Mar 31, 2018
NOTES TO STANDALONE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED MARCH 31, 2018
(All amounts in INR lakhs, unless otherwise stated)
Note 1:
Company Information
Binani Industries Limited ("the Company") is a public limited company domiciled in India and incorporated under the provisions of the Companies Act 1956. The registered office of the Company is located at 37/2, Chinar Park, New Town, Rajarhat Main Road, P.O. Hatiara, Kolkata, West Bengal -700157. The Company is listed on the Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and Calcutta Stock Exchange (CSE).
The financial statements are approved for issue by the Company''s board of directors on May 30, 2018.
Note 2:
Basis of Preparation of Financial Statements Compliance with Indian Accounting Standards
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 and relevant provisions of the Companies Act, 2013 ("the Act"). The policies set out below have been consistently applied during the year presented.
Historical Cost Convention
The financial statements have been prepared under the historical cost convention, as modified by the following: Certain financial assets and financial liabilities (including derivative instruments) at fair value; Defined benefit plans-plan assets that are measured at fair value; and Freehold land included in PPE are measured at fair value
The financial statements are presented in INR, which is also the Company''s functional currency and all amounts are rounded to the nearest Lakhs, unless otherwise stated.
Summary of significant accounting policies
The financial statements have been prepared using the significant accounting policies and measurement basis summarised below. These were used throughout all periods presented in the financial statements, except where the Company has applied certain accounting policies and exemptions upon transition to Ind AS.
2.1 Current versus Non-Current classification
The Company presents assets and liabilities in the balance sheet based on current/non-current classification. An asset is treated as current when it is:
Expected to be realised or intended to be sold or consumed in normal operating cycle
Held primarily for the purpose of trading
Expected to be realised within twelve months after the reporting period, or
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period All other assets are classified as non-current. A liability is current when:
It is expected to be settled in normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the reporting period, or
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The company has identified twelve months as its operating cycle.
2.2 Foreign Currency Initial Recognition
Foreign currency transactions are recorded in the functional currency, by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
Exchange differences
Exchange differences arising on the settlement of monetary items or on reporting such monetary items of Company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise. The gain or loss arising on translation of non-monetary items measured at cost is treated in line with the recognition of the gain or loss on the change in the value of the item (i.e..translation differences on items whose gain or loss is recognised in OCI or statement of profit & loss are also recognised in OCI or statement of profit & loss, respectively).
In respect of foreign exchange differences arising on revaluation or settlement of long term foreign currency monetary items, the Company has availed the option available in the Companies (Accounting Standards) (Second Amendment) Rules 2011, wherein:
Foreign exchange differences on account of depreciable assets are adjusted in the cost of depreciable assets and would be depreciated over the balance life of the assets.
In other cases, foreign exchange differences are accumulated in "Foreign Currency Monetary Item Translation Difference Account" and amortised over the balance period of such long term assets/ liabilities.
An asset or liability is designated as a long term foreign currency monetary item, if the asset or liability is expressed in a foreign currency and has a term of twelve months or more at the date of origination of the asset or the liability, which is determined taking into consideration the terms of the payment /settlement as defined under the respective agreement / memorandum of understanding.
2.3 Fair Value Measurement
The Company discloses fair values of financial instruments measured at amortised cost in the financial statements.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability Or
In the absence of a principal market, in the most advantageous market for the asset or liability
The Company must be able to access the principal or the most advantageous market at the measurement date.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs significant to the fair value measurement as a whole:
Level 1 ?uoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 ?aluation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 ?aluation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. Valuation process and assumption used to measure the fair value of Assets and Liabilities is disclosed.
2.4 Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Amount disclosed as revenue are inclusive of excise duty and net of discounts, returns and value added taxes and amount collected on behalf of third party. The Company recognizes revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met, as described below.
Revenue from Sales of Goods
Revenue from sale of goods is recognized when all the following conditions have been satisfied:
a) The company has transferred to the buyer the significant risks and rewards of the ownership of the goods;
b) The company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
c) The amount of revenue can be measured reliably;
d) It is probable that the economic benefits associated with the transaction will flow to the company; and
e) The cost incurred or to be incurred in respect of the transaction can be measured reliably. Revenue from sales of services
Revenue from sale of services is recognized when all the following conditions have been satisfied:
a) The amount of revenue can be measured reliably;
b) It is probable that the economic benefits associated with the transaction will flow to the entity;
c) The stage of completion of the transaction at the end of the reporting period can be measured reliably; and
d) The costs incurred for the transaction and the costs to complete the transaction can be measured reliably. Other Revenue is recognized as follow:
Finance Income:
Finance income is recognised as it accrues using the Effective Interest Rate (EIR) method. EIR is the rate that exactly discounts the estimated future cash payment or receipts over the expected life of the financial instruments or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. Finance income is included in other income in the profit & Loss Account.
Royalty Income:
Royalties is recognized on an accrual basis in accordance with the substance of the relevant agreement. Dividend
Dividends are recognized in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
2.5 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are included in the cost of that asset. Qualifying asset are asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the statement of profit & loss in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs is reduced to the extent of income arising from temporary parking of funds in fixed deposits and mutual funds.
The capitalisation of borrowing costs is suspended if there are prolonged periods when active development is interrupted. Interest expense for such period has been charged to statement of profit & loss account.
2.6 Property, Plant and Equipment (PPE) Recognition and initial measurement
Freehold land and leasehold land are carried at fair value based on periodic valuation by the external independent valuers. Increase in the carrying amounts arising on revaluation of freehold and leasehold land are recognised, net of tax, in other comprehensive income and accumulated in reserves in shareholder''s equity. To the extent that the reverses show a decrease previously recognised in profit or loss, the increase is first recognised in profit and loss. Decrease that reverses previous increases of the same asset are first recognised in other comprehensive income to the extent of the remaining surplus attributable to the asset; all other decreases are charged to profit or loss. Each year, difference between depreciation based on the revalued carrying amount of the asset charged to profit or loss and depreciation based on the asset''s original cost, net of tax, is reclassified from the revaluation reserve to the retained earnings.
All other items of property, plant and equipment acquired or constructed are initially recognized at cost net of recoverable taxes, duties, trade discounts and rebates, less accumulated depreciation and impairment of loss, if any. The cost of Tangible Assets comprises of its purchase price, borrowing costs and adjustment arising for exchange rate variations attributable to the assets, including any cost directly attributable to bringing the assets to their working condition for their intended use.
Expenditure incurred on assets which are not ready for their intended use comprising direct cost, related incidental expenses and attributable borrowing cost (net of revenues during constructions) are disclosed under Capital Work-in-Progress.
Spare parts are recognised when they meet the definition of property, plant and equipment, otherwise, such items are classified as inventory. Subsequent measurement (depreciation and useful lives)
When significant parts of plant and equipment are required to be replaced at regular intervals, the company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repairs and maintenance costs are recognized in the statement of profit & loss as and when incurred.
Depreciation on property, plant and equipment (except for other Fixed Assets, Office & Transport Equipment which is provided on Written Down Value Method) is provided on the Straight Line Method, computed on the basis of useful life prescribed in Schedule II to the Companies Act, 2013, onapro-rata basis from the date the asset is ready to put to use.
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year and adjusted prospectively, if appropriate. De-recognition
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognized in statement of profit & loss when the asset is derecognized.
2.7 Investment Properties Recognition and initial measurement
Investment properties are properties held to earn rentals or for capital appreciation, or both. Investment properties are measured initially at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognised in statement of profit & loss as incurred.
De-recognition
Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in statement of profit & loss in the period of de-recognition.
Transfers are made to or from investment properties only when there is change in use. Transfer between investment properties, owner occupied properties and inventories do not change the carrying value of the property transferred and they do not change the cost of that property for measurement or disclosure purpose
2.8 Intangible Assets
Recognition and initial measurement
Intangible assets are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price.
The useful lives of intangible assets are assessed to be finite. Intangible assets are amortised over their useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end. The intangibles are amortized on a straight line basis over the estimated useful economic life, not exceeding for a period of 5 Years.
The residual values, useful lives and method of depreciation of are reviewed at the end of each financial year and adjusted prospectively, if appropriate.
Depreciation and Amortisation of the assets commences when the assets are ready for their intended use. Depreciation and amortisation ceases when the net book value of the asset is zero or the asset is no longer in use.
Gains or losses arising from derecognizing of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss at the moment that the asset is derecognised.
2.9 Impairment of Non-Financial Assets
Property, Plant and Equipment and Intangible Assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
For assets excluding goodwill, an assessment is made at each reporting period end or whenever triggering event occurs as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Company makes an estimation of the recoverable amount.
Goodwill is tested annually for impairment:
A previously recognised impairment loss is reversed only if there has been a change in the estimations used to determine the asset''s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, or had no impairment loss been recognised for the asset in prior years.
2.10 Inventories
Traded Goods have been valued at lower of cost and net realisable value. The cost of inventories shall comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
NRV is the estimated selling price in the ordinary course of business less the estimated cost of completion and estimated cost necessary to make the sale.
2.11 Trade Receivable
Trade receivables are amounts due from customers for sale of goods or services performed in the ordinary course of business. Trade receivables are recognized initially at fair value. They are subsequently measured at amortized cost using the effective interest method, net of provision for impairment. The carrying value less impairment provision of trade receivables, are assumed to be approximate to their fair values.
2.12 Cash and Cash Equivalents
Cash and cash equivalents include cash at bank and in hand and deposits held at call with banks.
For the purpose of the cash flows statements, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management. In the balance sheet, bank overdrafts are shown within borrowings in current liabilities.
2.13 Financial Instruments
a) Investments and Other 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. Transaction costs that are directly attributable to the acquisition or issue of financial assets, which are not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.
ii. Subsequent measurement
For purposes of subsequent measurement, the Company classifies its financial assets in the following measurement categories: those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and those measured at amortized cost.
The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.
The Company reclassifies debt investments when and only when its business model for managing those assets changes. Debt Instruments
Subsequent measurement of debt instruments depends on the Company''s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its debt instruments:
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost is recognized in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is included in finance income using the effective interest rate method.
Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss. Interest income from these financial assets is included in other income using the effective interest rate method.
Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss is recognized in profit or loss in the period in which it arises. Interest income from these financial assets is included in other income.
Equity Investments
The Company subsequently measures all equity investments at fair value. Where the Company''s management has elected to present fair value gains and losses for an equity investments, that is not held for trading, in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss. Dividends from such investments are recognised in profit or loss as other income when the Company''s right to receive payments is established. Changes in the fair value of financial assets at fair value through profit or loss are recognised in the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.
Investment in Subsidiaries
Investments in subsidiaries are carried at cost less impairments (if any). However pursuant to a Scheme of Amalgamation approved by the Hon''ble High Court of Calcutta, from 31st March 2014 onwards, the Company shall be stating its Investment in subsidiaries at their fair value and classify the same as "investments available for sale as financial assets".
Extract from para 2.9 of amalgamation scheme of erstwhile Wada Industrial Estate Limited (WIEL) and the Company as a successor to WEIL approved by Hon''ble High Court of Calcutta dated 18th March, 2014:
In accordance with the accounting policies applicable to erstwhile WIEL and to the Company as a successor to WIEL, being accounting policies adopted as per the Scheme of Amalgamation approved by the Horible High Court at Calcutta on 18th March 2014, the Company has applied AS 30, the Accounting Standard on Financial Instruments: Recognition and Measurement, issued by the Institute of Chartered Accountants of India (ICAI), and pursuant thereto has as on March 31, 2014, being the date of conclusion of the first Accounting Year post the provisions of AS 30 becoming applicable to the Company, classified the investments as "available for sale financial assets" and has accordingly, measured such investments at fair value as on that date (except for those investments whose fair value cannot be reliably measured, which investments in accordance with AS 30 are continued to be measured at cost and their cost is considered as the fair value). All amount required to be taken as per AS 30 to revenue reserve or to an appropriate equity account shall be aggregated and such aggregate shall be taken to the Business Reorganisation Reserves (BRR). In the event of any conflict between the provision of AS 30 and any other Accounting Standards, the provision of AS 30 will be applied in preference to any other Accounting standard. BRR shall constitute a reserve arising as per this Scheme and shall not for any purpose be considered to be a Reserve create by the Company.
In accordance with the accounting policies applicable to WIEL and to the Company as a successor to WlEL being accounting policies adopted as per the Scheme of Amalgamation approved by the Horible High Court at Calcutta, the Board of directors of the transferee Company may at its sole discretion offset any expenses or losses including in particulars, any expenses in the nature of (but not limited to) (a) the interest, forex loss and other financial charges/expenses paid/payable on borrowings and refinancing of borrowings used for acquisition/ investment/ loans to subsidiaries (b) impairment, diminution, loss, amortization, and/or write off of assets/ investments/ intangibles (including goodwill arising on preparation of consolidated accounts), if any, in the financial statements; and (c) expenses incurred in relation to and in connection with this scheme, by corresponding withdrawal from BRR.
The Institute of Chartered Accountants of India (ICAI) has withdrawn Accounting Standard 30 (Accounting Standard on Financial Instruments: Recognition and Measurement) considering that accounting standards pertaining to Financial Instruments are now part of notified Indian Accounting Standards (Ind AS). Consequent to this, the Company, backed by legal opinion, has applied principles of notified Ind AS related to Financial Instruments being new accounting standards applicable instead of AS 30. All equity investment including Investment in Subsidiaries are designated as fair value through profit & loss. Accordingly, all amounts required to be taken as per the Financial Instruments Standards under Ind AS to revenue reserve or to an appropriate equity account/Other Comprehensive Income are aggregated and such aggregate is taken to Business Reorganisation Reserves (BRR).
iii. Derecognition
A financial asset is derecognised only when:
a) the rights to receive cash flows from the asset have expired, or
b) the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows to one or more recipient
Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
iv. Impairment of Financial Assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
The impairment methodology for each class of financial assets stated above is as follows:
Debt investments measured at amortised cost and FVOCI: Debt investments at amortised cost and those at FVOCI where there has been a significant increase in credit risk, lifetime expected credit loss provision method is used and in all other cases, the impairment provision is determined as 12 months expected credit losses.
Trade receivables from customers: The Company applies the simplified approach to providing for expected credit losses prescribed by Ind AS 109, which requires the use of the lifetime expected loss provision for all trade receivables.
v. Offsetting Financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.
b) Derivative Financial Instruments
The Company uses derivative financial instruments, such as forward currency contracts, option contract and cross currency swap, to hedge its foreign currency risks and interest rate risks. Such derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value with changes in fair value recognized in the statement of profit and loss, under financial income or financial cost, in the period when they arise.
c) Share Capital:
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
d) Financial Liabilities
i. Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definition of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
ii. Initial recognition and measurement
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
iii. Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
1) Borrowings: Borrowings are subsequently carried at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the statement of profit and loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortized over the period of the facility to which it relates.
Non-Cumulative Preference shares were payment of dividend is discretionary and which are mandatorily redeemable on a specific date, are classified as compounded Instruments. The fair value of the liabilities portion is determined by discounting amount repayable at maturity using market rate of interest. Difference between proceed receive and fair value of liability on initial recognition is included in shareholder equity, net off income tax effect and not subsequently remeasured. Subsequently liability component of preference share is measured at amortised cost.
2) Trade and other payable: These amounts represent obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade and payables are subsequently measured at amortized cost using the effective interest method .
3) Financial Guarantee Contracts: Financial Guarantee Contracts are recognized as a financial liability at the time the guarantee is issued. The liability is initially is measured at fair value and subsequently at the higher of the amount determined in accordance with IND AS 37 and the amount initially recognized less cumulative amortization, where appropriate.
The fair value of financial guarantee is determined as the present value of the differences in net cash flows between the contractual payments under the debt instruments and the payments that would be required without the guarantee, for the estimated that would be payable to third party for assuming the obligation.
Where guarantees in relation to loan or other payables of associates are provided for no compensation, the fair value are accounted for as contribution and recognized as part of the cost of the investment.
iv. Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
2.14 Income Tax
Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit in the statement of profit and loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted orsubstantively enacted by the balance sheet date. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred income tax assets and liabilities are measured using tax rates and tax laws 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. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. 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.
2.15 Employee Benefits
a) Short-term /Longterm obligations
All employee benefits payable wholly within twelve months of rendering the service including performance incentives and compensated absences are classified as short term employee benefits. The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are charged off to the Statement of Profit and Loss/ Capital Work-in-Progress, as applicable. The employee benefits which are not expected to occur within twelve months are classified as long term benefits and are recognised as liability at the net present value.
b) Defined contribution plan
Contributions to defined contribution schemes such as provident fund, Employees State Insurance and Pension Plans are charged off to the Statement of Profit and Loss/Capital Work-in-Progress, as applicable, during the year in which the employee renders the related service.
c) Defined benefit plan
I. Gratuity:
The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.
The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government bond and that have terms to maturity approximating to the terms of the related gratuity.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income(OCI) in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.
II. Other Long term employee benefits:
The company has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each balance sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is recognized in the statement of profit or loss in the period in which the absences occur.
The Company has a scheme for payment of Loyalty on retirement to eligible employees. The scheme is unfunded. The expected cost of loyalty obligation is determined by actuarial valuation performed by an independent actuary at each balance sheet date using projected unit credit method. Expense on loyalty obligation is recognized in the statement of profit or loss in the period in which they occur.
2.16 Leases
As a lessee (Operating lease)
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the group as lessee are classified as operating leases. Payments made under operating leases are charged to statement of profit and loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the Lessor''s expected inflationary cost increases.
As a lessor (Finance lease)
In case of finance leases, where assets are leased out under a finance lease, the present value of the lease receipts is recognized as a finance lease receivable.
For a finance lease, each lease receipt is allocated between the receivable and finance income so as to achieve a constant rate on the finance balance outstanding. The interest element of the lease receipt is recognized in statement of profit and loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the receivable for each period.
2.17 Provisions, contingent liabilities and contingent assets Provisions
Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent liabilities
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or reliable estimate of the amount cannot be made, is termed as contingent liability.
Contingent Assets
Contingent assets is disclosed where an inflow of economic benefit is probable.
2.18 Earnings Per Share (EPS)
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting 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 are adjusted for the effects of all dilutive potential equity shares.
2.19 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
2.20 Critical accounting estimates and judgements
Preparing the financial statements under Ind AS requires management to take decisions and make estimates and assumptions that may impact the value of revenues, costs, assets and liabilities and the related disclosures concerning the items involved as well as contingent assets and liabilities at the balance sheet date. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Company make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
a) Impairment of Non-Financial Assets
The Company assesses at each reporting date whetherthere is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or CGU''s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate the cash inflow that is largely independent of those from other asset or group of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing the value in use, the estimated future cash flow are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted shares prices for publicly traded subsidiaries or other available fair value indicators.
b) Defined benefit obligations
The present value of the defined benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determiningthe net cost (income) for post employments plans include the discount rate. Any changes in these assumptions will impact the carrying amount of such obligations.
The Company determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the defined benefit obligations. In determining the appropriate discount rate, the Company considers the interest rates of government bonds of maturity approximating the terms of the related plan liability.
c) Income taxes
There are transactions and calculations for which the ultimate tax determination is uncertain and would get finalized on completion of assessment by tax authorities. Where the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
Deferred tax on temporary differences reversing within the tax holiday period is measured at the tax rates that are expected to apply during the tax holiday period, which is the lower tax rate or the nil tax rates.
d) Recoverability of advances /receivables
At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding receivables and advances.
2.21 Standards issued but not yet effective and have not been adopted early by the Company a) Ind AS 115- Revenue from Contract with Customers
On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers.
The standard permits two possible methods of transition:
(i) Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors
(ii) Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach) The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.
The Company is currently evaluating the requirements of amendments. The Company believe that the adoption of this amendment will not have a material effect on its financial statements
Mar 31, 2016
1 CORPORATE INFORMATION
Binani Industries Limited is a public limited company (herein after called ''Company'') domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is listed on the Bombay Stock Exchange(BSE), National Stock Exchange(NSE) and the Calcutta Stock Exchange (CSE).
2 SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING
The Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Companies has prepared these financial statements to comply in all material respects with the Accounting Standards specified under section 133 of the Companies Act 2013 (''the 2013 Act'') read with Rule 7 of the Companies (Accounts) Rules 2014. The Financials Statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financials statements are consistent with those of previous year.
All Assets and Liabilities have been classified as Current or Non-Current as per the Group''s normal operating cycle and other criteria set out in the Revised Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in Cash and Cash Equivalents, the Group has ascertained its operating cycle as up to twelve months for the purpose of Current & Non-Current classification of Assets and Liabilities.
USE OF ESTIMATES
The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainties about these assumptions and estimates could result in the outcomes requiring adjustment to the carrying amount of assets or liabilities in future periods.
REVENUE RECOGNITION
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Income is recognized on accrual basis except when there is significant uncertainty.
The method of recognizing the revenues and costs depends on the nature of the services rendered:
Income from Services
a) Management Services Fees and Royalty Income are recognized on accrual basis (net of Service Tax).
b) The Company recognizes revenue when the significant terms of the arrangement are enforceable, services have been delivered and the collectability is reasonably assured.
c) Sale of Shares and Securities are recognized on the trade dates.
Income from Trading
Sale of Goods recognized on transfer of significant risks and rewards of ownership which is generally on the date of dispatch/ bill of lading.
Interest Income
Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
Sale of Investments
Income from sale of investments is recognized on transfer of underlying instruments.
Dividend Income
Income from Dividend is recognized when the right to receive payment is established.
FIXED ASSETS
Fixed Assets are stated at cost, net of Cenvat less accumulated depreciation and impairment loss (if any). Cost includes trial run and stabilization expenses, interest, finance costs and incidental expenses up to the date of capitalization less specific grants received, if any. An Intangible Asset is recognized when it is probable that the future economic benefits attributable to the asset will flow to the enterprise and where its cost can be reliably measured. Intangible assets are stated at cost of acquisition less accumulated amortization and impairment losses, if any.
DEPRECIATION AND AMORTISATION
Depreciation on Plant and Machinery (except office equipments and transport equipment) is provided on Straight Line Method on the basis of the useful life in the manner prescribed as per Schedule II of The Companies Act, 2013.
Depreciation on other Fixed Assets, Office Equipments and Transport Equipments is provided on Written Down Value Method on the basis of the useful life in the manner prescribed as per Schedule II of The Companies Act, 2013.
Intangible Assets are amortized on a straight line basis over the estimated useful economic life. Expenditure on major Computer Software is amortized over the period of expected benefit not exceeding five years.
IMPAIRMENT OF FIXED ASSETS
At the end of each reporting period, the Company determines whether a provision should be made for impairment loss on assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on âImpairment of Assets" issued by the ICAI. An impairment loss is charged to the Statement of Profit and Loss in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognized in the earlier accounting periods is reversed, if there has been a change in the estimate of recoverable amount.
INVESTMENTS
Investments that are readily realizable and intended to be held for not more than a year from the date of investment made are classified as Current Investments. All other investments are classified as Non-Current Investments. Current Investments are carried at lower of cost or fair value determined on an individual investment basis. Hitherto, Non-Current Investments were carried at cost, however pursuant to a Scheme of Amalgamation approved by the Hon''ble High Court of Calcutta, from 31st March 2014 onwards, the Company shall be stating its Non-Current Investments at their fair value and classify the same as "Investments available for sale as financial assets". Provision is made to recognize any diminution other than temporary in the value of such investments.
CASH & CASH EQUIVALENTS
Cash & Cash Equivalent for the purpose of Cash Flow Statement comprise Cash at Bank and in Hand and Short-Term Investments with an original maturity of three months or less.
LEASING BUSINESS
Lease rentals are accounted for as revenue when they contractually accrue. The corresponding assets are depreciated over the life prescribed under Schedule II of the Companies Act, 2013. In the year of addition or disposal of any assets, the depreciation is charged on pro-rata basis in proportion to the period of its ownership.
ASSETS TAKEN ON LEASE
Operating lease payments are recognized as expenditure in the Statement of Profit and Loss on a straight line basis, representative of the time pattern of benefits received from the use of the assets taken on lease.
INVENTORIES
Share and Securities are valued at lower of cost or net realizable value . Cost of inventories is ascertained on ''Weighted Average Method'' basis. The costs incurred in bringing the inventories to their present location and condition forms a part of Cost of inventories.
Traded Goods have been valued at lower of cost and net realizable value. Direct Cost and attributable overheads forms a part of cost of Traded Goods.
FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are accounted at the exchange rate prevailing on the date of each transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognized in the Statement of Profit and Loss. In case of forward contracts (non speculative), the premium / discount are dealt with in the Statement of Profit and Loss over the period of contracts.
Exchange differences arising on long term foreign currency monetary items are accumulated in the "Foreign Currency Monetary Item Translation Difference Account" and amortized over the remaining life of the concerned Monetary item.
Exchange differences arising on a monetary item, that in substance forms part of the Company''s net investment in a non-integral foreign operation are accumulated in a "Foreign Currency Translation Reserve Account" until the disposal of the net investment, at which time these would be transferred to the Statement of Profit and Loss.
EMPLOYEE BENEFITS
i) Short Term Employee Benefits - All employee benefits payable within twelve months of rendering the service are recognized in the period in which the employees render the related services.
ii) Post Employment/Retirement Benefits - Defined Contribution Plans such as Provident Fund etc. are charged to the Statement of Profit and Loss, as incurred.
Defined Benefit Obligation Plans - The present value of the obligation under such plans, is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognized immediately in the Statement of Profit and Loss . In case of gratuity, which is funded with the Life Insurance Corporation of India, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis.
EARNINGS PER SHARE
Basic Earning per Share are calculated by dividing Net Profit After Tax attributable to Equity Shareholders by the weighted average number of Equity Shares outstanding during the Year. The Company has not issued any potential dilutive Equity Shares, and accordingly the basic and diluted Earnings Per Share are the same.
BORROWING COSTS
Borrowing costs directly attributable to acquisition, construction or production of a qualifying asset are capitalized as a part of the cost of that asset. Other borrowing costs are recognized as expenses in the period in which they are incurred.
Borrowing costs directly attributable to the construction or production of qualifying assets are capitalized as part of the cost.
SEGMENT REPORTING Identification of Segments
The Company''s operating businesses are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.
Allocation of Common Costs
Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.
Transactions between segments are primarily for materials which are transferred at market determined prices and common costs are apportioned on a reasonable basis.
Unallocated Items
The Corporate and Other segment includes general corporate income and expense items which are not directly identifiable to any segment and, therefore, not allocated to any business segment.
INCOME TAX
Income Tax is accounted in accordance with AS-22 ''Accounting for taxes on income'', issued under Accounting Standards Rules 2006, which includes current tax and deferred tax. Deferred income tax reflect the impact of the current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred Tax Assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available except that deferred tax assets arising due to unabsorbed depreciation and losses are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.
Mar 31, 2015
1 CORPORATE INFORMATION
Binani Industries Limited is a public limited company (herein after
called 'Company') domiciled in India and incorporated under the
provisions of the Companies Act, 1956. The Company is listed on the
Bombay Stock Exchange(BSE), National Stock Exchange(NSE) and the
Calcutta Stock Exchange (CSE).
BASIS OF ACCOUNTING
The financial statements of the Company have been prepared in accordance
with generally accepted accounting principles in India (Indian GAAP).
The Companies has prepared these financial statements to comply in all
material respects with the Accounting Standards specified under section
133 of the Companies Act 2013 (' the 2013 Act") read with Rule 7 of the
Companies ( Accounts) Rules 2014. The Financial Statements have been
prepared on an accrual basis and under the historical cost convention.
The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year.
All assets and liabilities have been classified as current or
non-current as per the Group's normal operating cycle and other
criteria set out in the Revised Schedule III to the Companies Act,
2013. Based on the nature of products and the time between the
acquisition of assets for processing and their realisation in cash and
cash equivalents, the Group has ascertained its operating cycle as up to
twelve months for the purpose of current - non-current classification of
assets and liabilities.
USE OF ESTIMATES
The preparation of the financial statements, in conformity with the
generally accepted accounting principles, requires the management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities on the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Although these estimates are based on the management's best knowledge
of current events and actions, uncertainties about these assumptions
and estimates could result in the outcomes requiring adjustment to the
carrying amount of assets or liabilities in future periods.
REVENUE RECOGNITION
Income from Services
Management Services fees and royalty income are recognised on accrual
basis (net of Service Tax).
Interest income
Interest Income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
Sale of investments
Income from sale of investments is recognised on transfer of underlying
instruments.
Dividend income
Income from Dividend is recognised when the right to receive payment is
established.
FIXED ASSETS
Fixed Assets are stated at cost, net of accumulated depreciation /
amortization and accumulated impairment loss, if any. Interest and
Finance costs, if any in respect of loan for financing Fixed Assets, are
capitalised till the date the assets are ready for use. However
tangible assets having individual value below Rs. 5,000/- are depreciated
@ 100% except mobile phones, which are charged to revenue, considering
their useful life to be less than one year. Subsequent expenditure
related to an item of fixed assets is added to its book value only if it
increases the future benefits arising from the existing assets beyond
its previously assessed standard of performance.
DEPRECIATION AND AMORTISATION
Depreciation on plant and machinery (except office equipments and
transport equipment) is provided on Straight Line Method on the basis
of the useful life in the manner prescribed as per Schedule II of The
Companies Act, 2013.
Depreciation on other fixed assets, office equipments and transport
equipments is provided on Written Down Value Method on the basis of the
useful life in the manner prescribed as per Schedule II of The
Companies Act, 2013.
Intangible assets are amortised on a straight line basis over the
estimated useful economic life. Expenditure on major computer software
is amortised over the period of expected benefit not exceeding fve
years.
IMPAIRMENT OF FIXED ASSETS
At the end of each reporting period, the Company determines whether a
provision should be made for impairment loss on assets by considering
the indications that an impairment loss may have occurred in accordance
with Accounting Standard 28 on "Impairment of Assets" issued by the
ICAI. An impairment loss is charged to the Statement of Profit and Loss
in the period in which, an asset is identified as impaired, when the
carrying value of the asset exceeds its recoverable value. The
impairment loss recognised in the earlier accounting periods is
reversed, if there has been a change in the estimate of recoverable
amount.
INVESTMENTS
Investments that are readily realisable and intended to be held for not
more than a year from the date of investment made are classified as
Current investments. All other investments are classified as Non Current
investments. Current investments are carried at lower of cost or fair
value determined on an individual investment basis. Hitherto, non
current investments were carried at cost, however pursuant to a Scheme
of Amalgamation approved by the Hon'ble High Court of Calcutta, from
31st March 2014 onwards, the Company shall be stating its non current
investments at their fair value and classify the same as "investments
available for sale as financial assets". Provision is made to recognize
any diminution other than temporary in the value of such investments.
FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are accounted at the exchange rate
prevailing on the date of each transaction. Gains and losses resulting
from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies, are
recognized in the Statement of Profit and Loss. In case of forward
contracts (non speculative), the premium / discount are dealt with in
the Statement of Profit and Loss over the period of contracts.
Exchange differences arising on long term foreign currency monetary
items are accumulated in the "Foreign Currency Monetary Item
Translation Difference Account" and amortised over the remaining life
of the concerned Monetary item.
Exchange differences arising on a monetary item, that in substance
forms part of the Company's net investment in a non-integral foreign
operation are accumulated in a "Foreign Currency Translation Reserve
Account" until the disposal of the net investment, at which time these
would be transferred to the Statement of Profit and Loss.
EMPLOYEE BENEFITS
i) Short Term Employee Benefits  All employee benefits payable within
twelve months of rendering the service are recognized in the period in
which the employees render the related services.
ii) Post Employment/Retirement Benefits  Defined Contribution Plans such
as Provident Fund etc. are charged to the Statement of Profit and Loss,
as incurred.
Defined Benefit Obligation Plans  The present value of the obligation
under such plans, is determined based on an actuarial valuation, using
the Projected Unit Credit Method. Actuarial gains and losses arising on
such valuation are recognized immediately in the Statement of Profit and
Loss . In case of gratuity, which is funded with the Life Insurance
Corporation of India, the fair value of the plan assets is reduced from
the gross obligation under the defined benefit plans, to recognize the
obligation on net basis.
BORROWING COSTS
Borrowing costs which are directly attributable to acquisition,
construction or production of a qualifying asset are capitalized as a
part of the cost of that asset. Other borrowing costs are recognised as
expenses in the period in which they are incurred.
INCOME TAX
Income tax is accounted in accordance with AS-22 'Accounting for taxes
on income', issued under Accounting Standards Rules 2006, which
includes current tax and deferred tax. Deferred income tax reflect the
impact of the current year timing differences between taxable income
and accounting income for the year and reversal of timing differences
of earlier years. Deferred tax assets are recognised only to the extent
that there is reasonable certainty that sufficient future taxable income
will be available except that deferred tax assets arising due to
unabsorbed depreciation and losses are recognised if there is virtual
certainty that sufficient future taxable income will be available to
realise the same.
CONTINGENT LIABILITY
A provision is recognised when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
embodying economic benefit will be required to settle the obligation, in
respect of which a reliable estimate can be made. Provisions are not
discounted to its present value and are determined based on best
estimate required to settle the obligation at the Balance Sheet date.
These are reviewed at each Balance Sheet date and adjusted to reflect
the current best estimates. A contingent liability is disclosed, unless
the possibility of an outflow of resources embodying the economic benefit
is remote.
Mar 31, 2014
BASIS OF ACCOUNTING
The financial statements of the company have been prepared under the
historical cost convention and on accrual basis in accordance with
accounting principles generally accepted in India and in compliance
with all material aspects of the Accounting Standards as notified by
the Companies (Accounting Standards) Rules, 2006 and the relevant
provisions of the Companies Act, 1956 read with General Circular
15/2013 dated 13th September 2013, issued by the Ministry of Corporate
Affairs, in respect of section 133 of the Companies Act, 2013.
All assets and liabilities have been classified as current or
non-current as per the Group''s normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Group has ascertained its operating cycle as upto
twelve months for the purpose of current - non-current classification
of assets and liabilities.
USE OF ESTIMATES
The preparation of the financial statements, in conformity with the
generally accepted accounting principles, requires the management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities on the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Although these estimates are based on the management''s best knowledge
of current events and actions, uncertainties about these assumptions
and estimates could result in the outcomes requiring adjustment to the
carrying amount of assets or liabilities in future periods.
REVENUE RECOGNITION
Income from Services
Management Services fees and royalty income are recognised on accrual
basis (net of Service Tax).
Interest income
Interest Income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
Sale of investments
Income from sale of investments is recognised on transfer of underlying
instruments.
Dividend income
Income from Dividend is recognised when the right to receive payment is
established.
FIXED ASSETS
Fixed Assets are stated at cost, net of accumulated depreciation /
amortization and accumulated impairment loss, if any. Interest and
finance costs, if any in respect of loan for financing fixed assets,
are capitalised till the date the assets are ready for use. However
tangible assets having individual value below Rs. 5,000/- are
depreciated 0 100% except mobile phones, which are charged to revenue,
considering their useful life to be less than one year. Subsequent
expenditure related to an item of fixed assets is added to its book
value only if it increases the future benefits arising from the
existing assets beyond its previously assessed standard of performance.
DEPRECIATION AND AMORTISATION
Depreciation on Plant and Machinery is provided on Straight Line Method
(SLM) , at the rates and in the manner prescribed under Schedule XIV of
the Companies Act, 1956 which includes Computers and Air Conditioners.
Depreciation on other Fixed Assets, Office Equipments and Transport
Equipments is provided on Written Down Value Method at the rates and in
the manner prescribed as per Schedule XIV of the Companies Act, 1956.
Intangible assets are amortised on a straight line basis over the
estimated useful economic life. Expenditure on major computer software
is amortised over the period of expected benefit not exceeding five
years.
IMPAIRMENT OF FIXED ASSETS
At the end of each reporting period, the Company determines whether a
provision should be made for impairment loss on assets by considering
the indications that an impairment loss may have occurred in accordance
with Accounting Standard 28 on "Impairment of Assets" issued by the
ICAI. An impairment loss is charged to the Statement of Profit and Loss
in the period in which, an asset is identified as impaired, when the
carrying value of the asset exceeds its recoverable value. The
impairment loss recognised in the earlier accounting periods is
reversed, if there has been a change in the estimate of recoverable
amount.
INVESTMENTS
Investments that are readily realisable and intended to be held for not
more than a year from the date of investment made are classified as
Current investments. All other investments are classified as Non
Current investments.Current investments are carried at lower of cost or
fair value determined on an individual investment basis. Hitherto, non
current investments were carried at cost, however pursuant to a Scheme
of Amalgamation approved by the Hon''ble High Court of Calcutta, from
31st March 2014 onwards, the Company shall be stating its non current
investments at their fair value and classify the same as "investments
available for sale as financial assets". Provision is made to recognize
any diminution other than temporary in the value of such investments.
FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are accounted at the exchange rate
prevailing on the date of each transaction. Gains and losses resulting
from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies, are
recognized in the Statement of Profit and Loss. In case of forward
contracts (non speculative), the premium / discount are dealt with in
the Statement of Profit and Loss over the period of contracts.
Exchange differences arising on long term foreign currency monetary
items are accumulated in the "Foreign Currency Monetary Item
Translation Difference Account" and amortised over the remaining life
of the concerned Monetary item.
Exchange differences arising on a monetary item, that in substance
forms part of the Company''s net investment in a non-integral foreign
operation are accumulated in a "Foreign Currency Translation Reserve
Account" until the disposal of the net investment, at which time these
would be transferred to the Statement of Profit and Loss.
EMPLOYEE BENEFITS
i) Short Term Employee Benefits - All employee benefits payable within
twelve months of rendering the service are recognized in the period in
which the employees render the related services.
ii) Post Employment/Retirement Benefits - Defined Contribution Plans
such as Provident Fund etc. are charged to the Statement of Profit and
Loss, as incurred.
Defined Benefit Obligation Plans - The present value of the obligation
under such plans, is determined based on an actuarial valuation, using
the Projected Unit Credit Method. Actuarial gains and losses arising on
such valuation are recognized immediately in the Statement of Profit
and Loss . In case of gratuity, which is funded with the Life Insurance
Corporation of India, the fair value of the plan assets is reduced from
the gross obligation under the defined benefit plans, to recognize the
obligation on net basis.
BORROWING COSTS
Borrowing costs which are directly attributable to acquisition,
construction or production of a qualifying asset are capitalized as a
part of the cost of that asset. Other borrowing costs are recognised as
expenses in the period in which they are incurred.
INCOME TAX
Income tax is accounted in accordance with AS-22 ''Accounting for taxes
on income'', issued under Accounting Standards Rules 2006, which
includes current tax and deferred tax. Deferred income tax reflect the
impact of the current year timing differences between taxable income
and accounting income for the year and reversal of timing differences
of earlier years. Deferred tax assets are recognised only to the extent
that there is reasonable certainty that sufficient future taxable
income will be available except that deferred tax assets arising due to
unabsorbed depreciation and losses are recognised if there is virtual
certainty that sufficient future taxable income will be available to
realise the same.
CONTINGENT LIABILITY
A provision is recognised when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
embodying economic benefit will be required to settle the obligation,
in respect of which a reliable estimate can be made. Provisions are
not discounted to its present value and are determined based on best
estimate required to settle the obligation at the Balance Sheet date.
These are reviewed at each Balance Sheet date and adjusted to reflect
the current best estimates. A contingent liability is disclosed, unless
the possibility of an outflow of resources embodying the economic
benefit is remote .
Mar 31, 2013
BASIS OF ACCOUNTING
The fnancial statements of the Company have been prepared under the
historical cost convention and on accrual basis in accordance with
accounting principles generally accepted in India and in compliance
with all material aspects of the Accounting Standards as notifed by the
Companies (Accounting Standards) Rules, 2006 and the relevant
provisions of the Companies Act, 1956.
All assets and liabilities have been classifed as current or
non-current as per the Group''s normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Group has ascertained its operating cycle as upto
twelve months for the purpose of current - non-current classifcation of
assets and liabilities.
USE OF ESTIMATES
The preparation of the fnancial statements, in conformity with the
generally accepted accounting principles, requires the management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities on the date of the fnancial statements and the
reported amounts of revenues and expenses during the reporting period.
Although these estimates are based on the management''s best knowledge
of current events and actions, uncertainties about these assumptions
and estimates could result in the outcomes requiring adjustment to the
carrying amount of assets or liabilities in future periods.
REVENUE RECOGNITION
Income from Services
Management Services fees and royalty income are recognised on accrual
basis (net of Service Tax).
Interest income
Interest Income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
Sale of investments
Income from sale of investments is recognised on transfer of underlying
instruments.
Dividend income
Income from Dividend is recognised when the right to receive payment is
established.
FIXED ASSETS
Fixed Assets are stated at cost, net of accumulated depreciation /
amortization and accumulated impairment loss, if any. Interest and
Finance costs, if any in respect of loan for fnancing Fixed Assets, are
capitalised till the date the assets are ready for use. However
tangible assets having individual value below Rs.5,000/- are depreciated
@ 100% except mobile phones, which are charged to revenue, considering
their useful life to be less than one year. Subsequent expenditure
related to an item of fxed assets is added to its book value only if it
increases the future benefts arising from the existing assets beyond
its previously assessed standard of performance.
DEPRECIATION AND AMORTISATION
Depreciation on Plant and Machinery is provided on Straight Line Method
(SLM) , at the rates and in the manner prescribed under Schedule XIV of
the Companies Act, 1956 which includes Computers and Air Conditioners.
Depreciation on other Fixed Assets, Offce Equipments and Transport
Equipments is provided on Written Down Value Method at the rates and in
the manner prescribed as per Schedule XIV of the Companies Act, 1956.
Intangible assets are amortised on a straight line basis over the
estimated useful economic life. Expenditure on major computer software
is amortised over the period of expected beneft not exceeding fve
years.
IMPAIRMENT OF FIXED ASSETS
At the end of each reporting period, the Company determines whether a
provision should be made for impairment loss on assets by considering
the indications that an impairment loss may have occurred in accordance
with Accounting Standard 28 on "Impairment of Assets" issued by the
ICAI. An impairment loss is charged to the Proft and Loss account in
the period in which, an asset is identifed as impaired, when the
carrying value of the asset exceeds its recoverable value. The
impairment loss recognised in the earlier accounting periods is
reversed, if there has been a change in the estimate of recoverable
amount.
INVESTMENTS
Investments classifed as long term investments are stated at cost.
Provision is made to recognize any diminution other than temporary in
the value of such investments. Current Investments are carried at lower
of cost and fair value.
FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are accounted at the exchange rate
prevailing on the date of each transaction. Gains and losses resulting
from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies, are
recognized in the Statement of Proft and Loss. In case of forward
contracts (non speculative), the premium / discount are dealt with in
the Statement of Proft and Loss over the period of contracts.
Exchange differences arising on long term foreign currency monetary
items are accumulated in the "Foreign Currency Monetary Item
Translation Difference Account" and amortised over the remaining life
of the concerned Monetary item.
EMPLOYEE BENEFITS
i) Short Term Employee Benefts  All employee benefts payable within
twelve months of rendering the service are recognized in the period in
which the employees render the related services.
ii) Post Employment/Retirement Benefts  Defned Contribution Plans such
as Provident Fund etc. are charged to the Statement of Proft and Loss,
as incurred.
Defned Beneft Obligation Plans  The present value of the obligation
under such plans, is determined based on an actuarial valuation, using
the Projected Unit Credit Method. Actuarial gains and losses arising on
such valuation are recognized immediately in the Statement of Proft and
Loss . In case of gratuity, which is funded with the Life Insurance
Corporation of India, the fair value of the plan assets is reduced from
the gross obligation under the defned beneft plans, to recognize the
obligation on net basis.
BORROWING COSTS
Borrowing costs which are directly attributable to acquisition,
construction or production of a qualifying asset are capitalized as a
part of the cost of that asset. Other borrowing costs are recognised as
expenses in the period in which they are incurred.
INCOME TAX
Income tax is accounted in accordance with AS-22 ''Accounting for taxes
on income'', issued under Accounting Standards Rules 2006, which
includes current tax and deferred tax. Deferred income tax refect the
impact of the current year timing differences between taxable income
and accounting income for the year and reversal of timing differences
of earlier years. Deferred tax assets are recognised only to the extent
that there is reasonable certainty that suffcient future taxable income
will be available except that deferred tax assets arising due to
unabsorbed depreciation and losses are recognised if there is virtual
certainty that suffcient future taxable income will be available to
realise the same.
CONTINGENT LIABILITY
A provision is recognised when an enterprise has a present obligation
as a result of past event; it is probable that an outfow of resources
embodying economic beneft will be required to settle the obligation, in
respect of which a reliable estimate can be made. Provisions are not
discounted to its present value and are determined based on best
estimate required to settle the obligation at the Balance Sheet date.
These are reviewed at each Balance Sheet date and adjusted to refect
the current best estimates. A contingent liability is disclosed, unless
the possibility of an outfow of resources embodying the economic beneft
is remote.
Mar 31, 2012
PRESENTATION AND DISCLOSURE OF FINANCIAL STATEMENT
For the year ended March 31, 2012, the revised Schedule VI format as
notified under the Companies Act 1956, has become applicable to the
Company for preparation and presentation of its financial statements.
The Company has therefore reclassified / regrouped the previous year
figures in accordance with the requirements applicable for the current
year.
USE OF ESTIMATES
The preparation of the financial statements, in conformity with the
generally accepted accounting principles, requires the management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities on the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Although these estimates are based on the management's best knowledge
of current events and actions, uncertainties about these assumptions
and estimates could result in the outcomes requiring adjustment to the
carrying amount of assets or liabilities in future periods.
REVENUE RECOGNITION Income from Services
Management Services Fees and Royalty Income are recognized on accrual
basis. The Company collects service tax on behalf of the government
and, therefore, it is not an economic benefit flowing to the Company.
Hence, it is excluded from revenue.
Interest income
Interest Income is recognized on a time proportion basis taking into
account the amount outstanding and the rate applicable.
Sale of investment
Income from sale of long term investments is recognized on transfer of
underlying instruments.
Dividend income
Income from Dividend is recognized when the right to receive payment is
established.
TANGIBLE FIXED ASSETS
Tangible Fixed Assets are stated at cost net of accumulated
depreciation and accumulated impairment loss, if any. Interest and
Finance costs, if any in respect of loan for financing Fixed Assets,
are capitalized till the date the assets are ready for use. However
assets having individual value below Rs.5,000/- are depreciated @ 100%
except mobile phones which are charged to revenue considering their
useful life to be less than one year. Subsequent expenditure related to
an item of tangible fixed assets is added to its book value only if it
increases the future benefits arising from the existing assets beyond
its previously assessed standard of performance.
DEPRECIATION AND AMORTISATION
Depreciation on Plant and Machinery is provided on Straight Line Method
(SLM) , at the rates and in the manner prescribed under Schedule XIV of
the Companies Act, 1956, which includes Computer and Air Conditioners.
Depreciation on other Fixed Assets, Office Equipments and Transport
Equipments has been provided on Written Down Value Method at the rates
and in the manner prescribed as per Schedule XIV of the Companies Act,
1956.
INTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial
recognition at cost. Intangible assets are amortized on a straight line
basis over the estimated useful economic life. Expenditure on major
computer software is amortized over the period of expected benefit not
exceeding five years.
IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS
At the end of each reporting period, the Company determines whether a
provision should be made for impairment loss on tangible and intangible
assets by considering the indications that an impairment loss may have
occurred in accordance with Accounting Standard 28 on "Impairment of
Assets" issued under Accounting Standard Rules, 2006. An impairment
loss is charged to the Statement of Profit and Loss in the period in
which, an asset is identified as impaired, when the carrying value of
the asset exceeds its recoverable value. The impairment loss recognized
in the prior accounting periods is reversed, if there has been a change
in the estimate of recoverable amount.
INVESTMENTS
Investments classified as long term investments are stated at cost.
Provision is made to recognize any diminution other than temporary in
the value of such investments. Current Investments are carried at lower
of cost and fair value.
CASH AND CASH EQUIVALENTS
Cash and cash equivalent for the purpose of Cash Flow Statement
comprise cash at bank and in hand and short term investments with an
original maturity of three months or less.
FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are accounted at the exchange rate
prevailing on the date of each transaction. Gains and losses resulting
from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies, are
recognized in the Statement of Profit and Loss. In case of forward
contracts, the exchange differences are dealt with in the Statement of
Profit and Loss over the period of contracts.
Exchange differences arising on long term foreign currency monetary
items are accumulated in the "Foreign Currency Monetary Item
Translation Difference Account" and amortized over the remaining life
of the concerned monetary item.
EMPLOYEE BENEFITS
i) Short Term Employee Benefits - All employee benefits payable within
twelve months of rendering the service are recognized in the period in
which the employee renders the related service.
ii) Post Employment/Retirement Benefits - Defined Contribution Plans
such as Provident Fund etc, are charged to the Profit and Loss
statement as incurred.
DEFINED BENEFIT OBLIGATION PLANS - i) The present value of the
obligation under such plans, is determined based on an actuarial
valuation, using the Projected Unit Credit Method. Actuarial gains and
losses arising on such valuation are recognized immediately in the
Statement of Profit and Loss. In case of gratuity, which is funded with
the Life Insurance Corporation of India, the fair value of the plan
assets is reduced from the gross obligation under the defined benefit
plans, to recognize the obligation on net basis.
ii) Other Long Term Employee Benefits are recognized in the same manner
as Defined Benefit Plans. (refer note 37)
BORROWING COSTS
Borrowing costs which are directly attributable to acquisition,
construction or production of a qualifying asset are capitalized as a
part of the cost of that asset. Other borrowing costs are recognized as
expenses in the period in which they are incurred.
INCOME TAX
Income tax is accounted in accordance with AS-22 Accounting for taxes
on income', issued under Accounting Standards Rules 2006, which
includes current tax and deferred tax. Deferred income tax reflect the
impact of the current year timing differences between taxable income
and accounting income for the year and reversal of timing differences
of earlier years. Deferred tax assets are recognized only to the extent
that there is reasonable certainty that sufficient future taxable
income will be available except that deferred tax assets arising due to
unabsorbed depreciation and losses are recognised if there is virtual
certainty that sufficient future taxable income will be available to
realize the same.
CONTINGENT LIABILITY
Contingent Liabilities are possible but not probable obligations as on
Balance Sheet date, based on the available evidence. Provision is made
in the accounts if it becomes probable that an out flow of resources
embodying economic benefits will be required to settle the obligation.
Mar 31, 2011
BASIS OF ACCOUNTING
The financial statements have been prepared on accrual basis and under
the historical cost convention in accordance with accounting principles
generally accepted in India and the provisions of the Companies Act,
1956.
USE OF ESTIMATES
The preparation of the financial statements, in conformity with the
generally accepted accounting principles, requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period.
Differences between actual results and estimates are recognised in the
period in which the results are known / materialise.
CASH & CASH EQUIVALENTS
Cash & cash equivalent for the purpose of Cash Flow Statement comprise
cash at bank and current Accounts.
REVENUE RECOGNITION
Management Services fees are recognised on accrual basis. Income from
Dividend is recognised when the right to receive payment is
established. Income from sale of long term investments is recognised on
transfer of shares. Interest is recognised on a time proportion basis
taking into account the amount outstanding and the rate applicable.
FIXED ASSETS
Fixed Assets are stated at cost net of impairment loss, if any.
Interest and Finance costs, if any in respect of loan for fnancing
Fixed Assets, are capitalised till the date the assets are ready for
use. However assets having individual value below Rs.5,000/- are
depreciated @ 100% except mobile phones which are charged to revenue
considering their useful life to be less than one year.
DEPRECIATION AND AMORTISATION
Depreciation on Plant and Machinery which include Computer and Air
Conditioner is provided on Straight Line Method, at the rates and in
the manner prescribed under Schedule XIV of the Companies Act, 1956.
Depreciation on other Fixed Assets, office Equipments and Transport
Equipments has been provided on Written Down Value Method at the rates
and in the manner prescribed as per Schedule XIV of the Companies Act,
1956.
Expenditure on major computer sofitware is amortised over the period of
expected benefit not exceeding fve years.
IMPAIRMENT OF ASSETS
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with Accounting Standard 28 on "Impairment of Assets"
issued under Accounting Standard Rules 2006. An impairment loss is
charged to the Profit and Loss account in the period in which, an asset
is identifed as impaired, when the carrying value of the asset exceeds
its recoverable value. The impairment loss recognised in the prior
accounting periods is reversed if there has been a change in the
estimate of recoverable amount.
INVESTMENTS
Long-term investments are stated at cost less provision for diminution
in value, which is other than temporary.
FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are accounted at the exchange rate
prevailing on the date of each transaction. Gains and losses resulting
from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies, are
recognized in the profit and loss account. In case of forward contracts,
the exchange differences are dealt with in the profit and loss account
over the period of contracts.
EMPLOYEE BENEFIT
i) Short Term Employee Benefits à All employee benefits payable within
twelve months of rendering the service are recognized in the period in
which the employee renders the related service.
ii ) Post Employment/Retirement Benefits à Defned Contribution Plans
such as Provident Fund etc. are charged to the Profit and Loss Account
as incurred.
Defned Benefit Obligation Plans à The present value of the obligation
under such plans, is determined based on an actuarial valuation, using
the Projected Unit Credit Method. Actuarial gains and losses arising on
such valuation are recognized immediately in the Profit and Loss
Account. In case of gratuity, which is funded with the Life Insurance
Corporation of India, the fair value of the plan assets is reduced from
the gross obligation under the defned benefit plans, to recognize the
obligation on net basis.
Employee Benefit in form of contribution to Provident Fund managed by a
Trust set up by the Company is charged to Profit & Loss Account as and
when the contribution is due. The defcit, if any, in the accumulated
corpus of the Trust at the period end for which the Company is liable,
is recognised as a provision in the Profit & Loss Account.
iii) Other Long Term Employee Benefits are recognized in the same manner
as Defned Benefit Plans. (Refer Note 15)
BORROWING COSTS
Borrowing costs which are directly attributable to acquisition,
construction or production of a qualifying asset are capitalized as a
part of the cost of that asset. Other borrowing costs are recognised as
expenses in the period in which they are incurred.
INCOME TAX
Income tax is accounted in accordance with AS-22 ÃAccounting for taxes
on income, issued under Accounting Standards Rules 2006, which
includes current tax and deferred tax. Deferred income tax refect the
impact of the current year timing differences between taxable income
and accounting income for the year and reversal of timing differences
of earlier years. Deferred tax assets are recognised only to the extent
that there is reasonable certainty that suffcient future taxable income
will be available except that deferred tax assets arising due to
unabsorbed depreciation and losses are recognised if there is virtual
certainty that suffcient future taxable income will be available to
realise the same.
CONTINGENT LIABILITY
These, if any, are disclosed in the notes on accounts. Provision is
made in the accounts if it becomes probable that an out flow of
resources embodying economic benefits will be required to settle the
obligation.
Mar 31, 2010
BASIS OF ACCOUNTING
The financial statements have been prepared on accrual basis (except
dividend income) and under the historical cost convention in accordance
with accounting principles generally accepted in India and the
provisions of the Companies Act, 1956.
USE OF ESTIMATES
The preparation of the financial statements, in conformity with the
generally accepted accounting principles, requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period.
Differences between actual results and estimates are recognised in the
period in which the results are known / materialise.
REVENUE RECOGNITION
Management Services dees are recognised on accrual basis. Income from
Dividend is recognised as and when received. Income from sale of long
term investments is recognised on transfer of shares.
FIXED ASSETS
Fixed Assets are stated at cost. Interest and Finance costs, if any in
respect of loan for financing Fixed Assets, are capitalised till the
date the assets are ready for use. However assets having individual
value below Rs.5000/- are depreciated @ 100% except mobile phones which
are charged to revenue considering their useful life to be less than
one year.
DEPRECIATION AND AMORTISATION
Depreciation on Plant and Machinery which include Computer and Air
Conditioner is provided on Straight Line Method , at the rates and in
the manner prescribed under Schedule XIV of the Companies Act, 1956.
Depreciation on other Fixed Assets, Office Equipments and Transport
Equipments has been provided on Written Down Value Method at the rates
and in the manner prescribed as per Schedule XIV of the Companies Act,
1956.
Expenditure on major computer software is amortised over the period of
expected benefit not exceeding five years.
IMPAIRMENT OF ASSETS
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with Accounting Standard 28 on ÃImpairment of AssetsÃ
issued under Accounting Standard Rules 2006. An impairment loss is
charged to the Profit and Loss account in the period in which, an asset
is identified as impaired, when the carrying value of the asset exceeds
its recoverable value. The impairment loss recognised in the prior
accounting periods is reversed if there has been a change in the
estimate of recoverable amount.
INVESTMENTS
Long-term investments are stated at cost less provision for diminution
in value, which is other than temporary.
FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are accounted at the exchange rate
prevailing on the date of each transaction. Gains and losses resulting
from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies, are
recognized in the profit and loss account. In case of forward
contracts, the exchange differences are dealt with in the profit and
loss account over the period of contracts.
EMPLOYEE BENEFIT
i) Short Term Employee Benefits à All employee benefits payable within
twelve months of rendering the service are recognized in the period in
which the employee renders the related service.
ii) Post Employment/Retirement Benefits à Defined Contribution Plans
such as Provident Fund etc. are charged to the Profit and Loss Account
as incurred.
Defined Benefit Obligation Plans à The present value of the obligation
under such plans, is determined based on an actuarial valuation, using
the Projected Unit Credit Method. Actuarial gains and losses arising on
such valuation are recognized immediately in the Profit and Loss
Account. In case of gratuity, which is funded with the Life Insurance
Corporation of India, the fair value of the plan assets is reduced from
the gross obligation under the defined benefit plans, to recognize the
obligation on net basis.
Employee Benefit in form of contribution to Provident Fund managed by a
Trust set up by the Company is charged to Profit & Loss Account as and
when the contribution is due. The deficit, if any, in the accumulated
corpus of the Trust at the period end for which the Company is liable,
is recognised as a provision in the Profit & Loss Account.
iii) Other Long Term Employee Benefits - are recognized in the same
manner as Defined Benefit Plans. (refer note 17)
BORROWING COSTS
Borrowing costs which are directly attributable to acquisition,
construction or production of a qualifying asset are capitalised as a
part of the cost of that asset. Other borrowing costs are recognised as
expenses in the period in which they are incurred.
INCOME TAX
Income tax is accounted in accordance with AS-22 ÃAccounting for taxes
on incomeÃ, issued under Accounting Standards Rules 2006, which
includes current tax and deferred tax. Deferred income tax reflect the
impact of the current year timing differences between taxable income
and accounting income for the year and reversal of timing differences
of earlier years. Deferred tax assets are recognised only to the extent
that there is reasonable certainty that sufficient future taxable
income will be available except that deferred tax assets arising due to
unabsorbed depreciation and losses are recognised if there is virtual
certainty that sufficient future taxable income will be available to
realise the same.
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