Mar 31, 2018
Notes forming part of the financial statements for the year ended March 31, 2018 Note - 1 - Company overview
Ginni Filaments Ltd is a textile company manufacturing cotton yarn, knitted fabric, non-woven fabric, garments and wipes at its factories located at Kosikalan (UP), Panoli (Gujarat), Noida (U.P.) and Haridwar (Uttarakhand).
Note - 2 - Significant Accounting Policies
a. Basis of preparation of financial statements
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 as amended and other relevant provisions of the Act.
For all periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with accounting standards notified under Companies (Accounting Standard) Rule, 2006 (Indian GAAP). These financial statements have been prepared in accordance with Ind-AS 101, âFirst Time Adoption of Ind-ASâ,â as these are the Companyâs first Ind-AS compliant Financial Statements for the year ended March 31, 2018.
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.
b. Use of estimate and judgments
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made. Differences between actual results and estimates are recognized in the period in which the results are known/ materialized.
c. Revenue recognition
Revenue is recognized at the fair value of the consideration received or receivable. The amount disclosed as revenue is inclusive of excise duty and net of returns, trade discounts.
The company recognizes revenue when the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the entity.
(i) Sales of goods
Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods are transferred to the buyer and the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold.
Revenue from export sales is recognized on the basis of bill of lading while other sale of goods is recognized on the basis of exactor dispatch.
(ii) Sale of services
Revenue from services is accounted for on the basis of work performed and rendering of services as per the terms of the specific contract.
(iii) Export Incentives
Export benefits/incentives are accounted for on accrual basis.
(iv) Insurance and Other Claims
In accordance with the consistent practice, insurance and other claims, to the extent considered recoverable, are accounted for in the year relevant to claim while the balance is accounted for on settlement.
d. Employee benefits
(i) Short term Employee Benefits
Short Term Employee Benefits are recognized as an expense on an undiscounted basis in the statement of profit and loss of the year in which the related service is rendered.
(ii) Post-Employment Benefits
(a) Defined Contribution Plans Provident Fund
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service.
(b) Defined benefit plans Gratuity
Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each balance sheet date using the projected unit credit method. The Company recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Remeasurements comprising of actuarial gains and losses, on the net defined benefit liability are recognized in Other Comprehensive Income which are not reclassified to profit or loss in subsequent periods.
Long-term employee benefits
The liability of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each balance sheet date using projected unit credit method.
e. Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation / impairment loss, if any. Cost includes freight, duties, taxes, and other incidental expenses. Pre-operative expenses including eligible borrowing cost incurred during construction period are charged to Capital Work-in-Progress and on completion, the cost is allocated to the respective property, plant and equipment. Machinery spares which are specific to a particular item of the property, plant and equipment and if their use is expected to be irregular are capitalized as applicable.
Notes forming part of the financial statements for the year ended March 31, 2018
The Company has applied for the one time transition exemption under Ind AS 101 for considering the carrying cost on the transition date i.e. April 1, 2015 as the deemed cost under IND AS and hence regarded thereafter as historical cost.
f. Intangible assets
Intangible assets are stated at cost less accumulated amount of amortization. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use.
g. Depreciation and amortization expenses
Depreciation on property, plant and equipment is provided on straight line method at the rate and in the manner prescribed in Schedule II of the Companies Act, 2013, w.e.f. 1st April, 2014 except in case of continuous Process plant. The depreciation on continuous Process Plant has been provided as per useful life technically evaluated by chartered engineer. Cost of leasehold land is amortized over the period of lease.
h. Inventories
Raw materials, stores and spares are valued at lower of cost and net realizable value.
Work in progress and finished goods, stock in trade and stock in transit are valued at lower of cost and net realizable value. The costs of work in progress and finished goods include costs of raw material, conversion cost and other costs incurred in bringing the inventories to their present location and condition. Waste is valued at net realizable value.
Cost of inventories is computed on weighted average.
i. Borrowing costs
Borrowing cost attributable to acquisition and construction of qualifying assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Statement of Profit and Loss. j. Leases
Lease under which the risks and rewards incidental to ownership are not transferred to lessee is classified as operating lease. Lease payments under operating leases are recognized as an expense on a straight line basis in net profit in the statement of profit and loss over the lease term.
k. Government Grants
Capital grants relating to property, plant and equipment are reduced from the gross value of property, plant and equipment. Other capital grants are credited to capital reserve. Revenue grants are credited in Statement of Profit and Loss or deducted from related expenses. l. Income taxes
Income tax expense represents the sum of current and deferred tax (including MAT). Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized directly in equity or other comprehensive income, in such cases the tax is also recognized directly in equity or in other comprehensive income.
Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the Balance sheet and the corresponding tax bases used in the computation of taxable profit and are accounted for using the liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences, carry forward tax losses and allowances to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, carry forward tax losses and allowances can be utilized. Deferred tax assets and liabilities are measured at the applicable tax rates. Deferred tax assets and deferred tax liabilities are off set and presented as net.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available against which the temporary differences can be utilized.
Credit of MAT is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the profit and loss account and shown as MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.
m. Earnings per share
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value. n. Foreign Currency Transactions
The functional currency of the company is Indian rupee. These financial statements are presented in Indian rupee.
Export Sales in foreign currency are accounted for at the exchange rate prevailing on the date of negotiation, where such sales are not covered by forward contracts. Outstanding export documents pending negotiation when not covered by foreign exchange forward contracts are accounted for at the prevailing conversion rates at the end of each reporting date and difference if any in actual realization of such documents is accounted for in foreign exchange fluctuation account to be credited/charged to the Statement of Profit and Loss account in the year of realization.
The foreign currency monetary items are translated using the closing rate at the end of each reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency shall be translated using the exchange rate at the date of the transaction. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements shall be recognized in profit or loss in the period in which they arise. All other foreign exchange gains and losses are presented in the statement of profit and loss on net basis.
o. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
(i) Initial Recognition and measurement
On initial recognition, all the financial assets and liabilities are recognized at its fair value plus or minus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability except financial asset or financial liability measured at fair value through profit or loss. Transaction costs of financial assets and liabilities carried at fair value through the Profit and Loss are immediately recognized in the Statement of Profit and Loss.
(ii) Subsequent measurement
Financial assets carried at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through profit or loss (FVTPL)
A financial asset is measured at fair value through profit and loss unless it is measured at amortized cost or at fair value through other comprehensive income.
Financial liabilities
The financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
p. Impairment of assets
(i) Financial assets
The company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss.
Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses(or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in statement of profit or loss.
(ii) Non-financial assets
Intangible assets and property, plant and equipment. Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the 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 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. q. Cash and cash equivalents
The Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with a maturity period of three months or less from the balance sheet date, which are subject to an insignificant risk of changes in value.
r. Provisions and Contingencies
A provision is recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources in respect of which a reliable estimate can be made. 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 or 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 a reliable estimate of the amount cannot be made. Information on contingent liability is disclosed in the Notes to the Financial Statements. Contingent assets are not recognized.
s. Recent Accounting Pronouncements
i. Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:
On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018.
ii. Ind AS 115- Revenue from Contract with Customers:
On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) 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 entityâs contracts with customers. The new standard will be effective from April 1, 2018.
a) Details of security for debentures
All Debentures are secured by: -
(i) mortgage by deposit of the title deeds of immovable properties and by hypothecation of Companyâs movable properties, ranking pari-passu, subject to prior charge on current assets in favour of Companyâs bankers for working capital;
(ii) personal guarantee of one Director;
(iii) secured by pledge of 115.45 lacs shares of the company held by promotersâ and relatives, ranking pari pasu with all term loans and working capital loans.
b) Details of security for term loan
Term Loans amounting to Rs, 2341.32 Lacs are secured by: -
(i) secured by mortgage by deposit of the Title Deeds of immovable properties and by hypothecation of Companyâs movable properties, ranking pari-passu, subject to prior charge on current assets in favour of Companyâs bankers for working capital;
(ii) guaranteed by one director for Rs, 1111.56 Lacs and by two Director for ? 1229.76 Lacs
(iii) secured by pledge of 61.55 lacs equity shares of the company held by promoter and relative for Term Loan of Rs, 3.06 Lacs (March 31 2017: ? 14.90 lacs and April 1, 2016: Rs, 26.74 Lacs) and further secured by pledge of 115.45 lacs shares of the company held by promotersâ and relatives for Term Loans of Rs, 2081.32 Lacs ( March 31 2017: Rs, 5662.62 and April 1, 2016: Rs, 7720.50 Lacs ),ranking pari pasu with the debentures and working capital loans.
Mar 31, 2017
NOTES ON FINANCIAL STATEMENT FOR THE YEAR ENDED 31st MARCH, 2017
Note 1
COMPANY OVERVIEW:-
Ginni Filaments Ltd is a textile company manufacturing cotton yarn, knitted fabric, non-woven fabric, garments and wipes at its factories located at Kosi kalan (UP), Panoli (Gujarat), Noida (U.P.) and Haridwar (Uttarakhand) .
Note 2
SIGNIFICANT ACCOUNTING POLICIES
2.1 ACCOUNTING CONCEPTS
The company follows the mercantile system of accounting and recognizes income and expenses on accrual basis. The accounts are prepared on historical cost basis as a going concern. Accounting policies not referred to otherwise are consistent with generally accepted accounting principles and the provisions of the Companies Act, 2013. The Financial Statements comply with the requirements of the accounting standards notified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.
2.2 USE OF ESTIMATES
The preparation of financial statements in conformity with 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. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.
2.3 FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation / impairment loss, if any. Cost includes freight, duties, taxes, and other incidental expenses. Pre-operative expenses including eligible borrowing cost incurred during construction period are charged to Capital Work-in-Progress and on completion, the cost is allocated to the respective fixed assets. Machinery spares which are specific to a particular item of the fixed assets and if their use is expected to be irregular are capitalized as applicable. Exchange rate gain or loss on foreign currency loans related to acquisition of depreciable assets are being capitalized as per the notification dated 31st March, 2009 as amended from time to time issued by Ministry of Corporate Affairs, New Delhi
2.4 DEPRECIATION/AMORTISATION
Depreciation on fixed assets is provided on straight line method at the rate and in the manner prescribed in Schedule II of the Companies Act, 2013, wef 1st April, 2014 except in case of continuous Process plant. The depreciation on continuous Process Plant has been provided as per useful life technically evaluated by chartered engineer. Cost of leasehold land is amortized over the period of lease.
2.5 IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying amount of an asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist.
2.6 LEASES
Lease payments under an operational lease are recognized as expense in the Statement of Profit and Loss as per terms of lease agreement.
2.7 RESEARCH AND DEVELOPMENT
Revenue expenditure is charged as an expense in the year it is incurred. Capital expenditure is taken as fixed assets and depreciation is provided on such assets as per the provisions of the Companies Act, 2013.
2.8 INVENTORIES
Raw materials, stores and spares are valued at lower of cost and net realizable value.
Work in progress and finished goods, stock in trade and stock in transit are valued at lower of cost and net realizable value. The costs of work in progress and finished goods include costs of raw material, conversion cost and other costs incurred in bringing the inventories to their present location and condition. Waste is valued at net realizable value. The excise duty in respect of closing inventory of finish goods is included as part of finished goods.
Cost of inventories is computed on weighted average/FIFO/specific identification, as applicable.
2.9 INVESTMENTS
Long term investments are stated at cost. Provision for diminution in value of long term investments is made only if such decline is other than temporary.
2.10 GOVERNMENT GRANTS
Capital grants relating to fixed assets are reduced from the gross value of fixed assets. Other capital grants are credited to capital reserve. Revenue grants are credited in Statement of Profit and Loss or deducted from related expenses.
2.11 PROVISION AND CONTINGENCIES
A provision is recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources in respect of which a reliable estimate can be made. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
2.12 FOREIGN CURRENCY TRANSACTIONS
Export Sales in foreign currency are accounted for at the exchange rate prevailing on the date of negotiation, where such sales are not covered by forward contracts. Outstanding export documents pending negotiation when not covered by foreign exchange forward contracts are accounted for at the prevailing conversion rates at the end of each reporting date and difference if any in actual realization of such documents is accounted for in foreign exchange fluctuation account to be credited/charged to the Statement of Profit and Loss Account in the year of realization.
Forward contract are fair valued at each reporting date and resultant gain or loss from these transaction are recognized in the Statement of Profit and Loss.
Any income or expense on account of exchange difference either on settlement or on transactions is recognized in the Statement of Profit and Loss except in cases where they relate to the acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.
2.13 REVENUE RECOGNITION
Export sales are recognized on the basis of date of bill of lading and other sales on ex-factory dispatch. Export benefits/incentives are accounted for on accrual basis.
Sales include excise duty and are net of claims, rebates and discounts allowed during the year.
2.14 EMPLOYEE BENEFITS
(i) The company makes defined contribution to Provident Fund which is recognized in the Statement of Profit and Loss on accrual basis.
(ii) The company''s liabilities under Payment of Gratuity Act and long term compensated absences (unfunded) are determined on the basis of actuarial valuation made at the end of each financial year using the Projected Unit Credit Method. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.
(iii) Termination benefits are recognized as and when incurred.
2.15 CLAIMS
In accordance with the consistent practice, insurance and other claims, to the extent considered recoverable, are accounted for in the year relevant to claim while the balance is accounted for on settlement.
2.16 BORROWING COST
Borrowing cost attributable to acquisition and construction of qualifying assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Statement of Profit and Loss.
2.17 INCOME TAXES
Current tax represents amount of income tax payable including the tax payable u/s 115JB, if any, in respect of taxable income for the year. Minimum Alternate Tax Credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax within the specified period.
The deferred tax for timing differences between the book profits and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future.
2.18 FINANCIAL DERIVATIVES HEDGING TRANSACTIONS
The use of Financial Derivatives Hedging Contracts is governed by Company''s policies which provide for the use of such financial derivatives consistent with the Company''s risk management strategy. The Company does not use derivative financial instruments for speculative purposes.
Keeping in view of the principle of prudence as per Accounting Standard 1 on "Disclosure of Accounting Policies" outstanding derivative contracts at the Balance Sheet date are now marked to market and accordingly, the resulting mark to market losses / gains are recognized in the Statement of Profit and Loss
Equity Shares
3.1 The Company has only one class of equity shares having a par value of Rs 10/- per share. Each holder of equity share is entitled to one vote per share.
3.2 In the liquidation of the company, the holder of equity share will be entitled to receive remaining assets of the company, after distribution of all preferential amount. The distribution will be in proportion to the number of equity shares held by the shareholders
Preference Shares
3.3 8% cumulative redeemable preference shares are redeemable at par on or before 31st December 2018. Accumulated dividend on preference shares up to 31st March, 2017 is Rs. 445 lacs (previous year Rs. 385 lacs)
Mar 31, 2016
Note 1
COMPANY OVERVIEW
Ginni Filaments Ltd is a textile company manufacturing cotton yarn, knitted fabric, non-woven fabric, garments and wipes at its factories located at Kosi Kalan (UP), Panoli (Gujarat), Noida (U.P.) and Haridwar (Uttarakhand) .
Note 2
SIGNIFICANT ACCOUNTING POLICIES
2.1 ACCOUNTING CONCEPTS
The company follows the mercantile system of accounting and recognizes income and expenses on accrual basis. The accounts are prepared on historical cost basis as a going concern. Accounting policies not referred to otherwise are consistent with generally accepted accounting principles and the provisions of the Companies Act, 2013. The Financial Statements comply with the requirements of the accounting standards notified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.
2.2 USE OF ESTIMATES
The preparation of financial statements in conformity with 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. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.
2.3 FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation / impairment loss, if any. Cost includes freight, duties, taxes, and other incidental expenses. Pre-operative expenses including eligible borrowing cost incurred during construction period are charged to Capital Work-in-Progress and on completion, the cost is allocated to the respective fixed assets. Machinery spares which are specific to a particular item of the fixed assets and if their use is expected to be irregular are capitalized as applicable. Exchange rate gain or loss on foreign currency loans related to acquisition of depreciable assets are being capitalized as per the notification dated 31st March, 2009 as amended from time to time issued by Ministry of Corporate Affairs, New Delhi
2.4 DEPRECIATION/AMORTISATION
Depreciation on fixed assets is provided on straight line method at the rate and in the manner prescribed in Schedule II of the Companies Act, 2013, w.e.f. 1st April, 2014 except in case of continuous Process plant. The depreciation on continuous Process Plant has been provided as per useful life technically evaluated by chartered engineer. Cost of leasehold land is amortized over the period of lease.
2.5 IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying amount of an asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist.
2.6 LEASES
Lease payments under an operational lease are recognized as expense in the Statement of Profit and Loss as per terms of lease agreement.
2.7 RESEARCH AND DEVELOPMENT
Revenue expenditure is charged as an expense in the year it is incurred. Capital expenditure is taken as fixed assets and depreciation is provided on such assets as per the provisions of the Companies Act, 2013.
2.8 INVENTORIES
Raw materials, stores and spares are valued at lower of cost and net realizable value.
Work in progress and finished goods, stock in trade and stock in transit are valued at lower of cost and net realizable value. The costs of work in progress and finished goods include costs of raw material, conversion cost and other costs incurred in bringing the inventories to their present location and condition. Waste is valued at net realizable value. The excise duty in respect of closing inventory of finish goods is included as part of finished goods.
Cost of inventories is computed on weighted average/FIFO/specific identification, as applicable.
2.9 INVESTMENTS
Long term investments are stated at cost. Provision for diminution in value of long term investments is made only if such decline is other than temporary.
2.10 GOVERNMENT GRANTS
Capital grants relating to fixed assets are reduced from the gross value of fixed assets. Other capital grants are credited to capital reserve. Revenue grants are credited in Statement of Profit and Loss or deducted from related expenses.
2.11 PROVISION AND CONTINGENCIES
A provision is recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources in respect of which a reliable estimate can be made. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
2.12 FOREIGN CURRENCY TRANSACTIONS
Export Sales in foreign currency are accounted for at the exchange rate prevailing on the date of negotiation, where such sales are not covered by forward contracts. Outstanding export documents pending negotiation when not covered by foreign exchange forward contracts are accounted for at the prevailing conversion rates at the end of each reporting date and difference if any in actual realization of such documents is accounted for in foreign exchange fluctuation account to be credited/charged to the Statement of Profit and Loss Account in the year of realization.
Forward contract are fair valued at each reporting date and resultant gain or loss from these transaction are recognized in the Statement of Profit and Loss.
Any income or expense on account of exchange difference either on settlement or on transactions is recognized in the Statement of Profit and Loss except in cases where they relate to the acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets.
2.13 REVENUE RECOGNITION
Export sales are recognized on the basis of date of bill of lading and other sales on ex-factory dispatch. Export benefits/ incentives are accounted for on accrual basis. Sales include excise duty and are net of claims, rebates and discounts allowed during the year.
2.14 EMPLOYEE BENEFITS
(i) The company makes defined contribution to Provident Fund which is recognized in the Statement of Profit and Loss on accrual basis.
(ii) The companyâs liabilities under Payment of Gratuity Act and long term compensated absences (unfunded) are determined on the basis of actuarial valuation made at the end of each financial year using the Projected Unit Credit Method. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.
(iii) Termination benefits are recognized as and when incurred.
2.15 CLAIMS
In accordance with the consistent practice, insurance and other claims, to the extent considered recoverable, are accounted for in the year relevant to claim while the balance is accounted for on settlement.
2.16 BORROWING COST
Borrowing cost attributable to acquisition and construction of qualifying assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Statement of Profit and Loss.
2.17 INCOME TAXES
Current tax represents amount of income tax payable including the tax payable u/s 115JB, if any, in respect of taxable income for the year. Minimum Alternate Tax Credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax within the specified period.
The deferred tax for timing differences between the book profits and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future.
2.18 FINANCIAL DERIVATIVES HEDGING TRANSACTIONS
The use of Financial Derivatives Hedging Contracts is governed by Companyâs policies which provide for the use of such financial derivatives consistent with the Companyâs risk management strategy. The Company does not use derivative financial instruments for speculative purposes.
Keeping in view of the principle of prudence as per Accounting Standard 1 on âDisclosure of Accounting Policiesâ outstanding derivative contracts at the Balance Sheet date are now marked to market and accordingly, the resulting mark to market losses / gains are recognized in the Statement of Profit and Loss.
Mar 31, 2015
1.1 ACCOUNTING CONCEPTS
The company follows the mercantile system of accounting and recognizes
income and expenses on accrual basis. The accounts are prepared on
historical cost basis as a going concern. Accounting policies not
referred to otherwise are consistent with generally accepted accounting
principles and the provisions of the Companies Act, 2013. The Financial
Statements comply with the requirements of the accounting standards
notified under Section 133 of the Companies Act, 2013 read with Rule 7
of the Companies (Accounts) Rules, 2014.
1.2 USE OF ESTIMATES
The preparation of financial statements in conformity with 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. Difference between the actual
results and estimates are recognized in the period in which the results
are known/materialized.
1.3 FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation /
impairment loss, if any. Cost includes freight, duties, taxes, and
other incidental expenses. Pre-operative expenses including eligible
borrowing cost incurred during construction period are charged to
Capital Work-in-Progress and on completion, the cost is allocated to
the respective fixed assets. Machinery spares which are specific to a
particular item of the fixed assets and if their use is expected to be
irregular are capitalized as applicable. Exchange rate gain or loss on
foreign currency loans related to acquisition of depreciable assets are
being capitalized as per the notification dated 31st March, 2009 as
amended from time to time issued by Ministry of Corporate Affairs, New
Delhi
1.4 DEPRECIATION/AMORTISATION
Depreciation on fixed assets is provided on straight line method at the
rate and in the manner prescribed in Schedule II of the Companies Act,
2013, wef 1st April, 2014 except in case of continuous Process
plant.The depreciation on continuous Process Plant has been provided as
per useful life technically evaluated by chartered engineer. Cost of
leasehold land is amortized over the period of lease.
1.5 IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying amount of an asset
exceeds its recoverable value. An impairment loss is charged to the
Statement of Profit and Loss in the year in which an asset is
identified as impaired. Reversal of impairment losses recognized in
prior years is recorded when there is an indication that the impairment
losses recognized for the assets no longer exist.
1.6 LEASES
Lease payments under an operational lease are recognized as expense in
the Statement of Profit and Loss as per terms of lease agreement.
1.7 RESEARCH AND DEVELOPMENT
Revenue expenditure is charged as an expense in the year it is
incurred. Capital expenditure is taken as fixed assets and depreciation
is provided on such assets as per the provisions of the Companies Act,
2013.
1.8 INVENTORIES
Raw materials, stores and spares are valued at lower of cost and net
realizable value.
Work in progress and finished goods, stock in trade and stock in
transit are valued at lower of cost and net realizable value. The
costs of work in progress and finished goods include costs of raw
material, conversion cost and other costs incurred in bringing the
inventories to their present location and condition. Waste is valued at
net realizable value. The excise duty in respect of closing inventory
of finish goods is included as part of finished goods.
Cost of inventories is computed on weighted average/FIFO/specific
identification, as applicable.
1.9 INVESTMENTS
Long term investments are stated at cost. Provision for diminution in
value of long term investments is made only if such decline is other
than temporary.
1.10 GOVERNMENT GRANTS
Capital grants relating to fixed assets are reduced from the gross
value of fixed assets. Other capital grants are credited to capital
reserve. Revenue grants are credited in Statement of Profit and Loss or
deducted from related expenses.
1.11 PROVISION AND CONTINGENCIES
A provision is recognized when there is a present obligation as a
result of past event and it is probable that there will be an outflow
of resources in respect of which a reliable estimate can be made.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
1.12 FOREIGN CURRENCY TRANSACTIONS
Export Sales in foreign currency are accounted for at the exchange rate
prevailing on the date of negotiation, where such sales are not covered
by forward contracts. Outstanding export documents pending negotiation
when not covered by foreign exchange forward contracts are accounted
for at the prevailing conversion rates at the end of each reporting
date and difference if any in actual realization of such documents is
accounted for in foreign exchange fluctuation account to be
credited/charged to the Statement of Profit and Loss Account in the
year of realization.
Forward contract are fair valued at each reporting date and resultant
gain or loss from these transaction are recognized in the Statement of
Profit and Loss.
Any income or expense on account of exchange difference either on
settlement or on transactions is recognized in the Statement of Profit
and Loss except in cases where they relate to the acquisition of fixed
assets in which case they are adjusted to the carrying cost of such
assets.
1.13 REVENUE RECOGNITION
Export sales are recognized on the basis of date of bill of lading and
other sales on ex-factory dispatch. Export benefits/ incentives are
accounted for on accrual basis. Sales include excise duty and are net
of claims, rebates and discounts allowed during the year.
1.14 EMPLOYEE BENEFITS
(i) The company makes defined contribution to Provident Fund which is
recognized in the Statement of Profit and Loss on accrual basis.
(ii) The company's liabilities under Payment of Gratuity Act and long
term compensated absences (unfunded) are determined on the basis of
actuarial valuation made at the end of each financial year using the
Projected Unit Credit Method. Actuarial gains and losses are
recognized immediately in the Statement of Profit and Loss as income or
expense. Obligation is measured at the present value of estimated
future cash flows using a discounted rate that is determined by
reference to market yields at the Balance Sheet date on Government
bonds where the currency and terms of the Government bonds are
consistent with the currency and estimated terms of the defined benefit
obligation.
(iii) Termination benefits are recognized as and when incurred.
1.15 CLAIMS
In accordance with the consistent practice, insurance and other claims,
to the extent considered recoverable, are accounted for in the year
relevant to claim while the balance is accounted for on settlement.
1.16 BORROWING COST
Borrowing cost attributable to acquisition and construction of
qualifying assets are capitalized as a part of the cost of such asset
up to the date when such asset is ready for its intended use. Other
borrowing costs are charged to the Statement of Profit and Loss.
1.17 INCOME TAXES
Current tax represents amount of income tax payable including the tax
payable u/s 115JB, if any, in respect of taxable income for the year.
Minimum Alternate Tax Credit is recognised as an asset only when and to
the extent there is convincing evidence that the Company will pay
normal income tax within the specified period.
The deferred tax for timing differences between the book profits and
tax profits for the year is accounted for, using the tax rates and laws
that have been substantively enacted as of the balance sheet date.
Deferred tax assets arising from timing differences are recognized to
the extent there is reasonable certainity that these would be realized
in future.
1.18 Financial Derivatives Hedging Transactions
The use of Financial Derivatives Hedging Contracts is governed by
Company's policies which provide for the use of such financial
derivatives consistent with the Company's risk management strategy. The
Company does not use derivative financial instruments for speculative
purposes.
Keeping in view of the principle of prudence as per Accounting Standard
1 on "Disclosure of Accounting Policies" outstanding derivative
contracts at the Balance Sheet date are now marked to market and
accordingly, the resulting mark to market losses / gains are recognized
in the Statement of Profit and Loss.
Mar 31, 2014
1.1 ACCOUNTING CONCEPTS
The company follows the mercantile system of accounting and recognizes
income and expenses on accrual basis. The accounts are prepared on
historical cost basis as a going concern. Accounting policies not
referred to otherwise are consistent with generally accepted accounting
principles and the provisions of the Companies Act, 1956. The Financial
Statements comply with the requirements of the accounting standards
notified under Section 211(3C) [Companies (Accounting Standards) Rules,
2006, as amended] and other relevant provisions of the Companies Act,
1956.
2.2 USE OF ESTIMATES
The preparation of financial statements in conformity with 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. Difference between the actual
results and estimates are recognized in the period in which the results
are known/materialized.
2.3 FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation /
impairment loss, if any. Cost includes freight, duties, taxes, and
other incidental expenses. Pre-operative expenses including eligible
borrowing cost incurred during construction period are charged to
Capital Work-in-Progress and on completion, the cost is allocated to
the respective fixed assets. Machinery spares which are specific to a
particular item of the fixed assets and if their use is expected to be
irregular are capitalized as applicable. Exchange rate gain or loss on
foreign currency loans related to acquisition of depreciable assets are
being capitalized as per the notification dated 31st March, 2009 as
amended from time to time issued by Ministry of Corporate Affairs, New
Delhi
2.4 DEPRECIATION/AMORTISATION
Depreciation on fixed assets is provided on straight line method at the
rate and in the manner prescribed in Schedule XIV of the Companies Act,
1956. Cost of leasehold land is amortized over the period of lease.
Lease hold improvements are amortized over the primary period of lease.
2.5 IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying amount of an asset
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. Reversal of impairment losses recognized in prior years is
recorded when there is an indication that the impairment losses
recognized for the assets no longer exist.
2.6 LEASES
Lease payments under an operational lease are recognized as expense in
the Statement of Profit and Loss as per terms of lease agreement.
2.7 RESEARCH AND DEVELOPMENT
Revenue expenditure is charged as an expense in the year it is
incurred. Capital expenditure is taken as fixed assets and depreciation
is provided on such assets as per the provisions of the Companies Act,
1956.
2.8 INVENTORIES
Raw materials, stores and spares are valued at lower of cost and net
realizable value.
Work in progress and finished goods, stock in trade and stock in
transit are valued at lower of cost and net realizable value. The costs
of work in progress and finished goods include costs of raw material,
conversion cost and other costs incurred in bringing the inventories to
their present location and condition. Waste is valued at net realizable
value. The excise duty in respect of closing inventory of finish goods
is included as part of finished goods.
Cost of inventories is computed on weighted average/FIFO/specific
identification, as applicable.
2.9 INVESTMENTS
Long term investments are stated at cost. Provision for diminution in
value of long term investments is made only if such decline is other
than temporary.
2.10 GOVERNMENT GRANTS
Capital grants relating to fixed assets are reduced from the gross
value of fixed assets. Other capital grants are credited to capital
reserve. Revenue grants are credited in Statement of Profit and Loss
account or deducted from related expenses.
2.11 PROVISION AND CONTINGENCIES
A provision is recognized when there is a present obligation as a
result of past event and it is probable that there will be an outflow
of resources in respect of which a reliable estimate can be made.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
2.12 FOREIGN CURRENCY TRANSACTIONS
Export Sales in foreign currency are accounted for at the exchange rate
prevailing on the date of negotiation, where such sales are not covered
by forward contracts. Outstanding export documents pending negotiation
when not covered by foreign exchange forward contracts are accounted
for at the prevailing conversion rates at the end of each reporting
date and difference if any in actual realization of such documents is
accounted for in foreign exchange fluctuation account to be
credited/charged to the Statement of Profit and Loss Account in the
year of realization.
Forward contract are fair valued at each reporting date and resultant
gain or loss from these transaction are recognized in the Statement of
Profit and Loss.
Any income or expense on account of exchange difference either on
settlement or on transactions is recognized in the Statement of Profit
and Loss except in cases where they relate to the acquisition of fixed
assets in which case they are adjusted to the carrying cost of such
assets.
2.13 REVENUE RECOGNITION
Export sales are recognized on the basis of date of bill of lading and
other sales on ex-factory dispatch. Export benefits/incentives are
accounted for on accrual basis. Sales include excise duty and are net
of claims, rebates and discounts allowed during the year.
2.14 EMPLOYEE BENEFITS
(i) The company makes defined contribution to Provident Fund which is
recognized in the Statement of Profit and Loss on accrual basis.
(ii) The company''s liabilities under Payment of Gratuity Act and long
term compensated absences (unfunded) are determined on the basis of
actuarial valuation made at the end of each financial year using the
Projected Unit Credit Method. Actuarial gains and losses are recognized
immediately in the Statement of Profit and Loss as income or expense.
Obligation is measured at the present value of estimated future cash
flows using a discounted rate that is determined by reference to market
yields at the Balance Sheet date on Government bonds where the currency
and terms of the Government bonds are consistent with the currency and
estimated terms of the defined benefit obligation.
(iii) Termination benefits are recognized as and when incurred.
2.15 CLAIMS
In accordance with the consistent practice, insurance and other claims,
to the extent considered recoverable, are accounted for in the year
relevant to claim while the balance is accounted for on settlement.
2.16 BORROWING COST
Borrowing cost attributable to acquisition and construction of
qualifying assets are capitalized as a part of the cost of such asset
up to the date when such asset is ready for its intended use. Other
borrowing costs are charged to the Statement of Profit and Loss.
2.17 INCOME TAXES
Current tax represents amount of income tax payable including the tax
payable u/s 115JB, if any, in respect of taxable income for the year.
Minimum Alternate Tax Credit is recognised as an asset only when and to
the extent there is convincing evidence that the Company will pay
normal income tax within the specified period.
The deferred tax for timing differences between the book profits and
tax profits for the year is accounted for, using the tax rates and laws
that have been substantively enacted as of the balance sheet date.
Deferred tax assets arising from timing differences are recognized to
the extent there is reasonable certainty that these would be realized
in future.
2.18 FINANCIAL DERIVATIVES HEDGING TRANSACTIONS
The use of Financial Derivatives Hedging Contracts is governed by
Company''s policies which provide for the use of such financial
derivatives consistent with the Company''s risk management strategy. The
Company does not use derivative financial instruments for speculative
purposes. Keeping in view of the principle of prudence as per
Accounting Standard 1 on "Disclosure of Accounting Policies"
outstanding derivative contracts at the Balance Sheet date are now
marked to market and accordingly, the resulting mark to market losses /
gains are recognized in the Profit and Loss Account.
5.1 All due instalment and interest during the period has been paid
timely.
5.2 Interest rates on Debentures and term loan, varies during the
period ie. 01.04.2013 to 18.09.2013 @11.95% p.a. 19.09.2013 to
06.11.2013 @12.05% p.a., 07.11.2013 to 31.03.2014 @ 12.25% p.a. except
the loan of Rs. 639.83 Lacs is subject to interest rate which varies
during the period 01.04.2013 to 18.09.2013 @ 13.95% p.a.,19.09.2013 to
06.11.2013 @ 14.05% p.a. and 07.11.2013 to 31.03.2014 @ 14.25% p.a.
5.3 Interest on Foreign currecy loan charged @Libor 3% p.a.
5.4 The above Interest Rate are subject to benefit under T.U.F. Scheme
of Government of India
Note 30
Exceptional Items
Exceptional Items include a provision for Rs. 1671.00 Lacs (previous year
Nil) towards recompense amount payable under CDR guidelines and Rs.
322.54 Lacs (previous year Nil) towards gain on acquisition of part of
freehold land of company by National Highway Authority. The recompense
liability has been provided in accounts as advised by monitoring bank
State Bank of India as per RBI and CDR guidelines. The difference,if
any in amount payable shall be adjusted on final
settlement/determination of liability with CDR Cell.
Mar 31, 2013
1.1 ACCOUNTING CONCEPTS
The company follows the mercantile system of accounting and recognizes
income and expenses on accrual basis. The accounts are prepared on
historical cost basis as a going concern. Accounting policies not
referred to otherwise are consistent with generally accepted accounting
principles and the provisions of the Companies Act, 1956.
1.2 USE OF ESTIMATES
The preparation of financial statements in conformity with 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. Difference between the actual
results and estimates are recognized in the period in which the results
are known/ materialized.
1.3 FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation /
impairment loss, if any. Cost includes freight, duties, taxes, and
other incidental expenses. Pre-operative expenses including eligible
borrowing cost incurred during construction period are charged to
Capital Work-in-Progress and on completion, the cost is allocated to
the respective fixed assets. Machinery spares which are specific to a
particular item of the fixed assets and if their use is expected to be
irregular are capitalized as applicable.
1.4 DEPRECIATION/AMORTISATION
Depreciation on fixed assets is provided on straight line method at the
rate and in the manner prescribed in Schedule XIV of the Companies Act,
1956. Cost of leasehold land is amortized over the period of lease.
Lease hold improvements are amortized over the primary period of lease.
1.5 IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying amount of an asset
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. Reversal of impairment losses recognized in prior years is
recorded when there is an indication that the impairment losses
recognized for the assets no longer exist.
1.6 LEASES
Lease payments under an operational lease are recognized as expense in
the statement of Profit and Loss as per terms of lease agreement.
1.7 RESEARCH AND DEVELOPMENT
Revenue expenditure is charged as an expense in the year it is
incurred. Capital expenditure is taken as fixed assets and depreciation
is provided on such assets as per the provisions of the Companies Act,
1956.
1.8 INVENTORIES
Raw materials, stores and spares are valued at lower of cost and net
realizable value.
Work in progress and finished goods, stock in trade and stock in
transit are valued at lower of cost and net realizable value. The costs
of work in progress and finished goods include costs of raw material,
conversion cost and other costs incurred in bringing the inventories to
their present location and condition. Waste is valued at net realizable
value. The excise duty in respect of closing inventory of finish goods
is included as part of finished goods.
Cost of inventories is computed on weighted average/FIFO/specific
identification, as applicable.
1.9 INVESTMENTS
Long term investments are stated at cost. Provision for diminution in
value of long term investments is made only if such decline is other
than temporary.
1.10 GOVERNMENT GRANTS
Capital grants relating to fixed assets are reduced from the gross
value of fixed assets. Other capital grants are credited to capital
reserve. Revenue grants are credited in profit & loss account or
deducted from related expenses.
1.11 PROVISION AND CONTINGENCIES
A provision is recognized when there is a present obligation as a
result of past event and it is probable that there will be an outflow
of resources in respect of which a reliable estimate can be made.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
1.12 FOREIGN CURRENCY TRANSACTIONS
Export Sales in foreign currency are accounted for at the exchange rate
prevailing on the date of negotiation, where such sales are not covered
by forward contracts. Outstanding export documents pending negotiation
when not covered by foreign exchange forward contracts are accounted
for at the prevailing conversion rates at the end of the month of
respective export date and difference if any in actual realization of
such documents is accounted for in foreign exchange fluctuation account
to be credited/charged to the Profit & Loss Account in the year of
realization.
Forward contract are fair valued at each reporting date and resultant
gain or loss from these transaction are recognize in the statement of
profit & loss.
Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the Profit & Loss Account
except in cases where they relate to the acquisition of fixed assets in
which case they are adjusted to the carrying cost of such assets.
1.13 REVENUE RECOGNITION
Export sales are recognized on the basis of date of bill of lading and
other sales on ex-factory dispatch. Export benefits/incentives are
accounted for on accrual basis. Sales include excise duty and are net
of claims, rebates & discounts allowed during the year.
1.14 EMPLOYEE BENEFITS
(i) The company makes defined contribution to Provident Fund which is
recognized in the Profit & Loss Account on accrual basis.
(ii) The company''s liabilities under Payment of Gratuity Act and long
term compensated absences (unfunded) are determined on the basis of
actuarial valuation made at the end of each financial year using the
Projected Unit Credit Method. Actuarial gains and losses are recognized
immediately in the statement of Profit & Loss Account as income or
expense. Obligation is measured at the present value of estimated
future cash flows using a discounted rate that is determined by
reference to market yields at the Balance Sheet date on Government
bonds where the currency and terms of the Government bonds are
consistent with the currency and estimated terms of the defined benefit
obligation.
(iii) Termination benefits are recognized as and when incurred.
1.15 CLAIMS
In accordance with the consistent practice, insurance and other claims,
to the extent considered recoverable, are accounted for in the year
relevant to claim while the balance is accounted for on settlement.
1.16 MISCELLANEOUS EXPENDITURE
In accordance with AS - 26 on Intangible assets issued by the Institute
of Chartered Accountants of India the balances as on 1.04.2003 in
respect of deferred revenue expenditure and preliminary expenses are
being expensed over a number of years as originally contemplated.
1.17 BORROWING COST
Borrowing cost attributable to acquisition and construction of
qualifying assets are capitalized as a part of the cost of such asset
up to the date when such asset is ready for its intended use. Other
borrowing costs are charged to the profit & loss account.
1.18 INCOME TAXES
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. The deferred tax for timing differences
between the book profits and tax profits for the year is accounted for,
using the tax rates and laws that have been substantively enacted as of
the balance sheet date. Deferred tax assets arising from timing
differences are recognized to the extent there is reasonable certainty
that these would be realized in future.
1.19 FINANCIAL DERIVATIVES HEDGING TRANSACTIONS
The use of Financial Derivatives Hedging Contracts is governed by
Company''s policies which provide for the use of such financial
derivatives consistent with the Company''s risk management strategy. The
Company does not use derivative financial instruments for speculative
purposes.
Mar 31, 2012
1.1 ACCOUNTING CONCEPTS
The company follows the mercantile system of accounting and recognizes
income and expenses on accrual basis. The accounts are prepared on
historical cost basis as a going concern. Accounting policies not
referred to otherwise are consistent with generally accepted accounting
principles and the provisions of the Companies Act, 1956.
1.2 USE OF ESTIMATES
The preparation of financial statements in conformity with 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. Difference between the actual
results and estimates are recognized in the period in which the results
are known/materialized.
1.3 FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation /
impairment loss, if any. Cost includes freight, duties, taxes, and
other incidental expenses. Pre-operative expenses including eligible
borrowing cost incurred during construction period are charged to
Capital Work-in-Progress and on completion, the cost is allocated to
the respective fixed assets. Machinery spares which are specific to a
particular item of the fixed assets and if their use is expected to be
irregular are capitalized as applicable.
1.4 DEPRECIATION/AMORTISATION
Depreciation on fixed assets is provided on straight line method at the
rate and in the manner prescribed in Schedule XIV of the Companies Act,
1956. Cost of leasehold land is amortized over the period of lease.
Lease hold improvements are amortized over the primary period of lease.
1.5 IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying amount of an asset
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. Reversal of impairment losses recognized in prior years is
recorded when there is an indication that the impairment losses
recognized for the assets no longer exist.
1.6 LEASES
Lease payments under an operational lease are recognized as expense in
the statement of Profit and Loss as per terms of lease agreement.
1.7 RESEARCH AND DEVELOPMENT
Revenue expenditure is charged as an expense in the year it is
incurred. Capital expenditure is taken as fixed assets and depreciation
is provided on such assets as per the provisions of the Companies Act,
1956.
1.8 INVENTORIES
Raw materials, stores and spares are valued at lower of cost and net
realizable value.
Work in progress and finished goods, stock in trade and stock in
transit are valued at lower of cost and net realizable value. The costs
of work in progress and finished goods include costs of raw material,
conversion cost and other costs incurred in bringing the inventories to
their present location and condition. Waste is valued at net realizable
value. The excise duty in respect of closing inventory of finish goods
is included as part of finished goods.
Cost of inventories is computed on weighted average/FIFO/specific
identification, as applicable.
1.9 INVESTMENTS
Long term investments are stated at cost. Provision for diminution in
value of long term investments is made only if such decline is other
than temporary.
1.10 GOVERNMENT GRANTS
Capital grants relating to fixed assets are reduced from the gross
value of fixed assets. Other capital grants are credited to capital
reserve. Revenue grants are credited in profit & loss account or
deducted from related expenses.
1.11 PROVISION AND CONTINGENCIES
A provision is recognized when there is a present obligation as a
result of past event and it is probable that there will be an outflow
of resources in respect of which a reliable estimate can be made.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
1.12 FOREIGN CURRENCY TRANSACTIONS
Export Sales in foreign currency are accounted for at the exchange rate
prevailing on the date of negotiation, where such sales are not covered
by forward contracts. Outstanding export documents pending negotiation
when not covered by foreign exchange forward contracts are accounted
for at the prevailing conversion rates at the end of the month of
respective export date and difference if any in actual realization of
such documents is accounted for in foreign exchange fluctuation account
to be credited/charged to the Profit & Loss Account in the year of
realization.
Forward contract are fair valued at each reporting date and resultant
gain or loss from these transaction are recognize in the statement of
profit & loss.
Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the Profit & Loss Account
except in cases where they relate to the acquisition of fixed assets in
which case they are adjusted to the carrying cost of such assets.
1.13 REVENUE RECOGNITION
Export sales are recognized on the basis of date of bill of lading and
other sales on ex-factory dispatch. Export benefits/incentives are
accounted for on accrual basis.Sales include excise duty and are net of
claims, rebates & discounts allowed during the year.
1.14 EMPLOYEE BENEFITS
(i) The company makes defined contribution to Provident Fund which is
recognized in the Profit & Loss Account on accrual basis.
(ii) The company's liabilities under Payment of Gratuity Act and long
term compensated absences (unfunded) are determined on the basis of
actuarial valuation made at the end of each financial year using the
Projected Unit Credit Method. Actuarial gains and losses are recognized
immediately in the statement of Profit & Loss Account as income or
expense. Obligation is measured at the present value of estimated
future cash flows using a discounted rate that is determined by
reference to market yields at the Balance Sheet date on Government
bonds where the currency and terms of the Government bonds are
consistent with the currency and estimated terms of the defined benefit
obligation.
(iii) Termination benefits are recognized as and when incurred.
1.15 CLAIMS
In accordance with the consistent practice, insurance and other claims,
to the extent considered recoverable, are accounted for in the year
relevant to claim while the balance is accounted for on settlement.
1.16 MISCELLANEOUS EXPENDITURE
In accordance with AS - 26 on Intangible assets issued by the Institute
of Chartered Accountants of India the balances as on 1.04.2003 in
respect of deferred revenue expenditure and preliminary expenses are
being expensed over a number of years as originally contemplated.
1.17 BORROWING COST
Borrowing cost attributable to acquisition and construction of
qualifying assets are capitalized as a part of the cost of such asset
up to the date when such asset is ready for its intended use. Other
borrowing costs are charged to the profit & loss account.
1.18 INCOME TAXES
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. The deferred tax for timing differences
between the book profits and tax profits for the year is accounted for,
using the tax rates and laws that have been substantively enacted as of
the balance sheet date. Deferred tax assets arising from timing
differences are recognized to the extent there is reasonable certainty
that these would be realized in future.
1.19 FINANCIAL DERIVATIVES HEDGING TRANSACTIONS
The use of Financial Derivatives Hedging Contracts is governed by
Company's policies which provide for the use of such financial
derivatives consistent with the Company's risk management strategy. The
Company does not use derivative financial instruments for speculative
purposes.
Keeping in view of the principle of prudence as per Accounting Standard
1 on "Disclosure of Accounting Policies" outstanding derivative
contracts at the Balance Sheet date are now marked to market and
accordingly, the resulting mark to market losses / gains are recognized
in the Profit and Loss Account.
Mar 31, 2011
1. ACCOUNTING CONCEPTS
The company follows the mercantile system of accounting and recognizes
income and expenses on accrual basis. The accounts are prepared on
historical cost basis as a going concern. Accounting policies not
referred to otherwise are consistent with generally accepted accounting
principles and the provisions of the Companies Act, 1956.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with 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. Difference between the actual
results and estimates are recognized in the period in which the results
are known/materialized.
3. FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation /
impairment loss, if any. Cost includes freight, duties, taxes, and
other incidental expenses. Pre-operative expenses including eligible
borrowing cost incurred during construction period are charged to
Capital Work-in-Progress and on completion, the cost is allocated to
the respective fixed assets. Machinery spares which are specific to a
particular item of the fixed assets and if their use is expected to be
irregular are capitalized as applicable.
4. DEPRECIATION/AMORTISATION
Depreciation on fixed assets is provided on straight line method at the
rate and in the manner prescribed in Schedule XIV of the Companies Act,
1956. Cost of leasehold land is amortized over the period of lease.
Lease hold improvements are amortized over the primary period of lease.
5. IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying amount of an asset
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. Reversal of impairment losses recognized in prior years is
recorded when there is an indication that the impairment losses
recognized for the assets no longer exist.
6. LEASES
Lease payments under an operational lease are recognized as expense in
the statement of Profit and Loss as per terms of lease agreement.
7. RESEARCH AND DEVELOPMENT
Revenue expenditure is charged as an expense in the year it is
incurred. Capital expenditure is taken as fixed assets and depreciation
is provided on such assets as per the provisions of the Companies Act,
1956.
8. INVENTORIES
Raw materials, stores and spares are valued at lower of cost and net
realizable value.
Work in progress and finished goods are valued at lower of cost and net
realizable value. The costs of work in progress and finished goods
include costs of raw material, conversion cost and other costs incurred
in bringing the inventories to their present location and condition.
Waste is valued at net realizable value.
Cost of inventories is computed on weighted average/FIFO basis.
9. INVESTMENTS
Long term investments are stated at cost. Provision for diminution in
value of long term investments is made only if such decline is other
than temporary.
10. GOVERNMENT GRANTS
Capital grants relating to fixed assets are reduced from the gross
value of fixed assets. Other capital grants are credited to capital
reserve. Revenue grants are credited in profit & loss account or
deducted from related expenses.
11. PROVISION AND CONTINGENCIES
A provision is recognized when there is a present obligation as a
result of past event and it is probable that there will be an outflow
of resources in respect of which a reliable estimate can be made.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
12. FOREIGN CURRENCY TRANSACTIONS
Export Sales in foreign currency are accounted for at the exchange rate
prevailing on the date of negotiation, where such sales are not covered
by forward contracts. Outstanding export documents pending negotiation
when not covered by foreign exchange forward contracts are accounted
for at the prevailing conversion rates at the end of the month of
respective export date and difference if any in actual realization of
such documents is accounted for in foreign exchange fluctuation account
to be credited/charged to the Profit & Loss
Account in the year of realization.
In respect of Forward Exchange Contracts, the difference between the
forward rate and the exchange rate on the date of transaction is
recognized proportionately as income or expense, as the case may be,
over the life of contract.
Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the Profit & Loss Account
except in cases where they relate to the acquisition of fixed assets in
which case they are adjusted to the carrying cost of such assets.
13. SALES
Export sales are recognized on the basis of date of bill of lading and
other sales on ex-factory dispatch. Export benefits/incentives are
accounted for on accrual basis.
Sales include excise duty and are net of claims, rebates & discounts
allowed during the year.
14. EMPLOYEE BENEFITS
(i) The company makes defined contribution to Provident Fund which is
recognized in the Profit & Loss Account on accrual basis.
(ii) The companys liabilities under Payment of Gratuity Act and long
term compensated absences (unfunded) are determined on the basis of
actuarial valuation made at the end of each financial year using the
Projected Unit Credit Method. Actuarial gains and losses are recognized
immediately in the statement of Profit & Loss Account as income or
expense. Obligation is measured at the present value of estimated
future cash flows using a discounted rate that is determined by
reference to market yields at the Balance Sheet date on Government
bonds where the currency and terms of the Government bonds are
consistent with the currency and estimated terms of the defined benefit
obligation.
(iii) Termination benefits are recognized as and when incurred.
15. CLAIMS
In accordance with the consistent practice, insurance and other claims,
to the extent considered recoverable, are accounted for in the year
relevant to claim while the balance is accounted for on settlement.
16. MISCELLANEOUS EXPENDITURE
In accordance with AS - 26 on Intangible assets issued by the Institute
of Chartered Accountants of India the balances as on 1.04.2003 in
respect of deferred revenue expenditure and preliminary expenses are
being expensed over a number of years as originally contemplated.
17. BORROWING COST
Borrowing cost attributable to acquisition and construction of
qualifying assets are capitalized as a part of the cost of such asset
up to the date when such asset is ready for its intended use. Other
borrowing costs are charged to the profit & loss account.
18. TAXATION
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. The deferred tax for timing differences
between the book profits and tax profits for the year is accounted for,
using the tax rates and laws that have been substantively enacted as of
the balance sheet date. Deferred tax assets arising from timing
differences are recognized to the extent there is reasonable certainty
that these would be realized in future.
19. FINANCIAL DERIVATIVES HEDGING TRANSACTIONS
The use of Financial Derivatives Hedging Contracts is governed by
Companys policies which provide for the use of such financial
derivatives consistent with the Companys risk management strategy. The
Company does not use derivative financial instruments for speculative
purposes.
Keeping in view of the principle of prudence as per Accounting Standard
1 on "Disclosure of Accounting Policies" outstanding derivative
contracts at the Balance Sheet date are now marked to market and
accordingly, the resulting mark to market losses / gains are recognized
in the Profit and Loss Account.
Mar 31, 2010
1. ACCOUNTING CONCEPTS
The company follows the mercantile system of accounting and recognizes
income and expenses on accrual basis. The accounts are prepared on
historical cost basis as a going concern. Accounting policies not
referred to otherwise are consistent with generally accepted accounting
principles and the provisions of the Companies Act, 1956.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with 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. Difference between the actual
results and estimates are recognized in the period in which the results
are known/materialized.
3. FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation /
impairment loss, if any. Cost includes freight, duties, taxes, and
other incidental expenses. Pre-operative expenses including eligible
borrowing cost incurred during construction period are charged to
Capital Work-in-Progress and on completion, the cost is allocated to
the respective fixed assets. Machinery spares which are specific to a
particular item of the fixed assets and if their use is expected to be
irregular are capitalized as applicable.
4. DEPRECIATION/AMORTISATION
Depreciation on fixed assets is provided on straight line method at the
rate and in the manner prescribed in Schedule XIV of the Companies Act,
1956. Cost of leasehold land is amortized over the period of lease.
Lease hold improvements are amortized over the primary period of lease.
5. IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying amount of an asset
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. Reversal of impairment losses recognized in prior years is
recorded when there is an indication that the impairment losses
recognized for the assets no longer exist.
6. LEASES
Lease payments under an operational lease are recognized as expense in
the statement of Profit and Loss as per terms of lease agreement.
7. RESEARCH AND DEVELOPMENT
Revenue expenditure is charged as an expense in the year it is
incurred. Capital expenditure is taken as fixed assets and depreciation
is provided on such assets as per the provisions of the Companies Act,
1956.
8. INVENTORIES
Raw materials, stores and spares are valued at lower of cost and net
realisable value. work in progress and finish goods are valued at
lower of cost and net realizable value. The costs of work in progress
and finished goods include costs of raw material, conversion cost and
other costs incurred in bringing the inventories to their present
location and condition. Waste is valued at net realizable value. Cost
of inventories is computed on weighted average/FIFO basis.
9. INVESTMENTS
Long term investments are stated at cost. Provision for diminution in
value of long term investments is made only if such decline is other
than temporary.
10. GOVERNMENT GRANTS
Capital grants relating to fixed assets are reduced from the gross
value of fixed assets. Other capital grants are credited to capital
reserve. Revenue grants are credited in profit & loss account or
deducted from related expenses.
11. PROVISION AND CONTINGENCIES
A provision is recognized when there is a present obligation as a
result of past event and it is probable that there will be an outflow
of resources in respect of which a reliable estimate can be made.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
12. FOREIGN CURRENCY TRANSACTIONS
Export Sales in foreign currency are accounted for at the exchange rate
prevailing on the date of negotiation, where such sales are not covered
by forward contracts. Outstanding export documents pending negotiation
when not covered by foreign exchange forward contracts are accounted
for at the prevailing conversion rates at the end of the month of
respective export date and difference if any in actual realization of
such documents is accounted for in foreign exchange fluctuation account
to be credited/charged to the Profit & Loss Account in the year of
realization.
In respect of Forward Exchange Contracts, the difference between the
forward rate and the exchange rate on the date of transaction is
recognized proportionately as income or expense, as the case may be,
over the life of contract.
Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the Profit & Loss Account
except in cases where they relate to the acquisition of fixed assets in
which case they are adjusted to the carrying cost of such assets.
13. SALES
Export sales are recognized on the basis of date of bill of lading and
other sales on ex-factory dispatch. Export benefits/incentives are
accounted for on accrual basis.
Sales include excise duty and are net of claims, rebates & discounts
allowed during the year.
14. EMPLOYEE BENEFITS
(i) The company makes defined contribution to Provident Fund which is
recognized in the Profit & Loss Account on accrual basis.
(ii) The companys liabilities under Payment of Gratuity Act and long
term compensated absences (unfunded) are determined on the basis of
actuarial valuation made at the end of each financial year using the
Projected Unit Credit Method. Actuarial gains and losses are recognized
immediately in the statement of Profit & Loss Account as income or
expense. Obligation is measured at the present value of estimated
future cash flows using a discounted rate that is determined by
reference to market yields at the Balance Sheet date on Government
bonds where the currency and terms of the Government bonds are
consistent with the currency and estimated terms of the defined benefit
obligation.
(iii) Termination benefits are recognized as and when incurred.
15. CLAIMS
In accordance with the consistent practice, insurance and other claims,
to the extent considered recoverable, are accounted for in the year
relevant to claim while the balance is accounted for on settlement.
16. MISCELLANEOUS EXPENDITURE
In accordance with AS - 26 on Intangible assets issued by the Institute
of Chartered Accountants of India the balances as on 1.04.2003 in
respect of deferred revenue expenditure and preliminary expenses are
being expensed over a number of years as originally contemplated.
17. BORROWING COST
Borrowing cost attributable to acquisition and construction of
qualifying assets are capitalized as a part of the cost of such asset
up to the date when such asset is ready for its intended use. Other
borrowing costs are charged to the profit & loss account.
18. TAXATION
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. The deferred tax for timing differences
between the book profits and tax profits for the year is accounted for,
using the tax rates and laws that have been substantively enacted as of
the balance sheet date. Deferred tax assets arising from timing
differences are recognized to the extent there is reasonable certainty
that these would be realized in future.
19. FINANCIAL DERIVATIVES HEDGING TRANSACTIONS
The use of Financial Derivatives Hedging Contracts is governed by
Companys policies which provide for the use of such financial
derivatives consistent with the Companys risk management strategy. The
Company does not use derivative financial instruments for speculative
purposes.
Keeping in view of the principle of prudence as per Accounting Standard
1 on "Disclosure of Accounting Policies" outstanding derivative
contracts at the Balance Sheet date are now marked to market and
accordingly, the resulting mark to market losses / gains are recognized
in the Profit and Loss Account.