Mar 31, 2015
A) Basis of preparation of financial statements
The financial statements are prepared in accordance with Generally
Accepted Accounting Principles ("GAAP") applicable in India. GAAP
comprises mandatory accounting standards as prescribed under Section
133 of the Companies Act 2013 ('Act') read with Rule 7 of the Companies
(Accounts) Rules,2014 and other provisions of the Act (to the extent
notified) . Accounting policies have been consistently applied except
where a newly issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in the
accounting policy hitherto in use. The management evaluates all
recently issued or revised accounting standards on an on-going basis.
b) Use of estimates
The preparation of the financial statements in conformity with GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and disclosures of
contingent liabilities as at the date of the financial statements and
reported amounts of revenue and expenses for the year. The key
estimates made by the Company in preparing these financial statements
comprise provisions for doubtful debts, future obligations under
employee retirement benefit plans, income taxes and the useful lives of
assets. Actual results could differ from those estimates.
c) Fixed assets
Fixed assets are stated at acquisition cost less accumulated
depreciation and impairment losses, if any. Cost of acquisition is
inclusive of duties, taxes, freight and other directly attributable
costs incurred to bring the assets to its working condition for the
intended use and are net ofcenvat credits as applicable.
Cost of fixed assets not ready for their intended use as at the balance
sheet date are disclosed as capital work-in- progress.
d) Depreciation
Depreciation on fixed assets is calculated on Straight Line method over
the useful life of asset as specified in Schedule II to the Companies
Act, 2013.
Depreciation on assets costing individually Rs. 5,000 or below is
calculated on Straight Line method over the useful life of asset as
specified in Schedule II to the Companies Act, 2013 without considering
any residual value.
Depreciation for assets purchased / sold is calculated proportionately
from the quarter in which the asset is purchased orsold.
Lease hold land premium paid is amortised over the lease period on
straight line basis and grouped underthe head "Depreciation".
e) Leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of leased term are classified as operating
leases. Operating lease payments are recognized as an expense in the
Statement of Profit and Loss on a straight-line basis over the term of
the lease.
f) Revenue recognition
Revenues comprise of income from sale of manufactured, traded goods and
power.
Revenue from sale of manufactured and traded goods is recognized at the
point of despatch of goods to customers which generally coincides with
the transfer of risks and rewards of ownership of goods. Sales are net
of returns, trade discounts and allowances. Sales exclude excise duty
and sales tax.
Revenue from sale of power is recognised on the basis of actual power
sold and billed less rebate as per the terms of power purchase
agreement entered into with the West Bengal State Electricity
Distribution Company Limited. Income from interest on deposits is
recognised on time proportion basis taking into account the amount
outstanding and the applicable rate of interest.
g) Inventories
Raw Materials and Stores & Consumables are valued at lower of cost and
Net realisable value.
Finished Goods are valued at lower of cost and net realisable value.
Cost includes all direct costs and applicable overheads.
Net realizable value is the estimated selling price in the ordinary
course of business less any applicable selling expenses. Cost is
determined on weighted average basis.
Inventories in process are valued at raw material cost plus estimated
cost of conversion upto the stage of completion.
Variation, if any, detected on physical verification of stocks and
obsolete and slow moving stocks are adjusted in the books of account
appropriately.
h) Foreign currency transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies as at
the balance sheet date are translated at the closing exchange rates on
that date.
In case of items, which are covered by forward exchange contracts, the
difference between the year - end rate and the rate on the date of the
contract is accounted for as income/expense over the life of the
contract. Profit or loss on cancellation of forward contracts is
recognised as income/ expense in the Statement of Profit and Loss of
the year, in which they are cancelled.
Exchange difference arising on foreign exchange transactions during the
year are recognized in the Statement of profit and loss of the year.
i) Employee benefits
Employee benefits provided by the Company include contributions to
Provident fund, Gratuity benefits and Compensated absences.
Defined Contribution Plan - Provident Fund
Employees are entitled to receive benefits under the provident fund,
which is a defined contribution plan, in accordance with Employees
Provident Fund and Miscellaneous Provisions Act, 1952. Both, the
employee and the employer make monthly contributions to the plan at a
predetermined rate (presently at 12%) of the employees' basic salary.
The Company has no further obligations under the plan beyond its
monthly contributions.
Defined Benefit Plan - Gratuity
Employees in India are entitled to benefits under the Payment of
Gratuity Act, 1972, a defined benefit retirement plan covering eligible
employees of the Company. The Plan provides a lump-sum payment to
eligible employees at retirement or on termination of employment. The
gratuity benefit conferred by the Company on its employees is equal to
or greaterthan the statutory minimum. The year-end gratuity liability
is determined based on actuarial valuation performed by an independent
actuary using the Projected Unit Credit Method.
Leave encashment
Liability in respect of leave encashment becoming due or expected to be
availed within one year from the balance sheet date is recognised on
the basis of undiscounted value of estimated amount required to be paid
or estimated value of benefit expected to be availed by the employees.
Liability in respect of leave encashment becoming due or expected to be
availed more than one year after the Balance Sheet date is estimated on
the basis of an actuarial valuation performed by an independent actuary
using the Projected Unit Credit Method.
j) Incometaxes
Provision for tax for the year comprises current income tax and
deferred tax.
Current Tax
Provision for current income tax is made based on the estimated tax
liability in accordance with the relevant tax rates and tax laws.
Current income tax is payable on taxable profits, which differ from
profit or loss in the financial statements. Current income tax is
computed based on tax rates and tax laws that have been enacted or
substantively enacted by the end of the reporting period.
Deferred Tax
Deferred taxes reflect the impact of current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years. Deferred tax is measured based
on the tax rates and the tax laws enacted or substantively enacted at
the balance sheet date. Deferred tax assets are recognized only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realized. Unrecognized deferred tax assets of earlier years are
re-assessed and recognized to the extent that it has become reasonably
certain that future taxable income will be available against which such
deferred tax assets can be realized.
k) Borrowing cost
Borrowing Costs that are attributable to the acquisition and
constructions of qualifying assets are capitalised as a part of the
cost of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. Other
borrowing costs of the year are charged to revenue in the period in
which they are incurred.
l) Earnings per share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events including a bonus issue, bonus element in a
rights issue to existing shareholders, share split and reverse share
split (consolidation of shares). Forthe 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. In determining Earnings per Share,
the Company considers the net profit after tax and includes the
post-tax effect of any extra-ordinary / exceptional item. The number of
shares used in computing basic earnings per share is the weighted
average number of shares outstanding during the period.
m) Provisions, contingent liabilities and contingent assets
The Company creates a provision when there is present obligation as a
result of past event that probably requires an outflow of resources and
a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation or
a present obligation in respect of which the likelihood of outflow of
resources is remote, no provision or disclosure is made. Contingent
assets are neither recognized nor disclosed in the financial statements.
n) Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset.
Recoverable amount is the higher of the asset's net selling price and
its value in use. Value in use is the present value of estimated future
cash flows expected to arise from the continuing use of an asset and
from its disposal at the end of its useful life. If such recoverable
amount of the asset or the recoverable amount of the cash generating
unit to which the asset belongs is less than its carrying amount, the
carrying amount is reduced to its recoverable amount. The reduction is
treated as an impairment loss and is recognised in the Statement of
profit and loss. If at the balance sheet date there is an indication
that if a previously assessed impairment loss no longer exists, the
recoverable amount is reassessed and the asset is reflected at the
recoverable amount subject to a maximum of depreciated historical cost.
o) Segment Reporting
The company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the company as a whole.
Identification of Segments
The Company's Operating Businesses are organized and managed separately
according to the nature of products manufactured/traded, with each
segment representing a strategic business unit that offers different
products to different markets.
Allocation of Revenue and Costs
Direct revenues and direct expenses have been identified to segments on
the basis of their relationship to the operating activities of the
segment.
Common allocable costs are allocated to each segment according to sales
of each segment to total sales of the Company.
Revenue and expenses, which relate to the enterprise as a whole and are
not allocable to any of the segments on a reasonable basis, are
generally included under "unallocated corporate expenses/lncome"
Mar 31, 2014
1. General information
a) The financial statements have been prepared and presented as per the
revised Schedule VI notified under the Companies Act 1956.
b) All amounts in the financial statements are presented in
rupees,except as otherwise stated.
2. Company overview
Ennore Coke Limited (''the Company'') is an entity whose equity shares
are listed in the Bombay Stock Exchange Limited(BSE). The Company is
engaged in the activity of manufacturing and trading of Metallurgical
Coke. The installed capacity of Non- Recovery coke oven Plant at
Haldia, West Bengal is 130,000 TPA. The Company commenced the
commercial production of Metallurgical Coke during 2009-2010.In the
month of August 2011, the company commissioned a Co-Generation power
plant of 12MW capacity at Haldia. The Company shares were acquired by
Haldia Coke and Chemicals Private Limited in 2010-11 and presently its
shareholding is 60.86%. Consequent to the above Ennore Coke Limited is
a subsidiary company of Haldia Coke and Chemicals Private Limited.
3. Significant accounting policies
a) Basis of preparation of financial statements
The financial statements are prepared in accordance with Generally
Accepted Accounting Principles ("GAAP") applicable in India. GAAP
comprises mandatory accounting standards prescribed by the Companies
(Accounting Standards) Rules, 2006 and the provisions of the Companies
Act, 1956. Accounting policies have been consistently applied except
where a newly issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in the
accounting policy hitherto in use. The management evaluates all
recently issued or revised accounting standards on an on-going basis.
b) Use of estimates
The preparation of the financial statements in conformity with GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and disclosures of
contingent liabilities as at the date of the financial statements and
reported amounts of revenue and expenses for the year. The key
estimates made by the Company in preparing these financial statements
comprise provisions for doubtful debts, future obligations under
employee retirement benefit plans, income taxes and the useful lives of
assets. Actual results could differ from those estimates.
c) Fixed assets
Fixed assets are stated at acquisition cost less accumulated
depreciation and impairment losses, if any. Cost of acquisition is
inclusive of duties, taxes, freight and other directly attributable
costs incurred to bring the assets to its working condition for the
intended use and are net of cenvat credits as applicable.
Cost of fixed assets not ready for their intended use as at the balance
sheet are disclosed as capital work-in-progress.
d) Depreciation
* Depreciation on fixed assets is calculated on written down method at
the applicable rates specified in Schedule XIV to the Companies Act,
1956. Depreciation for assets purchased/ sold during a period is
proportionately charged.
* All assets costing individually Rs. 5,000 or below are fully
depreciated in the year of acquisition.
* Lease hold land premium paid is amortised over the lease period on
straight line basis.
e) Leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of leased term are classified as operating
leases. Operating lease payments are recognized as an expense in the
Statement of Profit and Loss on a straight-line basis over the term of
the lease.
f) Revenue recognition
* Revenues comprise of income from sale of manufactured, traded goods
and power.
* Revenue from sale of manufactured and traded goods is recognized at
the point of despatch of goods to customers which generally coincides
with the transfer of risks and rewards of ownership of goods. Sales are
net of returns, trade discounts and allowances. Sales exclude excise
duty and sales tax.
* Revenue from sale of power is recognised on the basis of actual power
sold and billed less rebate as per the terms of power purchase
agreement entered into with the West Bengal State Electricity
Distribution Company Limited.
* Income from interest on deposits is recognised on time proportion
basis taking into account the amount outstanding and the applicable
rate of interest.
g) Inventories
Raw Materials are valued at lower of cost and Net realisable value.
Finished Goods are valued at lower of cost and net realisable value.
Cost includes all direct costs and applicable overheads.
Net realizable value is the estimated selling price in the ordinary
course of business less any applicable selling expenses. Cost is
determined on weighted average basis.
Inventories in process are valued at raw material cost plus estimated
cost of conversion upto the stage of completion.
Variation, if any, detected on physical verification of stocks and
obsolete and slow moving stocks are adjusted in the books of account
appropriately.
h) Foreign currency transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies as at
the balance sheet date are translated at the closing exchange rates on
that date.
In case of items, which are covered by forward exchange contracts, the
difference between the year- end rate and the rate on the date of the
contract is accounted for as income/expense over the life of the
contract. Profit or loss on cancellation of forward contracts is
recognised as income/ expense in the Statement of Profit and Loss of
the year, in which they are cancelled.
Exchange difference arising on foreign exchange transactions during the
year are recognized in the Statement of profit and loss of the year.
i) Employee benefits
Employee benefits provided by the Company include contributions to
Provident fund, Gratuity benefits and Compensated absences.
* Defined Contribution Plan - Provident Fund
Employees are entitled to receive benefits under the provident fund,
which is a defined contribution plan, in accordance with Employees
Provident Fund and Miscellaneous Provisions Act, 1952. Both, the
employee and the employer make monthly contributions to the plan at a
predetermined rate (presently at 12%) of the employees'' basic salary.
The Company has no further obligations under the plan beyond its
monthly contributions.
* Defined Benefit Plan - Gratuity
Employees in India are entitled to benefits under the Payment of
Gratuity Act, 1972, a defined benefit retirement plan covering eligible
employees of the Company. The Plan provides a lump-sum payment to
eligible employees at retirement or on termination of employment. The
gratuity benefit conferred by the Company on its employees is equal to
or greater than the statutory minimum. The year-end gratuity liability
is determined based on actuarial valuation performed by an independent
actuary using the Projected Unit Credit Method.
* Leave encashment
Liability in respect of leave encashment becoming due or expected to be
availed within one year from the balance sheet date is recognised on
the basis of undiscounted value of estimated amount required to be paid
or estimated value of benefit expected to be availed by the employees.
Liability in respect of leave encashment becoming due or expected to be
availed more than one year after the Balance Sheet date is estimated on
the basis of an actuarial valuation performed by an independent actuary
using the Projected Unit Credit Method.
j) Income taxes
Provision for tax for the year comprises current income tax and
deferred tax.
Current Tax
Provision for current income tax is made based on the estimated tax
liability in accordance with the relevant tax rates and tax laws.
Current income tax is payable on taxable profits, which differ from
profit or loss in the financial statements. Current income tax is
computed based on tax rates and tax laws that have been enacted or
substantively enacted by the end of the reporting period.
Deferred Tax
Deferred income taxes reflect the impact of current year timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years. Deferred tax is
measured based on the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date. Deferred tax assets
are recognized only to the extent that there is reasonable certainty
that sufficient future taxable income will be available against which
such deferred tax assets can be realized. Unrecognized deferred tax
assets of earlier years are re-assessed and recognized to the extent
that it has become reasonably certain that future taxable income will
be available against which such deferred tax assets can be realized.
k) Borrowing cost
Borrowing costs are recognised in the financial statements in
accordance with the Accounting Standard -16 of Companies (Accounting
Standards) Rules, 2006. Borrowing Costs that are attributable to the
acquisition and constructions of qualifying assets are capitalised as a
part of the cost of such assets. A qualifying asset is one that
necessarily takes substantial period of time to get ready for its
intended use. Other borrowing costs of the year are charged to revenue
in the period in which they are incurred.
l) Earnings per share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events including a bonus issue, bonus element in a
rights issue to existing shareholders, share split and reverse share
split (consolidation of shares). 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. In determining Earnings per Share,
the Company considers the net profit after tax and includes the
post-tax effect of any extra-ordinary/ exceptional item. The number of
shares used in computing basic earnings per share is the weighted
average number of shares outstanding during the period.
m) Provisions, contingent liabilities and contingent assets
The Company creates a provision when there is present obligation as a
result of past event that probably requires an outflow of resources and
a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation in respect of which the likelihood of outflow
of resources is remote, no provision or disclosure is made. Contingent
assets are neither recognized nor disclosed in the financial
statements.
n) Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset.
Recoverable amount is the higher of the asset''s net selling price and
its value in use. Value in use is the present value of estimated future
cash flows expected to arise from the continuing use of an asset and
from its disposal at the end of its useful life. If such recoverable
amount of the asset or the recoverable amount of the cash generating
unit to which the asset belongs is less than its carrying amount, the
carrying amount is reduced to its recoverable amount. The reduction is
treated as an impairment loss and is recognised in the Statement of
profit and loss. If at the balance sheet date there is an indication
that if a previously assessed impairment loss no longer exists, the
recoverable amount is reassessed and the asset is reflected at the
recoverable amount subject to a maximum of depreciated historical cost.
o) Segment Reporting
The company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the company as a whole.
Identification of Segments
The Company''s Operating Businesses are organized and managed separately
according to the nature of products manufactured/traded, with each
segment representing a strategic business unit that offers different
products to different markets.
Allocation of Revenue and Costs
Direct revenues and direct expenses have been identified to segments on
the basis of their relationship to the operating activities of the
segment.
Common allocable costs are allocated to each segment according to sales
of each segment to total sales of the Company.
Revenue and expenses, which relate to the enterprise as a whole and are
not allocable to any of the segments on a reasonable basis, are
generally included under "unallocated corporate expenses/Income".
Mar 31, 2013
A) Basis of preparation of financial statements
The financial statements are prepared in accordance with Generally
Accepted Accounting Principles ("GAAP") applicable in India. GAAP
comprises mandatory accounting standards prescribed by the Companies
(Accounting Standards) Rules, 2006 and the provisions of the Companies
Act, 1956. Accounting policies have been consistently applied except
where a newly issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in the
accounting policy hitherto in use. The management evaluates all
recently issued or revised accounting standards on an on-going basis.
b) Use of estimates
The preparation of the financial statementsin conformity with GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and disclosures of
contingent liabilities as at the date of the financial statements and
reported amounts of revenue and expenses for the year. The key
estimates made by the Company in preparing these financial statements
comprise provisions for doubtful debts, future obligations under
employee retirement benefit plans, income taxes and the useful lives of
assets. Actual results could differ from those estimates.
c) Fixed assets and depreciation
Fixed assets are stated at acquisition cost less accumulated
depreciation and impairment losses, if any. Cost of acquisition is
inclusive of duties, taxes, freight and other directly attributable
costs incurred to bring the assets to its working condition for
intended use and are net of cenvat credits as applicable.
Advances paid towards the acquisition of fixed assets outstanding at
each balance sheet date and the cost of fixed assets not ready for
their intended use before such date are disclosed as capital
work-in-progress.
Depreciation on fixed assets is calculated on written down method at
the applicable rates specified in Schedule XIV to the Companies Act,
1956. Depreciation for assets purchased / sold during a period is
proportionately charged. All assets costing individually Rs 5,000 or
below are fully depreciated in the year of acquisition. Lease hold
land premium paid is amortised over the lease period on straight line
basis.
d) Leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of leased term are classified as operating
leases. Operating lease payments are recognized as an expense in the
Profit and Loss account on a straight-line basis over the term of the
lease.
e) Revenue recognition
Revenues comprise of income from sale of manufactured, traded goods and
power. Revenue from sale of manufactured and traded goods is
recognized at the point of despatch of goods to customers which
generally coincides with the transfer of risks and rewards of ownership
of goods. Sales are net of returns, trade discounts and allowances.
Sales exclude excise duty and sales tax. Revenue from sale of power is
recognised on the basis of actual power sold and billed less rebate as
per the terms of power purchase agreement entered into with the State
Electricity Board.
Income from interest on deposits is recognised on time proportion basis
taking into account the amount outstanding and the applicable rate of
interest.
f) Inventories
Raw Materials are valued at lower of cost and Net realisable value.
Finished Goods are valued at lower of cost and net realisable value.
Cost includes all direct costs and applicable overheads.
Net realizable value is the estimated selling price in the ordinary
course of business less any applicable selling expenses. Cost is
determined on weighted average basis.
Inventories in process are valued at raw material cost plus estimated
cost of conversion upto the stage of completion.
Variation, if any, detected on physical verification of stocks and
obsolete and slow moving stocks are adjusted in the books of account
appropriately.
g) Foreign currency transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies as at
the balance sheet date are translated at the closing exchange rates on
that date.
In case of items, which are covered by forward exchange contracts, the
difference between the year- end rate and the rate on the date of the
contract is accounted for as income/expense over the life of the
contract. Profit or loss on cancellation of forward contracts is
recognised as income/ expense in the Statement of Profit and Loss of
the year, in which they are cancelled.
Exchange difference arising on foreign exchange transactions during the
year are recognized in the profit and loss account of the year.
h) Employee benefits
Employee benefits provided by the Company include contributions to
Provident fund, Gratuity benefits and Compensated absences.
- Defined ContributionPlan - Provident Fund
Employees are entitled to receive benefits under the provident fund,
which is a defined contribution plan, in accordance with Employees
Provident Fund and Miscellaneous Provisions Act, 1952. Both, the
employee and the employer make monthly contributions to the plan at a
predetermined rate (presently at 12%) of the employees'' basic salary.
The Company has no further obligations under the plan beyond its
monthly contributions.
- Defined Benefit Plan - Gratuity
Employees in India are entitled to benefits under the Payment of
Gratuity Act, 1972, a defined benefit retirement plan covering eligible
employees of the Company. The Plan provides a lump-sum payment to
eligible employees at retirement or on termination of employment. The
gratuity benefit conferred by the Company on its employees is equal to
or greater than the statutory minimum. The year-end gratuity liability
is determined based on actuarial valuation performed by an independent
actuary using the Projected Unit Credit Method.
- Leave encashment
Liability in respect of leave encashment becoming due or expected to be
availed within one year from the balance sheet date is recognised on
the basis of undiscounted value of estimated amount required to be paid
or estimated value of benefit expected to be availed by the employees.
Liability in respect of leave encashment becoming due or expected to be
availed more than one year after the Balance Sheet date is estimated on
the basis of an actuarial valuation performed by an independent actuary
using the Projected Unit Credit Method.
i) Income taxes
Provision for tax for the year comprises current income tax and
deferred tax. Provision for current income tax is made based on the
estimated tax liability in accordance with the relevant tax rates and
tax laws.
Current tax is payable on taxable profits, which differ from profit or
loss in the financial statements. Current tax is computed based on tax
rates and tax laws that have been enacted or substantively enacted by
the end of the reporting period.
Deferred income taxes reflect the impact of current year timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years. Deferred tax is
measured based on the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date. Deferred tax assets
are recognized only to the extent that there is reasonable certainty
that sufficient future taxable income will be available against which
such deferred tax assets can be realized. Unrecognized deferred tax
assets of earlier years are re-assessed and recognized to the extent
that it has become reasonably certain that future taxable income will
be available against which such deferred tax assets can be realized.
j) Borrowing cost
Borrowing costs are recognised in the financial statements in
accordance with the Accounting Standard -16 of Companies (Accounting
Standards) Rules, 2006. Borrowing Costs that are attributable to the
acquisition and constructions of qualifying assets are capitalised as a
part of the cost of such assets. A qualifying asset is one that
necessarily takes substantial period of time to get ready for its
intended use.
Other borrowing costs of the year are charged to revenue in the period
in which they are incurred.
k) Earnings per share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events including a bonus issue, bonus element in a
rights issue to existing shareholders, share split and reverse share
split (consolidation of shares). 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.In determining Earnings per Share, the
Company considers the net profit after tax and includes the post-tax
effect of any extra-ordinary / exceptional item. The number of shares
used in computing basic earnings per share is the weighted average
number of shares outstanding during the period.
l) Provisions, contingent liabilities and contingent assets
The Company creates a provision when there is present obligation as a
result of past event that probably requires an outflow of resources and
a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation in respect of which the likelihood of outflow
of resources is remote, no provision or disclosure is made. Contingent
assets are neither recognized nor disclosed in the financial
statements.
m) Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset.
Recoverable amount is the higher of the asset''s net selling price and
its value in use. Value in use is the present value of estimated future
cash flows expected to arise from the continuing use of an asset and
from its disposal at the end of its useful life. If such recoverable
amount of the asset or the recoverable amount of the cash generating
unit to which the asset belongs is less than its carrying amount, the
carrying amount is reduced to its recoverable amount. The reduction is
treated as an impairment loss and is recognised in the profit and loss
account. If at the balance sheet date there is an indication that if a
previously assessed impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at the recoverable
amount subject to a maximum of depreciated historical cost.
n) Segment Reporting
The company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the company as a whole.
Identification of Segments
The Company''s Operating Businesses are organized and managed separately
according to the nature of products manufactured/traded, with each
segment representing a strategic business unit that offers different
products to different markets.
Allocation of Revenue and Costs
Direct revenues and direct expenses have been identified to segments on
the basis of their relationship to the operating activities of the
segment.
Common allocable costs are allocated to each segment according to sales
of each segment to total sales of the Company.
Revenue and expenses, which relate to the enterprise as a whole and are
not allocable to any of the segments on a reasonable basis, are
generally included under "unallocated corporate expenses/Income"
Mar 31, 2012
A) Basis of preparation of financial statements
The financial statements are prepared in accordance with Generally
Accepted Accounting Principles ("GAAP") applicable in India. GAAP
comprises mandatory accounting standards prescribed by the Companies
(Accounting Standards) Rules, 2006 and the provisions of the Companies
Act, 1956. Accounting policies have been consistently applied except
where a newly issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in the
accounting policy hitherto in use. The management evaluates all
recently issued or revised accounting standards on an on-going basis.
b) Use of estimates
The preparation of the financial statements in conformity with GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and disclosures of
contingent liabilities as at the date of the financial statements and
reported amounts of revenue and expenses for the year. The key
estimates made by the Company in preparing these financial statements
comprise provisions for doubtful debts, future obligations under
employee retirement benefit plans, income taxes and the useful lives of
assets. Actual results could differ from those estimates.
c) Fixed assets and depreciation
Fixed assets are stated at acquisition cost less accumulated
depreciation and impairment losses, if any. Cost of acquisition is
inclusive of duties, taxes, freight and other directly attributable
costs incurred to bring the assets to its working condition for
intended use and are net of cenvat credits as applicable.
Advances paid towards the acquisition of fixed assets outstanding at
each balance sheet date and the cost of fixed assets not ready for
their intended use before such date are disclosed as capital work-
in-progress.
Depreciation on fixed assets is calculated on written down method at
the applicable rates specified in Schedule XIV to the Companies Act,
1956. Depreciation for assets purchased / sold during a period is
proportionately charged. All assets costing individually Rs 5,000 or
below are fully depreciated in the year of acquisition. Lease hold land
premium paid is amortised over the lease period on straight line basis.
d) Leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of leased term are classified as operating
leases. Operating lease payments are recognized as an expense in the
Profit and Loss account on a straight-line basis over the term of the
lease.
e) Revenue recognition
Revenues comprise of income from sale of manufactured, traded goods and
power. Revenue from sale of manufactured and traded goods is recognized
at the point of despatch of goods to customers which generally
coincides with the transfer of risks and rewards of ownership of goods.
Sales are net of returns, trade discounts and allowances. Sales exclude
excise duty and sales tax. Revenue from sale of power is recognised on
the basis of actual power sold and billed as per the terms of power
purchase agreement entered into with the State Electricity Board.
Income from interest on deposits is recognised on time proportion basis
taking into account the amount outstanding and the applicable rate of
interest.
f) Inventories
Inventories are valued at lower of cost and net realisable value. Cost
includes all direct cost and applicable overheads.Net realizable value
is the estimated selling price in the ordinary course of business less
any applicable selling expenses. Cost is determined on weighted average
basis.
Inventories in process are valued at raw material cost plus estimated
cost of conversion upto the stage of completion.
Variation, if any, detected on physical verification of stocks and
obsolete and slow moving stocks are adjusted in the books of account
appropriately.
g) Foreign currency transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies as at
the balance sheet date are translated at the closing exchange rates on
that date.
In case of items, which are covered by forward exchange contracts, the
difference between the year- end rate and the rate on the date of the
contract is accounted for as income/expense over the life of the
contract. Profit or loss on cancellation of forward contracts is
recognised as income/ expense in the Statement of Profit and Loss of
the year, in which they are cancelled. Exchange difference arising on
foreign exchange transactions during the year are recognized in the
profit and loss account of the year.
h) Employee benefits
Employee benefits provided by the Company include contributions to
Provident fund, Gratuity benefits and Compensated absences.
- Defined Contribution Plan - Provident Fund
Employees are entitled to receive benefits under the provident fund,
which is a defined contribution plan, in accordance with Employees
Provident Fund and Miscellaneous Provisions Act, 1952. Both, the
employee and the employer make monthly contributions to the plan at a
predetermined rate (presently at 12%) of the employees' basic salary.
The Company has no further obligations under the plan beyond its
monthly contributions.
- Defined Benefit Plan - Gratuity
Employees in India are entitled to benefits under the Payment of
Gratuity Act, 1972, a defined benefit retirement plan covering eligible
employees of the Company. The Plan provides a lump-sum payment to
eligible employees at retirement or on termination of employment. The
gratuity benefit conferred by the Company on its employees is equal to
or greater than the statutory minimum. The year-end gratuity liability
is determined based on actuarial valuation performed by an independent
actuary using the Projected Unit Credit Method.
- Leave encashment
Liability in respect of leave encashment becoming due or expected to be
availed within one year from the balance sheet date is recognised on
the basis of undiscounted value of estimated amount required to be paid
or estimated value of benefit expected to be availed by the employees.
Liability in respect of leave encashment becoming due or expected to be
availed more than one year after the Balance Sheet date is estimated on
the basis of an actuarial valuation performed by an independent actuary
using the Projected Unit Credit Method.
i) Income taxes
Provision for tax for the year comprises current income tax and
deferred tax. Provision for current income tax is made based on the
estimated tax liability in accordance with the relevant tax rates and
tax laws.
Current tax is payable on taxable profits, which differ from profit or
loss in the financial statements. Current tax is computed based on tax
rates and tax laws that have been enacted or substantively enacted by
the end of the reporting period.
Deferred income taxes reflect the impact of current year timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years. Deferred tax is
measured based on the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date. Deferred tax assets
are recognized only to the extent that there is reasonable certainty
that sufficient future taxable income will be available against which
such deferred tax assets can be realized. Unrecognized deferred tax
assets of earlier years are re-assessed and recognized to the extent
that it has become reasonably certain that future taxable income will
be available against which such deferred tax assets can be realized.
j) Borrowing cost
Borrowing costs are recognised in the financial statements in
accordance with the Accounting Standard -16 of Companies (Accounting
Standards) Rules, 2006. Borrowing Costs that are attributable to the
acquisition and constructions of qualifying assets are capitalised as a
part of the cost of such assets. A qualifying asset is one that
necessarily takes substantial period of time to get ready for its
intended use. Other borrowing costs of the year are charged to revenue
in the period in which they are incurred.
k) Earnings per share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events including a bonus issue, bonus element in a
rights issue to existing shareholders, share split and reverse share
split (consolidation of shares). 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. In determining Earnings per Share,
the Company considers the net profit after tax and includes the
post-tax effect of any extra-ordinary / exceptional item. The number of
shares used in computing basic earnings per share is the weighted
average number of shares outstanding during the period.
l) Provisions, contingent liabilities and contingent assets
The Company creates a provision when there is present obligation as a
result of past event that probably requires an outflow of resources and
a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation in respect of which the likelihood of outflow
of resources is remote, no provision or disclosure is made. Contingent
assets are neither recognized nor disclosed in the financial
statements.
m) Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset.
Recoverable amount is the higher of the asset's net selling price and
its value in use. Value in use is the present value of estimated future
cash flows expected to arise from the continuing use of an asset and
from its disposal at the end of its useful life. If such recoverable
amount of the asset or the recoverable amount of the cash generating
unit to which the asset belongs is less than its carrying amount, the
carrying amount is reduced to its recoverable amount. The reduction is
treated as an impairment loss and is recognised in the profit and loss
account. If at the balance sheet date there is an indication that if a
previously assessed impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at the recoverable
amount subject to a maximum of depreciated historical cost.
Mar 31, 2011
1) General information
All amounts in the financial statements are presented in Rupees except
per share data and as otherwise stated. Figures of previous year have
been reclassified wherever considered necessary to conform to the
figures presented in the current year.
2) Company overview
Ennore Coke Limited ('the Company') is an entity whose equity shares
are listed in the Bombay Stock Exchange Limited (BSE). The Company is
engaged in the activity of manufacturing and trading of Metallurgical
Coke. The installed capacity of Non- Recovery coke oven plant at
Haldia, West Bengal is 130,000 TPA. The Company has commenced the
commercial production of Metallurgical Coke during 2009-2010. The12MW
Co-Generation power plant at Halida, is under construction and is
expected to commence production early 2011-2012. In the current year,
pursuant to the group re-structuring, the Company shares has been
acquired by Haldia Coke and Chemicals Private Limited to the extent of
60.87%. Consequent to the above acquisitions, Ennore Coke Limited is
subsidiary company of Haldia Coke and Chemicals Private Limited.
3) Significant accounting policies
a) Basis of preparation of financial statements
The financial statements are prepared in accordance with Generally
Accepted Accounting Principles ("GAAP") applicable in India. GAAP
comprises mandatory accounting standards prescribed by the Companies
(Accounting Standards) Rules, 2006 and the provisions of the Companies
Act, 1956. Accounting policies have been consistently applied except
where a newly issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in the
accounting policy hitherto in use. The management evaluates all
recently issued or revised accounting standards on an ongoing basis.
b) Use of estimates
The preparation of the financial statements in conformity with GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and disclosures of
contingent liabilities as at the date of the financial statements and
reported amounts of revenue and expenses for the year. The key
estimates made by the Company in preparing these financial statements
comprise provisions for doubtful debts, future obligations under
employee retirement benefit plans, income taxes and the useful lives of
assets. Actual results could differ from those estimates.
c) Fixed assets and depreciation
Fixed assets are stated at acquisition cost less accumulated
depreciation and impairment losses, if any. Cost of acquisition is
inclusive of duties, taxes, freight and other directly attributable
costs incurred to bring the assets to its working condition for
intended use and are net of cenvat credits as applicable.
Advances paid towards the acquisition of fixed assets outstanding at
each balance sheet date and the cost of fixed assets not ready for
their intended use before such date are disclosed as capital work-
in-progress.
Depreciation on fixed assets is calculated on written down method at
the applicable rates specified in Schedule XIV to the Companies Act,
1956. Depreciation for assets purchased / sold during a period is
proportionately charged. All assets costing individually Rs 5,000 or
below are fully depreciated in the year of acquisition. Lease hold land
premium paid is amortised over the lease period on straight line basis.
d) Leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of leased term are classified as operating
leases. Operating lease payments are recognized as an expense in the
Profit and Loss account on a straight- line basis over the term of the
lease.
e) Revenue recognition
Revenues comprise of income from sale of manufactured and traded goods.
Revenue is recognized at the point of dispatch of goods to customers
which generally coincides with the transfer of risks and rewards of
ownership of goods. Sales are net of returns, trade discounts, and
allowances. Sales exclude excise duty and sales tax.
Income from interest on deposits is recognised on time proportion basis
taking into account the amount outstanding and the applicable rate of
interest.
Agency income is recognised on identifying the buyer and concluding the
transaction as per terms of agreement.
f) Inventories
Inventories are valued at lower of cost and net realisable value. Cost
includes all direct cost and applicable overheads. Net realizable value
is the estimated selling price in the ordinary course of business less
any applicable selling expenses. Cost is determined on weighted average
basis.
Inventories in process are valued at raw material cost plus estimated
cost of conversion upto the stage of completion.
Variation, if any, detected on physical verification of stocks and
obsolete and slow moving stocks are adjusted in the books of account
appropriately.
g) Foreign currency transactions
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of the transactions. Monetary assets and
liabilities denominated in foreign currencies as at the balance sheet
date are translated at the closing exchange rates on that date.
Exchange difference arising on foreign exchange transactions during the
year are recognized in the profit and loss account of the year.
h) Employee benefits
Employee benefits provided by the Company include contributions to
Provident fund, Gratuity benefits and Leave encashment.
- Defined Contribution Plan - Provident Fund
Employees are entitled to receive benefits under the provident fund,
which is a defined contribution plan, in accordance with Employees
Provident Fund and Miscellaneous Provisions Act, 1952. Both, the
employee and the employer make monthly contributions to the plan at a
predetermined rate (presently at 12%) of the employees' basic salary.
The Company has no further obligations under the plan beyond its
monthly contributions.
- Defined Benefit Plan - Gratuity
Employees in India are entitled to benefits under the Payment of
Gratuity Act, 1972, a defined benefit retirement plan covering eligible
employees of the Company. The Plan provides a lump-sum payment to
eligible employees at retirement or on termination of employment. The
gratuity benefit conferred by the Company on its employees is equal to
or greater than the statutory minimum. The year end gratuity liability
is determined based on actuarial valuation using Projected Unit Credit
Method.
- Leave encashment
Liability in respect of leave encashment becoming due or expected to be
availed within one year from the balance sheet date is recognised on
the basis of undiscounted value of estimated amount required to be paid
or estimated value of benefit expected to be availed by the employees.
Liability in respect of leave encashment becoming due or expected to be
availed more than one year after the Balance Sheet date is estimated on
the basis of an actuarial valuation performed by an independent actuary
using the Projected Unit Credit Method.
i) Income taxes
Provision for tax for the year comprises current income tax and
deferred tax. Provision for current income tax is made based on the
estimated tax liability in accordance with the relevant tax rates and
tax laws.
Current tax is payable on taxable profits, which differ from profit or
loss in the financial statements. Current tax is computed based on tax
rates and tax laws that have been enacted or substantively enacted by
the end of the reporting period.
Deferred income taxes reflect the impact of current year timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years. Deferred tax is
measured based on the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date. Deferred tax assets
are recognized only to the extent that there is reasonable certainty
that sufficient future taxable income will be available against which
such deferred tax assets can be realized. Unrecognized deferred tax
assets of earlier years are re-assessed and recognized to the extent
that it has become reasonably certain that future taxable income will
be available against which such deferred tax assets can be realized.
j) Borrowing cost
Borrowing costs are recognised in the financial statements in
accordance with the Accounting Standard -16 of Companies (Accounting
Standards) Rules, 2006. Borrowing Costs that are attributable to the
acquisition and constructions of qualifying assets are capitalised as a
part of the cost of such assets. A qualifying asset is one that
necessarily takes substantial period of time to get ready for its
intended use. Other borrowing costs of the year are charged to revenue
in the period in which they are incurred.
k) Earnings per share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events including a bonus issue, bonus element in a
rights issue to existing shareholders, share split and reverse share
split (consolidation of shares). 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.In determining Earnings Per Share,
the Company considers the net profit after tax and includes the post
tax effect of any extra-ordinary / exceptional item. The number of
shares used in computing basic earnings per share is the weighted
average number of shares outstanding during the period.
l) Provisions, contingent liabilities and contingent assets
The Company creates a provision when there is present obligation as a
result of past event that probably requires an outflow of resources and
a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation in respect of which the likelihood of outflow
of resources is remote, no provision or disclosure is made. Contingent
assets are neither recognized nor disclosed in the financial
statements.
m) Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset.
Recoverable amount is the higher of the asset's net selling price and
its value in use. Value in use is the present value of estimated future
cash flows expected to arise from the continuing use of an asset and
from its disposal at the end of its useful life. If such recoverable
amount of the asset or the recoverable amount of the cash generating
unit to which the asset belongs is less than its carrying amount, the
carrying amount is reduced to its recoverable amount. The reduction is
treated as an impairment loss and is recognised in the profit and loss
account. If at the balance sheet date there is an indication that if a
previously assessed impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at the recoverable
amount subject to a maximum of depreciated historical cost.
Mar 31, 2010
A) Basis of Preparation of Financial Statements
The financial statements are prepared in accordance with Generally
Accepted Accounting Principles ("GAAP") applicable in India. GAAP
comprises mandatory accounting standards prescribed by the Companies
(Accounting Standards) Rules, 2006 and the provisions of the Companies
Act, 1956. Accounting policies have been consistently applied except
where a newly issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in the
accounting policy hitherto in use. The management evaluates all
recently issued or revised accounting standards on an ongoing basis.
B) Use of Estimates
The preparation of the financial statements in conformity with GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and disclosures of
contingent liabilities as at the date of the financial statements and
reported amounts of revenue and expenses for the year.
The key estimates made by the Company in preparing these financial
statements comprise provisions for doubtful debts, future obligations
under employee retirement benefit plans, income taxes and the useful
lives of assets. Actual results could differ from those estimates.
C) Fixed Assets
Fixed assets are stated at acquisition cost less accumulated
depreciation and impairment losses, if any. Cost of acquisition is
inclusive of duties, taxes, freight and other directly attributable
costs incurred to bring the assets to its working condition for
intended use and are net of cenvat credits as applicable.
Advances paid towards the acquisition of fixed assets outstanding at
each balance sheet date and the cost of fixed assets not ready for
their intended use before such date are disclosed as capital
work-in-progress.
D) Depreciation and Amortisation
Depreciation on fixed assets is calculated on written down method at
the applicable rates specified in Schedule XIV to the Companies Act,
1956. Depreciation for assets purchased / sold during a period is
proportionately charged. All assets costing individually Rs 5,000 or
below are fully depreciated in the year of acquisition. Lease hold land
premium paid is amortised over the lease period on straight line basis.
E) Leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of leased term are classified as operating
leases. Operating lease payments are recognized as an expense in the
Profit and Loss account on a straight-line basis over the term of the
lease.
F) Revenue Recognition
Revenues comprise of income from sale of manufactured and traded goods.
Revenues are recognized at the point of dispatch of goods to customers
on the transfer of risks and rewards of ownership of goods. Sales are
net of returns, trade discounts, and allowances. Sales exclude excise
duty and sales tax.
G)Inventory
Inventory is valued at lower of cost and net realizable value. Cost
includes all direct cost and applicable overheads. Net realizable value
is the estimated selling price in the ordinary course of business less
any applicable selling expenses.
Stocks in process are valued at raw material cost plus estimated cost
of conversion upto the stage of completion.
Cost is determined on weighted average method basis for the each
category under different locations. Raw Material or Traded goods have
been categorised based on quality factor (say import or export
material, high or low quality)
Variation, if any, detected on physical verification of stocks and
obsolete and slow moving stocks are adjusted in the books of account
appropriately.
H) Foreign Currency Transactions
- Initial Recognition
Transactions denominated in foreign currencies are recorded at the
rates of exchange prevailing on the date of the transaction.
- Conversion
Monetary assets and liabilities denominated in foreign currency (other
than those against which a forward cover exists) are converted at the
rate of exchange prevailing on the date of the balance sheet.
- Exchange Differences
All exchange differences arising on settlement/conversion on foreign
currency transactions are included in the profit and loss account in
the year in which they arise.
I) Employee Benefits
- Short Term Employee Benefits Employee benefits payable wholly within
twelve months of rendering the service are classified as short term
employee benefits. Short term employee benefits, including accumulated
compensated absences, at the balance sheet date, are recognised as an
expense as per the Companys scheme based on expected obligations on
undiscounted basis.
- Defined Contribution Plan - Provident Fund Employees are entitled to
receive benefits under the provident fund, which is a defined
contribution plan, in accordance with Employees Provident Fund and
Miscellaneous Provisions Act, 1952. Both, the employee and the employer
make monthly contributions to the plan at a predetermined rate
(presently at 12%) of the employees basic salary. The Company has no
further obligations under the plan beyond its monthly contributions.
- Defined Benefit Plan - Gratuity Employees in India are entitled to
benefits under the Payment of Gratuity Act, 1972, a defined benefit
retirement plan covering eligible employees of the Company. The Plan
provides a lump-sum payment to eligible employees at retirement or on
termination of employment. The gratuity benefit conferred by the
Company on its employees is equal to or greater than the statutory
minimum. The year end gratuity liability is determined based on
actuarial valuation using Projected Unit Credit Method.
J) Income Taxes
Tax expense comprises current and deferred taxes. Current Income Tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act, 1961.
Deferred income taxes reflect the impact of current year timing
differences between taxable income and accounting income and reversal
of timing differences of earlier years. Deferred tax is measured based
on the tax rates and the tax laws enacted or substantively enacted at
the balance sheet date. Deferred tax assets are recognised only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realised. Unrecognised deferred tax assets of earlier years are
re-assessed and recognised to the extent that it has become reasonably
certain that future taxable income will be available against which such
deferred tax assets can be realised.
K) Investments
Investments are either classified as current or long-term based on the
managements intention at the time of purchase. Current investments are
carried at the lower of cost and fair value. Long- term investments are
carried at cost and provisions recorded to recognize any decline, other
than temporary, in the carrying value of each investment.
L) Borrowing Cost
Borrowing costs are recognised in the financial statements in
accordance with the Accounting Standard -16 of Companies (Accounting
Standards) Rules, 2006. Borrowing Costs that are attributable to the
acquisition and constructions of qualifying assets are capitalised as a
part of the cost of such assets. A qualifying asset is one that
necessarily takes substantial period of time to get ready for its
intended use. Other borrowing costs of the year are charged to revenue
in the period in which they are incurred.
M) Earnings Per Share
In determining Earnings Per Share, the Company considers the net profit
after tax and includes the post tax effect of any extra-ordinary /
exceptional item. The number of shares used in computing basic
earnings per share is the weighted average number of shares outstanding
during the period.
N) Provisions
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
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. Provision for expenditure relating to voluntary retirement
is made when the employee accepts the offer of early retirement.
O) Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset.
Recoverable amount is the higher of the assets net selling price and
its value in use. Value in use is the present value of estimated future
cash flows expected to arise from the continuing use of an asset and
from its disposal at the end of its useful life. If such recoverable
amount of the asset or the recoverable amount of the cash generating
unit to which the asset belongs is less than its carrying amount, the
carrying amount is reduced to its recoverable amount. The reduction is
treated as an impairment loss and is recognised in the profit and loss
account. If at the balance sheet date there is an indication that if a
previously assessed impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at the recoverable
amount subject to a maximum of depreciated historical cost.