Accounting Policies of Banco Products (India) Ltd. Company
Mar 31, 2018
1. CORPORATE INFORMATION
Banco Products (India) Limited is a Public limited company domiciled in India and incorporated under the Indian Companies Act, 1956. Equity shares of the company are listed on two stock exchanges in India. The Company is engaged in manufacturing and selling of Heat Exchangers / Cooling Systems. The company caters to both domestic and international market. The Registered Office of the Company is located at Bil, Near Bhaili Railway Station, Padra Road, Dist. Vadodara , 391410.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation of financial statements
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed under Section 133 of the Act to be read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies ( Indian Accounting Standards) Amendment Rules, 2016. The Companyâs Financial Statements for the year ended 31st March, 2018 comprises of the Balance Sheet, Statement of Profit and Loss, Cash Flow Statement, Statement of Changes in Equity and the Notes to Financial Statements.
For all periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with Indian IGAAP, including accounting standards specified under section 133 of the Companies Act, 2013 read with rule 7 of Companies (Accounts) Rules, 2014. The financial statements for the year ended 31st March 2018 are the first Financial Statements of the Company prepared in accordance with Ind AS based on the permissible options and exemptions available to the Company in terms of Ind AS 101 âFirst time adoption of Indian Accounting Standardsâ in Note No. 38
Reconciliations and descriptions of the effect of the transition have been summarized in Note No. 38
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The financial statements have been prepared on a historical cost convention on the accrual basis except for certain financial Assets and liabilities that are measured at fair value at the end of each reporting period set out below. The Accounting Policy has been applied consistently over all the periods reported in these Financial Statements..
2.2 Significant accounting judgments, estimates and assumptions
In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Any change in these estimates and assumptions will generally be reflected in the financial statements in current period or prospectively, unless they are required to be treated retrospectively under relevant accounting standards.
2.3 Classification of current/non current assets and liabilities
All assets and liabilities are presented as Current or Non Current as per the Companyâs normal operating cycle and the other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle as 12 months for the purpose of Current/Non Current classification of assets/liabilities.
2.4 Property, plant and equipment
Property, Plant and Equipment were carried on historical cost /value transferred as per the scheme of arrangement in the balance sheet as on 31 March 2016 prepared in accordance with Indian IGAAP. The Company has elected to regard those values as deemed cost at the date of the transition i.e 1st April, 2016 as permitted under Ind AS 101.
Property, Plant and Equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost comprises of the purchase price net of Cenvat, Service Tax , Value Added Tax , Goods and Service Tax and any attributable cost of bringing the assets to its working condition for its intended use, including the cost of replacing parts, borrowing costs for long-term construction projects if the recognition criteria are met. Items such as Spare Parts, Standby Equipments and Service Equipments that meet definition of PPE are capitalized at cost.
The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the statement of profit and loss. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.
Capital work-in-progress
Projects under construction wherein assets are not ready for use in the manner as intended by the management are shown as Capital Work-In-Progress.
2.5 Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any.
The management, based on internal technical evaluation, believes that the useful lives as given above best represent the period over which the assets are expected to be used.
Leasehold Land is amortized over the period of lease.
Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.
2.7 Impairment of assets
The carrying amounts of assets are reviewed at balance sheet date to check if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss, if any, recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
2.8 Revenue recognition
(i) The Company recognises revenue in accordance with Ind AS 18. Revenue from the sale of goods is recognised when,
(a) It is probable that the economic benefits associated with the transaction will flow to the entity and the amount revenue can be measured reliably.
(b) The significant risks and rewards of ownership of the goods have been passed to the buyer; and
(c) The entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold.
Revenue represents net invoice value after the deduction of discounts and allowances given and accruals for estimated future rebates and returns. The methodology and assumptions used to estimate the allowances and accruals are monitored and adjusted regularly in the light of contractual and legal obligations, historical trends, past experience. Revenue is disclosed inclusive of excise duty but net of sales return, service tax, VAT, CST and GST.
Income from operations includes revenue earned, as per the terms agreed with the customers, from development of products and assignment of patent rights.
Export benefits available under prevalent schemes are accounted to the extent considered receivable.
(ii) Interest income is accounted on time proportionate basis at contractual rates.
(iii) Dividend income is recognized when the right to receive payment is established.
(iv) Export incentives in respect of export made under duty drawback and other schemes as per the foreign trade policy are recognized on accrual basis and to the extent of certainty of realization of ultimate collection.
2.9 Inventories
(i) Raw materials, stores and spares, packing materials, work-in-process and finished goods are valued at lower of cost and net realizable value. Damaged, unserviceable and inert stocks are suitably depreciated.
(ii) In determining cost of raw materials, stores and spares (except machinery spares which meet the definition of PPE) and packing materials, weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties and taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.
(iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, and an appropriate share of fixed and variable production overheads and other costs incurred in bringing the inventories to their present location and condition.
2.10 Financial instruments
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument.
a. Financial assets
(i) Initial recognition and measurement
The Company recognizes financial assets when it becomes a party to the contractual provisions of the instrument. All financial assets are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition of financial assets, that are not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way trade of financial assets are accounted for at trade date.
(ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
- Financial assets at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
After initial measurement, debt instruments at amortised cost are subsequently measured at amortised cost using the effective interest rate method, less impairment, if any.
- Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model.
- Financial assets at fair value through profit or loss
Financial assets which are not classified in any of the above categories are subsequently fair valued through profit or loss.
- Investment in Subsidiaries
Investment in subsidiaries is carried at cost in the financial statements.
(iii) Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the Companyâs Balance Sheet) when any of the following occurs:
i. The contractual rights to cash flows from the financial asset expires;
ii. The Company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;
iii. The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a âpassthroughâ arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);
iv. The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.
b. Financial liabilities
(i) Initial recognition and measurement
The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts. Financial liabilities are classified, at initial recognition, at fair value through profit and loss or as those measured at amortised cost.
(ii) Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit and loss include financial liabilities held for trading.
The Company has not designated any financial liabilities upon initial recognition at fair value through profit and loss.
Financial liabilities measured at amortised cost
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
c. Fair value
The company measures financial instruments at fair value in accordance with the accounting policies mentioned above. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for asset or liability or
- In the absence of principal market, in the most advantageous market for the assets or liability
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy that categorizes into three levels, described as follows, the inputs to valuation techniques used to measure value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).
Level 1 â quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 â inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3 â inputs that are unobservable for the asset or liability
For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period and discloses the same.
2.11 Foreign exchange transactions
Transactions in foreign currencies are initially recorded by the Company at the rate of exchange prevailing on the date of the transaction. Monetary assets and monetary liabilities denominated in foreign currencies remaining unsettled at the end of the year are converted at the exchange rate prevailing on the reporting date.
Differences arising on settlement or conversion of monetary items are recognised in statement of profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction.
2.12 Trade receivable
Trade receivable is stated after writing off debts considered as bad. Adequate provision is made for debts considered as doubtful. Discounts due yet to be quantified at the customer level are included under the head other Current Liabilities.
2.13 Borrowing costs
(i) Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
(ii) Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized. All other borrowing costs are expensed in the period they occur.
2.14 Provisions, contingent liabilities and contingent assets
a. Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit and loss.
b. Contingent liabilities
Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by the future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
c. Contingent assets
Contingent Assets are not recognised in the financial statements. Contingent Assets if any, are disclosed in the notes to the financial statements.
2.15 Taxes
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.
Current tax
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Taxable profit differs from âprofit before taxâ as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates that have been enacted by the end of reporting period for the amounts expected to be recovered from or paid to the taxation authorities.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit under Income Tax Act, 1961.
Deferred tax liabilities are generally recognized for all taxable temporary differences. However, in case of temporary differences that arise from initial recognition of assets or liabilities in a transaction (other than business combination) that affect neither the taxable profit nor the accounting profit, deferred tax liabilities are not recognized. Deferred tax assets are generally recognized for all deductible temporary differences to the extent it is probable that taxable profits will be available against which those deductible temporary difference can be utilized. In case of temporary differences that arise from initial recognition of assets or liabilities in a transaction (other than business combination) that affect neither the taxable profit nor the accounting profit, deferred tax assets are not recognized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefits of part or all of such deferred tax assets to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Presentation of current and deferred tax
Current and deferred tax are recognized as income or an expense in the Statement of Profit and Loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax income/ expense are recognized in other comprehensive income.
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 settle the liability simultaneously. In case of deferred tax assets and deferred tax liabilities, the same are offset if the Company has a legally enforceable right to set off corresponding current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the Company.
2.16 Research and development
(i) All revenue expenses related to research and development including expenses in relation to development of product/processes which does not meet the criteria for recognition as an intangible Assets , are charged to the statement of profit and loss in the year in which it is incurred.
(ii) Items of property, plant and equipment and acquired Intangible assets utilized for Research and Development are capitalized and depreciated in accordance with the policies stated for Property, Plant and Equipment and Intangible Assets.
2.17 Employees benefits
(i) Provident fund is a defined contribution scheme and the contribution as required by the statute paid to government provident fund and it is charged to the statement of profit and loss.
(ii) Gratuity liability is a defined benefit obligation and is funded through a gratuity fund administered by trustees and managed by the Life Insurance Corporation of India. The Company accounts for liability for future gratuity benefits based on actuarial valuation carried out as at the end of each financial year, using the projected unit credit method. Actuarial gain and/or losses are recognised in the statement of other comprehensive income.
(iii) The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation carried out as at the end of each financial year, using the projected unit credit method. Actuarial gain and/or losses are recognised in the statement of profit and loss.
2.18 Cash and cash equivalents
Cash and cash equivalents for the purpose of cash flow statement comprise cash and cheques in hand, bank balances, demand deposits with banks and other short term highly liquid investments where the original maturity is three months or less.
2.19 Earnings per share
Basic earnings per equity share are computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
2.20 Lease accounting
Assets given on operating lease
The Company has given certain properties to a company on an operating lease basis. Lease rental income is accounted on accrual basis in accordance with the lease agreement. Assets given on operating leases are included in Property, Plant and Equipment.
2.21 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The Chief Operating Decision Maker (CODM) is responsible for allocating resources and assessing performance of the operating segments of the Company.
Mar 31, 2017
1.1 Basis of accounting
The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (âIndian GAAPâ) to comply with the Accounting standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013(âthe 2013 Actâ)/Companies Act, 1956 (âthe 1956 Actâ) to the extent applicable. The Financial Statements have been prepared on accrual basis under the historical cost convention except for categories of fixed assets i.e. land which is carried at revalued amounts. The accounting policies adopted in the preparation of the Financial Statements are consistent with those followed in the previous year.
1.2 Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements and reported amounts of Revenue and expenses during the reporting period. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Actual results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known/materialize.
1.3 Classification of Current/Non Current Assets and Liabilites
All other assets and liabilities are presented as Current or Non Current as per the Companyâs normal operating cycle and the other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle as 12 months for the purpose of Current/Non Current classification of assets/liabilities.
1.4 Fixed assets
(i) Tangible fixed assets
Tangible fixed assets are carried at the cost of acquisition or construction, less accumulated depreciation/ accumulated impairment losses if any. Acquisition cost of fixed assets comprises of its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use. Expenses directly attributable to new manufacturing facility during its construction period are capitalized. Profit or Loss on disposal of tangible assets is recognised in the statement of profit and loss.
(ii) Intangible fixed assets
Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Acquisition cost of intangible fixed assets comprises of the purchase price and other non-refundable taxes or levies and any attributable cost of bringing the assets to its working condition for its intended use.
(iii) Capital work in progress and capital advances
Cost of Assets not ready for intended use, as on the balance sheet date, is shown as capital work in progress. Advances given towards acquisition of fixed assets outstanding at each balance sheet date are disclosed under long term loans and advances.
(iv) As per revised AS-10 (property, plant and equipments) machinery spares included in stores and spares has been segregated and transferred to capital work in progress as on 31st March 2017.
1.5 Depreciation and amortization
Depreciation on plant and machinery (except electrical installations), computers, laboratory equipmentâs, machine tools and effluent tmreatment plant purchased on or after 1st October, 1982 has been provided on straight line basis and on other assets on written down value basis over the useful lives of assets as prescribe in Schedule II of the Companies Act, 2013. Individual items of fixed assets costing up to Rs.5,000 are fully depreciated in the year of purchase.
Leasehold land and leasehold improvement are amortized over the primary period of lease.
Intangible assets are amortised on a straight line basis over a period of five years. Purchase cost, user license fees and consultancy fees for major software are amortized over the useful lives of assets as specified in schedule II of the Companies Act, 2013.
1.6 Impairment of assets
The carrying amounts of assets are reviewed at balance sheet date to check if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss, if any, recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
1.7 Revenue recognition
(i) Sale of products is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. The amount recognized as sales is exclusive of net of returns and discounts excise duty, sales tax/ VAT and other charges. Sales are stated gross of excise duty as well as net of excise duty (on goods manufactured), excise duty being the amount included in the amount of gross turnover. The excise duty related to the difference between the closing stock and opening stock is recognized separately as part of changes in inventories of finished goods and work-in- progress.
(ii) Interest income is accounted on time proportionate basis at contractual rates.
(iii) Dividend income is recognized when the right to receive payment is established.
(iv) Export incentives in respect of export made under duty drawback and other schemes as per the foreign trade policy are recognized on accrual basis and to the extent of certainty of realization of ultimate collection.
1.8 Inventories
(i) Raw materials, stores and spares, packing materials, work-in-process and finished goods are valued at lower of cost and net realizable value. Damaged, unserviceable and inert stocks are suitably depreciated.
(ii) In determining cost of raw materials, stores and spares (except machinery spares which as per revised accounting standard AS-10 property, plant and equipments, machinery spares included in stores and spares has been segregated and transferred to capital work in progress as on 31st March 2017) and packing materials weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties and taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.
(iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads and excise duty as applicable on the finished goods and other costs incurred in bringing the inventories to their present location and condition.
1.9 Investments
Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.
1.10 Transactions in foreign currency
(i) Initial recognition:
Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss.
(ii) Measurement of foreign currency items at the balance sheet date:
Foreign currency monetary items of the Company are restated at the closing exchange rates. Nonmonetary items are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising out of these translations are recognized in the statement of profit and loss.
1.11 Trade receivable
Trade receivable is stated after writing off debts considered as bad. Adequate provision is made for debts considered as doubtful. Discounts due yet to be quantified at the customer level are included under the head other Current Liabilities.
1.12 Borrowing costs
(i) Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
(ii) Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized. All other borrowing costs are expensed in the period they occur.
1.13 Provisions, contingent liabilities and contingent assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent liabilities which are not recognized are disclosed by way of notes. Contingent assets are neither recognized nor disclosed in the financial statements.
1.14 Taxes on Income
(i) Tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period).
(ii) The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date.
(iii) Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed at each Balance Sheet date to reassess realisation.
1.15 Research and development
(i) Research and Development expenditure of a revenue nature is expensed out and shown separately as research and development expenses under the respective heads of account in the year in which it is incurred.
(ii) Fixed assets utilized for research and development are capitalized and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets
1.16 Employees benefits
(i) Provident fund is a defined contribution scheme and the contribution as required by the statute paid to government provident fund and it is charged to the statement of profit and loss.
(ii) Gratuity liability is a defined benefit obligation and is funded through a gratuity fund administered by trustees and managed by the Life Insurance Corporation of India. The Company accounts for liability for future gratuity benefits based on actuarial valuation carried out as at the end of each financial year, using the projected unit credit method.
(iii) The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation carried out as at the end of each financial year, using the projected unit credit method.
(iv) Actuarial gain and/or losses are recognised in the statement of profit and loss.
1.17 Cash and Cash Equivalents
Cash and cash equivalents for the purpose of cash flow statement comprise cash and cheques in hand, bank balances, demand deposits with banks and other short term highly liquid investments where the original maturity is three months or less.
1.18 Proposed Dividend
The final dividend recommended by the Board of Directors is accounted in the financial year in which it is approved by the Shareholders in the Annual General Meeting.
1.19 Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
1.20 Lease Accounting
Assets given on operating lease:
The Company has provided certain properties to a company on an operating lease basis. Lease rental income is accounted on accrual basis in accordance with the lease agreement. Assets given on operating leases are included in the fixed assets.
Mar 31, 2016
1. CORPORATE INFORMATION
Banco Products (India) Limited is a Public limited company domiciled in India and incorporated under the Indian Companies Act, 1956. Equity shares of the company are listed on two stock exchanges in India. The Company is engaged in manufacturing and selling of radiators. The company caters to both domestic and international market.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of accounting
The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (âIndian GAAPâ) to comply with the Accounting standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013(âthe 2013 Actâ)/Companies Act, 1956 (âthe 1956 Actâ) as applicable. The Financial Statements have been prepared on accrual basis under the historical cost convention except for categories of fixed assets i.e. land which is carried at revalued amounts. The accounting policies adopted in the preparation of the Financial Statements are consistent with those followed in the previous year.
2.2 Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements and reported amounts of Revenue and expenses during the reporting period. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Actual results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known/materialize.
2.3 Classification of Current/Non Current Assets and Liabilities
All other assets and liabilities are presented as Current or Non Current as per the Companyâs normal operating cycle and the other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle as 12 months for the purpose of Current/Non Current classification of assets/liabilities.
2.4 Fixed assets
(i) Tangible fixed assets
Tangible fixed assets are carried at the cost of acquisition or construction, less accumulated depreciation/ accumulated impairment losses if any. Acquisition cost of fixed assets comprises of its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use. Expenses directly attributable to new manufacturing facility during its construction period are capitalized. Profit or Loss on disposal of tangible assets is recognized in the statement of profit and loss.
(ii) Intangible fixed assets
Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Acquisition cost of intangible fixed assets comprises of the purchase price and other non-refundable taxes or levies and any attributable cost of bringing the assets to its working condition for its intended use.
(iii) Capital work in progress and capital advances
Cost of Assets not ready for intended use, as on the balance sheet date, is shown as capital work in progress. Advances given towards acquisition of fixed assets outstanding at each balance sheet date are disclosed as long term loans and advances.
2.5 Depreciation and amortization
Depreciation on plant and machinery (except electrical installations), computers, laboratory equipmentâs, machine tools and effluent treatment plant purchased on or after 1st October, 1982 has been provided on straight line basis and on other assets on written down value basis over the useful lives of assets as prescribed in Schedule
II of the Companies Act, 2013. Individual items of fixed assets costing up to Rs. 5,000 are fully depreciated in the year of purchase.
Leasehold land and leasehold improvement are amortized over the primary period of lease.
Intangible assets are amortized on a straight line basis over a period of five years. Purchase cost, user license fees and consultancy fees for major software are amortized over the useful lives of assets as specified in schedule II of the Companies Act, 2013.
2.6 Impairment of assets
The carrying amounts of assets are reviewed at balance sheet date to check if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss, if any, recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
2.7 Revenue recognition
(i) Sale of products is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. The amount recognized as sales is exclusive of net of returns and discounts excise duty, sales tax/ VAT and other charges. Sales are stated gross of excise duty as well as net of excise duty (on goods manufactured), excise duty being the amount included in the amount of gross turnover. The excise duty related to the difference between the closing stock and opening stock is recognized separately as part of changes in inventories of finished goods and work-in- progress.
(ii) Interest income is accounted on time proportionate basis at contractual rates.
(iii) Dividend income is recognized when the right to receive payment is established.
(iv) Export incentives in respect of export made under duty drawback and other schemes as per the foreign trade policy are recognized on accrual basis and to the extent of certainty of realization of ultimate collection.
2.8 Inventories
(i) Raw materials, stores and spares, packing materials, work-in-process and finished goods are valued at lower of cost and net realizable value. Damaged, unserviceable and inert stocks are suitably depreciated.
(ii) In determining cost of raw materials, stores and spares and packing materials weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties and taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.
(iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads and excise duty as applicable on the finished goods and other costs incurred in bringing the inventories to their present location and condition.
2.9 Investments
Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.
2.10 Transactions in foreign currency
(i) Initial recognition:
Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss.
(ii) Measurement of foreign currency items at the balance sheet date:
Foreign currency monetary items of the Company are restated at the closing exchange rates. Non-monetary items are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising out of these translations are recognized in the statement of profit and loss.
2.11 Trade receivable
Trade receivable is stated after writing off debts considered as bad. Adequate provision is made for debts considered as doubtful. Discounts due yet to be quantified at the customer level are included under the head other Current Liabilities.
2.12 Borrowing costs
(i) Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
(ii) Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized. All other borrowing costs are expensed in the period they occur.
2.13 Provisions, contingent liabilities and contingent assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent liabilities which are not recognized are disclosed by way of notes. Contingent assets are neither recognized nor disclosed in the financial statements.
2.14 Taxes on Income
(i) Tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period).
(ii) The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the Balance Sheet date.
(iii) Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future however, where there is unabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each Balance Sheet date to reassess realization.
2.15 Research and development
(i) Research and Development expenditure of a revenue nature is expensed out and shown separately as research and development expenses under the respective heads of account in the year in which it is incurred.
(ii) Fixed assets utilized for research and development are capitalized and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets
2.16 Employees benefits
(i) Provident fund is a defined contribution scheme and the contribution as required by the statute paid to government provident fund is charged to the statement of profit and loss.
(ii) Gratuity liability is a defined benefit obligation and is funded through a gratuity fund administered by trustees and managed by the Life Insurance Corporation of India. The Company accounts for liability for future gratuity benefits based on actuarial valuation carried out as at the end of each financial year, using the projected unit credit method.
(iii) The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation carried out as at the end of each financial year, using the projected unit credit method.
(iv) Actuarial gain and losses are recognized in the statement of profit and loss.
2.17 Cash and Cash Equivalents
Cash and cash equivalents for the purpose of cash flow statement comprise cash and cheques in hand, bank balances, demand deposits with banks and other short term highly liquid investments where the original maturity is three months or less.
2.18 Proposed Dividend
Dividend recommended by the board of directors is provided for in the accounts, pending approval at Annual General Meeting.
2.19 Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
2.20 Lease Accounting
Assets given on operating lease:
The Company has provided certain properties to a company on an operating lease basis. Lease rental income is accounted on accrual basis in accordance with the lease agreement. Assets given on operating leases are included in the fixed assets.
Mar 31, 2015
1.1 Basis of accounting
i) The financial statements have been prepared under the historical
cost convention (except for certain fixed assets, which have been
revalued) in accordance with the generally accepted accounting
principles (GAAP) to comply with the applicable Accounting Standards as
prescribed under section 133 of the companies act, 2013 (Act) read with
rule 7 of the Companies (Accounts) Rules 2014.
The company generally follows the mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
ii) Use of estimates: The preparation of financial statements in
conformity with generally accepted accounting principles in India
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities on the date of the financial statements and reported
amounts of income and expenses during the period.
2.2 Fixed assets and depreciation/amortization
i) Fixed Assets are stated at cost (net of cenvat/service tax credit
wherever claimed) less accumulated depreciation and impairment, if any,
other than land and building at Bhaili division which are shown at
revalued cost. The cost of assets comprises of purchase price and
directly attributable cost of bringing the assets to its working
condition for its intended use including borrowing cost and incidental
expenditure incurred up to the date the assets are ready for its
intended use.
ii) Depreciation on plant & machinery (except electrical
installations), computers, laboratory equipments, machine tools and
effluent treatment plant purchased on or after 1st October, 1982 has
been provided on straight line basis and on other assets on written
down value basis over the useful lives of assets as specified in
schedule II of the Companies Act, 2013. Individual items of fixed
assets costing upto Rs. 5,000 are fully depreciated in the year of
purchase.
iii) Leasehold land is amortized over the period of lease.
iv) Intangible assets are amortized over a period of five years.
v) Purchase cost and user license fees on software are amortized on
straight line basis over the useful lives of assets as specified in
schedule II of the Companies Act, 2013.
2.3 Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date
to check if there is any indication of impairment based on internal or
external factors. An asset is treated as impaired when the carrying
cost of assets exceeds its recoverable value. An impairment loss is
charged to the statement of profit & loss in the year in which an asset
is identified as impaired. The impairment loss, if any, recognized in
prior accounting period is reversed if there has been a change in the
estimate of recoverable amount.
2.4 Foreign currency transactions
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Monetary items denominated in
foreign currencies at the year-end are translated at the year-end
rates. Any exchange differences arising on settlement/transaction are
dealt with in the statement of profit and loss except those relating to
acquisition of fixed assets, which are adjusted to the cost of the
asset.
2.5 Investments
Non-current Investments are stated at cost. No provision for diminution
in value, if any, has been made as these are long-term investments and
in the opinion of the management any decline is temporary. Current
investments are stated at lower of cost and fair value.
2.6 Inventories
i) Raw materials, stores & spares, packing materials, work-in-process
and finished goods are valued at lower of cost and net realizable
value. Damaged, unserviceable and inert stocks are suitably
depreciated.
ii) In determining cost of raw materials, stores & spares and packing
materials weighted average cost method is used. Cost of inventory
comprises all costs of purchase, duties and taxes other than those
subsequently recoverable from tax authorities.
iii) Cost of finished products and work-in-process include the cost of
raw materials, packing materials, an appropriate share of fixed and
variable production overheads and excise duty as applicable on the
finished goods.
2.7 Retirement benefits
The Company has defined contribution plan for its employee's
retirement benefits comprising of provident fund. The Company
contributes to provident fund for its employees. The Company has
defined benefit plan comprising of gratuity fund and leave encashment
entitlement. The liability for the gratuity fund and leave encashment
has been determined on the basis of an independent actuarial valuation
done at the year-end. Actuarial gains and losses comprise adjustments
and the effects of changes in the actuarial assumptions are recognised
in the statement of profit and loss as income or expense. Contribution
in respect of gratuity is paid to the Life Insurance Corporation of
India (LIC).
2.8 Research and development
i) Capital expenditure related to scientific research is shown
separately under the respective head of fixed assets. In note 45 of the
financial statement.
ii) Revenue expenses including depreciation are charged to the
statement of profit & loss and shown separately as research and
development expenses in note 45 of the financial statement.
2.9 Revenue Recognition
i) Sale of products are recognized only when it can be reliably
measured and it is reasonable to expect ultimate collection. Sales are
net of returns and discounts and exclude value added tax, excise duty
and other charges.
ii) Interest income is accounted on accrual basis/time proportionate
basis at contractual rates
iii) Divided income is recognized when the company's right to receive
dividend is established.
2.10 Provision for current and deferred tax
i) Provision for current tax is calculated after taking into
consideration the deductions allowable under the provisions of the
Income-tax Act, 1961.
ii) Deferred tax resulting from 'timing difference' between book
and taxable profit is accounted by using the tax rate that have been
enacted or substantively enacted as on the balance sheet date. The
deferred tax liability is provided in the statement of profit and loss.
Deferred tax assets are recognised only if there is reasonable
certainty that the assets can be realized in future.
2.11 Borrowing costs
Borrowing costs attributable to the acquisition or construction of a
qualifying asset is capitalized as part of the cost of the asset. Other
borrowing cost is recognized as an expense in the period in which they
are incurred.
2.12 Export Incentives
Export incentives in respect of export made under duty drawback scheme
as per the import export policy is recognised on accrual basis and to
the extent of certainty of realization of ultimate collection.
2.13 Provisions, contingent liabilities and contingent assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
event and it is probable that there will be an outflow of resources.
Contingent Liabilities which are not recognised are disclosed by way of
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
2.14 Sundry debtors
Sundry debtors are stated after writing off debts considered as bad.
Provision is made for debts considered as doubtful, if any. Discounts
due yet to be quantified at the customer level are included under the
head "Current Liabilities and provisions'.
2.15 Earning per share
The basic and diluted earning per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
2.16 Proposed dividend
Dividend recommended by the board of directors is provided for in the
accounts, pending approval at annual general meeting.
2.17 Lease accounting
Lease rental income is accounted on accrual basis in accordance with
the lease agreement.
Mar 31, 2014
2.1 Basis of accounting
i) The financial statements have been prepared under the historical
cost convention (except for certain fixed assets, which have been
revalued) in accordance with the generally accepted accounting
principles to comply with the applicable Accounting Standards as
prescribed under the Companies (Accounting Standards) Rules, 2006 and
the relevant provisions of the Companies Act, 1956.
The Company generally follows the mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
ii) Use of estimates: The preparation of financial statements in
conformity with generally accepted accounting principles in India
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities on the date of the financial statements and reported
amounts of income and expenses during the period.
2.2 Fixed assets and depreciation/amortization
i) Fixed Assets are stated at cost (net of cenvat/service tax credit
wherever claimed) less accumulated depreciation and impairment, if any,
other than land and building at Bhaili division which are shown at
revalued cost. The cost of assets comprises of purchase price and
directly attributable cost of bringing the assets to its working
condition for its intended use including borrowing cost and incidental
expenditure incurred up to the date the assets are ready for its
intended use.
ii) Depreciation on plant & machinery (except electrical
installations), computers, laboratory equipments, machine tools and
effluent treatment plant purchased on or after 1st October, 1982 has
been provided on straight line basis and on other assets on written
down value basis at the rates specified in schedule XIV of the
Companies Act, 1956. Individual items of fixed assets costing upto Rs.
5,000 are fully depreciated in the year of purchase.
iii) Leasehold land is amortized over the period of lease.
iv) Purchase cost and user license fees on software are amortized on
straight line basis on rates of computer.
2.3 Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date
to check if there is any indication of impairment based on internal or
external factors. An asset is treated as impaired when the carrying
cost of assets exceeds its recoverable value. An impairment loss is
charged to the statement of profit & loss in the year in which an asset
is identified as impaired. The impairment loss, if any, recognized in
prior accounting period is reversed if there has been a change in the
estimate of recoverable amount.
2.4 Foreign currency transactions
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Monetary items denominated in
foreign currencies at the year-end are translated at the year-end
rates. Any exchange differences arising on settlement/transaction are
dealt with in the statement of profit and loss except those relating to
acquisition of fixed assets, which are adjusted to the cost of the
asset.
2.5 Investments
Non-current Investments are stated at cost. No provision for diminution
in value, if any, has been made as these are long-term investments and
in the opinion of the management any decline is temporary. Current
investments are stated at lower of cost and fair value.
2.6 Inventories
i) Raw materials, stores & spares, packing materials, work-in-process
and finished goods are valued at lower of cost and net realizable
value. Damaged, unserviceable and inert stocks are suitably
depreciated.
ii) In determining cost of raw materials, stores & spares and packing
materials weighted average cost method is used. Cost of inventory
comprises all costs of purchase, duties and taxes other than those
subsequently recoverable from tax authorities.
iii) Cost of finished products and work-in-process include the cost of
raw materials, packing materials, an appropriate share of fixed and
variable production overheads and excise duty as applicable on the
finished goods.
2.7 Retirement benefits
The Company has defined contribution plan for its employee's retirement
benefits comprising of provident fund. The Company contributes to
provident fund for its employees. The Company has defined benefit plan
comprising of gratuity fund and leave encashment entitlement. The
liability for the gratuity fund and leave encashment has been
determined on the basis of an independent actuarial valuation done at
the year-end. Actuarial gains and losses comprise adjustments and the
effects of changes in the actuarial assumptions are recognised in the
statement of profit and loss as income or expense. Contribution in
respect of gratuity is paid to the Life Insurance Corporation of India
(LIC).
2.8 Research and development
i) Capital expenditure related to scientific research is shown
separately under the respective head of fixed assets.
ii) Revenue expenses including depreciation are charged to the
statement of profit & loss.
2.9 Revenue Recognition
i) Sale of products are recognised only when it can be reliably
measured and it is reasonable to expect ultimate collection. Sales are
net of returns and discounts and exclude sales tax, excise duty and
other charges.
ii) Interest income is accounted on accrual basis/time proportionate
basis at contractual rates
iii) Divided income is considered on receipt basis.
2.10 Provision for current and deferred tax
i) Provision for current tax is calculated after taking into
consideration the deduction allowable under the provisions of the
Income-tax Act, 1961.
ii) Deferred tax resulting from 'timing difference' between book and
taxable profit is accounted by using the tax rate that have been
enacted or substantively enacted as on the balance sheet date. The
deferred tax liability is provided in the statement of profit and loss.
Deferred tax assets are recognised only if there is reasonable
certainty that the assets can be realized in future.
2.11 Borrowing costs
Borrowing costs attributable to the acquisition or construction of a
qualifying asset is capitalized as part of the cost of the asset. Other
borrowing cost is recognized as an expense in the period in which they
are incurred.
2.12 Export Incentives
Export incentives in respect of export made under duty drawback scheme
as per the import export policy is recognised on accrual basis and to
the extent of certainty of realization of ultimate collection.
2.13 Provisions, contingent liabilities and contingent assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
event and it is probable that there will be an outflow of resources.
Contingent Liabilities which are not recognised are disclosed by way of
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
2.14 Sundry debtors
Sundry debtors are stated after writing off debts considered as bad.
Provision is made for debts considered as doubtful, if any. Discounts
due yet to be quantified at the customer level are included under the
head "Current Liabilities and provisions".
2.15 Earning per share
The basic and diluted earning per share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
2.16 Proposed dividend
Dividend recommended by the board of directors is provided for in the
accounts, pending approval at annual general meeting.
2.17 Lease accounting
Lease rental income is accounted on accrual basis in accordance with
the lease agreement.
Mar 31, 2013
A. Basis of accounting
i) The financial statements have been prepared under the historical
cost convention (except for certain fixed assets, which have been
revalued) in accordance with the generally accepted accounting
principles to comply with the applicable Accounting Standards as
prescribed under the Companies (Accounting Standards) Rules, 2006 and
the relevant provisions of the Companies Act, 1956.
The Company generally follows the mercantile system of accounting and
recognises significant items of income and expenditure on accrual
basis.
ii) Use of estimates: The preparation of financial statements in
conformity with generally accepted accounting principles in India
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities on the date of the financial statements and reported
amounts of income and expenses during the period.
b. Fixed assets and depreciation/amortization
i) Fixed Assets are stated at cost (net of cenvat/service tax credit
wherever claimed) less accumulated depreciation and impairment, if any,
other than land and building at Bhaili division which are shown at
revalued cost. The cost of assets comprises of purchase price and
directly attributable cost of bringing the assets to its working
condition for its intended use including borrowing cost and incidental
expenditure incurred up to the date the assets are ready for its
intended use.
ii) Depreciation on plant & machinery (except electrical
installations), computers, laboratory equipments, machine tools and
effluent treatment plant purchased on or after 1st October, 1982 has
been provided on straight line basis and on other assets on written
down value basis at the rates specified in schedule XIV of the
Companies Act, 1956. Individual items of fixed assets costing upto Rs.
5,000 are fully depreciated in the year of purchase.
iii) Leasehold land is amortized over the period of lease.
iv) Purchase cost and user license fees on software are amortized on
straight line basis on rates of computer.
c. Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal or external
factors. An asset is treated as impaired when the carrying cost of
assets exceeds its recoverable value. An impairment loss is charged to
the profit & loss in the year in which an asset is identified as
impaired. The impairment loss, if any, recognised in prior accounting
period is reversed if there has been a change in the estimate of
recoverable amount.
d. Foreign currency transactions
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Monetary items denominated in
foreign currencies at the year-end are translated at the year-end
rates. Any exchange differences arising on settlement/transaction are
dealt with in the statement of profit and loss except those relating to
acquisition of fixed assets, which are adjusted to the cost of the
asset.
e. Investments
Non-current Investments are stated at cost. No provision for diminution
in value, if any, has been made as these are long-term investments and
in the opinion of the management any decline is temporary. Current
investments are stated at lower of cost and fair value.
f. Inventories
i) Raw materials, stores & spares, packing materials, work-in-process
and finished goods are valued at lower of cost and net realisable
value. Damaged, unserviceable and inert stocks are suitably
depreciated.
ii) In determining cost of raw materials, stores & spares and packing
materials weighted average cost method is used. Cost of inventory
comprises all costs of purchase, duties and taxes other than those
subsequently recoverable from tax authorities.
iii) Cost of finished products and work-in-process include the cost of
raw materials, packing materials, an appropriate share of fixed and
variable production overheads and excise duty as applicable on the
finished goods. g. Retirement benefits
The Company has defined contribution plan for its employee''s retirement
benefits comprising of provident fund. The Company contributes to
provident fund for its employees. The Company has defined benefit plan
comprising of gratuity fund and leave encashment entitlement. The
liability for the gratuity fund and leave encashment has been
determined on the basis of an independent actuarial valuation done at
the year-end. Actuarial gains and losses comprise adjustments and the
effects of changes in the actuarial assumptions are recognised in the
statement of profit and loss as income or expense. Contribution in
respect of gratuity is paid to the Life Insurance Corporation of India
(LIC).
h. Research and development
i) Capital expenditure related to scientific research is shown
separately under the respective head of fixed
assets. ii) Revenue expenses including depreciation are charged to the
statement of profit and loss. i. Sales
Revenue from sale of goods is recognised only when it can be reliably
measured and it is reasonable to expect ultimate collection. Sales are
net of returns and discounts and exclude sales tax, excise duty and
other charges.
j. Provision for current and deferred tax
i) Provision for current tax is calculated after taking into
consideration the deduction allowable under the provisions of the
Income-tax Act, 1961.
ii) Deferred tax resulting from ''timing difference'' between book and
taxable profit is accounted by using the tax rate that have been
enacted or substantively enacted as on the balance sheet date. The
deferred tax liability is provided in the statement of profit and loss.
Deferred tax assets are recognised only if there is reasonable
certainty that the assets can be realised in future.
k. Borrowing costs
Borrowing costs attributable to the acquisition or construction of a
qualifying asset is capitalised as part of the cost of the asset. Other
borrowing cost is recognised as an expense in the period in which they
are incurred.
I. Dividend
Dividend income is considered on receipt basis
m. Provisions, contingent liabilities and contingent assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
event and it is probable that there will be an outflow of resources.
Contingent Liabilities which are not recognised are disclosed by way of
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
n. Sundry debtors
Sundry debtors are stated after writing off debts considered as bad.
Provision is made for debts considered as doubtful, if any. Discounts
due yet to be quantified at the customer level are included under the
head "Current Liabilities and provisions".
o. Earning per share
The basic and diluted earning per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
p. Proposed dividend
Dividend recommended by The Board of Directors is provided for in the
accounts, pending approval at annual general meeting.
q. Lease accounting
Lease rental income is accounted on accrual basis in accordance with
the lease agreement.
Mar 31, 2012
A. Fixed Assets and Depreciation / Amortisation
i) Fixed Assets are stated at cost (net of cenvat /service tax credit
wherever claimed) less accumulated depreciation and impairment, if any,
other than land and building at Bhaili division which are shown at
revalued cost. The cost of assets comprises of purchase price and
directly attributable cost of bringing the assets to its working
condition for its intended use including borrowing cost and incidental
expenditure incurred up to the date the assets are ready for its
intended use.
ii) Depreciation on plant & machinery (except electrical
installations), computers, laboratory equipments, machine tools and
effluent treatment plant purchased on or after 1st October, 1982 has
been provided on straight line basis and on other assets on written
down value basis at the rates specified in schedule XIV of the
Companies Act, 1956. Individual items of fixed assets costing up to Rs
5,000 are fully depreciated in the year of purchase.
iii) Technical know-how recognised as intangible asset was stated at
the consideration paid for acquisition and amortised on straight-line
basis at plant & machinery rates.
b. Impairment of Assets
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal or external
factors. An asset is treated as impaired when the carrying cost of
assets exceeds its recoverable value. An impairment loss is charged to
the profit & loss account in the year in which an asset is identified
as impaired. The impairment loss, if any, recognised in prior
accounting period is reversed if there has been a change in the
estimate of recoverable amount.
c. Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Monetary items denominated in
foreign currencies at the year-end are translated at the year-end
rates. Any exchange differences arising on settlement/transaction are
dealt with in the Statement of Profit and Loss except those relating to
acquisition of fixed assets, which are adjusted to the cost of the
asset.
d. Investments
Non-current Investments are stated at cost. No provision for diminution
in value, if any, has been made as these are long-term investments and
in the opinion of the management any decline is temporary. Current
Investments are stated at lower of cost and fair value.
e. Inventories
i) Raw materials, stores & spares, packing materials, work-in-process
and finished goods are valued at lower of cost and net realisable
value. Damaged, unserviceable and inert stocks are suitably
depreciated.
ii) In determining cost of raw materials, stores & spares and packing
materials weighted average cost method is used. Cost of inventory
comprises all costs of purchase, duties and taxes other than those
subsequently recoverable from tax authorities.
iii) Cost of finished products and work-in-process include the cost of
raw materials, packing materials, an appropriate share of fixed and
variable production overheads and excise duty as applicable on the
finished goods.
f. Retirement Benefits
The Company has defined contribution plan for its employee's
retirement benefits comprising of provident fund. The Company
contributes to provident fund for its employees. The Company has
defined benefit plan comprising of gratuity fund and leave encashment
entitlement. The liability for the gratuity fund and leave encashment
has been determined on the basis of an independent actuarial valuation
done at the year-end. Actuarial gains and losses comprise adjustments
and the effect of changes in the actuarial assumptions and are
recognised in the Statement of Profit and Loss as income or expense.
Contribution in respect of gratuity is paid to the Life Insurance
Corporation of India (LIC).
g. Research and Development
i) Capital expenditure related to scientific research is shown
separately under the respective head of fixed assets.
ii) Revenue expenses including depreciation are charged to Statement of
Profit and Loss.
h. Sales
Revenue from sale of goods is recognised only when it can be reliably
measured and it is reasonable to expect ultimate collection. Sales are
net of returns and discounts and exclude sales tax, excise duty and
other charges.
i. Provision for Current and Deferred Tax
i) Provision for current tax is calculated after taking into
consideration the deduction allowable under the provisions of the
Income-tax Act, 1961.
ii) Deferred tax resulting from âÃÃtiming difference' between book
and taxable profit is accounted by using the tax rate that have been
enacted or substantively enacted as on the balance sheet date. The
deferred tax liability is provided in the Statement of Profit and Loss.
Deferred tax assets are recognised only if there is reasonable
certainty that the assets can be realised in future.
j. Borrowing Costs
Borrowing costs attributable to the acquisition or construction of a
qualifying asset is capitalised as part of the cost of the asset. Other
borrowing cost is recognised as an expense in the period in which they
are incurred,
k. Dividend
Dividend income is considered on receipt basis
I. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
event and it is probable that there will be an outflow of resources.
Contingent Liabilities which are not recognised are disclosed by way of
notes. Contingent assets are neither recognised nor disclosed in the
financial statements
m. Trade Receivables
Trade Receivables are stated after writing off debts considered as bad.
Provision is made for debts considered as doubtful, if any. Discounts
due yet to be quantified at the customer level are included under the
head Provisions,
n. Earning Per Share
The Basic and Diluted Earning Per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
o. Proposed Dividend
Dividend recommended by The Board of Directors is provided for in the
accounts, pending approval at annual general meeting.
Mar 31, 2011
1) Basis of Accounting
i) The financial statements have been prepared under the historical
cost convention (except for certain fixed assets, which have been
revalued) in accordance with the generally accepted accounting
principles to comply with the applicable Accounting Standards as
prescribed under the Companies (Accounting Standards) Rules, 2006 and
the relevant provisions of the Companies Act, 1956.
ii) The Company generally follows the mercantile system of accounting
and recognizes significant items of income and expenditure on accrual
basis.
iii) Use of estimates: The preparation of financial statements in
conformity with generally accepted accounting principles in India
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements.
2) Fixed Assets and Depreciation
i) Fixed Assets are stated at cost (net of cenvat/service tax credit
wherever claimed) less accumulated depreciation and impairment, if any,
other than land and building at Bhaili division which are shown at
revalued cost. The cost of assets comprises of purchase price and
directly attributable cost of bringing the assets to its working
condition for its intended use including borrowing cost and incidental
expenditure incurred up to the date the assets are ready for its
intended use.
ii) Depreciation on plant-,& machinery except electrical installations,
computers, laboratory equipments, machine tools and effluent treatment
plant purchased on or after 1st October, 1982 has been provided on
straight line basis and on other assets on written down value basis at
the rates specified in schedule XIV of the Companies Act, 1956.
Individual items of fixed assets costing upto Rs. 5,000 are fully
depreciated in the year of purchase.
iii) Technical know-how recognized as intangible asset is stated at the
consideration paid for acquisition and amortised on straight-line basis
at plant & machinery rates.
3) Impairment of Assets
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal or external
factors. An asset is treated as impaired when the carrying cost of
assets exceeds its recoverable value. An impairment loss is charged to
the profit & loss account in the year in which an asset is identified
as impaired. The impairment loss, if any, recognized in prior
accounting period is reversed if there has been a change in the
estimate of recoverable amount.
4) Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Monetary items denominated in
foreign currencies at the year-end are translated at the year-end
rates. Any exchange differences arising on settlement/transaction are
dealt with in the profit and loss account except those relating to
acquisition of fixed assets, which are adjusted to the cost of the
asset.
5) Investments
Investments are stated at cost. No provision for diminution in value,
if any, has been made as these are long-term investments and in the
opinion of the management any decline is temporary.
6) Inventories
i) Raw materials, stores & spares, packing materials, work-in-process
and finished goods are valued at lower of cost and net realizable
value. Damaged, unserviceable and inert stocks are suitably
depreciated.
ii) In determining cost of raw materials, stores & spares and packing
materials weighted average cost method is used. Cost of inventory
comprises all costs of purchase, duties and taxes other than those
subsequently recoverable from tax authorities.
iii) Cost of finished products and work-in-process include the cost of
raw materials, packing materials, an appropriate share of fixed and
variable production overheads and excise duty as applicable on the
finished goods.
7) Retirement Benefits
The Company has defined contribution plan for its employees' retirement
benefits comprising of provident fund. The Company contributes to
provident fund for its employees. The Company has defined benefit plan
comprising of gratuity fund and leave encashment entitlement. The
liability for the gratuity fund and leave encashment has been
determined on the basis of an independent actuarial valuation done at
the year-end. Actuarial gains and losses comprise adjustments and the
effect of changes in the actuarial assumptions and are recognised in
the profit and loss account as income or expense. Contribution in
respect of gratuity is paid to the Life Insurance Corporation of India
(LIC).
8) Research and Development
i) Capital expenditure is shown separately under the respective head of
fixed assets. ii) Revenue expenses including depreciation are charged
to profit & loss account.
9) Sales
Revenue from sale of goods is recognised only when it can be reliably
measured and it is reasonable to expect ultimate collection. Sales are
net of returns and discounts and exclude sales tax, excise duty and
other charges.
10) Provision for Current and Deferred Tax
i) Provision for current tax is made after taking into consideration
the deduction allowable under the provisions of the Income-tax Act,
1961.
ii) Deferred tax resulting from 'timing difference' between book and
taxable profit is accounted by using the tax rate that have been
enacted or substantively enacted as on the balance sheet date. The
deferred tax liability is provided in the profit and loss account.
Deferred tax assets are recognised only if there is reasonable
certainty that the assets can be realized in future.
11) Borrowing Costs
Borrowing costs attributable to the acquisition or construction of a
qualifying asset is capitalized as part of the cost of the asset. Other
borrowing cost is recognized as an expense in the period in which they
are incurred.
12) Dividend
Dividend income is considered on receipt basis
13) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
event and it is probable that there will be an outflow of resources.
Contingent Liabilities which are not recognised are disclosed by way of
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
14) Sundry Debtors
Sundry debtors are stated after writing off debts considered as bad.
Provision is made for debts considered as doubtful, if any. Discounts
due yet to be quantified at the customer level are included under the
head "Current Liabilities and provisions'.
15) Earning Per Share
The basic and diluted earning per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
16) Proposed Dividend
Dividend recommended by The Board of Directors is provided for in the
accounts, pending approval at annual general meeting.
Mar 31, 2010
1) Basis of Accounting:
i) The financial statements have been prepared under the historical
cost convention (except for certain fixed assets, which have been
revalued) in accordance with the generally accepted accounting
principles to comply with the applicable Accounting Standards as
prescribed under the Companies (Accounting Standards) Rules, 2006 and
the relevant provisions of the Companies Act, 1956.
ii) The Company generally follows the mercantile system of accounting
and recognizes significant items of income and expenditure on accrual
basis.
iii) Use of Estimates : The preparation of financial statements in
conformity with generally accepted accounting principles in India
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements.
2) Fixed Assets and Depreciation:
i) Fixed Assets are stated at cost (net of cenvat/service tax credit
wherever claimed) less accumulated depreciation less impairment, if
any, other than land and building at Bhaili division which are shown at
revalued cost. The cost of assets comprises of purchase price and
directly attributable cost of bringing the assets to its working
condition for its intended use including borrowing cost and incidental
expenditure incurred up to the date the assets are ready for its
intended use.
ii) Depreciation on plant & machinery (except electrical
installations), computers, laboratory equipments, machine tools and
effluent treatment plant purchased on or after 1st October, 1982 has
been provided on straight line basis and on other assets on written
down value basis at the rates specified in schedule XIV of the
Companies Act, 1956. Individual items of fixed assets costing upto Rs.
5,000 are fully depreciated in the year of purchase.
iii) Technical know-how recognized as intangible asset is stated at the
consideration paid for acquisition and amortised on straight-line basis
at plant & machinery rates.
3) Impairment of Assets:
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal or external
factors. An asset is treated as impaired when the carrying cost of
assets exceeds its recoverable value. An impairment loss is charged to
the profit & loss account in the year in which an asset is identified
as impaired. The impairment loss, if any, recognized in prior
accounting period is reversed if there has been a change in the
estimate of recoverable amount.
4) Foreign Currency Transactions:
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Monetary items denominated in
foreign currencies at the year-end are translated at the year-end
rates. Any exchange differences arising on settlement/transaction are
dealt with in the profit and loss account except those relating to
acquisition of fixed assets, which are adjusted to the cost of the
asset.
5) Investments:
Investments are stated at cost. No provision for diminution in value,
if any, has been made as these are long-term investments and in the
opinion of the management any decline is temporary.
6) Inventories:
i) Raw materials, stores & spares and packing materials are valued at
cost. Cost is determined on weighted average basis.
ii) Work-in-process is valued at cost.
iii) Finished products are valued at cost or market value whichever is
lower. Cost includes cost of raw material, packing materials, an
appropriate share of fixed & variable production overheads. Excise
duty applicable thereon is included for valuation purpose.
7) Retirement Benefits:
The Company has defined contribution plan for its employees retirement
benefits comprising of provident fund. The Company contributes to
provident fund for its employees. The Company has defined benefit plan
comprising of gratuity fund and leave encashment entitlement. The
liability for the gratuity fund and leave encashment has been
determined on the basis of an independent actuarial valuation done at
the year-end. Actuarial gains and losses comprise adjustments and the
effect of changes in the actuarial assumptions and are recognised in
the profit and loss account as income or expense. Contribution in
respect of gratuity is paid to the Life Insurance Corporation of India
(LIC).
8) Research and Development:
i) Capital expenditure is shown separately under the respective head of
fixed assets. ii) Revenue expenses including depreciation are charged
to profit & loss account.
9) Sales:
Revenue from sale of goods is recognised only when it can be reliably
measured and it is reasonable to expect ultimate collection. Sales are
net of returns and discounts and exclude sales tax, excise duty and
other charges.
10) Provision for Current and Deferred Tax:
i) Provision for current tax is made after taking into consideration
the deduction allowable under the provisions of the Income-tax Act,
1961.
ii) Deferred tax resulting from timing difference between book and
taxable profit is accounted by using the tax rate that have been
enacted or substantively enacted as on the balance sheet date. The
deferred tax liability is provided in the profit and loss account.
Deferred tax assets are recognised only if there is reasonable
certainty that the assets can be realized in future.
11) Borrowing Costs:
Borrowing costs attributable to the acquisition or construction of a
qualifying asset is capitalized as part of the cost of the asset. Other
borrowing cost is recognized as an expense in the period in which they
are incurred.
12) Dividend:
Dividend income is considered on receipt basis
13) Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
event and it is probable that there will be an outflow of resources.
Contingent Liabilities which are not recognised are disclosed by way of
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
14) Sundry Debtors:
Sundry debtors are stated after making adequate provision for debt
considered doubtful.
15) Earning Per Share:
The basic and diluted earning per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
16) Proposed Dividend:
Dividend recommended by Board of Directors is provided for in the
accounts, pending approval at annual general meeting.
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