losses, if any. The cost of an intangible asset comprises
its purchase price, including any import duties and other taxes (other
than those subsequently recoverable from the taxing authorities), and
any directly attributable expenditure on making the asset ready for its
intended use and net of any trade discounts and rebates. Subsequent
expenditure on an intangible asset after its purchase / completion is
recognised as an expense when incurred unless it is probable that such
expenditure will enable the asset to generate future economic benefits
in excess of its originally assessed standards of performance and such
expenditure can be measured and attributed to the asset reliably, in
which case such expenditure is added to the cost of the asset.
AS-27 Joint venture operations
The accounts of the Company reflect its share of the Assets,
Liabilities, Income and Expenditure of the Joint Venture Operations
which are accounted on the basis of the audited accounts of the Joint
Ventures on line-by-line basis with similar items in the Company's
accounts to the extent of the participating interest of the Company as
per the Joint Venture Agreements.
AS-28 Impairment of assets
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the Profit and
Loss Statement in the year in which an asset is identified as impaired.
The impairment loss recognised in prior accounting period is reversed
if there has been a change in the estimate of recoverable amount.
The recoverable amount is the greater of the net selling price and
their value in use. Value in use is arrived at by discounting the
future cash flows to their present value based on an appropriate
discount factor. When there is indication that an impairment loss
recognized for an assets in earlier accounting periods no longer exists
or may have decreased, such reversal of impairment loss is recognized
in the Statement of Profit and Loss, except in case of revalued assets.
AS-29 Provisions and contingencies
Provision is recognised in the accounts when there is a present
obligation as a result of past event(s) and it is probable that an
outflow of resources will be required to settle the obligation and a
reliable estimate can be made. Provisions are not discounted to their
present value and are determined based on the best estimate required to
settle the obligation at the reporting date. These estimates are
reviewed at each reporting date and adjusted to reflect the current
best estimates. Contingent liabilities are disclosed in the Notes
unless the possibility of outflow of resources is remote. Contingent
assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2014
1 CORPORATE INFORMATION
The company is carrying on the business of manufacture and trading of
garment accessories such as labels narrow fabric woven labels, printed
labels, hang tags, plastic seals etc. Company has its manufacturing
facility at Panchkula, Haryana AS-1 SIGNIFICANT ACCOUNTING POLICIES
System of Accounting
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on going concern and on accrual basis
under the historical cost convention . The accounting policies adopted
in the preparation of the financial statements are consistent with
those followed in the previous year.
Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialise.
AS-2 Inventories
Inventories are valued at the lower of cost (on FIFO basis) and the net
realisable value after providing for obsolescence and other losses,
where considered necessary. Cost includes all charges in bringing the
goods to the point of sale, including octroi and other levies, transit
insurance and receiving charges. Work-in-progress and finished goods
include appropriate proportion of overheads and, where applicable,
excise duty.
AS-3 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances , highly liquid investments that
are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
AS-6 Depreciation and amortisation
Depreciation has been provided on the straight-line method as per the
rates prescribed in Schedule XIV to the Companies Act, 1956.
Depreciation has been provided in respect of addition to/deletions from
fixed assets on prorata basis with reference to the date of
addition/deletion of assets.
Intangible assets are amortised ''over their estimated useful life, The
estimated useful life of the intangible assets and the amortisation
period are reviewed at the end of each financial year and the
amortisation method is revised to reflect the changed pattern.
AS-7,9 Revenue recognition Sale of goods
Sales are recognised, net of returns and trade discounts, on transfer
of significant risks and rewards of ownership to the buyer, which
generally coincides with the delivery of goods to customers.
Other income
Interest and commission income is accounted on accrual basis. Dividend
income is accounted for when the right to receive it is established.
Interest subsidy under Tufs is accounted on receipt basis.
AS-10 Tangible fixed assets
"Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date. Exchange differences
arising on restatement / settlement of long-term foreign currency
borrowings relating to acquisition of depreciable fixed assets are
adjusted to the cost of the respective assets and depreciated over the
remaining useful life of such assets. "
Fixed assets retired from active use and held for sale are stated at
the lower of their net book value and net realisable value and are
disclosed separately in the Balance Sheet.
Capital work-in-progress:
Projects under which assets are not ready for their intended use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.
AS-11 Foreign currency transactions and translations
Initial recognition
Transactions in foreign currencies entered into by the Company and its
integral foreign operations are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction.
Measurement of foreign currency monetary items at the Balance Sheet
date
Foreign currency monetary items (other than derivative contracts) of
the Company and its net investment in non-integral foreign operations
outstanding at the Balance Sheet date are restated at the year-end
rates.In the case of integral operations, assets and liabilities (other
than non-monetary items), are translated at the exchange rate
prevailing on the Balance Sheet date. Non-monetary items are carried at
historical cost. Revenue and expenses are translated at the average
exchange rates prevailing during the year. Exchange differences arising
out of these translations are charged to the Statement of Profit and
Loss.
Treatment of exchange differences
Exchange differences arising on settlement / restatement of short-term
foreign currency monetary assets and liabilities of the Company and its
integral foreign operations are recognised as income or expense in the
Statement of Profit and Loss. The exchange differences on restatement /
settlement of loans to non- integral foreign operations that are
considered as net investment in such operations are accumulated in a
""Foreign currency translation reserve"" until disposal / recovery of
the net investment.The exchange differences arising on restatement /
settlement of long-term foreign currency monetary items are capitalised
as part of the depreciable fixed assets to which the monetary item
relates and depreciated over the remaining useful life of such assets
or amortised on settlement / over the maturity period of such items if
such items do not relate to acquisition of depreciable fixed assets.
The unamortised balance is carried in the Balance Sheet as "Foreign
currency monetary item translation difference account" net of the tax
effect thereon.
Accounting of forward contracts
Premium / discount on forward exchange contracts, which are not
intended for trading or speculation purposes, are amortised over the
period of the contracts if such contracts relate to monetary items as
at the Balance Sheet date.
AS-12 Government grants, subsidies and export incentives
Government grants and subsidies are recognised when there is reasonable
assurance that the Company will comply with the conditions attached to
them and the grants / subsidy will be received. Government grants
whose primary condition is that the Company should purchase, construct
or otherwise acquire capital assets are presented by deducting them
from the carrying value of the assets. The grant is recognised as
income over the life of a depreciable asset by way of a reduced
depreciation charge.
Export benefits are accounted for in the year of exports based on
eligibility and when there is no uncertainty in receiving the same.
"Government grants in the nature of promoters'' contribution like
investment subsidy, where no repayment
is ordinarily expected in respect thereof, are treated as capital
reserve. Government grants in the form of non-monetary assets, given at
a concessional rate, are recorded on the basis of their acquisition
cost. In case the non-monetary asset is given free of cost, the grant
is recorded at a nominal value.Other government grants and subsidies
are recognised as income over the periods necessary to match them with
the costs for which they are intended to compensate, on a systematic
basis. "
AS-13 Investments
"Long-term investments (excluding investment properties), are carried
individually at cost less provision for diminution, other than
temporary, in the value of such investments. Current investments are
carried individually, at the lower of cost and fair value. Cost of
investments include acquisition charges such as brokerage, fees and
duties. Investment properties are carried individually at cost less
accumulated depreciation and impairment, if any. Investment properties
are capitalised and depreciated (where applicable) in accordance with
the policy stated for Tangible Fixed Assets. Impairment of investment
property is determined in accordance with the policy stated for
Impairment of Assets."
AS-15 Employee benefits
Employee benefits include provident fund, superannuation fund, gratuity
fund, compensated absences, long service awards and post-employment
medical benefits.
Provident Fund contribution in respect of employees are made to
Government as per the Provident Fund Act.
Retirement benefits as to Gratuity to its employees is accounted in
accordance with Accouning Standard (AS 15) on the basis of acturial
valuation . Gratuity payment scheme is funded with an insurance
company.
The actuarial gains or losses are recognised immediately in the profit
and loss account. Contributions towards the defined contribution plans
are recognised in the profit and loss account on accrual basis. AS-16
Borrowing costs
Borrowing costs include interest, amortisation of ancillary costs
incurred and exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the
loan. Borrowing costs, allocated to and utilised for qualifying assets,
pertaining to the period from commencement of activities relating to
construction / development of the qualifying asset upto the date of
capitalisation of such asset is added to the cost of the assets.
Capitalisation of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
AS-17 Segment reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive Management
in deciding how to allocate resources and in assessing performance.
AS-20 Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the
profit / (loss) after tax (including the post tax effect of
extraordinary items, if any) as adjusted for dividend, interest and
other charges to expense or income relating to the dilutive potential
equity shares, by the weighted average number of equity shares
considered for deriving basic earnings per share and the weighted
average number of equity shares which could have been issued on the
conversion of all dilutive potential equity shares. Potential equity
shares are deemed to be dilutive only if their conversion to equity
shares would decrease the net profit per share from continuing ordinary
operations. Potential dilutive equity shares are deemed to be converted
as at the beginning of the period, unless they have been issued at a
later date. The dilutive potential equity shares are adjusted for the
proceeds receivable had the shares been actually issued at fair value
(i.e. average market value of the outstanding shares). Dilutive
potential equity shares are determined
independently for each period presented. The number of equity shares
and potentially dilutive equity shares are adjusted for share splits /
reverse share splits and bonus shares, as appropriate.
AS-22 Taxes on income
"Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognised only if there is virtual certainty that there
will be sufficient future taxable income available to realise such
assets. Deferred tax assets are recognised for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realised. Deferred tax assets and liabilities are offset if
such items relate to taxes on income levied by the same governing tax
laws and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
realisability. "
Current and deferred tax relating to items directly recognised in
equity are recognised in equity and not in the Statement of Profit and
Loss.
AS-26 Intangible assets
Intangible assets are carried at cost less accumulated amortisation and
impairment losses, if any. The cost of an intangible asset comprises
its purchase price, including any import duties and other taxes (other
than those subsequently recoverable from the taxing authorities), and
any directly attributable expenditure on making the asset ready for its
intended use and net of any trade discounts and rebates. Subsequent
expenditure on an intangible asset after its purchase / completion is
recognised as an expense when incurred unless it is probable that such
expenditure will enable the asset to generate future economic benefits
in excess of its originally assessed standards of performance and such
expenditure can be measured and attributed to the asset reliably, in
which case such expenditure is added to the cost of the asset.
AS-27 Joint venture operations
The accounts of the Company reflect its share of the Assets,
Liabilities, Income and Expenditure of the Joint Venture Operations
which are accounted on the basis of the audited accounts of the Joint
Ventures on line-by-line basis with similar items in the Company''s
accounts to the extent of the participating interest of the Company as
per the Joint Venture Agreements.
AS-28 Impairment of assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the
greater of the net selling price and their value in use. Value in use
is arrived at by discounting the future cash flows to their present
value based on an appropriate discount factor. When there is
indication that an impairment loss recognised for an asset in earlier
accounting periods no longer exists or may have decreased, such
reversal of impairment loss is recognised in the Statement of Profit
and Loss, except in case of revalued assets.
AS-29 Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
Mar 31, 2013
AS-1 System of Accounting
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on going concern and on accrual basis
under the historical cost convention . The accounting policies adopted
in the preparation of the financial statements are consistent with
those followed in the previous year.
Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialise.
AS-2 Inventories
Inventories are valued at the lower of cost (on FIFO basis) and the net
realisable value after providing for obsolescence and other losses,
where considered necessary. Cost includes all charges in bringing the
goods to the point of sale, including octroi and other levies, transit
insurance and receiving charges. Work-in-progress and finished goods
include appropriate proportion of overheads and, where applicable,
excise duty. AS-3 Cash and cash equivalents (for purposes of Cash Flow
Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances , highly liquid investments that
are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value. Cash flow statement
Cash flows are reported using the indirect method, whereby profit/
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
AS-6 Depreciation and amortization
Depreciation has been provided on the straight-line method as per the
rates prescribed in Schedule XIV to the Companies Act, 1956.
Depreciation has been provided in respect of addition to/deletions from
fixed assets on prorata basis with reference to the date of
addition/deletion of assets. Intangible assets are amortized ''over
their estimated useful life, The estimated useful life of the
intangible assets and the amortization period are reviewed at the end
of each financial year and the amortisation method is revised to
reflect the changed pattern. AS-7,9 Revenue recognition Sale of goods
Sales are recognised, net of returns and trade discounts, on transfer
of significant risks and rewards of ownership to the buyer, which
generally coincides with the delivery of goods to customers. Other
income
Interest and commission income is accounted on accrual basis. Dividend
income is accounted for when the right to receive it is established.
AS-10 Tangible fixed assets
"Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date. Exchange differences
arising on restatement / settlement of long-term foreign currency
borrowings relating to acquisition of depreciable fixed assets are
adjusted to the cost of the respective assets and depreciated over the
remaining useful life of such assets. "
Fixed assets retired from active use and held for sale are stated at
the lower of their net book value and net realisable value and are
disclosed separately in the Balance Sheet.
Capital work-in-progress:
Projects under which assets are not ready for their intended use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.
AS-11 Foreign currency transactions and translations
Initial recognition
Transactions in foreign currencies entered into by the Company and its
integral foreign operations are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction.
Measurement of foreign currency monetary items at the Balance Sheet
date
"Foreign currency monetary items (other than derivative contracts) of
the Company and its net investment in non-integral foreign operations
outstanding at the Balance Sheet date are restated at the year-end
rates.In the case of integral operations, assets and liabilities (other
than non-monetary items), are translated at the exchange rate
prevailing on the Balance Sheet date. Non-monetary items are carried at
historical cost. Revenue and expenses are translated at the average
exchange rates prevailing during the year. Exchange differences arising
out of these translations are charged to the Statement of Profit and
Loss."
Treatment of exchange differences
"Exchange differences arising on settlement / restatement of short-term
foreign currency monetary assets and liabilities of the Company and its
integral foreign operations are recognised as income or expense in the
Statement of Profit and Loss. The exchange differences on restatement /
settlement of loans to non-integral foreign operations that are
considered as net investment in such operations are accumulated in a
""Foreign currency translation reserve"" until disposal / recovery of
the net investment.The exchange differences arising on restatement /
settlement of long-term foreign currency monetary items are capitalised
as part of the depreciable fixed assets to which the monetary item
relates and depreciated over the remaining useful life of such assets
or amortised on settlement / over the maturity period of such items if
such items do not relate to acquisition of depreciable fixed assets.
The unamortised balance is carried in the Balance Sheet as "Foreign
currency monetary item translation difference account" net of the tax
effect thereon."
Accounting of forward contracts
Premium / discount on forward exchange contracts, which are not
intended for trading or speculation purposes, are amortised over the
period of the contracts if such contracts relate to monetary items as
at the Balance Sheet date.
AS-12 Government grants, subsidies and export incentives
Government grants and subsidies are recognised when there is reasonable
assurance that the Company will comply with the conditions attached to
them and the grants / subsidy will be received.
Government grants whose primary condition is that the Company should
purchase, construct or otherwise acquire capital assets are presented
by deducting them from the carrying value of the assets.
The grant is recognised as income over the life of a depreciable asset
by way of a reduced depreciation charge.
Export benefits are accounted for in the year of exports based on
eligibility and when there is no uncertainty in receiving the same.
"Government grants in the nature of promoters'' contribution like
investment subsidy, where no repayment is ordinarily expected in
respect thereof, are treated as capital reserve. Government grants in
the form of non-monetary assets, given at a concessional rate, are
recorded on the basis of their acquisition cost. In case the
non-monetary asset is given free of cost, the grant is recorded at a
nominal value.Other government grants and subsidies are recognised as
income over the periods necessary to match them with the costs for
which they are intended to compensate, on a systematic basis."
AS-13 Investments
"Long-term investments (excluding investment properties), are carried
individually at cost less provision for diminution, other than
temporary, in the value of such investments. Current investments are
carried individually, at the lower of cost and fair value. Cost of
investments include acquisition charges such as brokerage, fees and
duties. Investment properties are carried individually at cost less
accumulated depreciation and impairment, if any. Investment properties
are capitalised and depreciated (where applicable) in accordance with
the policy stated for Tangible Fixed Assets. Impairment of investment
property is determined in accordance with the policy stated for
Impairment of Assets."
AS-15 Employee benefits
Employee benefits include provident fund, superannuation fund, gratuity
fund, compensated absences, long service awards and post-employment
medical benefits.
Provident Fund contribution in respect of employees are made to
Government as per the Provident Fund Act.
Retirement benefits as to Gratuity to its employees is accounted in
accordance with Accounting Standard (AS 15) on the basis of actual
valuation . Gratuity payment scheme is funded with an insurance
company.
The actuarial gains or losses are recognized immediately in the profit
and loss account. Contributions towards the defined contribution plans
are recognized in the profit and loss account on accrual basis.
AS-16 Borrowing costs
Borrowing costs include interest, amortization of ancillary costs
incurred and exchange differences arising from foreign currency
borrowing to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the
loan. Borrowing costs, allocated to and utilizes for qualifying assets,
pertaining to the period from commencement of activities relating to
construction / development of the qualifying asset upto the date of
capitalization of such asset is added to the cost of the assets.
Capitalization of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
AS-17 Segment reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organization and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive Management
in deciding how to allocate resources and in assessing performance.
AS-20 Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the
profit / (loss) after tax (including the post tax effect of
extraordinary items, if any) as adjusted for dividend, interest and
other charges to expense or income relating to the dilutive potential
equity shares, by the weighted average number of equity shares
considered for deriving basic earnings per share and the weighted
average number of equity shares which could have been issued on the
conversion of all dilutive potential equity shares. Potential equity
shares are deemed to be dilutive only if their conversion to equity
shares would decrease the net profit per share from continuing ordinary
operations. Potential dilutive equity shares are deemed to be converted
as at the beginning of the period, unless they have been issued at a
later date. The dilutive potential equity shares are adjusted for the
proceeds receivable had the shares been actually issued at fair value
(i.e. average market value of the outstanding shares). Dilutive
potential equity shares are determined independently for each period
presented. The number of equity shares and potentially dilutive equity
shares are adjusted for share splits / reverse share splits and bonus
shares, as appropriate.
AS-22 Taxes on income
"Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961 .Minimum Alternate Tax (MAT) paid in accordance with the tax
laws, which gives future economic benefits in the form of adjustment to
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax.
Accordingly, MAT is recognised as an asset in the Balance Sheet when it
is probable that future economic benefit associated with it will flow
to the Company.Deferred tax is recognised on timing differences, being
the differences between the taxable income and the accounting income
that originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax is measured using the tax rates and
the tax laws enacted or substantially enacted as at the reporting date.
Deferred tax liabilities are recognised for all timing differences.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognised only if there is virtual certainty
that there will be sufficient future taxable income available to
realise such assets. Deferred tax assets are recognised for timing
differences of other items only to the extent that reasonable certainty
exists that sufficient future taxable income will be available against
which these can be realised. Deferred tax assets and liabilities are
offset if such items relate to taxes on income levied by the same
governing tax laws and the Company has a legally enforceable right for
such set off. Deferred tax assets are reviewed at each Balance Sheet
date for their realisability."
Current and deferred tax rel-''ing to items directly recognised in
equity are recognised in equity and not in the Statement of Profit and!
-s.
AS-26 Intangible assets
"Intangible assets are carried at cost less accumulated amortisation
and impairment fosses, if any. The cost of an intangible asset
comprises its purchase price, including any import duties and other
taxes (other than those subsequently recoverable from the taxing
authorities), and any directly attributable expenditure on making the
asset ready for its intended use and net of any trade discounts and
rebates. Subsequent expenditure on an intangible asset after its
purchase / completion is recognised as an expense when incurred unless
it is probable that such expenditure will enable the asset to generate
future economic benefits in excess of its originally assessed standards
of performance and such expenditure can be measured and attributed to
the asset reliably, in which case such expenditure is added to the cost
of the asset. " AS-27 Joint venture operations
The accounts of the Company reflect its share of the Assets,
Liabilities, Income and Expenditure of the Joint Venture Operations
which are accounted on the basis of the audited accounts of the Joint
Ventures on line-by-line basis with similar items in the Company''s
accounts to the extent of the participating interest of the Company as
per the Joint Venture Agreements.
AS-28 Impairment of assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the
greater of the net selling price and their value in use. Value in use
is arrived at by discounting the future cash flows to their present
value based on an appropriate discount factor. When there is
indication that an impairment loss recognised for an asset in earlier
accounting periods no longer exists or may have decreased, such
reversal of impairment loss is recognised in the Statement of Profit
and Loss, except in case of revalued assets. AS-29 Provisions and
contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
Mar 31, 2012
System of Accounting
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on going concern and on accrual basis
under the historical cost convention . The accounting policies adopted
in the preparation of the financial statements are consistent with
those followed in the previous year.
Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known/materialise.
AS-1 Inventories
Inventories are valued at the lower of cost (on FIFO basis) and the net
realisable value after providing for obsolescence and other losses,
where considered necessary. Cost includes all charges in bringing the
goods to the point of sale, including octroi and other levies, transit
insurance and receiving charges. Work-in-progress and finished goods
include appropriate proportion of overheads and, where applicable,
excise duty.
AS-2 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances , highly liquid investments that
are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
Cash flow statement
Cash flows are reported using the indirect method, whereby
profit/(loss) before extraordinary items and tax is adjusted for the
effects of transactions of non-cash nature and any deferrals or
accruals of past or future cash receipts or payments. The cash flows
from operating, investing and financing activities of the Company are
segregated based on the available information.
AS-3 Depreciation and amortization
Depreciation has been provided on the straight-line method as per the
rates prescribed in Schedule XIV to the Companies Act, 1956.
Depreciation has been provided in respect of addition to/deletions from
fixed assets or prorata basis with reference to the date of
addition/deletion of assets.
Intangible assets are amortized 'over their estimated useful life, The
estimated useful life of the intangible assets and the amortization
period are reviewed at the end of each financial year and the
amortisation method is revised to reflect the changed pattern.
AS-4, 9 Revenue recognition
Sale of goods
Sales are recognised, net of returns and trade discounts, on transfer
of significant risks and rewards of ownership to the buyer, which
generally coincides with the delivery of goods to customers.
Other income
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established.
AS-5 Tangible fixed assets
"Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date. Exchange differences
arising on restatement/settlement of long-term foreign currency
borrowings relating to acquisition of depreciable fixed assets are
adjusted to the cost of the respective assets and depreciated over the
remaining useful life of such assets. "
Fixed assets retired from active use and held for sale are stated at
the lower of their net book value and net realisable value and are
disclosed separately in the Balance Sheet.
Capital work-in-progress:
Projects under which assets are not ready for their intended use and
other capital work-in-progress are carried at cost, comprising direct
cost, related incidental expenses and attributable interest.
AS-6 Foreign currency transactions and translations
Initial recognition
Transactions in foreign currencies entered into by the Company and its
integral foreign operations are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction.
Measurement of foreign currency monetary items at the Balance Sheet
date
"Foreign currency monetary items (other than derivative contracts) of
the Company and its net investment in non- integral foreign operations
outstanding at the Balance Sheet date are restated at the year-end
rates. In the case of integral operations, assets and liabilities
(other than non-monetary items), are translated at the exchange rate
prevailing on the Balance Sheet date. Non-monetary items are carried at
historical cost. Revenue and expenses are translated at the average
exchange rates prevailing during the year. Exchange differences arising
out of these translations are charged to the Statement of Profit and
Loss."
Treatment of exchange differences
"Exchange differences arising on settlement/restatement of short-term
foreign currency monetary assets and liabilities of the Company and its
integral foreign operations are recognised as income or expense in the
Statement of Profit and Loss. The exchange differences on
restatement/settlement of loans to non-integral foreign operations that
are considered as net investment in such operations are accumulated in
a ""Foreign currency translation reserve"" until disposal/recovery of
the net investment. The exchange differences arising on
restatement/settlement of long-term foreign currency monetary items are
capitalised as part of the depreciable fixed assets to which the
monetary item relates and depreciated over the remaining useful life of
such assets or amortised on settlement/over the maturity period of such
items if such items do not relate to acquisition of depreciable fixed
assets. The unamortised balance is carried in the Balance Sheet as
"Foreign currency monetary item translation difference account" net of
the tax effect thereon."
Accounting of forward contracts
"Premium/discount on forward exchange contracts, which are not intended
for trading or speculation purposes, are amortised over the period of
the contracts if such contracts relate to monetary items as at the
Balance Sheet date. Refer Notes 2.26 and 2.27 for accounting for
forward exchange contracts relating to firm commitments and highly
probable forecast transactions."
AS-7 Government grants, subsidies and export incentives
Government grants and subsidies are recognised when there is reasonable
assurance that the Company will comply with the conditions attached to
them and the grants/subsidy will be received. Government grants whose
primary condition is that the Company should purchase, construct or
otherwise acquire capital assets are presented by deducting them from
the carrying value of the assets. The grant is recognised as income
over the life of a depreciable asset by way of a reduced depreciation
charge.
Export benefits are accounted for in the year of exports based on
eligibility and when there is no uncertainty in receiving the same.
"Government grants in the nature of promoters' contribution like
investment subsidy, where no repayment is ordinarily expected in
respect thereof, are treated as capital reserve. Government grants in
the form of non- monetary assets, given at a concessional rate, are
recorded on the basis of their acquisition cost. In case the non-
monetary asset is given free of cost, the grant is recorded at a
nominal value.
Other government grants and subsidies are recognised as income over the
periods necessary to match them with the costs for which they are
intended to compensate, on a systematic basis."
AS-8 Investments
"Long-term investments (excluding investment properties), are carried
individually at cost less provision for diminution, other than
temporary, in the value of such investments. Current investments are
carried individually, at the lower of cost and fair value. Cost of
investments include acquisition charges such as brokerage, fees and
duties. Investment properties are carried individually at cost less
accumulated depreciation and impairment, if any.
Investment properties are capitalised and depreciated (where
applicable) in accordance with the policy stated for Tangible Fixed
Assets. Impairment of investment property is determined in accordance
with the policy stated for Impairment of Assets."
AS-9 Employee benefits
Employee benefits include provident fund, superannuation fund, gratuity
fund, compensated absences, long service awards and post-employment
medical benefits.
Provident Fund contribution in respect of employees are made to
Government as per the Provident Fund Act.
Retirement benefits as to Gratuity to its employees is accounted in
accordance with Accounting Standard (AS 15) on the basis of acturial
valuation. Gratuity payment scheme is funded with an insurance company.
The actuarial gains or losses are recognised immediately in the profit
and loss account. Contributions towards the defined contribution plans
are recognised in the profit and loss account on accrual basis.
AS-10 Borrowing costs
Borrowing costs include interest, amortisation of ancillary costs
incurred and exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the
loan. Borrowing costs, allocated to and utilised for qualifying assets,
pertaining to the period from commencement of activities relating to
construction/ development of the qualifying asset upto the date of
capitalisation of such asset is added to the cost of the assets.
Capitalisation of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
AS-11 Segment reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive Management
in deciding how to allocate resources and in assessing performance.
AS-12 Earnings per share
Basic earnings per share is computed by dividing the profit/(loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the
profit/(loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive
potential equity shares. Potential equity shares are deemed to be
dilutive only if their conversion to equity shares would decrease the
net profit per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning
of the period, unless they have been issued at a later date.
The dilutive potential equity shares are adjusted for the
proceeds receivable had the shares been actually issued at fair value
(i.e. average market value of the outstanding shares). Dilutive
potential equity shares are determined independently for each period
presented. The number of equity shares and potentially dilutive equity
shares are adjusted for share splits/reverse share splits and bonus
shares, as appropriate.
AS-13 Taxes on income
"Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income
Tax Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods.
Deferred tax is measured using the tax rates and the tax laws enacted
or substantially enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognised only if there is virtual certainty that there
will be sufficient future taxable income available to realise such
assets. Deferred tax assets are recognised for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realised. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
realisability."
Current and deferred tax relating to items directly recognised in
equity are recognised in equity and not in the Statement of Profit and
Loss.
AS-14 Intangible assets
"Intangible assets are carried at cost less accumulated amortisation
and impairment losses, if any. The cost of an intangible asset
comprises its purchase price, including any import duties and other
taxes (other than those subsequently recoverable from the taxing
authorities), and any directly attributable expenditure on making the
asset ready for its intended use and net of any trade discounts and
rebates. Subsequent expenditure on an intangible asset after its
purchase/completion is recognised as an expense when incurred unless it
is probable that such expenditure will enable the asset to generate
future economic benefits in excess of its originally assessed standards
of performance and such expenditure can be measured and attributed to
the asset reliably, in which case such expenditure is added to the cost
of the asset."
AS-15 Joint venture operations
The accounts of the Company reflect its share of the Assets,
Liabilities, Income and Expenditure of the Joint Venture Operations
which are accounted on the basis of the audited accounts of the Joint
Ventures on line-by-line basis with similar items in the Company's
accounts to the extent of the participating interest of the Company as
per the Joint Venture Agreements.
AS-16 Impairment of assets
The carrying values of assets/cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognised for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognised in the Statement of Profit and Loss,
except in case of revalued assets.
AS-17 Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
Mar 31, 2010
A) System of Accounting
i) Financial statements are prepared under the historical cost
convention, in accordance with Accounting Standards applicable in India
on a going concern basis.
ii) The Company follows the mercantile system of accounting and recognises
income and expenditure on accrual basis.
b) Inventories
i) Raw Materials, Stores and Spares and Packing Materials are valued at
cost.
ii) Finished goods, Traded Goods and Semi-finished goods are valued at
lower of cost or market value.
iii) While determining the cost, the direct material cost is assigned
on the basis of weighted average cost and the conversion cost is
determined on the basis of systematic allocation of relatable fixed and
variable production overheads and the element of excise duty, in
accordance with the revised Accounting Standards (AS-2) "Valuation of
inventories "issued by the ICAI.
c) Fixed Assets & Depreciation Fixed Assets
i) Fixed Assets are stated at cost less depreciation/amortisation.
ii) Cost of major civil works required for plant & machinery support,
is capitalised as Plant & Machinery.
iii) In case of new projects including major expansion, the related
identifiable expenses like interest on borrowings for specific project,
employees related expenses, travelling expenses, trial run costs and
other preoperative expenses etc. up to its commissioning are
capitalised. iv) Capital Assets under erection/installation are
reflected in the Balance Sheet as "Capital Work in Progress".
Depreciation
v) The Company has provided depreciation on the straight line method as
per the provisions of Schedule XIV of the Companies Act 1956.
vi) Depreciation has been provided in respect of addition to/deletions
from Fixed Assets, on prorata basis with reference to the date of
addition / deletion of the assets.
d) Accounting for effects of changes in foreign exchange rates.
a. Transaction denominated in foreign currencies are normally recorded
at the exchange rate prevailing at the time of the transaction.
b. Year end foreign currency denominated liabilities and receivable
are translated at year end market exchange rates the difference being
charged/credited to revenue account.
e) Accounting for Government Grants
i) Grant related to Depreciable assets are treated as Deferred Income
which is recognised in the Profit and Loss Statement on a systematic
and rational basis over the useful life of the Asset.
ii) Grants relating to revenue items are recognised in the Profit and
Loss Account after matching them with the related costs which they are
intended to compensate.
f) Accounting for investments
Investments that are readily realisable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognise a
decline other than temporary in the value of the investments.
g) Accounting for Retirement benefits
a. Provident Fund contribution in respect of employees are made to
Government as per the Provident Fund Act.
b. Retirement benefits as to Gratuity to its employees are accounted
in accordance with Accounting Standard (AS15) issued by the Institute
of Chartered Accountants of India on the basis of actuarial valuation.
The actuarial gains or losses are recognised immediately in the profit
and loss account. Contributions towards the defined contribution plans
are recognised in the profit and loss account on accrual basis.
h)Borrowing cost
All borrowing costs are charged to revenue except to the extent they
are attributable to qualifying assets which are capitalized.
i) Segment reporting Company operates in one segment.
j) Accounting for taxes on income Provision for current tax is made
after taking into consideration benefits admissible under the
provisions of Income Tax Act1961.
Deferred tax resulting from timing differences between book and taxable
profit is accounted for using the tax rates in force as on the balance
sheet date. The deferred tax liability/asset is recognized and carried
forward only to the extent that there is reasonable certainty that the
asset will be realized in future.