Accounting Policies of Vishnu Chemicals Ltd. Company
Mar 31, 2022
A. Basis of Preparation of Financial Statements
a) Statement of Compliance
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 ("the Act"), the Companies (Indian Accounting Standards) Rules, 2015, Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and other relevant provisions of the Act, as applicable.
The financial statements have been prepared on a going concern basis and on an accrual method of accounting. Historical cost is used in preparation of the financial statements except as otherwise mentioned in the policy.
c) Functional and presentation currency
The financial statements are prepared in Indian Rupees (''), which is the Company''s functional currency and all values are rounded to the nearest Lakh, except otherwise indicated.
d) Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/non-current classification. An asset is treated as current when it is:
- expected to be realised or intended to be sold or consumed in normal operating cycle,
- held primarily for the purpose of trading,
- expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
- it is expected to be settled in normal operating cycle,
- i t is held primarily for the purpose of trading, it is due to be settled within twelve months after the reporting period, or
- there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash
equivalents. The Company has identified twelve months as its operating cycle.
e) use of Estimates and Judgments
The preparation of financial statements in conformity with Ind AS requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as on the date of the financial statements and the income and expenditure for the reporting year. Though, these estimates and assumptions are based on the information available at that point of time, the actual results could differ from these estimates.
Critical estimates and judgments in applying accounting policies
Estimates and judgments made in applying accounting policies that have significant effect on the amounts recognised in the financial statements are as follows:
i) property, plant and Equipment
The charge in respect of periodic depreciation is derived after estimating the asset''s expected useful life and the expected residual value at the end of its life. The depreciation method, useful lives and residual values of Company''s assets are estimated by management at the time the asset is acquired and reviewed during each financial year.
Employee defined benefit plans and long term benefit plans are measured on the basis of actuarial assumptions. However, any changes in these assumptions may have impact on the reported amount of obligation and expenses.
B. Significant Accounting policies
a) property, plant and equipment
Property, plant and equipment are stated in the Balance Sheet at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price (net of reimbursable taxes), attributable expenditure incurred in bringing the asset to its working condition for the intended use and cost of borrowing till the date of capitalisation in the case of assets involving material investment and substantial lead time.
Depreciation is provided on Straight Line Method in respect of assets situated at Bhilai, Jeedimetla (API), Corporate Office and Vizag Units and on Written down value method in respect of assets situated at Kazipally Unit, by considering the useful life of the assets as specified in Schedule II of the Companies Act, 2013.
Depreciation methods, useful lives and residual values are reviewed in each financial year and changes, if any, are accounted for prospectively. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Freehold land is not depreciated.
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.
Intangible assets with finite lives are amortised over the useful economic life, reviewed regularly, and are assessed for impairment whenever there is an indication that the intangible asset may be impaired.
Expenditure on research activities, if any, is recognised in profit or loss as incurred. Expenditure on development activities, if any, is capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the company intends to and has sufficient resources to complete development and to use or sell the asset.
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease.
At the date of commencement of the lease, the Company recognises a right-of-use asset ("ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (shortterm leases) and low value leases. For these short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.
The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the lease term and useful
life of the underlying asset. The lease liability is initially measured at amortised cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liability and ROU asset have been separately presented in the Balance Sheet.
d) Investments in Subsidiaries
Investments in subsidiaries are accounted at cost less impairment losses, if any. If the intention of the management is to dispose the investment in near future, it is classified as held for sale and measured at lower of its carrying amount and fair value less costs to sell.
Financial instruments are classified as:
⢠Financial assets, measured at (a) amortised cost and (b) fair value through Profit and Loss ("FVTPL")
⢠Financial liabilities are carried at amortised cost.
All financial instruments are recognised initially at fair value. Transaction costs that are attributable to the acquisition of the financial asset (other than financial assets recorded at fair value through profit or loss) are included in the fair value of the financial assets.
Subsequently, financial assets are measured as follows:
A financial asset shall be measured at amortised cost if both of the following conditions are met:
⢠the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
⢠the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding.
Financial assets under this category are measured initially at fair value plus transaction costs and subsequently carried at amortised cost using the effective interest method, less any impairment loss.
b) Fair Value Through profit and Loss Account
Financial instruments classified in this category are subsequently carried at fair value with changes recorded in the statement of profit or loss. Directly attributable transaction costs are recognised in Profit and Loss account as incurred.
Financial liabilities are measured subsequently at amortised cost using effective interest method.
f) Derivative financial instruments and hedge accounting
Initial recognition and subsequent measurement
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
The purchase contracts that meet the definition of a derivative under Ind AS 109 are recognised in the statement of profit and loss. Commodity contracts that are entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with the Company''s expected purchase, sale or usage requirements are held at cost.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to profit or loss when the hedge item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability.
For the purpose of hedge accounting, hedges are classified as:
(i) Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability or an unrecognised firm commitment.
(ii) Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised firm commitment.
(iii) Hedges of a net investment in a foreign operation.
Hedges that meet the strict criteria for hedge accounting are accounted for, as described below:
The change in the fair value of a hedging instrument is recognised in the statement of profit and loss as finance costs. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognised in the statement of profit and loss as finance costs.
For fair value hedges relating to items carried at amortised cost, any adjustment to carrying value is amortised through profit or loss over the remaining term
of the hedge using the EIR method. EIR amortisation may begin as soon as an adjustment exists and no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged.
I f the hedged item is derecognised, the unamortised fair value is recognised immediately in profit or loss. When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss recognised in profit and loss.
The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the statement of profit and loss.
The ineffective portion relating to foreign currency contracts is recognised in finance costs and the ineffective portion relating to commodity contracts is recognised in other income or expenses.
Amounts recognised as OCI are transferred to profit or loss when the hedged transaction affects profit or loss, such as when the hedged financial income or financial expense is recognised or when a forecast sale occurs. When the hedged item is the cost of a non-financial asset or nonfinancial liability, the amounts recognised as OCI are transferred to the initial carrying amount of the non-financial asset or liability.
If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover (as part of the hedging strategy), or if its designation as a hedge is revoked, or when the hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss previously recognised in OCI remains separately in equity until the forecast transaction occurs or the foreign currency firm commitment is met.
g) Impairment of Assets
The carrying amount of cash generating units is reviewed at each reporting date where there is any indication of impairment. An impairment loss is recognised in the statement of profit and loss where the carrying amount exceeds the recoverable amount of the cash generating units. Recoverable amount is the higher of cash-generating unit''s fair value less costs of disposal and its value in use.
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.
The loss allowance in respect of trade receivables is at an amount equal to lifetime expected credit losses. The loss allowance in respect of all other financial assets is measured at an amount equal to lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. Otherwise, the loss allowance is measured at an amount equal to 12 month expected credit losses.
Inventories are valued at lower of cost, determined on First-in-First-Out (FIFO) basis, or net realisable value. Inventories comprise of raw materials, stores, spares & consumables and finished goods. Cost of Inventories comprises all cost of purchase (net of reimbursable taxes), cost of conversion and other cost incurred in bringing the inventories to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates after taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
The Company recognises revenue in accordance with Ind AS115 "Revenue from Contracts with Customers". The core principle of the standard is that an entity should recognise revenue to depict the transfer of control 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.
Other income is comprised primarily of interest income, dividend income, gain/loss on investments and exchange gain / loss on forward and options contracts and on translation of other assets and liabilities. Interest income is recognised using the effective interest method. Claims for export incentives/ duty drawbacks, duty refunds and insurance are accounted when the right to receive payment is established.
Provisions are recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Where the effect of time value of money is material, provisions are determined and maintained by discounting the expected future cash flows, wherever applicable.
Borrowing costs attributable to a qualifying asset are capitalised as a part of the cost of such assets and other borrowing costs are recognised as an expense in the year of incurrence.
The Company''s contribution to Provident and Pension fund for the employees is covered under defined contribution plan and is recognised as employee benefit expense in statement of profit and loss in the periods during which services are rendered by employees.
The Company''s Gratuity scheme for its employees is a defined benefit retirement benefit plan. The liability recognised in the balance sheet in respect of defined benefit plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.
Defined benefit costs are categorised as follows:
⢠service cost
⢠net interest expense or income; and
⢠re-measurement
The Company presents the first two components of defined benefit costs in profit and loss in the line item ''Employee benefit expenses''.
Re-measurements comprising actuarial gains and losses as well as the difference between the return on plan assets and the amounts included in net interest on the net defined benefits liability (asset) are recognised in other comprehensive income, net of income tax.
Other long-term employee benefits comprise of leave encashment which is provided for based on the actuarial valuation carried out as at the end of the year. Liability is 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. Re-measurements and other expenses related to long term benefit plans are recognised in statement of profit and loss.
m) Foreign Currency Transactions and balances
Transactions in foreign currency are translated into the respective functional currencies using the exchange rates prevailing at the dates of the respective transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the exchange rates prevailing at reporting date of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of profit and loss and reported within foreign exchange gains / losses.
Non-monetary assets and liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.
Basic earnings per share is computed by dividing the profit or loss after tax by the weighted average number of equity shares outstanding during the year including any potential dilution resulting in issue of additional equity shares based on contractual terms and obligations. Diluted earnings per share is computed by dividing the profit / (loss) after tax, as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, with the weighted average number of equity shares considered for deriving basic earnings per share.
o) Statement of Cash Flows
Cash flows are reported using the indirect method, whereby profit/ (loss) before 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. Cash flows for the year are classified by operating, investing and financing activities.
p) Taxes on Income
I ncome tax comprises current and deferred tax. Income tax expense is recognised in the statement of profit and loss except to the extent it relates to items directly recognised in equity or in other comprehensive income.
Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for the period.
The tax rates and tax laws used to compute the current tax amount are those that are enacted or substantively enacted by the reporting date and applicable for the period. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognised amounts and where it intends either to settle on a net basis or to realise the asset and liability simultaneously.
Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Mar 31, 2019
1. Significant Accounting Policies:
i. Property, Plant and Equipment
Property, plant and equipment are stated in the Balance Sheet at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price (net of reimbursable taxes), attributable expenditure incurred in bringing the asset to its working condition for the intended use and cost of borrowing till the date of capitalization in the case of assets involving material investment and substantial lead time.
Depreciation is provided on Straight Line Method in respect of assets situated at Bhilai, Jeedimetla (API), Corporate Office and Vizag Units and on Written down value Method with respect to assets situated at Kazipally Unit, by considering the useful life of the assets as specified in Schedule II of the Companies Act, 2013.
Depreciation methods, useful lives and residual values are reviewed in each financial year and changes, if any, are accounted for prospectively. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Freehold land is not depreciated.
ii. Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses.
Intangible assets with finite lives are amortized over the useful economic life, reviewed regularly, and are assessed for impairment whenever there is an indication that the intangible asset may be impaired.
Expenditure on research activities is recognized in the statement of profit and loss as incurred. Expenditure on development activities is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible future economic benefits are probable and the company intends to and has sufficient resources to complete development and to use or sell the asset.
iii. Investments in Subsidiaries
Investments in subsidiaries are accounted at cost less impairment losses, if any.
If the intention of the management is to dispose the investment in near future, it is classified as held for sale and measured at lower of its carrying amount and fair value less costs to sell.
iv. Financial Instruments
Financial instruments are classified as:
- Financial assets, measured at (a) amortized cost and (b) fair value through Profit and Loss ("FVTPL")
- Financial liabilities carried at amortized cost.
All financial instruments are recognized initially at fair value. Transaction costs that are attributable to the acquisition of the financial asset (other than financial assets recorded at fair value through profit or loss) are included in the fair value of the financial assets.
Subsequently, financial assets are measured as follows:
a) Amortized Cost
A financial asset shall be measured at amortized cost if both of the following conditions are met:
- the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding.
Financial assets under this category are measured initially at fair value plus transaction costs and subsequently carried at amortized cost using the effective interest method, less any impairment loss.
b) Fair Value Through Profit and Loss Account
Financial instruments classified in this category are subsequently carried at fair value with changes recorded in the statement of profit or loss. Directly attributable transaction costs are recognized in Profit and Loss account as incurred.
Financial liabilities are measured subsequently at amortized cost using effective interest method.
v. Impairment of Assets
a. Non-Financial Assets
The carrying amount of cash generating units is reviewed at each reporting date where there is any indication of impairment. An impairment loss is recognized in the statement of profit and loss where the carrying amount exceeds the recoverable amount of the cash generating units. Recoverable amount is the higher of cash-generating unit''s fair value less costs of disposal and its value in use.
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.
b. Financial Assets
The loss allowance in respect of trade receivables is at an amount equal to lifetime expected credit losses. The loss allowance in respect of all other financial assets is measured at an amount equal to lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. Otherwise, the loss allowance is measured at an amount equal to 12- month expected credit losses.
vi. Inventories
Inventories are valued at lower of cost, determined on First-in-First-Out (FIFO) basis, or net realizable value. Inventories comprise of raw materials, stores, spares & consumables and finished goods. Cost of Inventories comprises all cost of purchase (net of reimbursable taxes), cost of conversion and other cost incurred in bringing the inventories to their present location and condition.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
vii. Revenue Recognition:
Effective April 1, 2018, the company adopted Ind AS 115"Revenue from Contracts with Customers" using the cumulative catch-up transition method, applied to contracts that were not completed as of April1, 2018. The core principal 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. In accordance with the cumulative catch-up transition method, the comparatives have not been retrospectively adjusted. The effect on adoption of Ind AS 115 was insignificant.
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services
Other income is comprised primarily of interest income, dividend income, gain/loss on investments and exchange gain/loss on forward and options contracts and on translation of other assets and liabilities. Interest income is recognized using the effective interest method. Claims for export incentives/ duty drawbacks, duty refunds and insurance are accounted when the right to receive payment is established.
viii. Provisions
Provisions are recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Where the effect of time value of money is material, provisions are determined and maintained by discounting the expected future cash flows, wherever applicable.
ix. Borrowing Costs
Borrowing costs attributable to a qualifying asset are capitalized as a part of the cost of such assets and other borrowing costs are recognized as an expense in the year of incurrence.
x. Leases
At the inception of an arrangement, the Company determines whether such an arrangement is or contains a lease. Upon initial recognition, assets taken on finance lease are capitalized at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Lease rentals arising under operating leases are recognized in the statement of profit and loss on a straight-line basis over the lease term except where the increment in lease rentals is in line with general rate of inflation.
xi. Employee Benefits
The Company''s contribution to Provident and Pension fund for the employees is covered under defined contribution plan and is recognized as employee benefit expense in statement of profit and loss in the periods during which services are rendered by employees.
The Company''s Gratuity scheme for its employees is a defined benefit retirement benefit plan. The liability recognized in the balance sheet in respect of defined benefit plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.
Defined benefit costs are categorized as follows:
- service cost
- net interest expense or income; and
- re-measurement
The Company presents the first two components of defined benefit costs in the statement of profit and loss in the line item ''Employee benefit expenses''.
Re-measurements comprising actuarial gains and losses as well as the difference between the return on plan assets and the amounts included in net interest on the net defined benefits liability (asset) are recognized in other comprehensive income, net of income tax.
Other Long term employee benefit comprise of leave encashment which is provided for based on the actuarial valuation carried out as at the end of the year. Liability is 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. Re-measurements and other expenses related to long term benefit plans are recognized in statement of profit and loss.
xii. Foreign Currency Transactions and balances
Transactions in foreign currency are translated into the respective functional currencies using the exchange rates prevailing at the dates of the respective transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the exchange rates prevailing at reporting date of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of profit and loss and reported within foreign exchange gains / (losses).
Non-monetary assets and liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.
xiii. Earnings Per Share
Basic earnings per share is computed by dividing the profit or loss after tax by the weighted average number of equity shares outstanding during the year including any potential dilution resulting in issue of additional equity shares based on contractual terms and obligations. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share.
xiv. Statement of Cash Flows
Cash flows are reported using the indirect method, whereby profit/ (loss) before 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. Cash flows for the year are classified by operating, investing and financing activities.
xv. Taxes on Income
Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and loss except to the extent it relates to items directly recognized in equity or in other comprehensive income.
i. Current income tax
Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for the period.
The tax rates and tax laws used to compute the current tax amount are those that are enacted or substantively enacted by the reporting date and applicable for the period. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis or to realize the asset and liability simultaneously.
ii. Deferred income tax
Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in financial statements. Deferred tax is measured using the tax rates and laws enacted or substantially enacted at the reporting date. Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
Mar 31, 2018
1. Significant Accounting Policies:
i. Property, Plant and Equipment
Property, plant and equipment are stated in the Balance Sheet at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price (net of reimbursable taxes), attributable expenditure incurred in bringing the asset to its working condition for the intended use and cost of borrowing till the date of capitalization in the case of assets involving material investment and substantial lead time.
Depreciation is provided on Straight Line Method in respect of assets situated at Bhilai, Jeedimetla (API), Corporate Office and Vizag Units and on Written down value Method in respect of assets situated at Kazipally Unit, by considering the useful life of the assets as specified in Schedule II of the Companies Act, 2013.
Depreciation methods, useful lives and residual values are reviewed in each financial year and changes, if any, are accounted for prospectively. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Freehold land is not depreciated.
ii. Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses.
Intangible assets with finite lives are amortized over the useful economic life, reviewed regularly, and are assessed for impairment whenever there is an indication that the intangible asset may be impaired.
Expenditure on research activities is recognized in profit or loss as incurred. Expenditure on development activities is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible future economic benefits are probable and the company intends to and has sufficient resources to complete development and to use or sell the asset.
iii. Investments in Subsidiaries
Investments in subsidiaries are accounted at cost less impairment losses, if any.
If the intention of the management is to dispose the investment in near future, it is classified as held for sale and measured at lower of its carrying amount and fair value less costs to sell.
iv. Financial Instruments
Financial instruments are classified as:
- Financial assets, measured at (a) amortized cost and (b) fair value through Profit and Loss ("FVTPL")
- Financial liabilities carried at amortized cost.
All financial instruments are recognized initially at fair value. Transaction costs that are attributable to the acquisition of the financial asset (other than financial assets recorded at fair value through profit or loss) are included in the fair value of the financial assets.
Subsequently, financial assets are measured as follows:
a) Amortized Cost
A financial asset shall be measured at amortized cost if both of the following conditions are met:
- the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding.
Financial assets under this category are measured initially at fair value plus transaction costs and subsequently carried at amortized cost using the effective interest method, less any impairment loss.
b) Fair Value Through Profit and Loss Account
Financial instruments classified in this category are subsequently carried at fair value with changes recorded in the statement of profit or loss. Directly attributable transaction costs are recognized in Profit and Loss account as incurred.
Financial liabilities are measured subsequently at amortized cost using effective interest method.
V. Impairment of Assets
a. Non-Financial Assets
The carrying amount of cash generating units is reviewed at each reporting date where there is any indication of impairment. An impairment loss is recognized in the statement of profit and loss where the carrying amount exceeds the recoverable amount of the cash generating units. Recoverable amount is the higher of cash-generating unit''s fair value less costs of disposal and its value in use.
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.
b. Financial Assets
The loss allowance in respect of trade receivables is at an amount equal to lifetime expected credit losses. The loss allowance in respect of all other financial assets is measured at an amount equal to lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. Otherwise, the loss allowance is measured at an amount equal to 12-month expected credit losses.
vi. Inventories
Inventories are valued at lower of cost, determined on First-in-First-Out (FIFO) basis, or net realizable value. Inventories comprise of raw materials, stores, spares & consumables and finished goods. Cost of Inventories comprises all cost of purchase (net of reimbursable taxes), cost of conversion and other cost incurred in bringing the inventories to their present location and condition.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
vii. Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
a) Sale of goods:
Revenue from sale of goods is recognized on dispatch (in respect of exports on the date of the bill of lading or airway bill) which coincides with transfer of significant risks and rewards to customer and is net of trade discounts, sales returns, where applicable and recognized based on the terms of the agreements entered into with the customers. Revenue is also recognized on sale of goods in case where the delivery is kept pending at the instance of the customer, the risk and rewards are transferred and customer takes title and accepts billing as per usual payment terms.
Sales include amounts recovered towards excise duty but exclude Goods and Services Tax / Sales tax / Value added tax. However, with the introduction of GST from July, 2017, applicability of excise duty, sales tax and Value added tax doesn''t arise.
b) Income from Services
Income from services rendered is recognized based on the agreements/arrangements with the concerned parties and when services are rendered.
c) Other Income
- Interest Income is recognized using effective interest rate method.
- Claims for export incentives/ duty drawbacks, duty refunds and insurance are accounted for on accrual basis.
viii. Provisions
Provisions are recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Where the effect of time value of money is material, provisions are determined and maintained by discounting the expected future cash flows, wherever applicable.
ix. Borrowing Costs
Borrowing costs attributable to a qualifying asset are capitalized as a part of the cost of such assets and other borrowing costs are recognized as an expense in the year of incurrence.
x. Leases
At the inception of an arrangement, the Company determines whether such an arrangement is or contains a lease. Upon initial recognition, assets taken on finance lease are capitalized at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Lease rentals arising under operating leases are recognized in the statement of profit or loss on a straight-line basis over the lease term except where the increment in lease rentals is in line with general rate of inflation.
xi. Employee Benefits
The Company''s contribution to Provident and Pension fund for the employees is covered under defined contribution plan and is recognized as employee benefit expense in statement of profit or loss in the periods during which services are rendered by employees.
The Company''s Gratuity scheme for its employees is a defined benefit retirement benefit plan. The liability recognized in the balance sheet in respect of defined benefit plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.
Defined benefit costs are categorized as follows:
- service cost
- net interest expense or income; and
- re-measurement
The Company presents the first two components of defined benefit costs in profit or loss in the line item ''Employee benefits expense''.
Re-measurements comprising actuarial gains and losses as well as the difference between the return on plan assets and the amounts included in net interest on the net defined benefits liability (asset) are recognized in other comprehensive income, net of income tax.
Other Long term employee benefit comprise of leave encashment which is provided for based on the actuarial valuation carried out as at the end of the year. Liability is 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. Re-measurements and other expenses related to long term benefit plans are recognized in statement of profit or loss.
xii. Foreign Currency Transactions and balances
Transactions in foreign currency are translated into the respective functional currencies using the exchange rates prevailing at the dates of the respective transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the exchange rates prevailing at reporting date of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of profit and loss and reported within foreign exchange gains / (losses).
Non-monetary assets and liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.
xiii. Earnings Per Share
Basic earnings per share is computed by dividing the profit or loss after tax by the weighted average number of equity shares outstanding during the year including any potential dilution resulting in issue of additional equity shares based on contractual terms and obligations. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share.
xiv. Statement of Cash Flows
Cash flows are reported using the indirect method, whereby profit/ (loss) before 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. Cash flow for the year are classified by operating, investing and financing activities
xv. Taxes on Income
Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and loss except to the extent it relates to items directly recognized in equity or in other comprehensive income.
i. Current income tax
Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for the period.
The tax rates and tax laws used to compute the current tax amount are those that are enacted or substantively enacted by the reporting date and applicable for the period. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis or to realize the asset and liability simultaneously.
ii. Deferred income tax
Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in financial statements. Deferred tax is measured using the tax rates and laws enacted or substantially enacted at the reporting date. Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
Mar 31, 2015
A) Accounting Convention and Basis:
The financial statements are prepared under the historical cost
convention as a going concern in accordance with the generally accepted
accounting principles and are based on accrual concept of accounting.
b) Use of Estimates:
The preparation of financial statements in conformity with the generally
accepted accounting principles requires the Management to make
estimates and assumptions that afect the reported amounts of assets and
liabilities and disclosure of contingent liabilities as on the date of
the financial statements and the income and expenditure for the
reporting year. Though these estimates and assumptions are based on the
information available at that point in time, the actual results could
difer from these estimates.
c) Fixed Assets and Capital Work-in-Progress:
Fixed assets are stated at cost (net of Cenvat credit & Vat) less
accumulated depreciation and inclusive of all costs including financial
expenses incurred till the asset is put to use. Indirect &
Pre-operative expenses related or attributable to the Capital works up
to commencement of commercial production are added to the cost of fxed
assets in the year of commencement of commercial Production.
d) Depreciation:
Depreciation is provided on Straight Line Method in respect of assets
situated at Bhilai, Jeedimetla (API), Corporate Ofce and Vizag Units
and on Written down value Method in respect of assets situated at
Kazipalli Unit, by considering the useful life of the assets as
specified in Schedule II of the Companies Act, 2013.
e) Impairment of Assets:
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with accounting standard 28 on "Impairment of Assets"
issued by ICAI. An impairment loss is charged to the Statement of Profit
and Loss in the period in which an asset is identifed as impaired, when
the carrying value of the asset exceeds it recoverable value. The
impairment loss recognized is reversed if there has been a change in
the estimate of recoverable amount.
f) Inventories:
Inventories are valued at lower of cost or net realizable
value on FIFO basis. Inventories comprise of raw materials, stores,
spares & consumables and fnished goods. Cost of Inventories comprises
all cost of purchase, cost of conversion and other cost incurred in
bringing the inventories to their present location and condition.
g) Sales:
Gross Sales comprise of Sale Value net of returns, internal transfers,
Sales Tax & rebates and are inclusive of excise duty and Freight.
h) Revenue recognition:
Revenue is recognized on the transfer of property of goods as per
contractual terms.
i) Borrowing Costs:
Borrowing costs attributable to a qualifying asset are capitalized as a
part of the cost of assets/ and other borrowing costs are recognized as
an expense in the year of incurrence.
j) Excise duty and Sales Tax:
The liability of excise duty on fnished goods lying in stock at the
close of the year is provided for in the accounts and included in the
valuation of Inventory as per the guidance note issued by ICAI.
k) Employee benefits:
i) Contribution to Provident and pension Funds are funded with
appropriate authorities and charged to the Profit and loss account.
ii) Liability for gratuity and leave encashment is provided on the
basis of actuarial valuation based on the projected unit credit method.
Actuarial gains or losses are recognized in the Statement of Profit and
Loss.
l) Investments:
Long term investments are stated at cost net of provision for
diminution in value other than temporary, if any. Current investments
are carried at lower of cost or fair market value.
m) Research & Development Expenditure:
Capital Expenditure incurred is disclosed separately in schedule of
fxed assets and revenue expenditure incurred during the Research phase
is charged to the Profit and Loss in the year of incurrence.
n) Foreign Currency Transactions:
Foreign currency transactions are accounted at the exchange rates
prevailing on the date of the transaction. Foreign currency monetary
items outstanding as at the Balance Sheet date are recognized using the
exchange rate as on that date. Gains/ Losses arising from the
settlement of such transactions and translation of monetary assets and
liabilities denominated in foreign currencies are accounted for in the
Statement of Profit and Loss.
o) Taxes on Income:
Tax on income for the current period is determined on the basis of
taxable income computed in accordance with the provisions of the Income
Tax Act,1961.
Deferred tax is recognized, subject to consideration of prudence, on
timing diferences between the accounting income and the taxable income
for the year and quantifed using the tax rates and laws enacted or
substantively enacted as on the balance sheet date. Deferred tax assets
are recognized and carried forward to the extent that there is a
reasonable certainty that sufcient future taxable income will be
available against which such deferred tax assets can be realized.
Disclosures:
1. All the equity shares carry equal rights and obligations including
for dividend and with respect to voting rights.
2. 7% Redeemable Preference Shares which are cumulative in nature are
liable to be redeemed at par after the expiry of ten years ending with
March, 2018 (Rs. 4000 Lakhs) and September, 2019 (Rs. 750 Lakhs).
3. Dividend on Redeemable Preference Share Capital:Dividends on the 7%
Redeemable Preference Share Capital of Rs. 4750 Lakhs has not been
provided for the year 2014-15. However, as the Preference Shares are
cumulative in nature, the amount payable as dividend for the year of
Rs. 332.50 Lakhs (Rs.332.50 Lakhs ) is being shown as a Contingent
liability.
4. Names of shareholders holding more than 5% of the Share capital and
their shareholding.
A) Secured Loans:
1. Term Loans from banks represents loans from Consortium of Bankers -
State Bank of Hyderabad, Andhra Bank, Indian Overseas Bank and Union
Bank of India. Term Loans are secured by charge on the assets acquired
out of the term loan including mortgage of building constructed and
charge on entire existing movable/immovable assets of the Company. The
above loans are further secured by personal guarantee of Directors and
others. All the above securities rank in all respects pari passu
amongst the consortium of bankers.
2. The term loans are repayable in equated periodic instalments
outstanding up to 5 years period from the date of respective loan.
These are repayable by 2019-20 and carry an average interest of 15.37%
p.a. The aggregrate amount of instalments outstanding as on March 31,
2015 is Rs. 5994.92 Lakhs.
3. The hire purchase loans are secured against the assets purchased
out of those loans. The net carrying amount of assets acquired on hire
purchase as on 31st March 2015 is Rs. 2,87,62,648/- (Rs.
2,61,96,181/-). The Company had capitalized the assets at their fair
value considering that the hire purchase agreements are in the nature
of Finance Lease as defned in Accounting Standard 19 on "Leases".
Installment payment are apportioned between Finance charge and
Principal which is disclosed under secured loans. The details are as
follows:-
Disclosures:
The Company has provided for Deferred Tax in accordance with the
Accounting Standard on "Accounting for Taxes on Income" (AS 22) issued
by the institute of Chartered Accountants of India. The details of
deferred tax assets and liabities of the Company as on the date of
Balance Sheet are as given above:
Disclosure:
1) The Company has no information as to whether any of its vendors
constitute a "Supplier" within the meaning of Section 2 (n) of the
Micro, Small and Medium Enterprises Development Act, 2006 as no
declarations were received under the said Act from them.
2) During the year, the Company has received advances against sales
from two overseas parties which is secured by bank guaranteee for which
sales are to be made by the Company in the Financial Year 2016-17 as
per the terms of agreement.
Disclosures:
A) Secured Loans:
1. The Rate of Interest for Loans repayable on demand from Banks
ranges from respective Banks Base Rate 3.75% to 7.00%
2. Security:
Working Capital Loans from Consortium Bankers consisting of State Bank
of Hyderabad, State Bank of India, Union Bank of India, Indian Overseas
Bank, Andhra Bank and Punjab National Bank are secured by frst pari
passu charge by way of hypothecation of inventories, book debts and
other current assets of the Company, and second pari passu charge on
the fxed assets of the Company. The directors have extended their
personal security i.e Land, Plots, Buildings & Shares etc.
3. Guarantees:
All the above loans are guranteed by the Promoter Directors.
B) Unsecured Loans:
1. Inter Corporate Loans:
These loans carry Interest rate of 15.5% and are repayable on demand
Mar 31, 2014
A) Accounting Convention and Basis:
The financial statements are prepared under the historical cost
convention as a going concern in accordance with the generally accepted
accounting principles and are based on accrual concept of accounting.
b) Use of Estimates:
The preparation of financial statements in conformity with the
generally accepted accounting principles requires the Management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent liabilities as on
the date of the financial statements and the income and expenditure for
the reporting year. Though these estimates and assumptions are based on
the information available at that point in time, the actual results
could differ from these estimates.
c) Fixed Assets and Capital Work-in-Progress:
Fixed assets are stated at cost (net of Cenvat credit & Vat) less
accumulated depreciation and inclusive of all costs including financial
expenses incurred till the asset is put to use. Indirect &
Pre-operative expenses related or attributable to the Capital works up
to commencement of commercial production are added to the cost of fixed
assets in the year of commencement of commercial Production.
d) Depreciation:
Depreciation is provided on Straight Line Method in respect of assets
situated at Bhilai, Jeedimetla (API), Corporate Office and Vizag Units
and on Written down value Method in respect of assets situated at
Kazipalli Unit, at rates prescribed in Schedule XIV to the Companies
Act, 19S6.
e) Impairment of Assets:
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with accounting standard 28 on "Impairment of Assets"
issued by ICAI. An impairment loss is charged to the Statement of
Profit and Loss in the period in which an asset is identified as
impaired, when the carrying value of the asset exceeds it recoverable
value. The impairment loss recognized is reversed if there has been a
change in the estimate of recoverable amount.
f) Inventories:
Inventories are valued at lower of cost or net realizable value on FIFO
basis. Inventories comprise of raw materials, stores, spares &
consumables and finished goods. Cost of Inventories comprises all cost
of purchase, cost of conversion and other cost incurred in bringing the
inventories to their present location and condition.
g) Sales:
Gross Sales comprise of Sale Value net of returns, internal transfers,
Sales Tax & rebates and are inclusive of excise duty and Freight.
h) Revenue recognition:
Revenue is recognized on the transfer of property of goods as per
contractual terms.
i) Borrowing Costs:
Borrowing costs attributable to a qualifying asset are capitalized as a
part of the cost of assets/ and other borrowing costs are recognized as
an expense in the year of incurrence.
j) Excise duty and Sales Tax:
The liability of excise duty on finished goods lying in stock at the
close of the year is provided for in the accounts and included in the
valuation of Inventory as per the guidance note issued by ICAI.
k) Employee Benefits:
i) Contribution to Provident and pension Funds are funded with
appropriate authorities and charged to the profit and loss account.
ii) Liability for gratuity and leave encashment is provided on the
basis of actuarial valuation based on the projected unit credit method.
Actuarial gains or losses are recognized in the Statement of Profit and
Loss.
l) Investments:
Long term investments are stated at cost net of provision for
diminution in value other than temporary, if any. Current investments
are carried at lower of cost or fair market value.
m) Research & Development Expenditure:
Capital Expenditure incurred is disclosed separately in schedule of
fixed assets and revenue expenditure incurred during the Research phase
is charged to the Profit and Loss in the year of incurrence.
n) Foreign Currency Transactions:
Foreign currency transactions are accounted at the exchange rates
prevailing on the date of the transaction. Foreign currency monetary
items outstanding as at the Balance Sheet date are recognized using the
exchange rate as on that date. Gains/Losses arising from the settlement
of such transactions and translation of monetary assets and liabilities
denominated in foreign currencies are accounted for in the Statement of
Profit and Loss.
o) Taxes on Income:
Tax on income for the current period is determined on the basis of
taxable income computed in accordance with the provisions of the Income
Tax Act,1961.
Deferred tax is recognized, subject to consideration of prudence, on
timing differences between the accounting income and the taxable income
for the year and quantified using the tax rates and laws enacted or
substantively enacted as on the balance sheet date. Deferred tax assets
are recognized and carried forward to the extent that there is a
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
Mar 31, 2013
A) Accounting Convention and Basis:
The financial statements are prepared under the historical cost
convention as a going concern in accordance with the generally accepted
accounting principles and are based on accrual concept of accounting.
b) Use of Estimates:
The preparation of financial statements in conformity with the
generally accepted accounting principles requires the Management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent liabilities as on
the date of the financial statements and the income and expenditure for
the reporting year. Though these estimates and assumptions are based on
the information available at that point in time, the actual results
could differ from these estimates.
c) Fixed Assets and Capital Work-in-Progress:
Fixed assets are stated at cost (net of Cenvat credit & Vat) less
accumulated depreciation and inclusive of all costs including financial
expenses incurred till the asset is put to use. Indirect &
Pre-operative expenses related or attributable to the Capital works up
to commencement of commercial production are added to the cost of fixed
assets in the year of commencement of commercial Production.
d) Depreciation:
Depreciation is provided on Straight Line Method in respect of assets
situated at Bhilai, Jeedimetla (API), Corporate Office and Vizag Units
and on Written down value Method in respect of assets situated at
Kazipalli Unit, at rates prescribed in Schedule XIV to the Companies
Act, 1956.
e) Impairment of Assets:
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with accounting standard 28 on "Impairment of Assets"
issued by ICAI. An impairment loss is charged to the Statement of
Profit and Loss in the period in which an asset is identified as
impaired, when the carrying value of the asset exceeds it recoverable
value. The impairment loss recognized is reversed if there has been a
change in the estimate of recoverable amount.
f) Inventories:
Inventories are valued at lower of cost or net realizable value on FIFO
basis. Inventories comprise of raw materials, stores, spares &
consumables and finished goods. Cost of Inventories comprises all cost
of purchase, cost of conversion and other cost incurred in bringing the
inventories to their present location and condition.
g) Sales:
Gross Sales comprise of Sale Value net of returns, internal transfers,
Sales Tax & rebates and are inclusive of excise duty and Freight.
h) Revenue recognition:
Revenue is recognized on the transfer of property of goods as per
contractual terms.
i) Borrowing Costs:
Borrowing costs attributable to a qualifying asset are capitalized as a
part of the cost of assets/ and other borrowing costs are recognized as
an expense in the year of incurrence.
j) Excise duty and Sales Tax:
The liability of excise duty on finished goods lying in stock at the
close of the year is provided for in the accounts and included in the
valuation of Inventory as per the guidance note issued by ICAI. k)
Employee Benefits:
i) Contribution to Provident and pension Funds are funded with
appropriate authorities and charged to the profit and loss account.
ii) Liability for gratuity and leave encashment is provided on the
basis of actuarial valuation based on the projected unit credit method.
Actuarial gains or losses are recognized in the Statement of Profit and
Loss.
l) Investments:
Long term investments are stated at cost net of provision for
diminution in value other than temporary, if any. Current investments
are carried at lower of cost or fair market value. m) Research &
Development Expenditure:
Capital Expenditure incurred is disclosed separately in schedule of
fixed assets and revenue expenditure incurred during the Research phase
is charged to the Profit and Loss in the year of incurrence. n) Foreign
Currency Transactions:
Foreign currency transactions are accounted at the exchange rates
prevailing on the date of the transaction. Foreign currency monetary
items outstanding as at the Balance Sheet date are recognized using the
exchange rate as on that date. Gains/Losses arising from the settlement
of such transactions and translation of monetary assets and liabilities
denominated in foreign currencies are accounted for in the Statement of
Profit and Loss.
o) Taxes on Income:
Tax on income for the current period is determined on the basis of
taxable income computed in accordance with the provisions of the Income
Tax Act,1961.
Deferred tax is recognized, subject to consideration of prudence, on
timing differences between the accounting income and the taxable income
for the year and quantified using the tax rates and laws enacted or
substantively enacted as on the balance sheet date. Deferred tax assets
are recognized and carried forward to the extent that there is a
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
Mar 31, 2012
A) Accounting Convention and Basis:
The financial statements are prepared under the historical cost
convention as a going concern in accordance with the generally accepted
accounting principles and are based on accrual concept of accounting.
b) Use of Estimates:
The preparation of financial statements in conformity with the
generally accepted accounting principles requires the Management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent liabilities as on
the date of the financial statements and the income and expenditure for
the reporting year. Though these estimates and assumptions are based on
the information available at that point in time, the actual results
could differ from these estimates.
c) Fixed Assets and Capital Work-in-Progress:
Fixed assets are stated at cost (net of Cenvat credit & Vat) less
accumulated depreciation and inclusive of all costs including financial
expenses incurred till the asset is put to use. Indirect &
Pre-operative expenses related or attributable to the Capital works up
to commencement of commercial production are added to the cost of fixed
assets in the year of commencement of commercial Production.
d) Depreciation:
Depreciation is provided on Straight Line Method in respect of assets
situated at Bhilai, Jeedimetla (API), Corporate Office and Vizag Units
and on Written down value Method in respect of assets situated at
Kazipalli Unit, at rates prescribed in Schedule XIV to the Companies
Act, 1956.
e) Impairment of Assets:
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with accounting standard 28 on "Impairment of Assets"
issued by ICAI. An impairment loss is charged to the Profit and loss
account in the period in which, an asset is identified as impaired,
when the carrying value of the asset exceeds it recoverable value. The
impairment loss recognized is reversed if there has been a change in
the estimate of recoverable amount.
f) Inventories:
Inventories are valued at lower of cost or net realizable value on FIFO
basis. Inventories comprises of raw materials, stores, spares &
consumables and finished goods. Cost of Inventories comprises all cost
of purchase, cost of conversion and other cost incurred in bringing the
inventories to their present location and condition.
g) Sales:
Gross Sales comprise of Sale Value net of returns, Internal Transfers,
Sales Tax & rebates and is inclusive of excise duty and Freight.
h) Revenue recognition:
Revenue is recognized on the transfer of property of goods as per
contractual terms.
i) Borrowing Costs:
Borrowing costs attributable to a qualifying asset are capitalized as a
part of the cost of assets and other borrowing costs are recognized as
an expense in the year of incurrence.
j) Excise duty and Sales Tax:
The liability of excise duty on finished goods lying in stock at the
close of the year is provided for in the accounts and included in the
valuation of Inventory. Sales tax paid is charged to profit and loss
account.
k) Employee Benefits:
i) Contribution to Provident and pension Funds are funded with
appropriate authorities and charged to the profit and loss account.
ii) Liability for gratuity and leave encashment is provided on the
basis of actuarial valuation by Life Insurance Corporation of India
based on the unit credit method. Actuarial gains or losses are
recognized in the Profit and Loss Account
l) Investments:
Long term investments are stated at cost net of provision for
diminution in value other than temporary, if any. Current investments
are carried at lower of cost or fair market value.
m) Research & Development Expenditure:
Capital Expenditure incurred has been disclosed separately in schedule
of fixed assets and revenue expenditure incurred during the Research
phase is charged to the Profit and Loss Account in the year of
incurrence.
n) Foreign Currency Transactions:
Foreign currency transactions are accounted at the exchange rates
prevailing on the date of the transaction. Foreign currency monetary
items outstanding as at the Balance Sheet date are recognized using the
exchange rate as on that date. Gains/Losses arising from the settlement
of such transactions and translation of monetary assets and liabilities
denominated in foreign currencies are accounted in the Profit and Loss
account.
o) Taxes on Income:
Tax on income for the current period is determined on the basis of
taxable income computed in accordance with the provisions of the Income
Tax Act,1961.
Deferred tax is recognized, subject to consideration of prudence, on
timing differences between the accounting income and the taxable income
for the year and quantified using the tax rates and laws enacted or
substantively enacted as on the balance sheet date. Deferred tax assets
are recognized and carried forward to the extent that there is a
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
Mar 31, 2011
A) Accounting Convention and Basis:
The financial statements are prepared under the historical cost
convention as a going concern in accordance with the generally accepted
accounting principles and are based on accrual concept of accounting.
b) Use of Estimates:
The preparation of financial statements in conformity with the
generally accepted accounting principles requires the Management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent liabilities as on
the date of the financial statements and the income and expenditure for
the reporting year. Though these estimates and assumptions are based on
the information available at that point in time, the actual results
could differ from these estimates.
c) Fixed Assets and Capital Work-in-Progress:
Fixed assets are stated at cost (net of Cenvat credit & Vat) less
accumulated depreciation and inclusive of all costs including financial
expenses incurred till the asset is put to use. Indirect &
Pre-operative expenses related or attributable to the Capital works up
to commencement of commercial production are added to the cost of fixed
assets in the year of commencement of commercial Production.
d) Depreciation:
Depreciation is provided on Straight Line Method in respect of assets
situated at Bhilai, Jeedimetla (API), Corporate Office and Vizag Units
and on Written down value Method in respect of assets situated at
Kazipalli Unit, at rates prescribed in Schedule XIV to the Companies
Act, 1956.
e) Impairment of Assets:
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with accounting standard 28 on "Impairment of Assets"
issued by ICAI. An impairment loss is charged to the Profit and loss
account in the period in which, an asset is identified as impaired,
when the carrying value of the asset exceeds it recoverable value. The
impairment loss recognized is reversed if there has been a change in
the estimate of recoverable amount.
f) Inventories:
Inventories are valued at lower of cost or net realizable value on FIFO
basis. Inventories comprises of raw materials, stores, spares &
consumables and finished goods. Cost of Inventories comprises all cost
of purchase, cost of conversion and other cost incurred in bringing the
inventories to their present location and condition.
g) Sales:
Gross Sales comprise of Sale Value net of returns, Internal Transfers &
rebates and is inclusive of excise duty, sales tax and Freight.
h) Revenue recognition:
Revenue is recognized on the transfer of property of goods as per
contractual terms.
i) Borrowing Costs:
Borrowing costs attributable to a qualifying asset are capitalized as a
part of the cost of assets and other borrowing costs are recognized as
an expense in the year of incurrence.
j) Excise duty and Sales Tax:
The liability of excise duty on finished goods lying in stock at the
close of the year is provided for in the accounts and included in the
valuation of Inventory. Sales tax paid is charged to profit and loss
account.
k) Employee Benefits:
i) Contribution to Provident and pension Funds are funded with
appropriate authorities and charged to the profit and loss account.
ii) Liability for gratuity and leave encashment is provided on the
basis of actuarial valuation by Life Insurance Corporation of India
based on the unit credit method. Actuarial gains or losses are
recognized in the Profit and Loss Account
l) Investments:
Long term investments are stated at cost net of provision for
diminution in value other than temporary, if any. Current investments
are carried at lower of cost or fair market value.
m) Research & Development Expenditure:
Capital Expenditure incurred has been disclosed separately in schedule
of fixed assets and revenue expenditure incurred during the Research
phase is charged to the Profit and Loss Account in the year of
incurrence.
n) Foreign Currency Transactions:
Foreign currency transactions are accounted at the exchange rates
prevailing on the date of the transaction. Foreign currency monetary
items outstanding as at the Balance Sheet date are recognized using the
exchange rate as on that date. Gains/Losses arising from the settlement
of such transactions and translation of monetary assets and liabilities
denominated in foreign currencies are accounted in the Profit and Loss
account.
o) Taxes on Income:
Tax on income for the current period is determined on the basis of
taxable income computed in accordance with the provisions of the Income
Tax Act,1961.
Deferred tax is recognized, subject to consideration of prudence, on
timing differences between the accounting income and the taxable income
for the year and quantified using the tax rates and laws enacted or
substantively enacted as on the balance sheet date. Deferred tax assets
are recognized and carried forward to the extent that there is a
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
Mar 31, 2010
A) Accounting Convention and Basis:
The financial statements are prepared under the historical cost
convention as a going concern in accordance with the generally accepted
accounting principles and are based on accrual concept of accounting.
b) Use of Estimates:
The preparation of financial statements in conformity with the
generally accepted accounting principles requires the Management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent liabilities as on
the date of the financial statements and the income and expenditure for
the reporting year. Though these estimates and assumptions are based on
the information available at that point in time, the actual results
could differ from these estimates.
c) Fixed Assets and Capital Work-in-Progress:
Fixed assets are stated at cost (net of Cenvat credit & Vat) less
accumulated depreciation and inclusive of all costs including financial
expenses incurred till the asset is put to use. Indirect &
Pre-operative expenses related or attributable to the Capital works up
to commencement of commercial production are added to the cost of fixed
assets in the year of commencement of commercial Production.
d) Depreciation:
Depreciation is provided on Straight Line Method in respect of assets
situated at Bhilai, Jeedimetla (API), Corporate Office and Vizag Units
and on Written down value Method in respect of assets situated at
Kazipalli Unit, at rates prescribed in Schedule XIV to the Companies
Act, 1956.
e) Impairment of Assets:
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordances with accounting standard 28 on "Impairment of Assets"
issued by ICAI. An impairment loss is charged to the Profit and loss
account in the period in which, an asset is identified as impaired,
when the carrying value of the asset exceeds it recoverable value. The
impairment loss recognized is reversed if there has been a change in
the estimate of recoverable amount.
f) Inventories:
Inventories are valued at lower of cost or net realizable value on FIFO
basis. Inventories comprises of raw materials, stores, spares &
consumables and finished goods. Cost of Inventories comprises all cost
of purchase, cost of conversion and other cost incurred in bringing the
inventories to their present location and condition.
g) Sales:
Gross Sales comprise of Sale Value net of returns, Internal Transfers &
rebates and is inclusive of excise duty, sales tax and Freight.
h) Revenue recognition:
Revenue is recognized on the transfer of property of goods as per
contractual terms.
i) Borrowing Costs:
Borrowing costs attributable to a qualifying asset are capitalized as a
part of the cost of assets and other borrowing costs are recognized as
an expense in the year of incurrence.
j) Excise duty and Sales Tax:
The liability of excise duty on finished goods lying in stock at the
close of the year is provided for in the accounts and included in the
valuation of Inventory. Sales tax paid is charged to profit and loss
account.
k) Employee Benefits:
i) Contribution to Provident and pension Funds are funded with
appropriate authorities and charged to the profit and loss account.
ii) Liability for gratuity and leave encashment is provided on the
basis of actuarial valuation by Life Insurance Corporation of India
based on the unit credit method. Actuarial gains or losses are
recognized in the Profit and Loss Account
l) Investments:
Long term investments are stated at cost net of provision for
diminution in value other than temporary, if any. Current investments
are carried at lower of cost or fair market value.
m) Miscellaneous Expenditure:
Product Development Expenditure is amortized over the estimated period
of benefit.
n) Research & Development Expenditure:
Capital Expenditure incurred has been disclosed separately in schedule
of fixed assets and revenue expenditure incurred during the Research
phase is charged to the Profit and Loss Account in the year of
incurrence.
o) Foreign Currency Transactions:
Foreign currency transactions are accounted at the exchange rates
prevailing on the date of the transaction. Foreign currency monetary
items outstanding as at the Balance Sheet date are recognized using the
exchange rate as on that date. Gains/Losses arising from the settlement
of such transactions and translation of monetary assets and liabilities
denominated in foreign currencies are accounted in the Profit and Loss
account.
p) Taxes on Income:
Tax on income for the current period is determined on the basis of
taxable income computed in accordance with the provisions of the Income
Tax Act,1961.
Deferred tax is recognized, subject to consideration of prudence, on
timing differences between the accounting income and the taxable income
for the year and quantified using the tax rates and laws enacted or
substantively enacted as on the balance sheet date. Deferred tax assets
are recognized and carried forward to the extent that there is a
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
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