Mar 31, 2023
1. Company overview
HBL Power Systems Limited ("HBL" or "The Company") is a public limited company incorporated and domiciled in India and has its registered office at Hyderabad, Telangana State, India. The Company has its primary listings on the BSE Limited and National Stock Exchange of India Limited in India. The financial statements were reviewed by the Audit Committee in its meeting held on 25th May 2023 and approved by the Company''s Board of Directors at the meeting held on 25th May 2023.
The principal activities of the Company comprise of manufacturing of different types of batteries including lead acid, nicad, silver zinc, lithium and railway and defence electronics and other products. The Company is also engaged in service activities related to the above products.
2. Basis of preparation and measurement2.1 Statement of compliance
The financial statements as at and for the year ended March 31, 2023 have been prepared in accordance with applicable Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.
2.2 Accounting convention and basis of measurement
The financial statements have been prepared on the historical cost convention and on an accrual basis, except for the following material items that have been measured at fair value as required by relevant Ind AS:
i) Certain financial assets and liabilities (refer accounting policy on financial instruments);
ii) Defined benefit and other long-term employee benefits
iii) Provision for warranties
iv) Lease liability on right of use assets
2.3 Functional and presentation currency
The financial statements are presented in Indian rupees, which is the functional currency of the Company and the currency of the primary economic environment in which the Company operates. All financial information presented in Indian rupees has been rounded off to the nearest lakh of rupees except share and per share data.
2.4 Use of judgments, estimates and assumptions
The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities,
income and expenses and the disclosure of contingent liabilities and contingent assets. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any affected future periods.
Information about critical judgements in applying accounting policies, as well as estimates and assumptions in respect of the following areas, that have most significant effect to the carrying amounts within the next financial year are included in the relevant notes.
i) Useful lives of property, plant, equipment and intangibles.
ii) Measurement of defined benefit obligations
iii) Measurement and likelihood of occurance of provisions and contingencies.
iv) Recognition of deferred tax assets/liabilities.
v) Impairment of intangibles
vi) Expenditure relating to research and development activities.
vii) Assessing the lease term (including anticipated renewals), non-cancellable period of a lease and the applicable discount rate in respect of assets taken on lease.
2.5 Operating cycle:
Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
3. Summary of significant accounting policies
3.1 Property, Plant and Equipment (PPE)
i) Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
ii) The cost of property, plant and equipment includes those incurred directly for the construction or acquisition of the asset, and directly attributable to bringing it to the location and condition necessary for it to be capable of operating in the manner intended by the management and includes the present value of expected cost for dismantling / restoration wherever applicable.
iii) The cost of major spares is recognized in the carrying amount of the item of property, plant and equipment, in accordance with the recognition criteria set out in the standard. The carrying amount of the replaced part is derecognized at the time of actual replacement. The costs of the day-to-day servicing of the item are recognized in statement of profit or loss as incurred.
iv) Depreciation on tangible assets including those on leasehold premises is provided for under straight line method over the useful life of assets specified in Part C of Schedule II to the Companies Act, 2013 and in the manner specified therein, except in respect of dies and moulds which are depreciated over their technically estimated useful lives of 5 years on straight line method. Assets costing less than D 5,000/- are fully depreciated in the year of purchase.
v) Depreciation methods, useful lives and residual values are reviewed at each reporting date and accounted for as change in accounting estimate.
vi) Each component / part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately only when it has a different useful life. The gain or loss arising from de-recognition of an item of property, plant and equipment is included in statement of profit or loss when the item is derecognized.
vii) Expenditure attributable /relating to PPE under construction / erection is accounted for as below:
A) To the extent directly identifiable to any specific plant / unit, trial run expenditure net of revenue is included in the cost of property, plant and equipment .
B) To the extent not directly identifiable to any specific plant / unit, is kept under ''expenditure during construction'' for allocation to property, plant and equipment and is grouped under ''capital work-in-progress''.
i) Intangible asset is recognised when it is probable that future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably.
ii) New product development expenditure, software licences, technical knowhow fee, infrastructure and logistic facilities, etc. are recognised as intangible assets
upon completion of development and commencement of commercial production.
iii) Intangible assets are amortized on straight line method over their technically estimated useful lives.
iv) Residual values and useful lives for all intangible assets are reviewed at each reporting date. Changes, if any, are accounted for as changes in accounting estimates.
A contract is, or contains, a lease if the contract conveys the
right to control the use of an identified asset for a period of
time in exchange for consideration.
a) The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset is measured in accordance with the measurement criteria as per Ind AS 116. The right-of-use asset is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.
b) The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The company recognises the amount of the re-measurement of lease liability in accordance with the requirements under Ind AS 116.
c) The Company has elected not to apply the requirements of Ind AS 116 leases to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease
v) |
Consumable tools |
At cost less amount charged off |
(which is at 1/3rd of value each |
||
year). |
||
vi) |
Services work in progress |
Lower of cost and net realisable value |
payments associated with these leases are recognized as an expense.
ii) Assets given on lease
At the inception of the lease the Company classifies each of its leases as either an operating lease or a finance lease. The Company recognises lease payments received under operating leases as income. In case of a finance lease, finance income is recognised over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor''s net investment in the lease.
3.4 Investment in subsidiaries, associates and joint ventures
i) Investments in subsidiaries, associate and joint ventures are measured at cost. Impairment / diminution in value, other than temporary, is provided for.
ii) Investments classified as ''current investments'' are carried at cost and diminution / impairment with reference to market value is recognized.
Government grants are recognised in the statement of profit or loss on a systematic basis over the periods in which the related costs for which the grants are intended to compensate are recognised as expenses.
3.6 Inventories are valued as under:
I) |
Raw materials, components, consumables and stores & spares. |
At lower of weighted average cost and net realisable value. |
ii) |
Work In progress and finished goods. |
At lower of net realisable value and weighted average cost of materials plus cost of conversion and other costs incurred in bringing them to the present location and condition. |
iii) |
Long term contract work in progress (where the income it is not eligible for recognition as per Income recognition policy stated elsewhere). |
At direct and attributable costs incurred in relation to such contracts. |
iv) |
Stock-in-trade |
At lower of cost and net realisable value |
Non-current assets or disposal groups comprising of assets and liabilities are classified as ''held for sale'' when all of the following criteria are met:
(i) decision has been made to sell.
(ii) the assets are available for immediate sale in their present condition.
(iii) the assets are being actively marketed and
(iv) sale has been agreed or is expected to be concluded within 12 months of the balance sheet date.
Subsequently, such non-current assets and disposal groups classified as held for sale are measured at the lower of its carrying value and fair value less costs to sell. Non-current assets held for sale are neither depreciated nor amortised.
i) Revenue from contracts with customers that meet the recognition criteria under paragraph 9 of Ind AS 115 are recognised when (or as) a performance obligation is satisfied by transferring a promised good or service to a customer, for the amount of the transaction price that is allocated to that performance obligation.
ii) "Satisfaction of a performance obligation and recognition of revenue over time is followed when, transfer of control of a good or service are made over time and, if one of the following criteria is met:
(a) the customer simultaneously receives and consumes the benefits provided by the entity''s performance as the entity performs.
(b) the entity''s performance creates or enhances an asset (for example, work in progress) that the customer controls as the asset is created or enhanced; or
(c) the entity''s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date.
Performance obligations that are not satisfied over time are treated as performance obligations satisfied
at a point in time which in case of goods are upon their despatch/delivery to domestic customers as per terms of sale and on the basis of proof of export/delivery for export customers as per terms of sale and in case of services are upon completion of service.
iii) Claims against outside agencies are accounted for on certainty of realization.
iv) Interest income is recognized on an accrual basis using the effective interest rate (EIR) method. Dividends, are recognized at the time the right to receive is established.
v) Export incentives under various schemes are recognized as income on certainty of realization.
3.9 Employee benefitsi) Short term benefits:
All employee benefits falling due within twelve months of rendering the service are classified as short term employee benefits. The cost of the benefits like salaries, wages, medical, leave travel assistance, short term compensated absences, bonus, exgratia, etc. is recognised as an expense in the period in which the employee renders the related service.
ii) Post-employment benefits:
A) Defined contribution plans:
The contribution paid/payable under provident fund scheme, ESI scheme and employee pension scheme is recognised as expenditure in the period in which the employee renders the related service.
B) Defined benefit plans:
The Company''s obligation towards Gratuity is a defined benefit plan. The present value of the estimated future cash flows of the obligation under such plan is determined based on actuarial valuation using the Projected Unit Credit (PUC) method. Any difference between the interest income on plan assets and the return actually achieved and any changes in the liabilities over the year due to changes in actuarial assumptions or experienced adjustments within the plan are recognized immediately in other comprehensive income and subsequently not reclassified to the statement of profit and loss.
All defined benefit plan obligations are determined based on valuation as at the end of the reporting period, made by independent actuary using the PUC Method. The classification of the Company''s
net obligation into current and non-current is as per the actuarial valuation report.
iii) Long term employee benefits:
The obligation for long term employee benefits such as long term compensated absences, is determined and recognised in the manner similar to that stated in the defined benefit plan.
3.10 Foreign currency transactions
i) Transactions relating to non-monetary items and purchase and sale of goods/services denominated in foreign currency are recorded at the prevailing exchange rate or a rate that approximates to the actual rate on the date of transaction.
ii) Assets & liabilities in the nature of monetary items denominated in foreign currencies are translated and restated at exchange rates prevailing at the end of the reporting period.
iii) Exchange differences arising on account of settlement / conversion of foreign currency monetary items are recognized as expense or income in the period in which they occur.
iv) Foreign currency gains and losses are reported on a net basis. This includes changes in the fair value of foreign exchange derivative instruments, which are accounted for at fair value through statement of profit or loss
3.11 Current tax and deferred tax
i) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profits differ from the profit as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are not taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted upto the end of the reporting period.
Deferred tax is recognised on temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for
all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
iv) Current and deferred tax for the year
Current and deferred tax are recognised in statement of profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
i) Borrowing costs incurred for obtaining assets which take substantial period to get ready for their intended use are capitalized to the respective assets wherever the costs are directly attributable to such assets and in other cases by applying weighted average cost of borrowings to the expenditure on such assets.
ii) Other borrowing costs are treated as expense for the year.
iii) Significant transaction costs in respect of long-term borrowings are amortized over the tenor of respective loans using effective interest rate (EIR) method.
3.13 Financial instruments (financial assets and financial
liabilities):
i) All financial instruments are recognized initially at fair value. The classification of financial Instruments depends on the objective of the business model for which it is held and the contractual cash flows that
are solely payments of principal and interest on the principal amount outstanding. For the purpose of subsequent measurement, financial instruments of the Company are classified into (a) Non-derivative financial instruments and (b) Derivative financial instruments.
ii) Non-derivative financial instruments
A) Security Deposits, cash and cash equivalents, employee and other advances, trade receivables and eligible current and non-current financial assets are classified as financial assets under this clause.
B) Loans and borrowings, trade and other payables including deposits collected from various parties and eligible current and non-current financial liabilities are classified as financial liabilities under this clause.
C) Financial instruments are subsequently carried at amortized cost wherever applicable using Effective Interest Rate (EIR) method less impairment loss.
D) Transaction costs that are attributable to the financial instruments recognized at amortized cost are included in the fair value of such instruments.
iii) Derivative financial instruments
A) Derivative financial assets and liabilities are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at each reporting date
B) Changes in the fair value of any derivative asset or liability are recognized immediately in the income statement and are included in other income or expense.
C) Cash flow hedge: Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognized in other comprehensive income and presented within equity in the cash flow hedging reserve to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognized in the statement of profit and loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the statement of
profit and loss upon the occurence of the related forecasted transaction.
(iv) Impairmenti) Financial assets
A) The Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
â Financial assets that are debt instruments, and are measured at amortized cost wherever applicable for e.g., loans, debt securities, deposits, and bank balance.
â Trade receivables
B) The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables which do not contain a significant financing component. The application of simplified approach does not require the company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECL''s at each reporting date, right from its initial recognition.
The company assesses at each reporting date whether there is any objective evidence that a non-financial asset or a group of non-financial assets is impaired. If any such indication exists, the Company estimates the amount of impairment loss.
i) Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a
reliable estimate of the amount of the obligation can be made .
ii) The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
iii) When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset, if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
iv) Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. Provisions for onerous contracts are measured at the present value of lower of the expected net cost of fulfilling the contract and the expected cost of terminating the contract.
3.15 Earnings Per Share ( EPS )
i) Basic EPS is computed by dividing the profit after tax attributable to equity shareholders by the weighted average number of equity shares outstanding during the year / period.
ii) Diluted EPS is computed by dividing the profit after tax attributable to equity shareholders, as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic EPS and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.
Mar 31, 2018
1.1 Property, Plant and Equipment (PPE)
i) Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
ii) The cost of property, plant and equipment includes those incurred directly for the construction or acquisition of the asset, and directly attributable to bringing it to the location and condition necessary for it to be capable of operating in the manner intended by the management and includes the present value of expected cost for dismantling / restoration wherever applicable.
iii) The cost of major spares is recognized in the carrying amount of the item of property, plant and equipment, in accordance with the recognition criteria set out in the standard. The carrying amount of the replaced part is derecognized at the time of actual replacement. The costs of the day-to-day servicing of the item are recognized in statement of profit or loss as incurred.
iv) Depreciation on tangible assets including those on leasehold premises is provided under straight line method over the useful life of assets specified in Part C of Schedule II to the Companies Act, 2013 and in the manner specified therein, except in respect of dies and moulds and âsecured land fillingâ (used for disposal of lead slag) which are depreciated over their technically estimated useful lives of 5 years and 10 years respectively on straight line method. Assets costing less than Rs. 5,000/- are fully depreciated in the year of purchase.
v) Depreciation methods, useful lives and residual values are reviewed at each reporting date and accounted as change in accounting estimate.
vi) Each component / part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately only when it has a different useful life. The gain or loss arising from de-recognition of an item of property, plant and equipment is included in statement of Profit and Loss when the item is derecognized.
vii) Expenditure attributable /relating to PPE under construction / erection is accounted as below:
A) To the extent directly identifiable to any specific plant / unit, trial run expenditure net of revenue is included in the cost of property, plant and equipment .
B) To the extent not directly identifiable to any specific plant / unit, is kept under âexpenditure during constructionâ for allocation to property, plant and equipment and is grouped under âcapital work-in- progressâ.
1.2 Intangible assets
i) Intangible asset is recognised when it is probable that future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably.
ii) New product development expenditure, software licences, technical knowhow fee, infrastructure and logistic facilities, etc. are recognised as intangible assets upon completion of development and commencement of commercial production.
iii) Intangible assets are amortized on straight line method over their technically estimated useful lives.
iv) Residual values and useful lives for all intangible assets are reviewed at each reporting date. Changes, if any, are accounted for as changes in accounting estimates.
1.3 Assets taken under lease
i) In respect of equipment taken under finance leases, the lower of fair value of the leased asset and present value of minimum lease payments, is recognised as an asset and corresponding liability is created. The finance charges are allocated to the period over the lease term and are charged off.
ii) In respect of equipment taken under operating lease, lease payments are recognised as expense over the period of lease term.
iii) Cost of acquisition of leasehold land is amortized over the leasehold period.
1.4 Investment in subsidiaries, associates and joint ventures
i) Investments in subsidiaries, associate and joint ventures are measured at cost. Impairment / diminution in value, other than temporary, is provided for.
ii) Investments classified as âcurrent investmentsâ are carried at cost and diminution / impairment with reference to market value is recognized.
1.5 Government grants
Government grants are recognised in the statement of profit or loss on a systematic basis over the periods in which the related costs for which the grants are intended to compensate are recognised as expenses.
1.6 Inventories are valued as under:
1.7 Assets held for sale
Non-current assets or disposal groups comprising of assets and liabilities are classified as âheld for saleâ when all of the following criteria are met:
(i) decision has been made to sell.
(ii) the assets are available for immediate sale in its present condition.
(iii) the assets are being actively marketed and
(iv) sale has been agreed or is expected to be concluded within 12 months of the balance sheet date.
Subsequently, such non-current assets and disposal groups classified as held for sale are measured at the lower of its carrying value and fair value less costs to sell. Non-current assets held for sale are not depreciated or amortised.
1.8 Revenue recognition
i) Revenue on sale of goods is recognised when significant risks and rewards of ownership and effective control on goods have been transferred to the buyer. Sales revenue is measured at fair value net of returns, trade discounts and volume rebates. Inter divisional transfers are not recognized as revenue.
ii) Revenue on rendering of service is recognized when the outcome of the services rendered can be estimated reliably. Revenue is recognized in the period when the service is performed by reference to the contract stage of completion at the reporting date. Where services are performed by an indeterminate number of acts over a specified period of time, revenue is recognised on a straight line basis over the specified period and when a specific act is much more significant than any other acts, the recognition of revenue is postponed unitll the significant act is executed.
iii) Claims against outside agencies are accounted on certainty of realization.
iv) Interest income is reported on an accrual basis using the effective interest method. Dividends are recognized at the time the right to receive is established.
v) Export incentives under various schemes are recognized as income on certainty of realization.
vi) In case of contracts (long term) of complex equipment/systems/development order where the normal cycle time for completion is spreading over one or more accounting periods, revenue is recognised, subject to provision of anticipated losses, based on percentage completion as certified by technical committee/customers acceptance wherever applicable.
vii) Short term contracts involving supply and service where price breakup is available, Revenue in respect of supplies is recognised when goods are delivered to customers unconditionally and service income is recognised on completion of service and bills submitted as per terms of the order.
1.9 Employee benefits
i) Short term benefits:
All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The cost of the benefits like salaries, wages, medical, leave travel assistance, short term compensated absences, bonus, exgratia, etc. is recognised as an expense in the period in which the employee renders the related service.
ii) Post-employment benefits:
A) Defined contribution plans:
The contribution paid/payable under provident fund scheme, ESI scheme and employee pension scheme is recognised as expenditure in the period in which the employee renders the related service.
B) Defined benefit plans:
The Companyâs obligation towards gratuity is a defined benefit plan. The present value of the estimated future cash flows of the obligation under such plan is determined based on actuarial valuation using the projected unit credit method. Any difference between the interest income on plan assets and the return actually achieved and any changes in the liabilities over the year due to changes in actuarial assumptions or experienced adjustments within the plan are recognized immediately in other comprehensive income and subsequently not reclassified to the statement of Profit and Loss.
All defined benefit plan obligations are determined based on valuation as at the end of the reporting period, made by independent actuary using the projected unit credit method. The classification of the Companyâs net obligation into current and non-current is as per the actuarial valuation report.
iii) Long term employee benefits:
The obligation for long term employee benefits such as long term compensated absences, is determined and recognised in the similar manner stated in the defined benefit plan.
1.10 Foreign currency transactions
i) Transactions relating to non-monetary items; purchase and sale of goods/services denominated in foreign currency are recorded at the exchange rate prevailing or a rate that approximates the actual rate on the date of transaction.
ii) Assets and liabilities in the nature of monetary items denominated in foreign currencies are translated and restated at prevailing exchange rates as at the end of the reporting period.
iii) Exchange differences arising on account of settlement / conversion of foreign currency monetary items are recognized as expense or income in the period in which they arise.
iv) Foreign currency gains and losses are reported on a net basis. This includes changes in the fair value of foreign exchange derivative instruments, which are accounted at fair value through statement of Profit and Loss
1.11 Current tax and deferred tax
i) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
ii) Current tax
The tax currently payable is based on taxable profit for the year. Taxable profits differ from the profit as reported in the statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Companyâs current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
iii) Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
iv) Current and deferred tax for the year
Current and deferred tax are recognised in the statement of Profit and Loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
1.12 Borrowing costs
i) Borrowing costs incurred for obtaining assets which take substantial period to get ready for their intended use are capitalized to the respective assets wherever the costs are directly attributable to such assets and in other cases by applying weighted average cost of borrowings to the expenditure on such assets.
ii) Other borrowing costs are treated as expense for the year.
iii) Significant transaction costs in respect of long-term borrowings are amortized over the tenor of respective loans using Effective Interest Rate (EIR) method.
1.13 Financial instruments ( financial assets and financial liabilities ):
i) All financial instruments are recognized initially at fair value. The classification of financial Instruments depends on the objective of the business model for which it is held and the contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. For the purpose of subsequent measurement, financial instruments of the Company are classified into (a) non- derivative financial instruments and (b) derivative financial instruments.
ii) Non - derivative financial instruments
A) Security deposits, cash and cash equivalents, employee and other advances, trade receivables and eligible current and non-current financial assets are classified as financial assets under this clause.
B) Loans and borrowings, trade and other payables including deposits collected from various parties and eligible current and non-current financial liabilities are classified as financial liabilities under this clause.
C) Financial instruments are subsequently carried at amortized cost wherever applicable using effective interest rate (EIR) method less impairment loss.
D) Transaction costs that are attributable to the financial instruments recognized at amortized cost are included in the fair value of such instruments.
iii) Derivative financial instruments
A) Derivative financial assets and liabilities are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at each reporting date
B) Changes in the fair value of any derivative asset or liability are recognized immediately in the income statement and are included in other income or expenses.
C) Cash flow hedge: Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognized in other comprehensive income and presented within equity in the cash flow hedging reserve to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognized in the statement of Profit and Loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the statement of Profit and Loss upon the occurence of the related forecasted transaction.
1.14 Impairment
i) Financial assets
A) The Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
0 Financial assets that are debt instruments are measured at amortized cost wherever applicable for e.g., loans, debt securities, deposits and bank balance.
0 Trade receivables
B) The Company follows âsimplified approachâ for recognition of impairment loss allowance on trade receivables which do not contain a significant financing component. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
ii) Non - financial assets
The Company assesses at each reporting date whether there is any objective evidence that a non-financial asset or a group of non-financial assets is impaired. If any such indication exists, the Company estimates the amount of impairment loss.
1.15 Provisions
i) Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
ii) The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
iii) When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset, if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
iv) Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. Provisions for onerous contracts are measured at the present value of lower of the expected net cost of fulfilling the contract and the expected cost of terminating the contract.
1.16 Earnings Per Share ( EPS )
i) Basic EPS is computed by dividing the profit after tax by the weighted average number of equity shares outstanding during the year / period.
ii) Diluted EPS is computed by dividing the profit after tax, as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic EPS and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.
1.17 Recent accounting pronouncements
i) In March 2018, the Ministry of Corporate Affairs issued the Companies ( Indian Accounting Standards ) (amendments) rules, 2018, on 28th March 2018, notifying a new Ind AS - 115, ârevenue from contracts with customersâ which is based on IFRS-15, ârevenue from contracts from customersâ.
ii) Ind AS 115 replaces existing revenue recognition standards Ind AS 11, construction contracts and Ind AS 18, revenue and revised guidance note of the Institute of Chartered Accountants of India (ICAI) on accounting for real estate transactions for Ind AS entities issued in 2016.
iii) The amendments are applicable to the Company from April 1, 2018. The Company is evaluating the requirements of the new Ind AS-115, other amendments and their effect on financial statements.
Mar 31, 2017
Note : 1
HBL Power Systems Limited ("HBL" or "The Company") is a public limited company incorporated and domiciled in India and has its registered office at Hyderabad, Telangana State, India. The company has its primary listings on the Bombay Stock Exchange and National Stock Exchange in India. The financial statements were authorized for issuance by the companyâs board of directors and audit committee on May 26, 2017.
The principal activities of the company comprises of manufacturing of different types of batteries including lead acid, niCad, silver zinc, lithium and railway and defense electronics, solar photovoltaic modules and other products. The company is also engaged in service activities related to the above products.
Note : 2 I
2.1 Statement of compliance
The financial statements as at and for the year ended March 31, 2017 have been prepared in accordance with Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
For all the periods up to and including the year ended March 31, 2016, the company prepared its financial statements in accordance with requirement of previous GAAP which includes accounting standards notified under the section 133 of the Companies Act 2013 read together with Companies (Accounting Standards) Rules, 2006. The date of transition to Ind AS is April 1, 2015. These financial statement for the year ended March 31, 2017 are company''s first Ind AS financial statements. The disclosure relating to Ind AS 101, First-time adoption of Indian Accounting Standards have been given in Note no. 4..
2.2 Accounting convention and basis of measurement
The financial statements have been prepared on the historical cost convention and on an accrual basis, except for the following material items that have been measured at fair value as required by relevant Ind AS:
i) Certain financial assets and liabilities measured at fair value (refer accounting policy on financial instruments);
ii) Defined benefit and other long-term employee benefits
2.3 Functional and presentation currency
The financial statements are presented in Indian rupees, which is the functional currency of the company and the currency of the primary economic environment in which the company operates. All financial information presented in Indian rupees has been rounded to the nearest lakh of rupees except share and per share data.
2.4 Use of judgments, estimates and assumptions
The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent liabilities and contingent assets. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Information about critical judgments in applying accounting policies, as well as estimates and assumptions in respect of the following areas, that have most significant effect to the carrying amounts within the next financial year are included in the relevant notes.
i) Useful lives of property, plant, equipment and intangibles.
ii) Measurement of defined benefit obligations
iii) Measurement and likelihood of occurance of provisions and contingencies.
iv) Recognition of deferred tax assets.
for the year ended on March 31, 2017
v) Impairment of intangibles
vi) Expenditure relating to research and development activities.
2.5 Operating cycle:
Based on the nature of products / activities of the company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
Note : 3 3.1 Property, plant and equipment (PPE)
i) Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
ii) The cost of property, plant and equipment includes those incurred directly for the construction or acquisition of the asset, and directly attributable to bringing it to the location and condition necessary for it to be capable of operating in the manner intended by the management and includes the present value of expected cost for dismantling / restoration wherever applicable.
iii) The cost of major spares is recognized in the carrying amount of the item of property, plant and equipment, in accordance with the recognition criteria set out in the standard. The carrying amount of the replaced part is derecognized at the time of actual replacement. The costs of the day-to-day servicing of the item are recognized in statement of profit or loss as incurred.
iv) Depreciation on tangible assets including those on leasehold premises is provided under straight line method over the useful life of assets specified in Part C of Schedule II to the Companies Act, 2013 and in the manner specified therein, except in respect of dies and moulds and ''secured land fillingâ (used for disposal of lead slag) which are depreciated over their technically estimated useful lives of 5 years and 10 years respectively on straight line method. Assets costing less than C5,000/- are fully depreciated in the year of purchase.
v) Depreciation methods, useful lives and residual values are reviewed at each reporting date and accounted as change in accounting estimate.
vi) Each component / part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately only when it has a different useful life. The gain or loss arising from de-recognition of an item of property, plant and equipment is included in statement of profit or loss when the item is derecognized.
vii) Expenditure attributable /relating to PPE under construction / erection is accounted as below:
A) To the extent directly identifiable to any specific plant / unit, trial run expenditure net of revenue is included in the cost of property, plant and equipment .
B) To the extent not directly identifiable to any specific plant / unit, is kept under ''expenditure during constructionâ for allocation to property, plant and equipment and is grouped under ''capital work-in-progressâ.
3.2 Intangible assets
i) Intangible asset is recognized when it is probable that future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Expenditure incurred for creating infrastructure facilities where the ownership does not rest with the company and where the benefits from it accrue to the company over a future period is also considered as intangible asset.
ii) New product development expenditure, software licences, technical knowhow fee, infrastructure and logistic facilities, etc. are recognized as intangible assets upon completion of development and commencement of commercial production.
iii) Intangible assets are amortized on straight line method over their technically estimated useful lives.
iv) Residual values and useful lives for all intangible assets are reviewed at each reporting date. Changes, if any, are accounted for as changes in accounting estimates.
3.3 Assets taken under lease
i) In respect of equipment taken under finance leases, the lower of fair value of the leased asset and present value of minimum lease payments, is recognized as an asset and corresponding liability is created. The finance charges are allocated to the period over the lease term and are charged off.
ii) In respect of equipment taken under operating lease, lease payments are recognized as expense over the period of lease term.
iii) Cost of acquisition of leasehold land is amortized over the leasehold period.
3.4 Investment in subsidiaries, associates and joint ventures
i) Investments in subsidiaries, associate and joint ventures are measured at cost. Impairment / diminution in value, other than temporary, is provided for.
ii) Investments classified as ''current investmentsâ are carried at cost and diminution / impairment with reference to market value is recognized.
3.5 Government grants
Government grants are recognized in the statement of profit or loss on a systematic basis over the periods in which the related costs for which the grants are intended to compensate are recognized as expenses.
3.7 Revenue recognitions
i) Revenue on sale of goods is recognized when significant risks and rewards of ownership and effective control on goods have been transferred to the buyer. Sales revenue is measured at fair value net of returns, trade discounts and volume rebates. Inter divisional transfers are not recognized as revenue.
ii) Revenue on rendering of service is recognized when the outcome of the services rendered can be estimated reliably. Revenue is recognized in the period when the service is performed by reference to the contract stage of completion at the reporting date. Where services are performed by an indeterminate number of acts over a specified period of time, revenue is recognized on a straight line basis over the specified period and when a specific act is much more significant than any other acts, the recognition of revenue is postponed unitll the significant act is executed.
iii) Claims against outside agencies are accounted on certainty of realization.
iv) Interest income is reported on an accrual basis using the effective interest method. Dividends, are recognized at the time the right to receive is established.
v) Export incentives under various schemes are recognized as income on certainty of realization.
vi) In case of contracts (long term) of complex equipment/systems/development order where the normal cycle time for completion is spreading over one or more accounting periods, revenue is recognized, subject to provision of anticipated losses, based on percentage completion as certified by technical committee/customers acceptance wherever applicable.
vii) Short term contracts involving supply and service where price breakup is available, revenue in respect of supplies are recognized when goods are delivered to customers unconditionally and service income is recognized on completion of service and bills submitted as per terms of the order.
3.8 Employee benefits
i) Short term benefits:
All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The cost of the benefits like salaries, wages, medical, leave travel assistance, short term compensated absences, bonus, exgratia, etc. is recognized as an expense in the period in which the employee renders the related service.
ii) Post-employment benefits:
A) Defined contribution plans:
The contribution paid/payable under provident fund scheme, ESI scheme and employee pension scheme is recognized as expenditure in the period in which the employee renders the related service.
B) Defined benefit plans:
The companyâs obligation towards gratuity is a defined benefit plan. The present value of the estimated future cash flows of the obligation under such plan is determined based on actuarial valuation using the projected unit credit method. Any difference between the interest income on plan assets and the return actually achieved and any changes in the liabilities over the year due to changes in actuarial assumptions or experienced adjustments within the plan are recognized immediately in other comprehensive income and subsequently not reclassified to the statement of profit and loss.
All defined benefit plan obligations are determined based on valuation as at the end of the reporting period, made by independent actuary using the projected unit credit method. The classification of the company''s net obligation into current and non-current is as per the actuarial valuation report.
iii) Long term employee benefits:
The obligation for long term employee benefits such as long term compensated absences, is determined and recognized in the similar manner stated in the defined benefit plan.
3.9 Foreign currency transactions
i) Transactions relating to non-monetary items and purchase and sale of goods/services denominated in foreign currency are recorded at the exchange rate prevailing or a rate that approximates the actual rate on the date of transaction.
ii) Assets & liabilities in the nature of monetary items denominated in foreign currencies are translated and restated at prevailing exchange rates as at the end of the reporting period.
iii) Exchange differences arising on account of settlement / conversion of foreign currency monetary items are recognized as expense or income in the period in which they arise.
iv) Foreign currency gains and losses are reported on a net basis. This includes changes in the fair value of foreign exchange derivative instruments, which are accounted at fair value through profit or loss
3.10 Current tax and deferred tax
i) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
ii) Current tax
The tax currently payable is based on taxable profit for the year. Taxable profits differ from the profit as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The companyâs current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
iii) Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
iv) Current and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.
3.11 Borrowing costs
i) Borrowing costs incurred for obtaining assets which take substantial period to get ready for their intended use are capitalized to the respective assets wherever the costs are directly attributable to such assets and in other cases by applying weighted average cost of borrowings to the expenditure on such assets.
ii) Other borrowing costs are treated as expense for the year.
iii) Significant transaction costs in respect of long-term borrowings are amortized over the tenor of respective loans using effective interest method.
3.12 Financial instruments (Financial assets and financial liabilities ):
i) All financial instruments are recognized initially at fair value. The classification of financial Instruments depends on the objective of the business model for which it is held and the contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. For the purpose of subsequent measurement, financial instruments of the company are classified into (a) Non- derivative financial instruments and (b) Derivative financial instruments.
ii) Non - derivative financial Instruments
A) Security deposits, cash and cash equivalents, employee and other advances, trade receivables and eligible current and noncurrent financial assets are classified as financial assets under this clause.
B) Loans and borrowings, trade and other payables including deposits collected from various parties and eligible current and non-current financial liabilities are classified as financial liabilities under this clause.
C) Financial instruments are subsequently carried at amortized cost wherever applicable using effective interest rate method (EIR) less impairment loss.
D) Transaction costs that are attributable to the financial instruments recognized at amortized cost are included in the fair value of such instruments.
iii) Derivative financial instruments
A) Derivative financial assets and liabilities are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at each reporting date.
B) Changes in the fair value of any derivative asset or liability are recognized immediately in the income statement and are included in other income or expenses.
C) Cash flow hedge: Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognized in other comprehensive income and presented within equity in the cash flow hedging reserve to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognized in the statement of profit and loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the statement of profit and loss upon the occurrence of the related forecasted transaction.
3.13 Impairment
i) Financial assets
A) The company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
- Financial assets that are debt instruments, and are measured at amortized cost wherever applicable for e.g., loans, debt securities, deposits, and bank balance.
- Trade receivables
B) The company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables which do not contain a significant financing component. The application of simplified approach does not require the company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
ii) Non - financial assets
The company assesses at each reporting date whether there is any objective evidence that a non-financial asset or a group of non-financial assets is impaired. If any such indication exists, the company estimates the amount of impairment loss.
3.14 Provisions
i) Provisions are recognized when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
ii) The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
iii) When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset, if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
iv) Provisions for onerous contracts are recognized when the expected benefits to be derived by the company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. Provisions for onerous contracts are measured at the present value of lower of the expected net cost of fulfilling the contract and the expected cost of terminating the contract.
3.15 Earnings per share (EPS)
i) Basic EPS is computed by dividing the profit after tax by the weighted average number of equity shares outstanding during the year / period.
ii) Diluted EPS is computed by dividing the profit after tax, as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic EPS and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.
3.16 Recent accounting pronouncements
i) In March 2017, the Ministry of Corporate Affairs issued the Companies ( Indian Accounting Standards ) (Amendments) Rules, 2017, notifying amendments to Ind AS - 7, ''statement of cash flows''. These amendments are in accordance with the recent amendments made by the International Accounting Standards Board (IASB) to IAS - 7, ''statement of cash flows''. The amendments are applicable to the company from April 1, 2017
ii) The amendment to Ind AS - 7, requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.
iii) The company is evaluating the requirements of the amendments and their effect on financial statements.
4.1 These standalone financial statements of HBL Power Systems Limited for the year ended March 31, 2017 have been prepared in accordance with Ind AS. For the purposes of transition to Ind AS, the company has followed the guidance prescribed in Ind AS 101- first time adoption of Indian Accounting Standard, with April 1, 2015 as the transition date and IGAAP as the previous GAAP.
4.2 The transition to Ind AS has resulted in changes in the presentation of the financial statements, disclosures in the notes thereto and accounting policies and principles. The accounting policies set out in Note 3 have been applied in preparing the standalone financial statements for the year ended March 31, 2017 and the comparative information. An explanation of how the transition from previous GAAP to Ind AS has affected the companyâs balance sheet, statement of profit and loss, is set out in note 4.4. Exemptions on first time adoption of Ind AS availed in accordance with Ind AS 101 have been set out in note 4.3..
4.3 Exemptions availed on first time adoption of Ind-AS 101
Ind AS 101 allows first - time adopters certain exemptions from the retrospective application of certain requirements under Ind AS and exemptions from other Ind AS. The company has accordingly applied the following exemptions.
(A) Deferred government grants
The company is permitted to apply the requirements under Ind AS 109, financial instruments and Ind AS 20, accounting for government grants and disclosure of government assistance, prospectively to government loans existing at the date of transition to Ind AS. Accordingly, the measurement of borrowings - interest free sales tax loan (IFST) is made prospectively
(B) Property, plant and equipment and intangibles
The company may elect to use the previous GAAP carrying amount as the deemed cost for measurement of items of property, plant and equipment and intangible assets at the date of transition to Ind AS. Accordingly the company adopted the previous GAAP carrying amount that existed at the date of transition to Ind AS. Further, the carrying amount of an insignificant finance lease relating to office equipment included in PPE had been retained without according the treatment prescribed by Ind AS 109 on financial instruments.
(C) Investments in subsidiaries, joint ventures and associates
Where the company adopts to measure such investments at cost, in accordance with Ind AS 27 - separate financial statements, it has an option of measuring the same at deemed cost, being the previous GAAP carrying amount as on the date of transition. Accordingly the company adopted the previous GAAP carrying amount that existed at the date of transition to Ind AS.
4.4 Reconciliations
The following reconciliations provide the effect of transition to Ind AS from IGAAP in accordance with Ind AS 101
(A) Equity as at April 1, 2015 and March 31, 2016
(B) Net profit for the year ended March 31, 2016.
Explanations for reconciliation of balance sheet as previously reported under IGAAP to Ind AS.
Reasons for adjustments:
a) Depreciation on PPE relating to previous year identified during the year.
b) Inclusion of freight element to the value of inventories.
c) Addition on account of prior period sales identified during the year.
d) Consequent to reclassification of financial instruments, dividends approved post to reporting period and prior period items.
e) Unwinding and amortization of interest against interest free loans from related parties and government assistance by way of interest free sales tax loan.
f) Recognition and amortization of deferred government assistance.
g) Recognition of liability against prior period expenses identified in subsequent years.
h) Discounting of provision for warranties and derecognition of liability for dividend declared post reporting period.
Explanations for reconciliation of statement of profit and loss as previously reported under IGAAP to Ind AS.
Reasons for adjustments:
i) Inclusion of excise duty paid on sales and recognition of prior period sales j) Recognition of amortised government assistance. k) Inclusion of freight element on inventories.
l) Expenditure on excise duty paid on sales shown as separate line item.
m) Recognition of actuarial gains and losses in other comprehensive income and consequential adjustment. n) On account of finance cost on financial instruments as per Ind AS.
o & p) On account of prior period depreciation, prior period expenses and discounting of liability towards warranties.
C) Cash flow statement
There were no significant reconciliation items between cash flows prepared under previous GAAP and those prepared under Ind AS.
5.2 Disclosure in respect of title deeds of immovable properties:
1 Freehold land:
a) The gross block of freehold land comprises of actual acquisition cost of RS,3756.77 lakhs and land development charges capitalized of RS,93.13 lakhs.
2 Non - factory buildings:
a) The gross block of non-factory buildings of RS,744.56 lakhs, comprise of actual cost of building constructed on factory lands of value of RS,519.37 lakhs, and cost of acquisition of buildings, (situated on other than factory lands) purchased from the third parties, is RS,225.19 lakhs.
14.5 During the year 2011-12, certain assets of the company were damaged due to heavy rainfall. The company had incurred RS,95.16 lakhs towards repairing the damages caused and was accounted for as claim recoverable. The cost of new assets acquired is capitalized. However, the claim is made for total cost of repairs and acquisition of assets, as the loss is covered under re-instatement policy which was in force. The total claim was repudiated by the insurer and the company filed a suit for recovery. The matter is still sub-judice.
17.1 Scheme of arrangement and amalgamation (business combination) of transferor company Beaver Engineering & Holdings Private Limited (BEHPL) (holding company) with transferee company HBL Power Systems Limited (HBL) (subsidiary company) from the appointed date April 1, 2016:
The board of directors in their meetings held on March 23, 2016 approved a scheme of arrangement and amalgamation of the holding company BEHPL with its subsidiary company HBL from the appointed date April 1, 2016. The companyâs petition for amalgamation was allowed by the Honâble NCLT, Hyderabad bench on May 9, 2017. As per the said scheme, the authorized share capital of HBL shall automatically stands increased and reclassified by the authorized share capital of BEHPL amounting to RS,125.00 lakhs consequently, the authorized share capital of HBL was increased and reclassified as 31,25,00,000 equity share of RS,1/- each i.e. RS,3125.00 lakhs.
17.3 Addition to and cancellation from issued, subscribed and paid-up capital:
i) Addition to paid up capital - As at the appointed date viz., 01.04.2016, the paid up capital of the BEHPL was RS,51.93 lakhs consisting of 3,04,726 equity shares of RS,10/- each (RS,30.47 lakhs), 77,163 compulsorily convertible preferential shares (CCPS) of RS,10/- each (RS,7.72 lakhs) and 68,726 optionally convertible redeemable preferential shares (OCRPS) of RS,20/- each (RS,13.75 lakhs). In terms of the scheme of amalgamation, upon amalgamation HBL issued equity shares, credited as fully paid up, to the members of BEHPL, holding fully paid up equity shares and preference shares in the following proportion:
a) 3883 fully paid equity shares of RS,1/- each of HBL issued as fully paid up for every 10 equity shares of RS,10/- fully paid up held in BEHPL i.e. issued 11,83,25,104 equity shares of RS,1/- each of HBL for 304726 equity shares of RS,10/- each of BEHPL.
b) 3,753 fully paid equity share of RS,1/- each HBL issued as fully paid up for every 10 CCPS of RS, 10/- each fully paid held in BEHPL i.e issued 289,59,273 equity share of RS,1/- each of HBL for 77,163 CCPS of RS,10/- each BEHPL.
c) 3901 fully paid equity shares of RS,1/- each of HBL issued for every 10 OCRPS of RS,20/- fully paid up held in BEHPL, i.e. issued 2,68,10,012 equity shares of RS,1/- each of HBL for 68,726 OCPS of RS, 20/- of BEHPL.
Thus HBL issued a total of 17,40,94,389 equity shares of RS,1/- each to the members of BEHPL in proportion to their holding and the same is shown as addition to paid up capital during the year in note 17.2 above.
ii) Cancellation of shares - as at the appointed date viz., 01.04.2016, BEHPL was holding 14,98,99,443 equity shares of RS,1/- each in the equity share capital of HBL and as per the scheme of amalgamation, the said investment held by BEHPL stands cancelled and accordingly the same is shown as reduction during the year in Note 17.2.
17.4 Terms/rights attached to equity shares
The company has only one class of equity shares having a par value of C1 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual general meeting.
19.3 Current maturities of long term debt
Installments due within 12 months from the date of balance sheet classified as current as shown above are disclosed under âother current liabilities"
19.4 Term loans :
The particulars of loans drawn, nature of security, terms of repayment, rate of interest, installments due and loan wise outstanding are as under.
19.5 Term loan from IDBI and HDFC :
a) The capex term loan of RS,2,500 lakhs is sanctioned by IDBI Bank for setting up of spun concrete poles unit with a project cost of RS,3,350 lakhs with a capacity of 1,00,000 poles p.a. at Narsaraopet, Guntur District, Andhra Pradesh. The loan is secured by pari passu first charge on the entire property, plant and equipment of the company both present and future. This loan is also guaranteed by CMD, spouse of CMD, director, and CFO in their personal capacity.
b) HDFC term loan II of RS,2000 lakhs is towards the refinancing of capital expenditure of the company. The loan is secured by a first charge on the entire property, plant and equipment of the company both present and future. This loan is also guaranteed by CMD, director and CFO in their personal capacity. RS, in Lakhs
c) HDFC bank - vehicle loan
The term loans are secured by exclusive hypothecation of vehicles acquired through execution of demand promissory notes and are repayable by equated monthly installments (EMIs'') as per the loan schedule sanctioned by the bank.
19.6 Unsecured loans
a ) Deferred payment liability - interest free sales tax loan (IFST):
IFST loan represents the sales tax payable by the company given as loan by state government under a scheme and is to be repaid without interest after 14 years from the date of a ailment. The loan requires creation of a charge on the assets of the company. Pending creation of charge, the amount is shown as ''unsecured loanâ to be regrouped as secured loan as and when the charge is created. Pursuant to requirement under Ind AS - 109 on financial instruments and in view of the option exercised under Ind AS - 101 on first time adoption of Ind AS, un-winding of interest using effective interest rate was made and the deferred government grant carved out, from the said loan, is being amortized in equal installments over the remaining repayment period of the IFST loan.
b ) Term loan from Hewlett-Packard Financial Services India Pvt Ltd (HPFSIPL) towards implementation of SAP Project is repayable in 20 quarterly installments from the date of loan with interest at the rate ranging between 11% and 13%. The loan is also guaranteed by a director of the company.
c ) Finance lease obligations from Hewlett-Packard Financial Services India Pvt Ltd (HPFSIPL) for implementation of SAP Project is repayable by way of lease rentals over a period of 5 years and is also guaranteed by a director of the company.
19.7 As on the balance sheet date, there were no continuing defaults in repayment of borrowings and interest.
23.1 Working capital loans
The demand loans from banks are secured by a first charge on all the chargeable current assets and by a second charge on the property, plant and equipment (both present and future) of the company. All the loans are also guaranteed by CMD, spouse of CMD, director, and CFO in their personal capacity.
23.2 Purchase bill discounting from Kotak Mahindra Bank Ltd. Is guaranteed by CMD and a director of the company in their personal capacity and purchase bill discounting from IDBI Bank Ltd. is secured by accepted bill of exchange and post dated cheque/standing instructions for making payment on due date.
23.3 Loan from directors is repayable on demand with interest @ 11% p.a.
The company has other commitments, for purchase / sale orders which are issued after considering requirements per operating cycle for purchase / sale of goods and services, employee benefits in the normal course of business. The company does not have any long term commitments or material non-cancellable contractual commitments / contracts, which might have material impact on the financial statements.
38.3 Commitment towards dividend and dividend distribution tax
The board in its meeting held on May 26, 2017 has recommended a dividend of RS,0.25 per equity share of RS,1/- each for the financial year ended March 31, 2017. The proposal is subject to the approval of share holders at the annual general meeting to be held, and if approved would result in a cash outflow of RS,692.99 lakhs towards dividend and RS,141.08 lakhs towards corporate dividend distribution tax.
38.4 Contingent assets:
During the year 2011, some assets at one of the plants of the company, were damaged due to heavy rains. The company''s claim for the loss was repudiated by the insurers. A case was filed for recovery of the claim of RS,234.60 Lakhs towards loss suffered apart from interest thereon. The matter is sub juice.
During the year 2014, there was a heavy damage to the assets and inventory at two plants of the company, due to hud-hud cyclone. The company''s claim for the resultant losses was partly allowed by the Insurers and the balance claims were repudiated. The matter relating to the claim of RS,400 lakhs towards damages to assets and inventory and RS,921.75 Lakhs towards loss of profits, apart from Interest thereon, was referred to arbitration. The matter is sub judice.
Mar 31, 2015
A Basis for preparation of financial statements:
The financial statements have been prepared under the Historical Cost
convention and on a Going Concern basis to comply, in all material
aspects, with the Accounting Principles Generally Accepted in India
(GAAP) including the Accounting Standards specified under Section 133
of the Companies Act, 2013 ('Act') read with Rule 7 of the Companies
(Accounts) Rules, 2014 and other relevant provisions of the Act.
B Use of Estimates:
The preparation of financial statements in conformity with GAAP
requires that the management of the Company makes estimates and
assumptions that affect the reported amounts of income and expenses of
the period, the reported balances of assets and liabilities and the
disclosure relating to contingent liabilities as of the date of the
financial statements. Examples of such estimates and assumptions
include the useful lives of tangible and intangible fixed assets,
provision for doubtful debts/advances, future obligations in respect of
retirement benefit plans, warranties, etc. Differences between the
actual results and estimates are recognised in the period in which the
results are known.
C Tangible Assets and Depreciation:
1. Tangible Assets are stated at original cost, net of recoverable
taxes and duties, less cumulative depreciation and impairment.
Administrative and other general overheads including borrowing costs
that are specifically attributable to acquisition of Assets or bringing
Fixed Assets into their working condition are allocated / apportioned
and capitalised as part of cost of the Asset. Premium paid for
acquiring Leasehold Lands along with directly related expenditure is
considered as tangible asset.
2. Depreciation on Tangible Assets including those on leasehold
premises is provided under straight line method over the useful life of
assets specified in Part 'C' of Schedule II to the Companies Act, 2013
and in the manner specified there in, except in respect of Dies and
Moulds used and 'Secured Land Filling' (used for disposal of Lead slag)
which are depreciated over their estimated useful lives of 5 years and
10 years respectively on Straight Line Method. Assets costing less than
Rs.5,000/- are fully depreciated in the year of purchase. Cost of
acquisition of Leasehold Land is amortised over the lease period.
D Intangible Assets and Amortisation:
1. Intangible Asset is recognised when it is probable that future
economic benefits that are attributable to the asset will flow to the
enterprise and the cost of the asset can be measured reliably.
Expenditure incurred for creating infrastructure facilities where the
ownership does not rest with the company and where the benefits from it
accrue over a future period is also considered as Intangible Asset.
2. New product development expenditure, software licences, technical
know-how fee, infrastructure and logistic facilities, etc. are
recognised as Intangible Assets upon completion of development and
commencement of commercial production.
3. Expenditure capitalised under 'Intangible Assets' is amortised over
a period of 60 months from the month of commencement of commercial
production/utilisation of facility.
4. Amortisation on impaired intangible assets is adjusted in the
future periods in such a manner that the revised carrying amount of the
asset is allocated over its remaining useful life.
E Capital Work in Progress (CWIP) and Assets under Development
1. Tangible CWIP includes Plant and Equipment under erection, Civil
works in progress and preoperative expenses pending allocation to the
related assets.
2. Intangible Assets Under Development include
a) New Product Expenditure where development is in progress
b) Payments made towards fees for software licences, technical
know-how, Infrastructure/logistic facilities etc., and also include all
related expenditure incurred up to absorption of technology and
completion of Development.
F Impairment of Assets:
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is recognised when an
asset is identified as impaired. Conversely, the impairment loss,
recognised in prior accounting period, is reversed if there is an
upward revision in the estimate of recoverable amount.
G Foreign Currency Transactions:
Transactions relating to non-monetary items and Purchase and Sale of
goods/services denominated in foreign currency are recorded at the
exchange rate prevailing or a rate that approximates the actual rate on
the date of transaction. Assets & Liabilities in the nature of
monetary items denominated in foreign currencies are translated and
restated at prevailing exchange rates at the Balance sheet date. Income
or expense arising on account of exchange rate difference either on
settlement or on translation is recognised in the Statement of Profit &
Loss. H Investments:
a) Investments classified as "Long Term Investments(Non-Current)" are
carried at cost and provision for diminution, if any, is made to
recognise the decline, other than temporary, in the value of the
Investments. Such reduction is determined and made for each investment
individually.
b) Investment classified as 'Current Investments' are carried at the
lower of cost and fair value determined on individual investment basis.
I Income Recognition:
a) Sales Revenue is recognised on despatch to customers as per the
terms of the order. Sales are disclosed at net of returns/trade
discounts and inclusive of Excise duty billed to customers. Inter
Divisional Transfers are not recognised as Revenue.
b) Service Income is recognised on the basis of bills submitted as per
the terms of the order.
c) Revenue from Short Term contracts involving Supply and Service,
where price breakup is available, is recognised -
i) In respect of Supplies when goods are delivered to customers
unconditionally; and
ii) In respect of Service on completion of Service and bills submitted
as per terms of the order.
d) In case of contracts (Long Term) for complex
equipment/systems/development orders where the normal cycle time for
completion is spread over two or more accounting periods, revenue is
recognised, subject to provision for anticipated losses, based on
percentage of completion as certified by technical committee/customers'
acceptance wherever applicable.
e) Dividends are recognised as income when the right to receive the
dividend is established.
f) Income from interest bearing deposits with Banks and others is
recognised on accrual basis.
g) Interest on Income tax refunds is recognised on determination or on
receipt whichever is earlier. h) Subsidies from Government are
recognised when received.
- Cost of Material is net of CENVAT/VAT availed on all items.
- Stock of Finished Goods at Factories and at Branches are inclusive of
Excise Duty.
- Customs Duty payable on Bonded Stock/ in transit is provided for and
is included in the value of such stocks.
- Inventory arising out of inter divisional transfers is valued at cost
to the transferring division after eliminating unrealised profit, if
any.
K Provisions, Contingent Liabilities and Contingent Assets:
a) Provision for liabilities is recognised if :
i) the Company has a present obligation as a result of a past event
ii) a probable outflow of resources is expected to settle the
obligation and
iii) the amount of obligation can be reliably estimated
b) Reimbursement of expenditure is recognised only upon virtual
certainty of receipt.
c) Contingent liability is disclosed but is not provided for, in
respect of a present obligation or a possible obligation which do not
require an out flow of resources or where the likelihood of such out
flow is remote.
d) Contingent assets are neither recognised nor disclosed.
e) Provisions and contingent liabilities are reviewed at each Balance
sheet date and are adjusted to reflect the current best estimate.
L Taxes on Income/Deferred Tax:
a) Current Tax on Income is determined and provided on the basis of
taxable income computed in accordance with the provisions of the Income
Tax Act, 1961. In the year in which 'Minimum Alternative Tax ' (MAT) on
book profits is applicable and paid, eligible MAT credit equal to the
excess of MAT paid over and above the normally computed tax, is
recognised as an asset to be carried forward for set off against
regular tax liability when it is probable that future economic benefit
will flow to the Company within the MAT credit Entitlement period as
specified under the provisions of Income Tax Act, 1961. The carrying
amount of MAT Credit entitlement is reviewed and adjusted wherever
required at each Balance Sheet date.
b) Deferred tax resulting from timing differences between accounting
Income and taxable Income is recognised and accounted for using the tax
rates and laws that are enacted or substantively enacted as on the
Balance Sheet date. The Deferred tax Asset is recognised and carried
forward only to the extent that there is reasonable certainty that the
Asset will be realised in future. The carrying amount of 'Deferred Tax
Asset' is reviewed and adjusted at each Balance Sheet date
M Assets taken under leases:
a) In respect of Equipment taken under finance leases, the fair value
of the leased asset is recognised as an asset and corresponding
liability is created. The finance charges are allocated to the period
over the lease term and are charged off.
b) In respect of Equipment taken under operating lease, lease payments
are recognised as expense over the period of lease term.
N Employee Benefits:
a) Short term Benefits:
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The cost of the benefits like salaries, wages, medical, leave travel
assistance, short term compensated absences, bonus, exgratia, etc. is
recognised as an expense in the period in which the employee renders
the related service.
b) Post-employment benefits:
(i) Defined contribution plans:
The contribution paid/payable under Provident Fund Scheme, ESI Scheme
and Employee Pension Scheme is recognised as expenditure in the period
in which the employee renders the related service.
(ii) Defined benefit plans:
The Company's obligation towards Gratuity is a defined benefit plan.
The present value of the estimated future cash flows of the obligation
under such plan is determined based on actuarial valuation using the
Projected Unit Credit method. Actuarial gains and losses are recognised
immediately in the Profit & Loss statement. The contribution made is
recognised as expense.
c) Long Term employee benefits:
The obligation for long term employee benefits such as long term
compensated absences, is determined and recognised in the similar
manner stated in the defined benefit plan.
O Cash Flow statement:
Cash Flow statement is reported using 'Indirect Method' as per
Accounting Standard, (AS)-3.
P Prior period and Extra-ordinary items/Exceptional items:
a) Items of Prior period Income and Expenditure are disclosed
distinctly.
b) Items of Income/ Expense/Loss which are exceptional and
non-recurring in nature are considered as Exceptional/Extraordinary
items and are disclosed distinctly for determination of net profit/loss
for the period.
Mar 31, 2014
A Basis for preparation of financial statements:
The financial statements have been prepared under the Historical Cost
convention and on a Going Concern basis to comply, in all material
aspects, with Generally Accepted Accounting Principles in India, the
Accounting Standards notified under the Companies (Accounting
Standards) Rules, 2006, (as amended) prescribed by the Central
Government and the relevant provisions of the Companies Act, 1956.
B Use of Estimates:
The preparation of financial statements in conformity with GAAP
requires that the management of the Company makes estimates and
assumptions that affect the reported amounts of income and expenses of
the period, the reported balances of assets and liabilities and the
disclosure relating to contingent liabilities as of the date of the
financial statements. Examples of such estimates and assumptions
include the useful lives of tangible and intangible fixed assets,
provision for doubtful debts/advances, future obligations in respect of
retirement benefit plans, warranties, etc. Differences between the
actual results and estimates are recognised in the period in which the
results are known.
C Tangible Assets and Depreciation:
1. Tangible Assets are stated at original cost, net of recoverable
taxes and duties, less cumulative depreciation and impairment.
Administrative and other general overheads including borrowing costs
that are specifically attributable to acquisition of Assets or bringing
Fixed Assets into their working condition are allocated / apportioned
and capitalised as part of cost of the Asset. Premium paid for
acquiring Leasehold Lands along with directly related expenditure is
considered as tangible asset.
2. Depreciation on Tangible Assets including those on leasehold
premises is provided under straight line method at the rates and in the
manner specified in Schedule XIV to the Companies Act, 1956 except in
respect of Dies and Moulds used and ''Secured Land Filling'' (used for
disposal of Lead slag) which are depreciated at 20% and 10%
respectively on Straight Line Method. Assets costing less than
Rs.5,000/- are fully depreciated in the year of purchase. Cost of
acquisition of Leasehold Land is amortised over the lease period.
D Intangible Assets and Amortisation:
1. Intangible Asset is recognised when it is probable that future
economic benefits that are attributable to the asset will flow to the
enterprise and the cost of the asset can be measured reliably.
Expenditure incurred for creating infrastructure facilities where the
ownership does not rest with the company and where the benefits from it
acccrue over a future period is also considered as Intangible Asset.
2. New product development expenditure, software licences,technical
knowhoe fee,infrastructure and logistic facilities, etc. are recognised
as Intangible Assets upon completion of development and commencement of
commercial production.
3. Expenditure capitalised under ''Intangible Assets'' is amortised over
a period of 60 months from the month of commencement of commercial
production/utilisation of facility.
4. Amortisation on impaired intangible assets is adjusted in the future
periods in such a manner that the revised carrying amount of the asset
is allocated over its remaining useful life.
E Capital Work in Progress (CWIP) and Assets under Development
1. Tangible CWIP includes Plant and Equipment under erection, Civil
works in progress and preoperative expenses pending allocation to the
related assets.
2. Intangible Assets Under Development includes
a) New Product Expenditure where development is in progress
b) Payments made towards fees for software licences, technical knowhow,
Infrastruture/logistic facilities etc., and also includes all related
expenditure incurred upto absorption of technology and completion of
Development.
F Impairment of Assets:
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is recognised when an
asset is identified as impaired. The impairment loss recognised in
prior accounting period is reversed if there is a change in the
estimate of recoverable amount.
G Foreign Currency Transactions:
Transactions relating to non-monetary items and Purchase and Sale of
goods/services denominated in foreign currency are recorded at the
exchange rate prevailing or that approximates actual rate on the date
of transaction. Assets & Liabilities in the nature of monetary items
denominated in foreign currencies are translated and restated at
prevailing exchange rates at the Balance sheet date. Income or expense
arrising on account of exchange rate difference either on settlement or
on translation is recognised in the Statement of Profit & Loss.
H Investments:
a) Investments classified as "Long Term Investments(Non-Current)" are
carried at cost and provision for diminution is made to recognise the
decline, other than temporary, in the value of the Investments. Such
reduction is determined and made for each investment individually.
b) Investment classified as ''Current Investments'' are carried at the
lower of cost and fair value determined on individual investment basis.
I Income Recognition:
a) Sales Revenue is recognised on dispatch to customers as per the
terms of the order. Gross sales are net of returns/trade discounts and
inclusive of Excise duty billed to customers. Inter Divisional
Transfers are not recognised as turnover.
b) Service Income is recognised on the basis of bills submitted as per
the terms of the order.
c) Short Term contracts involving Supply and Service where price
breakup is available, Revenue in respect of Supplies are recognised
when goods are delivered to customers unconditionally and Service
income is recognised on completion of Service and bills submitted as
per terms of the order.
d) In case of contracts (Long Term) of complex
equipment/systems/development order where the normal cycle time for
completion is spreading over two or more accounting periods, revenue is
recognised, subject to provision of anticipated losses, based on
percentage completion as certified by technical committee/ customers
acceptance wherever applicable.
e) Dividends are recognised as income when the right to receive the
dividend is established.
f) Income from interest bearing deposits with Banks and others is
recognised on accrual basis.
g) Interest on Income tax refunds is recognised on determination or on
receipt basis whichever is earlier.
h) Subsidies from Government are recognised when received.
J Inventories:
Inventories at the yearend are valued as under:
Raw Materials, Components, Consumables and Stores & Spares.
At lower of weighted average cost and net realisable value.
Work In Progress and Finished goods.
At lower of net realisable value and weighted average cost of materials
plus cost of conversion and other costs incurred in bringing them to
the present location and condition.
Long Term contract work in progress (where the income is not eligible
for recognition as per Income recognition policy stated above).
At direct and attributable costs incurred in relation to such contracts
.
Stock In Trade At lower of cost and net realisable value
Consumable Tools At cost less amount charged off (which is at 1/3rd of
value each year).
- Cost of Material is net of Cenvat/VAT availed on all items.
- Excise Duty payable on Stock of Finished Goods and Customs Duty
payable on Bonded Stock/ in transit(in case of imports) is provided for
and included in the value of such stocks.
- Stocks at Branches are inclusive of Duty paid at the time of dispatch
from Factories.
- Inventory arising out of inter divisional transfers is valued at cost
to the transferring division after eliminating unrealised profit, if
any.
K Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised for liabilities that can be measured only by
using a substantial degree of estimation, if
a) the Company has a present obligation as a result of a past event
b) a probable outflow of resources is expected to settle the obligation
and
c) the amount of obligation can be reliably estimated
Reimbursement expected in respect of expenditure is recognised only
when it is virtually certain that the reimbursement will be received.
Contingent liability is not provided for but is disclosed in the case
of :
a) present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation
b) a possible obligation, unless the probability of outflow of
resources is remote.
Contingent assets are neither recognised nor disclosed.
Provisions and contingent liabilities are reviewed at each Balance
sheet date.
L Taxes on Income/Deferred Tax:
Current Tax on Income is determined and provided on the basis of
taxable income computed in accordance with the provisions of the Income
Tax Act, 1961. In the year in which ''Minimum Alternative Tax '' (MAT) on
book profits is applicable and paid, eligible MAT credit equal to the
excess of MAT paid over and above the normally computed tax, is
recognised as an asset to be carried forward for set off against
regular tax liability when it is probable that future economic benefit
will flow to the Company within the MAT credit Entitlement period as
specified under the provisions of Income Tax Act, 1961. The carrying
amount of MAT Credit entitlement is reviewed and adjusted wherever
required at each Balance Sheet date.
Deferred tax resulting from timing differences between accounting
Income and taxable Income is recognised and accounted for using the tax
rates and laws that are enacted or substantively enacted as on the
Balance Sheet date. The Deferred tax Asset is recognised and carried
forward only to the extent that there is reasonable certainty that the
Asset will be realised in future. The carrying amount of ''Deferred Tax
Asset'' is reviewed at each Balance Sheet date
M Assets taken under leases:
a) In respect of Equipment taken under finance leases, the fair value
of the leased asset is recognised as an asset and corresponding
liability is created. The finance charges are allocated to the period
over the lease term and are charged off.
b) In respect of Equipment taken under operating lease, lease payments
are recognised as expense on a straight line basis over the lease term.
N Employee Benefits:
a) Short term Benefits:
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The cost of the benefits like salaries, wages, medical, leave travel
assistance, short term compensated absences, bonus, exgratia, etc. is
recognised as an expense in the period in which the employee renders
the related service.
b) Post-employment benefits:
(i) Defined contribution plans:
The contribution paid/payable under Provident Fund Scheme, ESI Scheme
and Employee Pension Scheme is recognised as expenditure in the period
in which the employee renders the related service.
(ii) Defined benefit plans:
The Company''s obligation towards Gratuity is a defined benefit plan.
The present value of the estimated future cash flows of the obligation
under such plan is determined based on actuarial valuation using the
Projected Unit Credit method. Actuarial gains and losses are recognised
immediately in the Profit & Loss statement. The contribution made is
recognised as expense.
c) Long Term employee benefits:
The obligation for long term employee benefits such as long term
compensated absences, is determined and recognised in the similar
manner stated in the defined benefit plan.
O Cash Flow statement:
Cash Flow statement is reported using indirect method as per Accounting
Standard, AS-(3).
P Prior period and Extra-ordinary items/Exceptional items:
Items of Prior period Income and Expenditure are disclosed distinctly.
Items of Income/ Expense/Loss which are exceptional and non recurring
in nature are considered as Exceptional/ Extraordinary items and are
disclosed distinctly for determination of net profit/loss for the
period.
Mar 31, 2013
A Basis for preparation of financial statements:
The financial statements have been prepared under the Historical Cost
convention and on a Going Concern basis to comply, in all material
aspects, with Generally Accepted Accounting Principles in India, the
Accounting Standards notified under the Companies (Accounting
Standards) Rules, 2006, (as amended) prescribed by the Central
Government and the relevant provisions of the Companies Act, 1956.
B Use of Estimates:
The preparation of financial statements in conformity with GAAP
requires that the management of the Company makes estimates and
assumptions that affect the reported amounts of income and expenses of
the period, the reported balances of assets and liabilities and the
disclosure relating to contingent liabilities as of the date of the
financial statements. Examples of such estimates and assumptions
include the useful lives of tangible and intangible fixed assets,
provision for doubtful debts/advances, future obligations in respect of
retirement benefit plans, warranties, etc. Differences between the
actual results and estimates are recognised in the period in which the
results are known.
C Tangible Assets and Depreciation:
Tangible Assets are stated at original cost, net of recoverable taxes
and duties, less cumulative depreciation and impairment. Administrative
and other general overheads including borrowing costs that are
specifically attributable to acquisition of Assets or bringing Fixed
Assets into their working condition are allocated / apportioned and
capitalised as part of cost of the Asset.
Depreciation:
Depreciation on Tangible Assets is provided under straight line method
at the rates and in the manner specified in Schedule XIV to the
Companies Act, 1956 except in respect of Dies and Moulds used and
''Secured Land Filling'' (used for disposal of Lead slag) which are
depreciated at 20% and 10% respectively on Straight Line Method.
Assets costing less than Rs.5,000/- are fully depreciated in the year
of purchase.
D Intangible Assets and Amortisation:
Intangible Asset is recognised when it is probable that future economic
benefits that are attributable to the asset will flow to the enterprise
and the cost of the asset can be measured reliably. Expenditure
incurred for creating infrastructure facilities where the ownership
does not rest with the company and where the benefits from it acccrue
over a future period is also considered as Intangible Asset.
Expenditure capitalised under ''Intangible Assets'' is amortised over a
period of 60 months from the month of commencement of commercial
production/utilisation of facility.
Amortisation on impaired intangible assets is adjusted in the future
periods in such a manner that the revised carrying amount of the asset
is allocated over its remaining useful life.
E Capital Work in Progress (CWIP):
CWIP includes Plant and Equipment under erection, Civil works in
progress and preoperative expenses pending allocation on the assets to
be acquired/commissioned, capitalised. Also include payments made for
technical know-how fee and for development of prototypes including for
related software, pending to be capitalised upon absorption of
technology and completion of development/commercial production.
F Intangible Assets Under Development
New Product Development expenditure, where development is completed and
awaiting commercial production or where development is in progress, is
classified as ''Intangible Assets under development'' to be capitalised
and amortised upon commencement of commercial production.
G Impairment of Assets:
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is recognised when an
asset is identified as impaired. The impairment loss recognised in
prior accounting period is reversed if there is a change in the
estimate of recoverable amount.
H Foreign Currency Transactions:
Transactions relating to non-monetary items and Purchase and Sale of
goods/services denominated in foreign currency are recorded at the
exchange rate prevailing or that approximates actual rate on the date
of transaction. Assets & Liabilities in the nature of monetary items
denominated in foreign currencies are translated and restated at
prevailing exchange rates at the Balance sheet date. Income or expense
arrising on account of exchange rate difference either on settlement or
on translation is recognised in the Statement of Profit & Loss.
I Investments:
a) Investments classified as "Long Term Investments(Non-Current)" are
carried at cost and provision for diminution is made to recognise the
decline, other than temporary, in the value of the Investments. Such
reduction is determined and made for each investment individually.
b) Investment classified as ''Current Investments'' are carried at the
lower of cost and fair value determined on individual investment basis.
J Income Recognition:
a) Sales Revenue is recognised on dispatch to customers as per the
terms of the order. Gross sales are net of returns/trade discounts and
inclusive of Excise duty billed to customers. Inter Divisional
Transfers are not recognised as turnover.
b) Service Income is recognised on the basis of bills submitted as per
the terms of the order.
c) Short Term contracts involving Supply and Service where price
breakup is available, Revenue in respect of Supplies are recognised
when goods are delivered to customers unconditionally and Service
income is recognised on completion of Service and bills submitted.
d) In case of contracts (Long Term) of complex
equipment/systems/development order where the normal cycle time for
completion is spreading over two or more accounting periods, revenue is
recognised, subject to provision of anticipated losses, based on
percentage completion as certified by technical committee/ customers
acceptance wherever applicable.
e) Dividends are recognised as income when the right to receive the
dividend is established.
f) Income from interest bearing deposits with Banks and others is
recognised on accrual basis.
g) Interest on Income tax refunds, if any, is recognised on
determination or on receipt basis whichever is earlier. h) Subsidies
from Government are recognised when received.
K Inventories:
Inventories at the year end are valued as under:
Raw Materials, Components, Consumables and Stores & Spares.
At lower of weighted average cost and net realisable value. Work In
Progress and Finished goods. At lower of net realisable value and
weighted average cost of materials plus cost of conversion and other
costs incurred in bringing them to the present location and condition.
Long Term contract work in progress (where the income its not eligible
for recognition as per Income recognition policy stated above).
At direct and attributable costs incurred in relation to such contracts
Stock In Trade At lower of cost and net realisable value
Consumable Tools At cost less amount charged off (which is at 1/3rd of
value each year).
* Cost of Material is net of Cenvat/VAT availed on all items.
* Excise/Custom Duty payable on Stock of Finished Goods and Bonded
Stocks is provided for and included in the value of stocks.
* Stocks at Branches are inclusive of Duty paid at the time of dispatch
from Factories.
* Inventory arising out of inter divisional transfers is valued at cost
to the transferring division after eliminating unrealised profit, if
any.
L Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised for liabilities that can be measured only by
using a substantial degree of estimation, if
a) the Company has a present obligation as a result of a past event
b) a probable outflow of resources is expected to settle the obligation
and
c) the amount of obligation can be reliably estimated
Reimbursement expected in respect of expenditure is recognised only
when it is virtually certain that the reimbursement will be received.
Contingent liability is not provided for but is disclosed in the case
of:
a) present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation
b) a possible obligation, unless the probability of outflow of
resources is remote. Contingent assets are neither recognised nor
disclosed.
Provisions and contingent liabilities are reviewed at each Balance
sheet date.
M Taxes on Income/Deferred Tax:
Current Tax on Income is determined and provided on the basis of
taxable income computed in accordance with the provisions of the Income
Tax Act, 1961. In the year in which ''Minimum Alternative Tax'' (MAT) on
book profits is applicable and paid, eligible MAT credit equal to the
excess of MAT paid over and above the normally computed tax, is
recognised as an asset to be carried forward for set off against
regular tax liability when it is probable that future economic benefit
will flow to the Company within the MAT credit Entitlement period as
specified under the provisions of Income Tax Act, 1961.
Deferred tax resulting from timing differences between accounting
Income and taxable Income is recognised and accounted for using the tax
rates and laws that are enacted or substantively enacted as on the
Balance Sheet date. The Deferred tax Asset is recognised and carried
forward only to the extent that there is reasonable certainty that the
Asset will be realised in future. The carrying amount of ''Deferred Tax
Asset'' is reviewed at each Balance Sheet date
N Assets taken under leases:
a) In respect of Equipment taken under finance leases, the fair value
of the leased asset is recognised as an asset and corresponding
liability is created. The finance charges are allocated to the period
over the lease term and are charged off.
b) In respect of Equipment taken under operating lease, lease payments
are recognised as expense on a straight line basis over the lease term.
O Employee Benefits:
a) Short term Benefits:
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The cost of the benefits like salaries, wages, medical, leave travel
assistance, short term compensated absences, bonus, exgratia, etc. is
recognised as an expense in the period in which the employee renders
the related service.
b) Post-employment benefits:
(i) Defined contribution plans:
The contribution paid/payable under Provident Fund Scheme, ESI Scheme
and Employee Pension Scheme is recognised as expenditure in the period
in which the employee renders the related service.
(ii) Defined benefit plans:
The Company''s obligation towards Gratuity is a defined benefit plan.
The present value of the estimated future cash flows of the obligation
under such plan is determined based on actuarial valuation using the
Projected Unit Credit method. Actuarial gains and losses are recognised
immediately in the Profit & Loss statement. The contribution made is
recognised as expense.
c) Long Term employee benefits:
The obligation for long term employee benefits such as long term
compensated absences, is determined and recognised in the similar
manner stated in the defined benefit plan.
Mar 31, 2011
1. Basis for preparation of accounts:
The accounts have been prepared under the historical cost convention
and on a going concern basis to comply in all material aspects with
applicable accounting principles in India, the Accounting Standards
under the companies (Accounting Standards) Rules, 2006 prescribed by
the Central Government and the relevant provisions of the Companies
Act, 1956.
2. Use of Estimates:
The preparation of financial statements in conformity with GAAP
requires that the management of the Company makes estimates and
assumptions that affect the reported amounts of income and expenses of
the period, the reported balances of assets and liabilities and the
disclosure relating to contingent liabilities as of the date of the
financial statements. Examples of such estimates and assumptions
include the useful lives of tangible and intangible fixed assets,
provision for doubtful debts/advances, future obligations in respect of
retirement benefit plans, warranties, etc. Differences between the
actual results and estimates are recognised in the period in which the
results are known.
3. Fixed Assets and Depreciation:
Fixed Assets are stated at original cost net of tax/duty credits
availed, if any, less cumulative depreciation and impairment.
Administrative and other general overheads including borrowing costs
that are specifically attributable to acquisition of Fixed Assets or
bringing Fixed Assets to working condition are allocated and
capitalised as part of cost of the Fixed Assets.
Depreciation:
Depreciation on Fixed Assets is provided on straight line method at the
rates and in the manner specified in Schedule XIV of the Companies Act,
1956 except in respect of Dies and Moulds used and 'Secured Land
Filling' used for disposal of Lead slag which are depreciated at 20%
and 10% respectively on SLM. Assets costing less than Rs. 5,000/- are
depreciated fully in the year of purchase.
4. Intangible Assets and Amortisation:
Intangible Asset is recognised when it is probable that future economic
benefits that are attributable to the asset will flow to the enterprise
and the cost of the asset can be measured reliably.
Product development expenditure incurred on new products are
capitalised under' Intangible Assets' and are amortised over a period
of 5 years from the year of commencement of commercial production.
Amortisation on impaired assets is adjusted in the future periods in
such a manner that the revised carrying amount of the asset is
allocated over its remaining useful life.
Intangible Assets are stated at cost net of amortisation.
5. Capital Work in Progress (CWIP):
CWIP includes Plant and Equipment under erection, Civil works in
progress, advances made to suppliers/ contractors for capital items and
preoperative expenses pending allocation on the assets to be acquired/
commissioned, capitalised. Also include payments made for technical
know-how fee and for development of prototypes including for related
software, pending to be capitalised upon absorption of technology and
completion of development.
6. Impairment of Assets:
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is recognised when an
asset is identified as impaired. The impairment loss recognised in
prior accounting period is reversed if there is a change in the
estimate of recoverable amount.
7. Foreign Currency Transactions:
Transactions relating to Purchase and Sale of goods/services
denominated in foreign currency are recorded at the exchange rate
prevailing on the date of transaction or that approximates at actual
rate on the date of transaction. Assets & Liabilities in the nature of
monetary items at the Balance sheet date denominated in foreign
currencies are translated and restated at prevailing exchange rates.
Income or expense on account of exchange difference either on
settlement or on translation is recognised in the Profit & Loss
account.
8. Investments:
a) Investments classified as "Long Term Investments" are carried at
cost and provision for diminution is made to recognise the decline,
other than temporary, in the value of the Investments. Such reduction
is determined and made for each investment individually.
b) Investment classified as' Current lnvestments' are carried at the
lower of cost and fair value determined on individual investment basis.
9. Inventories:
Inventories at the year end are valued as under:
Raw Materials, Components, At lower of weighted average
Consumables cost and net and
Stores & Spares. realisable value.
Semi-finished and Finished At lower of weighted average cost of
goods materials plus cost of conversion and
other costs incurred in bringing them
to the present location and condition
and net realisable value.
Consumable Tools At cost less amount charged off
(which is at 1/3rd of value each
year).
- Cost of Material is net of Cenvat/VAT availed on all items.
- Excise/Custom Duty payable on Stock of Finished Goods and Bonded
Stocks is provided and included in the value of stocks.
- Inventory arising out of inter divisional transfers is valued at cost
to the transferring division after eliminating unrealised profit, if
any.
- Stocks at Branches are inclusive of Duty paid at the time of despatch
from Factories.
10. Income Recognition:
a) Sales revenue is recognised on despatch to customers as per terms of
order. Gross sales are net of returns/discounts and inclusive of Excise
duty, central sales tax and service tax billed to customers. Service
income, works contract revenue are recognised on the basis of bills
submitted and accepted by the customers. Inter divisional transfers are
not recognised as turnover.
b) Dividends are recognised as income when the right to receive the
dividend is established.
c) Income from interest bearing deposits with Banks and others is
recognised on accrual basis.
d) Interest on Income tax refunds, if any, is recognised on
determination or on receipt basis whichever is earlier.
e) Subsidies from Government are recognised when received.
11. Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised for liabilities that can be measured only by
using a substantial degree of estimation, if
a) the Company has a present obligation as a result of a past event
b) a probable outflow of resources is expected to settle the obligation
and
c) the amount of obligation can be reliably estimated
Reimbursement expected in respect of expenditure required to settle a
provision is recognised only when it is virtually certain that the
reimbursement will be received.
Contingent liability is not provided but disclosed in the case of
a) present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation
b) a possible obligation, unless the probability of outflow of
resources is remote. Contingent assets are neither recognised nor
disclosed.
Provisions, contingent liabilities and contingent assets are reviewed
at each Balance sheet date.
12. Taxes on Income/Deferred Tax:
Tax on Income for the current period is determined and provided on the
basis of taxable income computed in accordance with the provisions of
the Income Tax Act, 1961.
Deferred tax resulting from timing differences between accounting
Income and taxable Income is recognised and accounted for using the tax
rates and laws that are enacted or substantively enacted as on the
Balance Sheet date.
The Deferred tax Asset is recognised and carried forward only to the
extent that there is reasonable certainty that the Asset will be
realised in future.
13. Assets taken under leases:
a) In respect of Equipment taken under finance leases, the fair value
of the leased asset is recognised as an asset and corresponding
liability is created. The finance charges are allocated to periods
during the lease term and charged to revenue.
b) In respect of Equipment taken under operating lease, lease payments
are recognised as expenses on straight line basis over the lease term.
14. Employee Benefits:
a) Short term Benefits:
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The benefits like salaries, wages, medical, leave travel assistance,
short term compensated absences etc. and the cost of bonus, exgratia
are recognised in the period in which the employee renders the related
services.
b) Post-employment benefits:
(i) Detailed contribution plans:
The contribution paid/payable under Provident Fund Scheme, ESI Scheme
and Employee Pension Scheme is recognised as expenditure during the
period in which the employee renders the related service.
(ii) Defined benefit plans:
The Company's obligation towards Gratuity is a definite benefit plan.
The present value of the obligation under such defined benefit plan is
determined based on acturial valuation using the Projected Unit Credit
method. The obligation is measured at the present value of the
estimated future cash flows. Acturial gains and losses are recognised
immediately in the profit & loss account. The contribution made is
recognised at expenses.
c) Long Term employee benefits:
The obligation for long term employee benefits such as long term
compensated absences is recognised in the similar manner as in the case
of defined benefit plans as mentioned in (b)(ii) above.
15. Cash Flow statement:
Cash Flow statement is reported using indirect method as per Accounting
Standard, AS-3.
16. Prior period and Extra-ordinary items:
Prior period and Extra-ordinary/exceptional items of Income and
Expenditure are reported distinctively and included in the
determination of net profit or loss for the current period.
Mar 31, 2010
1. Basis for preparation of accounts:
The accounts have been prepared on a going concern basis to comply in
all material aspects with applicable accounting principles in India,
the Accounting Standards under the companies (Accounting Standards)
Rules, 2006 and the relevant provisions of the Companies Act, 1956.
2. Use of Estimates:
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known / materialised.
3. Fixed Assets:
Fixed Assets are stated at Historical Cost, less accumulated
depreciation and impairment loss, if any. Cost of acquisition of Fixed
Assets is inclusive of freight, duties and taxes (net of CENVAT and
VAT) and incidental financial expenses thereto and borrowing cost upto
the date of commissioning / put to use.
4. Capital Work in Progress (CWIP):
CWIP includes Plant and Equipment under erection, Civil works in
progress, advances made to suppliers/ contractors for capital items and
preoperative financial expenses pending allocation on the assets to be
acquired / commissioned, capitalised. Also include payments made for
technical knowhow fee and for development of prototypes including for
related software, pending to be capitalised upon absorption of
technology and completion of development.
5. Depreciation:
Depreciation is provided in accordance with and at the rates specified
in Schedule XIV to the Companies Act, 1956, except for Dies & Moulds on
which deprecation is charged @ 20% from the date of addition and in the
case of assets costing Rs.5000/- or below deprecation is charged @ 100%
in the year of purchase.
6. Intangible Assets
Related costs of Development expenditure incurred on the new products
developed is recognised as intangible assets to be amortised over
expected benefit periods commencing from the year in which such
products are put to commercial use.
7. Impairment of Assets:
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is recognised when an
asset is identified as impaired. The impairment loss recognised in
prior accounting period is reversed if there has been a change in the
estimate of recoverable amount.
8. Foreign Currency Transactions:
a) Transactions denominated in foreign currency are recorded at the
exchange rate prevailing on the date of transaction or that
approximates at actual rate on the date of transaction.
b) Assets & Liabilities in the nature of monetary items at the year end
denominated in foreign currencies are translated and restated at year
end exchange rates.
Any income or expense on account of exchange difference either on
settlement or on translation is recognised in the Profit & Loss
account.
9. Investments:
a) Investments classified as ÃLong Term Investmentsà are carried at
cost and provision for diminution is made to recognise the decline,
other than temporary, in the value of the Investments. Such reduction
is determined and made for each investment individually.
b) Investment classified as ÃCurrent Investments are carried at the
lower of cost and fair value determined on individual investment basis.
10. Valuation of Inventories at the year end:
a) Raw materials, components, consumables and stores are valued at
lower of the cost (weighted average cost basis) or net realisable
value. Semi-finished and Finished goods are valued at lower of weighted
average cost of materials plus cost of conversion and other cost
incurred in bringing them to the present location and condition or net
realisable value..
b) Cost of materials is net of CENVAT /VAT on all the items.
c) The Excise and customs duties payable at the prevailing rates on
year end stock of finished goods and bonded stocks is provided for and
included in the value of such stocks.
d) Consumable Tools are valued at cost less amount charged off (which
is at 1/3rd of the value each year).
e) Inventory arising out of inter unit transfers is valued at cost to
the transferring division and after eliminating unrealised profit, if
any.
11. Income Recognition:
a) Sales revenue is recognised on despatch to customers as per terms of
order. Gross sales are net of returns/discounts and inclusive of Excise
duty, central sales tax and service tax billed to customers. Service
income, works contract revenue are recognised on the basis of bills
submitted and accepted by the customers. Inter divisional transfers are
not recognised as turnover.
b) Dividends are recognised as income when the right to receive the
dividend is established.
c) Income from interest bearing deposits with Banks and others is
recognised on accrual basis.
d) Interest on Income tax refunds, if any, is recognised on
determination or on receipt basis whichever is earlier.
12. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
13. Deferred Tax Asset / Liability:
Provision for Current Tax is made after considering admissible
deductions/exemptions under the provisions of the I.T Act, 1961.
Deferred tax resulting from timing differences between book and taxable
profit is accounted for using the tax rates and laws that are enacted
or substantively enacted as on the Balance Sheet date. The Deferred tax
Asset is recognised and carried forward only to the extent that there
is reasonable certainty that the Asset will be realised in future.
14. Assets taken under leases:
a) In respect of Equipment taken under finance leases, the fair value
of the leased asset is recognised as an asset and corresponding
liability is created. The finance charges are allocated to periods
during the lease term and charged to revenue.
b) In respect of Equipment taken under operating lease, lease payments
are recognised as expenses on straight line basis over the lease term.
15. Employee Benefits:
a) Short-term employee benefits are recognised as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
b) Post employment and other long term employee benefits are recognised
as an expense in the profit and loss account for the year in which the
employee has rendered services. The expense is recognised at the
present value of the amount payable determined at the year end using
actuarial valuation techniques. Actuarial gains and losses in respect
of post employment and other long term benefits are charged to the
profit and loss account.
16. Cash Flow statement:
Cash Flow statement is reported using indirect method as per Accounting
Standard, AS-(3).
17. Prior period and Extraordinary items:
Prior period and Extraordinary items of Income and Expenditure are
reported distinctively and included in the determination of net profit
or loss for the current period.
18. Issue expenses:
Expenditure incurred in connection with issue of shares including
Preferential / Rights issue is charged to Profit & Loss account.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article