Accounting Policies of High Energy Batteries (India) Ltd. Company
Mar 31, 2023
Company Overview
High Energy Batteries (India) Limited is a Public Limited Company. The Company is incorporated under The Companies Act, 1956 and is domiciled in India. Its Registered Office is located at ''Esvin House'', No. 13, Old Mahabalipuram Road, Seevaram Village, Perungudi, Chennai - 600 096. The Company is a battery manufacturer with its factory located at Mathur, near Trichy. The batteries are manufactured for use in Indian Army, Navy, Air Force and Satellite Launch Vehicles and also commercial batteries for auto and standby VRLA Applications. The company''s shares are listed in BSE Ltd. The Company is classifiedunder âMediumâ category since 16th May, 2021 vide MSME UDYAM Registration No. UDYAM-TN-02-0000445..
A. Significant Accounting Policies and Key Accounting Estimates and Judgements 1. Significant Accounting Policies1.1 Statement of compliance
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015.
1.2 Basis of Preparation and Compliance
The financial statements are prepared in accordance with the historical cost convention except for certain items that are measured at fair values at the end of each reporting period, as explained in the accounting policies set out below. The financial statements are prepared on a âgoing concernâ basis using accrual concept except for the cash flow information.
Historical cost is generally based on fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS-2 inventories or value in use in Ind AS 36 - Impairment of Assets.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, as described hereunder:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2 - Other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 - Unobservable inputs for the asset or liability.
Transactions and balances with values below the rounding off norm adopted by the company have been reflected as â--â in these financial statements.
1.3 Current / Non-Current Classification
An asset or liability is classified as current if it satisfies any of the following conditions:
(i) the asset / liability is expected to be realized / settled in the Company''s normal operating cycle;
(ii) the asset is intended for sale or consumption;
(iii) the asset / liability is held primarily for the purpose of trading;
(iv) the asset / liability is expected to be realized / settled within twelve months after the reporting period;
(v) the asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period;
(vi) in the case of a liability, the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
All other assets and liabilities are classified as non-current.
For the purpose of current / non-current classification, the Company has reckoned its normal operating cycle as twelve months based on the nature of products and the time between the acquisition of assets or inventories for processing and their realization in cash and cash equivalents.
Deferred tax assets and liabilities are classified as non-current.
1.4 Recent Accounting Pronouncements
Recent accounting pronouncements Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31,2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, and the major amendments are as below:
Ind AS 1 - Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies and also identify and eliminate immaterial accounting policies from the financial statements. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of ''accounting estimates'' which was absent and hitherto, and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.
Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statement.
1.5 Property, Plant and Equipment (PPE)
Property, plant and equipment are tangible items that:
(a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
(b) are expected to be used during more than one period.
The cost of an item of property, plant and equipment shall be recognized as an asset if, and only if:
(a) it is probable that future economic benefits associated with the item will flow to the entity; and
(b) the cost of the item can be measured reliably.
(i) An item of PPE that qualifies for recognition as an asset is measured on initial recognition at cost. Following initial recognition, PPEs are carried at its cost less accumulated depreciation and accumulated impairment losses.
(i) (a) For transition to Ind AS, the Company has elected to continue with the carrying value of all of
its PPE recognized as of April 1,2016 (transition date) measured as per the previous IGAAP as its deemed cost as on the transition date except land, which has been measured at fair value as deemed cost on the transition date.
(ii) The cost of an item of PPE comprises purchase price,taxes and duties net of input tax credit entitlement and other items directly attributable to the cost of bringing the asset to its working condition for its intended use. Trade discounts and rebates are deducted. Cost includes cost of replacing a part of a PPE if the recognition criteria are met. Expenses directly attributable to new manufacturing facility during its construction period are capitalized if the recognition criteria are met. Expenditure related to plans, designs and drawings of buildings or plant and machinery is capitalized under relevant heads of PPE if the recognition criteria are met.
(iii) The Company identifies and determines the cost of each part of an item of PPE separately, if the part has a cost which is significant to the total cost of that item of PPE and has useful life that is materially different from that of the remaining item.
(iv) Items such as spare parts, stand-by equipment and servicing equipment that meet the definition of PPE are capitalized at cost. Costs in nature of repairs and maintenance are recognized in the statement of Profit and Loss as and when incurred. All upgradation / enhancements are charged off as revenue expenditure unless they bring significant additional benefits. Borrowing Costs (net of interest earned on temporary investments of those borrowings) directly attributable to acquisition, construction or production of qualifying assets are capitalized as part of the cost of the assets till the asset is ready for its intended use.
(v) Capital advances and capital work-in-progress
Advances given towards acquisition of fixed assets outstanding at each Balance Sheet date are disclosed as Other Non-Current Assets. Cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work-in-progress. Such properties are classified to the appropriate categories of PPE when completed and ready for intended use. Depreciation on these assets commence when the assets are ready for their intended use.
(vi) Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives and residual values are reviewed at the end of each reporting period and changes, if any, are treated as changes in accounting estimate.The useful lives are based on technical estimates and the management believes that the useful lives are realistic and fair approximation over the period of which the assets are likely to be used.
(vii) Estimated useful lives of the assets are as follows:
|
Asset |
Years |
|
Factory Buildings |
30 |
|
Fences, Walls, Tube wells |
5 |
|
Buildings (other than factory buildings) |
10 |
|
Plant and Equipment - Silver Zinc Plant |
15 |
|
Plant and Equipment - Lead Acid Battery Plant |
|
|
Pump Motors and motorized pump stations |
15 |
|
Moulds, Humidifier & Air Conditioners |
10 |
|
Others |
20 |
|
Computers |
3 |
|
Servers |
6 |
|
Furniture and Fixtures |
10 |
|
Vehicles (Secondhand vehicles Based on Kilometers run maximum 12 years) |
15 |
|
Office Equipment |
5 |
Assets costing Rs 5,000/- and below are depreciated in full within the Financial Year.
The useful lives are based on the technical estimates made by the management which in the opinion of the management are realistic and fair approximation over the period over which assets are likely to be used..
a. Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life is reviewed annually with the effect of any changes in estimate being accounted for on a prospective basis.
b. Useful lives of intangible assets
Intangible assets are amortized equally over the estimated useful life not exceeding five years. Estimated useful life of Computer Software is five years.
1.7 De-recognition of tangible and intangible assets
An item of tangible and intangible asset is de-recognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of tangible and intangible assets is determined as the difference between the sales proceeds if any and the carrying amount of the asset and is recognized in the statement of profit or loss.
1.8 Impairment of tangible and intangible assets
The Company annually reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to Sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cashgenerating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.
Revenue from contract with customers
Effective from 1st April 2018, the company has applied IND AS-115- Revenue from contracts with customers.
Revenue on sale of Goods is recognized at a point in time on transfer of control of the products to the customer in an amount that reflects the consideration the company expects to receive in exchange for those products pursuant to the contract with the Customer i.e Transaction price.
Transfer of control happens
a) In respect of Aerospace, Naval and power system batteries on issue of Inspection Note by the customer and delivery to the common carrier and
b) In respect of Lead Acid Batteries when the goods are delivered to the common carrier. Development-cum-supply contracts
a) Revenue is recognized over a period of time based on output method and milestones achieved when the performance obligations in respect of the development work is distinct and independent from supply of goods.
b) Revenue is recognized over a period of time under the input method and milestones achieved where developmental work and the supplies are inter-related or inter-dependent.
c) When substantial portion of the developmental work has not been completed, the amount of expenditure incurred on the development work such as employees benefit expenses, materials and other direct expenses are carried forward as '' Work in progress''.
Significant financing component
Payment terms in Defense contracts are standardized and generally uniform across all customers. Typical payment terms are by way of advances, milestones achieved and 5%/10% payment on submission of BG or on the expiry of the warranty period.
The timing of the transfer of the goods is as specified by the customer in the contract. Advance from customers is for procuring specific materials having a long lead delivery time and specific to the products in nature and therefore the advances are not considered to have any significant financing component.
5% /10% payments are in the nature of retention towards performance warranty and do not carry any financing element and are moneys retained for reasons other than provision of finance. The retention moneys are payable on submission of bank guarantees and are classified as current.
Contract Assets (Included in Trade Receivables not due):
Contract Asset represents the company''s right to receive the consideration in exchange for the Goods or Services that the company has transferred to the customer, when the right is conditioned on something other than passage of time.
Materials receivable from the customer in respect of products already supplied as per the terms of the contract is recognized and is disclosed as non-financial assets - other current assets.
Contract liabilities - Cash Advance from Customers are disclosed under Current/Non Current based on the delivery period as per the contract as amended from time to time.
Advances in the form of materials from Customer are secured by Bank Guarantees and are netted off against the Inventory carried as the advance is to be adjusted by supply of products and is disclosed in the notes to accounts.
Impairment of Trade Receivables
Receivables from Government Departments are generally treated as fully recoverable based on past experience. However, in respect of other customers, impairment on account of expected credit loss is assessed on a case to case basis in respect of dues outstanding for a significant period of time.
b. Dividend and interest income
Dividend income from investments is recognised when the shareholder''s right to receive payment has been established (provided that it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably).
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and using effective interest rate method.
Insurance claims are recognized on the basis of claims admitted/expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.
Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received.
Grants are recognized in the Statement of Profit and Loss on a systematic basis over the period in which the Company recognises as expense the related costs which the grants are intended to compensate. Specifically, Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the Balance Sheet and transferred to the Statement of Profit and Loss on a systematic and rational basis over the useful lives of the related assets.
Grants that are receivable as compensation for expenses or losses incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognised in the Statement of Profit and Loss in the period in which they become receivable.
Grants related to income are presented in the Statement of Profit and Loss as ''other income''. Grant receivable is disclosed under âOther Financial Assetsâ.
Inventories are valued at lower of cost and net realizable value. Materials and other items intended for use in production of inventories are not written down below cost if the finished goods in which they will be incorporated are expected to be sold at or above cost. Cost includes taxes and duties, net of input tax credit entitlement. Cost of raw materials and components, stores and spares is determined on weighted average basis and includes inward freight and other direct expenses and Loose Tools are estimated to have useful life of three years and are charged to statement of profit and loss in equal installments over the useful life. Loose tools are carried at cost less amortization. Finished goods/Work-in-progress are valued at cost and cost includes material, direct labour, overheads (other than administrative overheads that do not contribute to bring the inventories to the present location and condition and selling costs) incurred in bringing the inventory to their present location and condition.
Net realizable value is the estimated selling price less estimated costs for completion and sale.
Obsolete, slow moving and defective inventories are periodically identified and provision is made where ever necessary.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use are added to the cost of those assets, until such time the assets are substantially ready for their intended use or sale. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are recognised in the Statement of profit or loss in the period in which they are incurred.
(a) Short term employee benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service. The company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.
(b) Post-employment benefits (i) Defined Contribution Plans
Contribution to Provident Fund (Defined Contribution Plan) as per the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 is recognised as expense in the Statement of Profit and Loss and remitted to the Provident Fund Commissioner. The contribution to the Superannuation Fund (Defined Contribution Plan) is recognised as expense and funded with Life Insurance Corporation of India.
The company operates the Defined Benefit Gratuity Plan for employees. The cost of providing defined benefits is determined using the Projected Unit Credit Method with actuarial valuations being carried out at each reporting date. The defined benefit obligations recognized in the Balance Sheet represent the present value of the defined benefit obligations as reduced by the fair value of plan assets, if applicable. Any defined benefit asset (negative defined benefit obligations resulting from this calculation) is recognized representing the present value of available refunds and reductions in future contributions to the plan.
All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability/(asset) are recognized in the Statement of Profit and Loss. Remeasurements of the net defined benefit liability/(asset) comprising actuarial gains and losses and the return on the plan assets (excluding amounts included in net interest on the net defined benefit liabilities/asset) are recognized in other comprehensive income and taken to retained earnings. Such re-measurements are not reclassified to the Statement of Profit and Loss in subsequent periods.
The entire liability towards gratuity is considered as current as the company is expected to contribute this amount to the gratuity fund within the next twelve months.
(c) Other Long-term Employee Benefits (Unfunded)
Entitlement to annual leave is recognized when they accrue to employees. Annual leave can be availed or encashed either during service or on retirement subject to a restriction on the maximum days of accumulation of leave. The company determines the liability for such accumulated leave using the Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date.
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised 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. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the relevant instrument and are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. However Trade Receivables are recognized at Transaction Price.
All regular purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets. However, trade receivables are measured at transaction price.
a. Classification of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortized cost. The debt instruments carried at amortised cost include Deposits, Loans and advances recoverable in cash.
⢠the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
⢠the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All other financial assets are subsequently measured at fair value.
b. Effective interest method (EIR)
The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as FVTPL. Interest income is recognised in the Statement of profit or loss.
c. Investments in equity instruments at FVTOCI
The company has irrevocably designated to carry investment in equity instruments at Fair value through other comprehensive income. On initial recognition, the Company can make an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes
in fair value in other comprehensive income pertaining to investments in equity instruments. This election is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the ''Reserve for equity instruments through other comprehensive income''. On derecognition of such Financial Assets, cumulative gain or loss previously reported in OCI is not reclassified from Equity to statement of Profit and Loss. However, the company may transfer such cumulative gain or loss into retained earnings within equity.
The Company has equity investments which are not held for trading. The Company has elected the FVTOCI irrevocable option for these investments (see note 3). Fair value is determined in the manner described in note 1.2.
Dividends on these investments in equity instruments are recognised in the statement of profit or loss when the Company''s right to receive same is established, it is probable that the economic benefits associated with the dividend will flow to the company, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably.
d. Impairment of Financial Assets
In accordance with Ind AS 109, the Company uses âExpected Credit Lossâ (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to:
⢠The 12 months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
⢠Full lifetime expected credit losses (expected credit losses that result from all possible defaults events over the life of the financial instrument).
For trade receivable, Company applies ''simplified approach'' which requires expected/ lifetime losses to be recognized from initial recognition of the receivables.
For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk, if there is significant increase in credit risk full lifetime ECL is used.
e. De-recognition of Financial Assets:
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized when the obligation specified in the contract is discharged or cancelled or expires.
Concomitantly, if the asset is one that is measured at
(a) Amortised cost, the gain or loss is recognized in the Statement of Profit and Loss.
(b) Fair value through other comprehensive income, the cumulative fair value adjustments previously taken to reserves are reclassified to the Statement of Profit and Loss unless the asset represents an equity investment in which case the cumulative fair value adjustments previously taken to reserves is reclassified within equity.
1.17 Financial liabilities and equity instruments
a. Classification as debt or equity
Debt and equity instruments issued by the company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
b. Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a company are recognised at the proceeds received, net of direct issue costs.
All financial liabilities are initially recognized at the value of respective contractual obligations. Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortized cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortized cost are determined based on the effective interest method. Interest expense that is not capitalized as part of costs of an asset is included in the ''Finance costs'' line item.
d. Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability modified, such an exchange or modification is treated as the Derecognition of the original liability and the recognition of a new liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid is recognized in the Statement of Profit and Loss.
1.18 Foreign Currency Transactionsa. Initial Recognition
On initial recognition, transactions in foreign currencies are recorded in the functional currency (i.e. Indian Rupees), by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.
b. Measurement of foreign currency items at reporting date
Foreign currency monetary items are translated at the closing exchange rates. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is measured.
c. Recognition of exchange difference
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements is recognized in profit or loss in the period in which they arise.
Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
Taxes on income comprise of current tax and deferred tax.
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Taxable profit differs from ''profit before tax'' as reported in the statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates and tax laws enacted during the reporting period together with any adjustment to tax in payable in respect of previous years.
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit under Income Tax Act, 1961.
Deferred tax liabilities are recognized for all taxable temporary differences. However, in case of temporary differences that arise from initial recognition of assets or liabilities in a transaction that affect neither the accounting profit nor the taxable profit, deferred tax liabilities are not recognized.
Deferred tax assets are recognized for all deductible temporary differences to the extent it is probable that future taxable profits will be available against which those deductible temporary difference can be utilized. In case of temporary differences that arise from initial recognition of assets or liabilities in a transaction that affect neither the taxable profit nor the accounting profit, deferred tax assets are not recognized.
Deferred Tax Assets in respect of tax carry forward of unused tax losses and unused tax credits are recognised to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits 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 the benefits of part or all of such deferred tax assets to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that have been enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
c. Current and deferred tax for the year
Current and deferred tax are recognised in the 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.
1.21 Events after reporting period
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size of nature are only disclosed.
Operating segments are reported in a manner consistent with internal reporting provided to the Chief Operating Decision Maker (CODM) of the company. The CODM is responsible for allocating resource and assessing performance of the operating segments of the company. The Managing Director is identified as the CODM.
Segment accounting policies are in line with the accounting policies of the company.In addition, the specific accounting policies have been followed for segment reporting as under:
The Company has identified two business segments viz.1. Aerospace, Naval and Power System Batteries and 2. Lead Acid Batteries. Revenue and expenses have been identified to respective segments on the basis of operating activities of the enterprise. Revenue and expenses which relate to the enterprise as awhole and are not allocable to a segment on a reasonable basis have been disclosed as unallocable revenue and expenses.
Segment assets and liabilities represent assets and liabilities in respective segments. Other assets and liabilities that cannot be allocated to a segment on a reasonable basis have been disclosed as unallocable assets and liabilities.
Inter segment revenue / expenditure - Not Applicable.
Geographical segment - Not Applicable.
Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares.
Key Accounting estimates and judgments 1.1 Use of Estimates
The preparation of financial statements in conformity with IndAS requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities
at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates.
1.2 Key sources of estimation uncertainty
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
Key assumption concerning the future and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as given below.
a. Fair value measurement and valuation processes
Some of the Company''s assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company engages third party qualified valuers to perform the valuation. The management works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model.
b. Useful life of Property, Plant and Equipments
The Company reviews the estimated useful life of Property, Plant and equipment at the end of each reporting period. During the current year, there has been no change in useful life considered for the assets.
The determination of Company''s liability towards defined benefit obligation to employees is made through independent actuarial valuation including determination of amounts to be recognised in the Statement of Profit and Loss and in other comprehensive income. Such valuation depend upon assumptions determined after taking into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. Information about such valuation is provided in notes to the financial statements.
d. Impairment loss
Impairment loss is recognized based on an independent valuation and cost to sell which are estimates.
e. Claims, Provisions and Contingent Liabilities
The Company has ongoing litigations with various tax and regulatory authorities and third parties. Where an outflow of funds is believed to be probable and a reliable estimate of the outcome of the dispute can be made based on management''s assessment of specific circumstances of each dispute and relevant external advice, management provides for its best estimate of the liability. Such accruals are by nature complex and can take number of years to resolve and can involve estimation uncertainty. Information about such litigations is provided in notes to the financial statements.
Mar 31, 2018
Notes to the Financial Statements for the Year ended 31st March, 2018
Company Overview
High Energy Batteries (India) Limited is a Public Limited Company, The Company is incorporated under The Companies Act, 1956 and is domiciled in India. I|s Registered Office is located at âEsvin House''. No. 13, Old Mahabalipuram Road, Seagram Vi 11 age. Pemngudi. Chennai - 600 096. The Company is a battery manufacturer with its factory located at Mathur, Trichy. The batteries are manufactured for use in Indian Army, Navy, Air Force and Launch Vehicles and also manufactures commercial batteries for auld and standby VRLA Applications. The company''s shares are listed in BSE Ltd.
A. Significant Accounting Policies and Key Accounting Estimates and Judgements
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 Statement of compliance
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules. 2015.
Up to the year ended 31st March, 2017. the Company prepared its financial statements in accordance with the requirements of Indian Generally Accepted Accounting Principles (IGAAP) that includes Standards notified under the Companies (Accounting Standards) Rules. 2006. ''
These are the Company''s first Ind AS financial statements. The date of transition to Ind AS is 01,04,2016. Please refer Note No. 1.19 for the details of exceptions and optional exemptions availed by the company and principal adjustments along with related reconciliations.
1.2 Basis of Preparation and Compliance
The financial statements are prepared in accordance with the historical cost convention except for certain items that are measured at fair values at the end of each reporting period, as explained in the accounting policies see out below. The financial statements are prepared on a going concern" basis using accrual concept except for the cash flow information.
Historical cost is generally based on fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of what her that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company lakes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pinking the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS-2 inventories or value in use in Ind AS 36 â Impairment of Assets.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1,2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirely, as described hereunder
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement; date.
Level 2 - Other than quoted prices included within Level 1. that are observable for the asset or liability, either directly or indirectly; and
Level 3 - Unobservable inputs for the asset or liability.
Transactions and balances with values below the rounding off norm adopted by The company have been reflected as "â" in these financial statements.
1.3 Current / Non-Current Classification
An asset or liability is classified as current If it satisfies any of the following conditions:
(ii) the asset / liability is expected to be realized / settled in the Companyâs normal operating cycle;
(ii) the asset is intended for sale or consumption;
(mi) the asset! liability Is held primarily for the purpose of trading;
(iv) the asset / liability is expected to be realized / settled within twelve months after the reporting period;
(v) the asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period;
(vi) In the case of a liability, the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
All other assets and liabilities are classified as non-current.
For the purpose of current I non-current classification, the Company has reckoned its normal operating cycle as twelve months based on the nature of products and the time between the acquisition of assets or inventories for processing and their realization in cash and cash equivalents.
Deferred tax assets and liabilities are classified as non-current.
1.4 Property, Plant and Equipment (PPE)
Property, plant and equipment are tangible items that:
(a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
(b) are expected lo bequest during more than one period.
The cost of an item of property, plant and equipment shall be recognised as an asset if. and only if:
(a) it is probable that nature economic benefits associated With the item will flow to the entity; and
(b) the cost of the item can be measured reliably.
(I) An item of PPE that qualifies for recognition as an asset is measured on initial recognition at cost. Following initial recognition. PPEs are carried at its cost less accumulated depreciation and accumulated impairment losses.
(i)(a) For transition to Ind AS. the Company has elected to continue with the carrying value of all of its PPE recognized as of April 1. 2016 (transition date) measured as per the previous I GAAP as its deemed cost as on the transition date except land, which has been measured at fair value as deemed cost on the transition date.
(ii) The cost of an item of PPE comprises purchase price, taxes and duties net of input tax credit entitlement and other items directly attributable to the cost of bringing the asset to its working condition for its intended use. Trade discounts and rebates are deducted. Cost includes cost of replacing a part of a PPE if the recognition criteria are met. Expenses directly attributable to new manufacturing facility during its construction period are capitalized if the recognition criteria are met. Expenditure related to plans, designs and drawings of buildings or plant and machinery is capitalized under relevant heads of PPE if the recognition criteria are met.
(iii) The Company identifies and determines the cost of each part of an item of PPE separately, if the part has a cost which Is significant to The total cost of that item of PPE and has useful life I hat is materially different from that of The remaining item.
(iii) Items such as spare parts, stand-by equipment and servicing equipment that meet the definition to PPE are capitalized at cost. Costs in nature of repairs and maintenance are recognized in the statement of Profit and Loss as and when incurred. All up gradation / enhancements are charged off as revenue expenditure unless they bring significant additional benefits. Borrowing Costs (net of interest earned on temporary investments of those borrowings) directly attributable to acquisition, construction or production of qualifying assets are capitalized as part of the cost of the assets till the asset is ready for its intended use.
(v) Capital advances and capital work- in- progress
Advances given towards acquisition of fixed assets outstanding at each Balance Sheet date are disclosed as Other Non-Current Assets. Cost of assets not ready for intended use. as on the Balance Sheet date, is shown as capital work- in- progress. Such properties are classified to the appropriate categories of PPE when completed and ready for intended use. Depreciation on these assets commences when the assets are ready for their intended use which is generally on commissioning.
(vi) Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives and residual values are reviewed at the end of each reporting period and changes, if any. are treated as changes in accounting estimate. The useful lives are based on technical estimates and the management believes that the useful lives are realistic and fair approximation over the period at which the assets are likely to be used.
Assess costing Rs 5,000/- and below are depreciated in full within the Financial Year.
The useful lives are based on the technical estimates made by the management which in the opinion of the management are realistic and fair approximation over the period over which assets are likely to be used.
1.5 Intangible assets
a. Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are earned at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life is reviewed annually with the effect of any changes in estimate being accounted for on a prospective basis.
b. Useful lives of intangible assets
Intangible assets are amortized equally over the estimated useful life.
1.6 De-recognition of tangible and Intangible assets
An item of tangible and intangible asset is de-recognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of tangible and intangible assets is determined as the difference between the sales proceeds if any and the carrying amount of The asset and is recognized in the statement of profit or loss.
1.7 impairment of tangible and intangible assets
The Company annually reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated In order to determine the extent of the impairment loss (if any). When it is not passible ta estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are a Isa allocated to individual cash-gene rating units, or otherwise I hey are allocated to the smallest group of cash-gen ©rating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased |o the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized Immediately in profit or loss.
1.8 Revenue Recognition
Revenue Is measured at the fair value of the consideration received or receivable for supply of goods or services net of returns.
a. Sale of products
Revenue from safe of products is recognized when the Company transfers alf significant risks and rewards of ownership to the buyer, and retains neither continuing managerial Involvement nor effective control o^/er the products sold. It is mainly upon delivery and the amount of revenue can be measured reliably and recovery of the consideration is probable.
b. Dividend and interest income
Dividend income from investments is recognised when the shareholder''s right to receive payment has been established (provided that it is probable that the economic benefits will flow to the company and the amount al income can be measured reliably interest income from a financial asset is recognised when it is probable that the economic benefits will flow to The company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and using effective interest rate method. ''
c. Insurance Claims
Insurance claims are recognized on the basis of claims admitted f expected to be admitted and to the extent that the amount recoverable can be measured reliably and it. is reasonable to expect ultimate collection.
1.9 Ind AS 115 - Revenue from Contracts with Customers
The standard is notified on 28.03.2018 and it is applicable for the accounting periods commencing on or alter 01-04.2018. Accordingly, this standard is not applicable for preparation of the financial statements for the year ended 31.03.2018. However, application of this standard from 01,04.2010 is not likely lo have any impact in the revenue recognition of the company.
1.10 Inventories
Inventories are valued at lower ol cost and net realizable value. Materials and other items intended for use in production of inventories are not written down below cost if the finished goods in which I hey will be incorporated are expected to be sold at or above cost. Cost includes taxes and duties, net of input tax credit entitlement. Cost of raw materials, consumables, stores and spares is determined on weighted average basis and includes inward height and other direct expenses. Net realizable value is the estimated selling price less estimated costs for completion and sale.
Obsolete, slow moving and defective inventories are periodically identified and provision is made where necessary.
1.11 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization, All other borrowing costs are recognised in the Statement of profit or loss in the period in which they are incurred.
1.12 Employee Benefits
Short term employee
All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service. The company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.
(b) Post-employment benefits
(i) Defined Contribution Plans
Contribution to Provident Fund (Defined Contribution Plan) as per the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 is recognised as expense in the Statement of Profit and Loss and remitted to the Provident Fund Commissioner. The contribution to the Superannuation Fund (Defined Contribution Plan) is recognised as expense and funded with Life Insurance Corporation of India.
(ii) Defined Benefit Plans
The company operates the Defined Benefit Gratuity Plan for employees. The cost of providing defined benefits is determined using the Projected Unit Credit Method with actuarial valuations being carried out at each reporting date. The defined benefit obligations recognized in the Balance Sheet represent the present value of the defined benefit obligations as reduced by The fair value of pain assets, if applicable. Any defined benefit asset (negative declined benefit obligations resulting from this calculation) is recognized representing the present value of available refunds and reductions in future contributions to The plan,
All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability/ (asset) are recognized in the Statement of Profit and Loss, Remeasuremenls of The net defined benefit liability/(asset) comprising actuarial gains and losses and the return on the plan assets (excluding amounts included in net interest on the net defined benefit liabilities/ asset) are recognized in other comprehensive income and taken to retained earnings. Such re-measurements are not reclassified to the Statement of Profit and Loss in subsequent periods.
The entire liability towards gratuity is considered as current as the company will contribute this amount to the gratuity fund within the next twelve months,
(c) Other Long-term Employee Benefits (Unfunded)
Entitlement to annual leave is recognized when I hey accrue to employees. Annual leave can be availed or encased either during service or on retirement subject to a restriction on the maximum number of accumulation ol leave. The company determines the liability for such accumulated leave using the Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date.
1.13 Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation on and a reliable estimate can be made of the amount of the obligation.
The amount recognised 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. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
1.14 Financial instruments
A financial in strum an no is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the relevant instrument and are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or Joss) are added to or deducted from the lair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
1.15 Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets,
a. Classification of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortized cost. The debt instruments carried at amortised cost include Deposits. Loans and advances recoverable in cash.
The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
The contractual terms of |he instrument give rise on specified dales lo cash flows that are solely payments of principal and interest on the principal amount outstanding.
All other financial assets are subsequently measured at fair value.
b. Effective interest method [EIR)
The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or.
where appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as FVTPL. Interest income is recognised in the Statement of profit or loss.
c. Investments in equity instruments at FVTOCI
The company has irrevocably designated to carry investment in equity instruments at Fair value through other comprehensive income. On initial recognition, the Company can make an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments. This election is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from coinages in fair value recognised in other comprehensive income and accumulated in the ''Reserve for equity instruments through other comprehensive income''. On recognition of such Financial Assets, cumulative gain or loss previously reported in OCI is not reclassified from Equity to statement of Profit and Loss. However, the company may transfer such cumulative gain or loss into retained earnings within equity.
The Company has equity investments which are not held for trading. The Company has elected the FVTOCI irrevocable option for these investments (see note 3). Farr value is determined in the manner described in note 1.2.
Dividends on these investments in equity instruments are recognised in the statement of profit or loss when the Company''s right to receive same is established, it is probable that the economic benefits associated with the dividend will flow to the company, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably.
d. Impairment of Financial Assets
In accordance with Ind AS 103. the Company uses ^Expected Credit Loss (ECL) model, for evaluating impairment of financial assets other than those measured a| fair value through profit and loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to:
The 12 months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date or
Felt lifetime expected credit losses (expected credit losses that result from alt possible defaults events over the life of the financial instrument).
For trade receivable. Company applies ''simplified approach'' which requires expected life lime tosses to be recognized from initial recognition of the receivables.
For other assets, The Company uses 12 months ECL to provide for impairment loss where thane is no significant increase in credit risk, if there is significant increase in credit risk full lifetime ECL is used.
e. De-recognition of Financial Assets:
The Company derecognizes a I i nan dal asset when the contractual rights to the cash flows from the financial asset expire or if transfers the financial asset and the transfer qualifies for de-recognition under Ind AS 109, A financial liability (or a part of a financial liability) is derecognized when the obligation specified in the contract is discharged or cancelled or expires
Concomitantly, if the asset is one that is measured at:
(a) Amortised cost, the gain or loss is recognized in the Statement of Profit and Loss.
(b) Fair value through other comprehensive income, the cumulative fair value adjustments previously taken to reserves are reclassified to the Statement of Profit and Loss unless the asset represents an equity investment in which case the cumulative fair value adjustments previously taken to reserves is reclassified within equity-
1.16 Financial liabilities and equity instruments
a. Classification as debt or equity
Debt and equity instruments issued by the company are classified as either financial liabilities or as equity in accordance with The substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
b. Equity instruments
An equity instrument is any contract (hat evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instrument issued by a company are recognised of the proceeds received, net of direct issue costs.
c. Financial liabilities
All financial liabilities are initially recognized at the value of respective contractual obligations. Financial liabilities that are not held-for-trading and are not designated as at FVI PL are measured at amortized cost at the end of subsequent accounting periods, The carrying amounts of financial liabilities that are subsequently measured at amortized cost are determined based on the effective interest method. Interest expense that is not capitalized as part of costs of an asset is included in the ''Finance costs'' line item,
d. Derecognition of financial liabilities
A financial liability is derecognized when the obligation under (he liability is discharged or cancelled or expires, When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability modified, such an exchange or modification is treated as the Derecognition of the original liability and the recognition of a new liability, The difference between the carrying amount of the financial liability derecognized and the consideration paid is recognized in the Statement of Profit and Loss.
1.17 Foreign Currency Transactions a. Initial Recognition
On initial recognition, transactions in foreign currencies are recorded in the functional currency (i.e. Indian Rupees), by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.
Measurement of foreign currency items at reporting date
Foreign currency monetary items are translated at the closing exchange rates. Nonmonetary items that are measured at historical cost in a foreign currency, are translated using the exchange rule at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency, are translated using the exchange rates at the date when the lair value is measured.
c, Recognition of exchange difference
Exchange differences arising on the settlement of monetary items or on translating monetary items at riles different from those at which they were translated on initial recognition during the period or in previous financial statements is recognized in profit or loss in the period in which they arise.
1.18 Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash Howâs from operating, investing and financing activities of the Company are segregated based on the available information.
1.19 First-time adoption - mandatory exceptions, optional exemptions
a. Overall principle
The Company has prepared the opening balance sheet as per Ind AS of 1stApril, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to the certain exceptions and certain optional exemptions availed by the Company as detailed below,
b. Materiality
The company has applied the standards only to items / transactions which are material.
c. Classification of debt instruments
The Company has determined the classification of debt instruments in terms of whether they meet the amortized cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the transition date.
d. Impairment of financial assets
The Company has applied the impairment requirements of Ind AS 109 retrospectively: however, as permitted by Ind A5 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101. The Company has determined the classification of debt instruments in terms of whether they meet the amortized cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the transition date.
e. Deemed cost for property, plant and equipment
The Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as of 1« April, 2016 (transition date) measured as per the previous IGAAP and use that carrying value as its deemed cost as of The transition date except land, which has been measured at fair value as deemed cost as on the transition date.
f. Business Combinations
The company has elected not to apply Ind AS -103 Business Combinations retrospectively for past business combinations.
1.20 Taxes on income
Taxes on income comprise of current tax and deferred tax.
a. Current tax
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Taxable profit differs from profit before tax'' as reported in the statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates and lax laws enacted during the reporting period together with any adjustment to tax in payable m respect of previous years.
b. Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding fax bases used in the computation of taxable profit under income Tax Act, 1961.
Deferred tax liabilities are recognized for all taxable temporary differences. However, in case of temporary differences that arise from initial recognition of assets or liabilities in a Transaction that affect neither the accounting profit nor the taxable profit, deferred tax liabilities are not recognized.
Deferred tax assets are recognized for all deductible temporary differences to the extent it is probable that future taxable profits will be available against which those deductible temporary difference can be utilized. In case of temporary differences that arise from initial recognition ol assets or liabilities in a transaction that affect neither the taxable profit nor the accounting profit, deferred tax assets are not recognized.
The carrying amount of deferred tax assets is reviewed at The end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefits of part or all of such deferred tax assets to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that have been enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
MAT Credit Entitlement are in the form of unused tax credits and are accordingly grouped under Deferred Tax Assets.
c. Current and deferred tax for the year
Current and deferred tax are recognised in the 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.
1.21 Events after reporting period
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within The financial statements. Otherwise, events after the Balance Sheet date of material size of nature are only disclosed.
1.22 Segment Reporting
Operating segments are reported in a manner consistent with internal reporting provided to the Chief Operating Decision Maker (CODM) of the company. The CODM is responsible for allocating resource and assessing performance ol the operating segments of the company. The MD is identified as the CODM.
Segment accounting policies are in line with the accounting policies of the company. In addition, the specific accounting policies have been followed for segment reporting as under:
The Company has identified two business segments viz. Aerospace, Naval and Power System Batteries and Lead Acid Batteries. Revenue and expenses have been identified to respective segments on the basis of operating activities of the enterprise. Revenue and expenses which relate to the enterprise as a whole and are not allocable to a segment on a reasonable basis have been disclosed as unallowable revenue and expenses. Segment assets and liabilities represent assets and liabilities in respective segments. Other assets and liabilities that cannot be allocated to a segment on a reasonable basis have been disclosed as unallowable assets and liabilities.
Inter segment revenue i expenditure - Mot Applicable.
Geographical segment - No! Applicable.
1.23 Earnings per Share (EPS)
Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares.
B. Key Accounting estimates and judgments
1.1 Use of Estimates
The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Actual results could differ From those estimates.
1.2 Key sources of estimation uncertainty
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions lo accounting estimates are recognised in the period in which the estimate is revised if The revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Key assumption concerning the future, and other key sources of estimation uncertainty al the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as given below.
a. Fair value measurement and valuation processes
Some of the Company''s assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company engages Third party qualified values to perform the valuation. The management works closely with the qualified external values to establish the appropriate valuation techniques and inputs to the model.
b. Useful life of Property Plant and Equipmentâs
The Company reviews the estimated useful lives of Property, plant and equipment at the end of each reporting period. During the current year, there has been no change in us etui life considered for the assets.
c. Actuarial valuation
The determination of Company''s liability towards defined benefit obligation to employees is made through independent actuarial valuation including determination of amounts to be recognised in the Statement of Profit and Loss and in other comprehensive income. Such valuation depend upon assumptions determined after taking into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. Information about such valuation is provided in notes to the financial statements.
d. Claims, Provisions and Contingent Liabilities
The Company has on-going obligations with various tax and regulatory authorities and third parties. Where an outflow of funds is believed to be probable and a reliable estimable of the outcome of the dispute can he made based on managementâs assessment of specific circumstances of each dispute and relevant external advice, management provides for its best estimate ol the liability. Such accruals are by nature complex and can take number of years to resolve and can involve estimation uncertainly, information about such litigations is provided in notes to the financial statements.
b. Terms / rights attached to Equity Shares:
The Equity shares of the company having par value of 10/- per share rank part pass in all respects including voting rights, dividend entitlement and repayment of capital.
Mar 31, 2017
SIGNIFICANT ACCOUNTING POLICIES
a) Accounting Concepts
The accounts are prepared under historical cost convention in accordance with generally accepted accounting principles and applicable Accounting Standards.
b) Use of Estimates
Estimates and assumptions made by Management in the preparation of Financial Statements have a bearing on reported amounts of Financial Results, Assets & Liabilities and the disclosure of Contingent Liabilities. Actual results could differ from those estimates. Any revision to accounting estimate is recognized prospectively.
c) Revenue Recognition
Revenue is recognized and expenditure is accounted for on their accrual. Excise duty recovery from customer is deducted from Gross Turnover. Excise duty differential between closing and opening stock of excisable goods is included under other expenses. Revenue from domestic sale is recognized on delivery to the carrier, when risk and rewards of ownership pass on to the customers.
Revenue from export sales is recognized when risk and rewards are passed on to the customers in accordance with the terms of the contract.
Dividend income is recognized when the right to receive payment is established.
Other items of income are recognized when there is no significant uncertainty as to measurability or collectability.
d) Property Plant and Equipment
Property Plant and Equipment are stated at cost less depreciation. Cost includes, taxes and duties (but does not include taxes and duties for which CENVAT / VAT credit is available), freight and other direct or allocated expenses and interest and finance charges on related borrowings during construction period.
e) Depreciation
Depreciation on Property Plant and Equipment (other than Plant & Machinery relating to Lead Acid Battery Division) is provided under Straight Line Method in accordance with Schedule II to the Companies Act, 2013, adopting the useful life for assets as specified therein and reckoning the residual value at 5% of the original cost of the asset.
In respect of Plant & Machinery relating to Lead Acid Battery Division, the useful life of the asset has been determined based on the technical evaluation and accordingly depreciation has been provided.
f) Inventories
Inventories are stated at lower of cost and net realizable value. Cost includes all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition net off CENVAT/VAT credit entitlement. The cost is arrived on weighted average basis. Tools cost is written off over a period of three years.
g) Investment
Long term investments are stated at cost. Any diminution in the value of long term investments is charged to Statement of Profit and Loss Account, if such a decline is other than temporary in the opinion of the Management.
h) Research and Development Expenditure
Expenditure incurred on Scientific Research, other than Capital Expenditure, are written off to revenue in the year in which they are incurred. Capital Expenditure is added to the Cost of Fixed Assets and depreciated accordingly.
i) Employee Benefits
Short term Employee benefits are charged at the undiscounted amount to Statement of Profit and Loss account in the year in which related service is rendered.
Contributions to defined contribution schemes towards retirement benefits in the form of provident fund and superannuation fund for the year are charged to Statement of profit and loss account as incurred.
Liabilities in respect of defined benefit plans are determined based on actuarial valuation made by an independent actuary. Actuarial gains or losses are recognized immediately in the Statement of profit and loss account. Obligation for leave encashment is recognized in the same manner.
Other terminal benefits are recognized as an expense as and when incurred.
j) Provision, Contingent Liabilities and Contingent Assets
Provisions are recognized when there is a present obligation as a result of a past event it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. Contingent Liabilities are disclosed, unless the possibility of any outflow in settlement is remote, in the notes on Accounts. Contingent assets are neither recognized nor disclosed.
k) Taxes on Income
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of Income Tax Act, 1961. Deferred Tax is recognized, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized if there is virtual certainty that there will be sufficient future taxable income available to realize such losses.
l) Foreign Exchange Transactions
Transactions in foreign exchange are initially recognized at the rates prevailing on the dates of transactions.
Premium or discount arising at the inception of forward contract is amortized as income or expense over the life of the contract. Exchange difference on such contract is recognized in the reporting period in which exchange rates change.
Foreign Currency Liabilities/ assets at the close of the year are restated, adopting the contracted/year-end rates, as applicable. Resultant exchange difference is recognized as income or expense in that period.
m) Insurance Claims
Insurance claims are accounted on the basis of claims lodged and accepted.
n) Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.
o) Impairment of Assets
Impairment loss, if any, is provided to the extent the carrying amount of assets exceed their recoverable amount.
p) Earnings per share
Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q) Segment Reporting
The accounting policies adopted for segment reporting are in line with the accounting policies of the company.
Revenue and expenses are identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under âunallocableâ.
There are no inter segment revenue and therefore their basis of measurement does not arise.
r) Derivatives
The Company enters into Futures Contracts in Silver to hedge the price risk consistent with its Risk Management Policy. The Company does not use these contracts for speculative purpose.
Losses in respect of the Futures Contracts as at the Balance Sheet date are charged to Statement of Profit and Loss by marking them to market, while gains are ignored.
s) Leases
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating lease. Operating Lease payments are recognized as an expense in the revenue account as per the lease terms.
Mar 31, 2016
1. Notes forming part of the Balance Sheet as at 31st March 2016 and the Statement of Profit and Loss for the year ended 31st March 2016.
SIGNIFICANT ACCOUNTING POLICIES
a) Accounting Concepts
The accounts are prepared under historical cost convention in accordance with generally accepted accounting principles and applicable Accounting Standards.
b) Use of Estimates
Estimates and assumptions made by Management in the preparation of Financial Statements have a bearing on reported amounts of Financial Results, Assets & Liabilities and the disclosure of Contingent Liabilities. Actual results could differ from those estimates. Any revision to accounting estimate is recognized prospectively.
c) Revenue Recognition
Revenue is recognized and expenditure is accounted for on their accrual. Excise duty recovery from customer is deducted from Gross Turnover. Excise duty differential between closing and opening stock of excisable goods is included under other expenses.
Revenue from domestic sale is recognized on delivery to the carrier, when risk and rewards of ownership pass on to the customers.
Revenue from export sales is recognized when risk and rewards are passed on to the customers in accordance with the terms of the contract.
Dividend income is recognized when the right to receive payment is established.
Other items of income are recognized when there is no significant uncertainty as to measurability or collectability.
d) Fixed Assets
Fixed Assets are stated at cost less depreciation. Cost includes, taxes and duties (but does not include taxes and duties for which CENVAT / VAT credit is available), freight and other direct or allocated expenses and interest and finance charges on related borrowings during construction period.
Any income earned during construction period is netted against cost of the Project.
e) Depreciation
Depreciation on Tangible Fixed Assets (other than Plant & Machinery relating to Lead Acid Battery Division) is provided under Straight Line Method in accordance with Schedule
II to the Companies Act, 2013, adopting the useful life for assets as specified therein and reckoning the residual value at 5% of the original cost of the asset.
In respect of Plant & Machinery relating to Lead Acid Battery Division, the useful life of the asset has been determined based on the technical evaluation and accordingly depreciation has been provided.
f) Inventories
Inventories are stated at lower of cost and net realizable value. Cost includes all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition net off CENVAT/VAT credit entitlement. The cost is arrived on weighted average basis. Tools cost is written off over a period of three years.
g) Investment
Long term investments are stated at cost. Any diminution in the value of long term investments is charged to Profit and Loss Account, if such a decline is other than temporary in the opinion of the Management.
h) Research and Development Expenditure
Expenditure incurred on Scientific Research, other than Capital Expenditure, are written off to revenue in the year in which they are incurred. Capital Expenditure is added to the Cost of Fixed Assets and depreciated accordingly.
i) Employee Benefits
Short term Employee benefits are charged at the undiscounted amount to Profit and Loss account in the year in which related service is rendered.
Contributions to defined contribution schemes towards retirement benefits in the form of provident fund and superannuation fund for the year are charged to profit and loss account as incurred.
Liabilities in respect of defined benefit plans are determined based on actuarial valuation made by an independent actuary. Actuarial gains or losses are recognized immediately in the profit and loss account. Obligation for leave encashment is recognized in the same manner.
Other terminal benefits are recognized as an expense as and when incurred. j) Provision, Contingent Liabilities and Contingent Assets
Provisions are recognized when there is a present obligation as a result of a past event it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. Contingent Liabilities are disclosed, unless the possibility of any outflow in settlement is remote, in the notes on Accounts. Contingent assets are neither recognized nor disclosed.
k) Taxes on Income
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of Income Tax Act, 1961. Deferred Tax is recognized, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized if there is virtual certainty that there will be sufficient future taxable income available to realise such losses.
l) Foreign Exchange Transactions
Transactions in foreign exchange are initially recognized at the rates prevailing on the dates of transactions.
Premium or discount arising at the inception of forward contract is amortized as income or expense over the life of the contract. Exchange difference on such contract is recognized in the reporting period in which exchange rates change.
Foreign Currency Liabilities/ assets at the close of the year are restated, adopting the contracted/year-end rates, as applicable. Resultant exchange difference is recognized as income or expense in that period.
m) Insurance Claims
Insurance claims are accounted on the basis of claims lodged and accepted. n) Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.
o) Impairment of Assets
Impairment loss, if any, is provided to the extent the carrying amount of assets exceed their recoverable amount.
p) Earnings per share
Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q) Segment Reporting
The accounting policies adopted for segment reporting are in line with the accounting policies of the company.
Revenue and expenses are identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under âunallowableâ.
There are no inter segment revenue and therefore their basis of measurement does not arise.
r) Derivatives
The Company enters into Futures Contracts in Silver to hedge the price risk consistent with its Risk Management Policy. The Company does not use these contracts for speculative purpose.
Losses in respect of the Futures Contracts as at the Balance Sheet date are charged to Statement of Profit and Loss by marking them to market, while gains are ignored.
s) Leases
Leases where the less or effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating lease. Operating Lease payments are recognized as an expense in the revenue account as per the lease terms.
Mar 31, 2015
A) Accounting Concepts
The accounts are prepared under historical cost convention in
accordance with generally accepted accounting principles and applicable
Accounting Standards.
b) Use of Estimates
Estimates and assumptions made by Management in the preparation of
Financial Statements have a bearing on reported amounts of Financial
Results, Assets & Liabilities and the disclosure of Contingent
Liabilities. Actual results could differ from those estimates. Any
revision to accounting estimate is recognized prospectively.
c) Revenue Recognition
Revenue is recognized and expenditure is accounted for on their
accrual. Excise duty recovery from customer is deducted from Gross
Turnover. Excise duty differential between closing and opening stock of
excisable goods is included under other expenses.
Revenue from domestic sale is recognized on delivery to the carrier,
when risk and rewards of ownership pass on to the customers.
Revenue from export sales is recognized when risk and rewards are
passed on to the customers in accordance with the terms of the
contract.
Dividend income is recognized when the right to receive payment is
established.
Other items of income are recognized when there is no significant
uncertainty as to measurability or collectability.
d) Fixed Assets
Fixed Assets are stated at cost less depreciation. Cost includes, taxes
and duties (but does not include taxes and duties for which CENVAT /
VAT credit is available), freight and other direct or allocated
expenses and interest and finance charges on related borrowings during
construction period.
Any income earned during construction period is netted against cost of
the Project.
e) Depreciation
Depreciation on Tangible Fixed Assets (other than Plant & Machinery
relating to Lead Acid Battery Division) is provided under Straight Line
Method in accordance with Schedule II to the Companies Act, 2013,
adopting the useful life for assets as specified therein and reckoning
the residual value at 5% of the original cost of the asset.
In respect of Plant & Machinery relating to Lead Acid Battery Division,
the useful life of the asset has been determined based on the technical
evaluation and accordingly depreciation has been provided.
f) Inventories
Inventories are stated at lower of cost and net realisable value. Cost
includes all costs of purchase, cost of conversion and other costs
incurred in bringing the inventories to their present location and
condition net off CENVAT/VAT credit entitlement. The cost is arrived on
weighted average basis. Tools cost is written off over a period of
three years.
g) Investment
Long term investments are stated at cost. Any diminution in the value
of long term investments is charged to Profit and Loss Account, if such
a decline is other than temporary in the opinion of the Management.
h) Research and Development Expenditure
Expenditure incurred on Scientific Research, other than Capital
Expenditure, are written off to revenue in the year in which they are
incurred. Capital Expenditure is added to the Cost of Fixed Assets and
depreciated accordingly.
i) Employee Benefits
Short term Employee benefits are charged at the undiscounted amount to
Profit and Loss account in the year in which related service is
rendered.
Contributions to defined contribution schemes towards retirement
benefits in the form of provident fund and superannuation fund for the
year are charged to profit and loss account as incurred.
Liabilities in respect of defined benefit plans are determined based on
actuarial valuation made by an independent actuary. Actuarial gains or
losses are recognized immediately in the profit and loss account.
Obligation for leave encashment is recognized in the same manner.
Other terminal benefits are recognised as an expense as and when
incurred.
j) Provision, Contingent Liabilities and Contingent Assets
Provisions are recognised when there is a present obligation as a
result of a past event it is probable that an outflow of resources will
be required to settle the obligation and in respect of which reliable
estimate can be made. Contingent Liabilities are disclosed, unless the
possibility of any outflow in settlement is remote, in the notes on
Accounts. Contingent assets are neither recognised nor disclosed.
k) Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of Income Tax Act,
1961. Deferred Tax is recognised, on timing difference, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods. Deferred Tax assets in respect of unabsorbed depreciation and
carry forward of losses are recognised if there is virtual certainty
that there will be sufficient future taxable income available to
realise such losses.
l) Foreign Exchange Transactions
Transactions in foreign exchange are initially recognised at the rates
prevailing on the dates of transactions.
Premium or discount arising at the inception of forward contract is
amortised as income or expense over the life of the contract. Exchange
difference on such contract is recognised in the reporting period in
which exchange rates change.
Foreign Currency Liabilities/ assets at the close of the year are
restated, adopting the contracted/year-end rates, as applicable.
Resultant exchange difference is recognised as income or expense in
that period.
m) Insurance Claims
Insurance claims are accounted on the basis of claims lodged and
accepted.
n) Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition,
construction or production of qualifying assets are capitalised as part
of the cost of that asset. Other borrowing costs are recognised as an
expense in the period in which they are incurred.
o) Impairment of Assets
Impairment loss, if any, is provided to the extent the carrying amount
of assets exceed their recoverable amount.
p) Earnings per share
Earnings per share is calculated by dividing the net profit or loss for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
q) Segment Reporting
The accounting policies adopted for segment reporting are in line with
the accounting policies of the company.
Revenue and expenses are identified to segments on the basis of their
relationship to the operating activities of the segment. Revenue,
expenses, assets and liabilities which relate to the enterprise as a
whole and are not allocable to segments on a reasonable basis have been
included under "unallocable".
There are no inter segment revenue and therefore their basis of
measurement does not arise.
r) Derivatives
The Company enters into Futures Contracts in Silver to hedge the price
risk consistent with its Risk Management Policy. The Company does not
use these contracts for speculative purpose.
Losses in respect of the Futures Contracts as at the Balance Sheet date
are charged to Statement of Profit and Loss by marking them to market,
while gains are ignored.
s) Leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased assets are classified as
operating lease. Operating Lease payments are recognized as an expense
in the revenue account as per the lease terms.
Rupee Term Loan from Banks including current maturities (Vide Note No
9) are secured by Paripassu First charge on movable and immovable fixed
assets of the Lead Acid Battery Facility and Paripassu Second charge on
all other existing movable and immovable fixed assets of the Company.
Car loan is secured by the hypothecation of the vehicle financed.
Rupee Term Loan is repayable as detailed below :
CANARA BANK :
Term Loan 1 20 Quarterly Instalments of Rs 12.50 Lakhs each @ 12.70%
p.a. commencing from 31st Mar 2011.
Term Loan 2 20 Quarterly Instalments of Rs 1.25 Lakhs each @ 13.45%
p.a. commencing from 31st May 2011.
Working Capital borrowings from Banks are secured by :
a) Paripassu first charge on all stocks of Raw Materials, Finished
Goods, Stock in Process, Stores, Spares and movable assets of the
company.
b) Paripassu first charge on all immovable fixed assets of the company
excepting those pertaining to Lead Acid Battery Facility.
c) Paripassu second charge on all movable and immovable fixed assets of
the Lead Acid Battery Facility.
d) Lien on Fixed Deposits (including interest) aggregating to Rs 64.65
Lakhs.
Micro and Small Enterprises under the Micro, Small and Medium
Enterprises Development Act, 2006 have been determined to the extent
such parties have been identified on the basis of information available
with the Company. There are no over dues to such parties.
* Includes overdue instalment due on March 2015 amounting to Rs 140.00
Lakhs
** No amount is due and outstanding to be credited to Investor
Education and Protection Fund.
Mar 31, 2013
A) Accounting Concepts
The accounts are prepared under historical cost convention in
accordance with generally accepted accounting principles and applicable
Accounting Standards.
b) Use of Estimates
Estimates and assumptions made by Management in the preparation of
Financial Statements have a bearing on reported amounts of Financial
Results, Assets & Liabilities and the disclosure of Contingent
Liabilities. Actual results could differ from those estimates. Any
revision to accounting estimate is recognized prospectively.
c) Revenue Recognition
Revenue is recognized and expenditure is accounted for on their
accrual. Excise duty recovery from customer is deducted from Gross
Turnover .Excise duty differential between closing and opening stock of
excisable goods is included under other expenses.
Revenue from domestic sale is recognized on delivery to the carrier,
when risk and rewards of ownership pass on to the customer.
Revenue from Export sales is recognized when risk and rewards are
passed on to the customer in accordance with the terms of the contract.
Dividend income is recognized when the right to receive payment is
established.
Other items of income are recognized when there is no significant
uncertainty as to measurability or collectability.
d) Fixed Assets
Fixed Assets are stated at cost less depreciation. Cost includes, taxes
and duties (but does not include taxes and duties for which CENVAT /
VAT credit is available), freight and other direct or allocated
expenses and interest and finance charges on related borrowings during
construction period.
Any income earned during construction period is netted against cost of
the Project.
e) Depreciation
The assets, with the exception of plant and machinery, are depreciated
on written down value basis. Plant and Machinery are depreciated on
straight-line method. Depreciation is provided in accordance with
Schedule XIV of the Companies Act 1956.
f) Inventories
Inventories are stated at lower of cost and net realisable value. Cost
includes all costs of purchase, cost of conversion and other costs
incurred in bringing the Inventories to their present location and
condition net off CENVAT/VAT credit entitlement. The cost is arrived on
weighted average basis. Tools cost is written off over a period of
three years.
g) Investment
Long term investments are stated at cost. Any diminution in the value
of Long term investments is charged to Profit and Loss Account, if such
a decline is other than temporary in the opinion of the Management.
h) Research and Development Expenditure
Expenditure incurred on Scientific Research, other than Capital
Expenditure, are written off to revenue in the year when they are
incurred. Capital Expenditure is added to the Cost of Fixed Assets and
depreciated accordingly.
i) Employee Benefits
Short term Employee benefits are charged at the undiscounted amount to
Profit and Loss account in the year in which related service is
rendered.
Contributions to defined contribution schemes towards retirement
benefits in the form of provident fund and super annuation fund for the
year are charged to profit and loss account as incurred.
Liabilities in respect of defined benefit plans are determined based on
actuarial valuation made by an independent actuary using Projected Unit
Credit Method as at the balance sheet date. Actuarial gains or losses
are recognized immediately in the profit and loss account. Obligation
for leave encashment is recognized in the same manner.
Other Terminal benefits are recognised as an expense as and when
incurred.
j) Provision, Contingent Liabilities and Contingent Assets
Provisions are recognised when there is a present obligation as a
result of a past event it is probable that an outflow of resources will
be required to settle the obligation and in respect of which reliable
estimate can be made. Contingent Liabilities are disclosed in the notes
on Accounts, unless the possibility of any outflow in settlement is
remote. Contingent assets are neither recognised nor disclosed.
k) Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of Income Tax Act,
1961. Deferred Tax is recognised, on timing difference, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods. Deferred Tax assets in respect of unabsorbed depreciation and
carry forward of losses are recognised if there is virtual certainty
that there will be sufficient future taxable income available to
realise such losses.
l) Foreign Exchange Transactions
Transactions in foreign exchange are initially recognised at the rates
prevailing on the dates of transactions.
Premium or discount arising at the inception of forward contract is
amortised as income or expense over the life of the contract. Exchange
difference on such contract is recognised in the reporting period in
which exchange rates change.
Foreign Currency Liabilities/ Assets at the close of the year are
restated, adopting the contracted/year-end rates, as applicable.
Resultant exchange difference is recognised as income or expense in
that period.
m) Insurance Claims
Insurance claims are accounted on the basis of claims lodged and
accepted.
n) Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition,
construction or production of qualifying assets are capitalised as part
of the cost of that asset. Other borrowing costs are recognised as an
expense in the period in which they are incurred.
o) Impairment of Assets
Impairment loss, if any, is provided to the extent the carrying amount
of assets exceeds their recoverable amount.
p) Earnings per share
Earnings per share is calculated by dividing the net profit or loss for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
q) Segment Reporting
The accounting policies adopted for segment reporting are in line with
the accounting policies of the company.
Revenue and expenses are identified to segments on the basis of their
relationship to the operating activities of the segment. Revenue,
expenses, assets and liabilities which relate to the enterprise as a
whole and are not allocable to segments on a reasonable basis have been
included under "unallocableÂ.
There are no inter segment revenue and therefore their basis of
measurement does not arise.
r) Derivatives
The Company enters into Futures Contracts in Silver to hedge the price
risk consistent with its Risk Management Policy. The Company does not
use these contracts for speculative purpose.
Lossess in respect of the Futures Contracts as at the Balance Sheet
date are charged to Statement of Profit and Loss by marking them to
market, while gains are ignored.
Mar 31, 2012
A) Accounting Concepts
The accounts are prepared under historical cost convention in
accordance with generally accepted accounting principles and applicable
Accounting Standards.
b) Use of Estimates
Estimates and assumptions made by Management in the preparation of
Financial Statements have a bearing on reported amounts of Financial
Results, Assets & Liabilities and the disclosure of Contingent
Liabilities. Actual results could differ from those estimates. Any
revision to accounting estimate is recognized prospectively.
c) Revenue Recognition
Revenue is recognized and expenditure is accounted for on their
accrual. Excise duty recovery from customer is deducted from Gross
Turnover .Excise duty differential between closing and opening stock of
excisable goods is included under other expenses. Revenue from
domestic sale is recognized on delivery to the carrier, when risk and
rewards of ownership pass on to the customer.
Revenue from Export sales is recognized when risk and rewards are
passed on to the customer in accordance with the terms of the contract.
Dividend income is recognized when the right to receive payment is
established.
Other items of income are recognized when there is no significant
uncertainty as to measurability or collectability.
d) Fixed Assets
Fixed Assets are stated at cost less depreciation. Cost includes, taxes
and duties (but does not include taxes and duties for which CENVAT /
VAT credit is available), freight and other direct or allocated
expenses and interest and finance charges on related borrowings during
construction period.
Any income earned during construction period is netted against cost of
the Project.
e) Depreciation
The assets, with the exception of plant and machinery, are depreciated
on written down value basis. Plant and Machinery are depreciated on
straight-line method. Depreciation is provided in accordance with
Schedule XIV of the Companies Act 1956.
f) Inventories
Inventories are stated at lower of cost and net realizable value. Cost
includes all costs of purchase, cost of conversion and other costs
incurred in bringing the Inventories to their present location and
condition net off CENVAT/VAT credit entitlement. The cost is arrived on
weighted average basis. Tools cost is written off over a period of
three years.
g) Investment
Long term investments are stated at cost. Any diminution in the value
of Long term investments is charged to Profit and Loss Account, if such
a decline is other than temporary in the opinion of the Management.
h) Research and Development Expenditure
Expenditure incurred on Scientific Research, other than Capital
Expenditure, are written off to revenue in the year when they are
incurred. Capital Expenditure is added to the Cost of Fixed Assets and
depreciated accordingly.
i) Employee Benefits
Short term Employee benefits are charged at the undiscounted amount to
Profit and Loss account in the year in which related service is
rendered.
Contributions to defined contribution schemes towards retirement
benefits in the form of provident fund and super annotation fund for the
year are charged to profit and loss account as incurred.
Liabilities in respect of defined benefit plans are determined based on
actuarial valuation made by an independent actuary using Projected Unit
Credit Method as at the balance sheet date. Actuarial gains or losses
are recognized immediately in the profit and loss account. Obligation
for leave encashment is recognized in the same manner.
Other Terminal benefits are recognized as an expense as and when
incurred, j) Provision, Contingent Liabilities and Contingent Assets
Provisions are recognized when there is a present obligation as a
result of a past event it is probable that an outflow of resources will
be required to settle the obligation and in respect of which reliable
estimate can be made. Contingent Liabilities are disclosed, in the
notes on Accounts, unless the possibility of any outflow in settlement
is remote, contingent assets are neither recognized nor disclosed.
k) Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of Income Tax Act,
1961. Deferred Tax is recognized, on timing difference, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods. Deferred Tax assets in respect of unabsorbed depreciation and
carry forward of losses are recognized if there is virtual certainty
that there will be sufficient future taxable income available to
realize such losses.
I) Foreign Exchange Transactions
Transactions in foreign exchange are initially recognized at the rates
prevailing on the dates of transactions.
Premium or discount arising at the inception of forward contract is
amortized as income or expense over the life of the contract. Exchange
difference on such contract is recognized in the reporting period in
which exchange rates change.
Foreign Currency Liabilities/ assets at the close of the year are
restated, adopting the contracted/year-end rates, as applicable.
Resultant exchange difference is recognized as income or expense in
that period.
m) Insurance Claims
Insurance claims are accounted on the basis of claims lodged and
accepted, n) Borrowing Costs Borrowing Costs that are directly
attributable to the acquisition, construction or production of
qualifying assets are capitalized as part of the cost of that asset.
Other borrowing costs are recognized as an expense in the period in
which they are incurred.
o) Impairment of Assets
Impairment loss, if any, is provided to the extent the carrying amount
of assets exceeds their recoverable amount.
p) Earnings per share
Earnings per share is calculated by dividing the net profit or loss for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
q) Segment Reporting
The accounting policies adopted for segment reporting are in line with
the accounting policy of the company.
Revenue and expenses are identified to segments on the basis of their
relationship to the operating activities of the segment. Revenue,
expenses, assets and liabilities which relate to the enterprise as a
whole and are not allocable to segments on a reasonable basis have been
included under "unallowable.
There are no inter segment revenue and therefore their basis of
measurement does not arise.
r) Derivatives
The Company enters into Futures Contracts in Silver to hedge the price
risk consistent with its Risk Management Policy. The Company does not
use these contracts for speculative purpose.
Losses in respect of the Futures Contracts as at the Balance Sheet
date are charged to Statement of Profit and Loss by marking them to
market, while gains are ignored.
The Rupee Term Loan including current maturities (Vide Note No 10) are
secured by First charge on movable and immovable fixed assets of the
Lead Acid Battery Facility and Second charge on all other existing
movable and immovable fixed assets of the Company.
Mar 31, 2011
A) Accounting Concepts
The accounts are prepared under historical cost convention and in
accordance with generally accepted accounting principles and complying
with the applicable Accounting Standards.
b) Revenue Recognition
Revenue is recognised and expenditure is accounted for on their
accrual.
Excise duty recovery from customer is deducted from Gross Turnover.
Revenue from domestic sale is recognized on delivery to the carrier,
when risk and rewards of ownership pass on to the customer.
Revenue from Export sales is recognized when risk and rewards are
passed on to the customer in accordance with the terms of the contract.
Dividend income is recognized when the right to receive payment is
established.
Other items of income are recognized when there is no significant
uncertainty as to measurability or collectability.
c) Use of Estimates
Estimates and assumptions made by management in the preparation of
Financial Statements have a bearing on reported amounts of Financial
Results, Assets & Liabilities and the disclosure of Contingent
Liabilities. Actual results could differ from those estimates. Any
revision to accounting estimate is recognized prospectively.
d) Fixed Assets
Fixed Assets are stated at cost less depreciation. Cost includes, taxes
and duties (but does not include taxes and duties for which CENVAT /
VAT credit is available), freight and other direct or allocated
expenses and interest and finance charges on related borrowings during
construction period.
Any income earned during construction period is netted against cost of
the Project.
e) Depreciation
The assets, with the exception of plant and machinery, are depreciated
on written down value basis. Plant and Machinery are depreciated on
straight-line method. Depreciation is provided in accordance with
Schedule XIV of the Companies Act 1956.
f) Inventories
Inventories are stated at lower of cost and net realisable value. Cost
includes all costs of purchase, cost of conversion and other costs
incurred in bringing the Inventories to their present location and
condition net off CENVAT/VAT credit entitlement. The cost is arrived on
weighted average basis. Tools cost is written off over a period of
three years.
g) Investment
Long term investments are stated at cost. Any diminution in the value
of Long term investments is charged to Profit and Loss Account, if such
a decline is other than temporary in the opinion of the Management.
h) Research and Development Expenditure
Expenditure incurred on Scientific Research, other than Capital
Expenditure, are written off to revenue in the year when they are
incurred. Capital Expenditure is added to the Cost of Fixed Assets and
depreciated accordingly.
i) Employee Benefits
Short term Employee benefits are charged at the undiscounted amount to
Profit and Loss account in the year in which related service is
rendered.
Contributions to defined contribution schemes towards retirement
benefits in the form of provident fund and super annuation fund for the
year are charged to profit and loss account as incurred.
Liabilities in respect of defined benefit plans are determined based on
actuarial valuation made by an independent actuary using Projected Unit
Credit Method as at the balance sheet date. Actuarial gains or losses
are recognized immediately in the profit and loss account. Obligation
for leave encashment is recognized in the same manner.
Terminal benefits are recognized as an expense as and when incurred.
j) Provision, Contingent Liabilities and Contingent Assets
Provisions are recognised when there is a present obligation as a
result of a past event it is probable that an outflow of resources will
be required to settle the obligation and in respect of which reliable
estimate can be made. Contingent Liabilities are disclosed, unless the
possibility of any outflow in settlement is remote, in the notes on
Accounts. Contingent Assets are neither recognised nor disclosed.
k) Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of Income Tax Act,
1961. Deferred Tax is recognised, on timing difference, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods. Deferred Tax assets in respect of unabsorbed depreciation and
carry forward of losses are recognised if there is virtual certainty
that there will be sufficient future taxable income available to
realise such losses.
I) Foreign Exchange Transactions
Transactions in foreign exchange are initially recognised at the rates
prevailing on the dates of transactions.
Premium or discount arising at the inception of forward contract is
amortised as income or expense over the life of the contract. Exchange
difference on such contract is recognized in the reporting period in
which exchange rates change.
Foreign Currency Liabilities/ Assets at the close of the year are
restated, adopting the contracted/year-end rates, as applicable.
Resultant exchange difference is recognized as income or expense in
that period.
m) Insurance Claims
Insurance claims are accounted on the basis of claims lodged and
accepted.
n) Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition,
construction or production of qualifying assets are capitalised as part
of the cost of that asset. Other borrowing costs are recognised as an
expense in the period in which they are incurred.
o) Impairment of Assets
Impairment loss, if any, is provided to the extent the carrying amount
of assets exceeds their recoverable amount.
p) Earnings per share
Earnings per share is calculated by dividing the net profit or loss for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
q) Segment Reporting
The accounting policies adopted for segment reporting are in line with
the accounting policy of the company.
Revenue and expenses are identified to segments on the basis of their
relationship to the operating activities of the segment. Revenue,
expenses, assets and liabilities which relate to the enterprise as a
whole and are not allocable to segments on a reasonable basis have been
included under "unallocable".
There are no inter segment revenue and therefore their basis of
measurement does not arise.
r) Derivatives
The Company enters into Futures Contracts in Silver to hedge price risk
consistent with its Risk Management Policy. The Company does not use
these contracts for speculative purpose.
Gains / losses on the futures contracts are recognized on settlement
during the year. Provision is made for losses in respect of all
outstanding derivative contracts as at the balance sheet date by
marking them to market, while gains are ignored.
Mar 31, 2010
A) Accounting Concepts
The accounts are prepared under historical cost convention and in
accordance with generally accepted accounting principles and complying
with the applicable Accounting Standards.
b) Revenue Recognition
Revenue is recognised and expenditure is accounted for on their
accrual.
Excise duty recovery from customer is deducted from Turnover (Gross):
Revenue from domestic sale is recognized on delivery to the carrier,
when risk and rewards of ownership pass on to the customer.
Revenue from Export sales is recognized when risk and rewards are
passed on to the customer in accordance with the terms of the contract.
Dividend income is recognized when the right to receive payment is
established.
Other items of income are recognized when there is no significant
uncertainty as to measurability or collectability.
c) Use of Estimates
Estimates and assumptions made by management in the preparation of
Financial Statements have a bearing on reported amounts of Financial
Results, Assets & Liabilities and the disclosure of Contingent
Liabilities. Actual results could differ from those estimates. Any
revision to accounting estimate is recognized prospectively.
d) Fixed Assets
Fixed Assets are stated at cost less depreciation. Cost includes, taxes
and duties (but does not include taxes and duties for which CENVAT /
VAT credit is available), freight and other direct or allocated
expenses and interest and finance charges on related borrowings during
construction period.
Any income earned during construction period is netted against cost of
the Project.
e) Depreciation
The assets, with the exception of plant and machinery, are depreciated
on written down value basis. Plant and Machinery are depreciated on
straight-line method. Depreciation is provided in accordance with
Schedule XIV of the Companies Act 1956.
f) Inventories
Inventories are stated at lower of cost and net realisable value. Cost
includes all costs of purchase, cost of conversion and other costs
incurred in bringing the Inventories to their present location and
condition net off CENVAT/VAT credit entitlement. The cost is arrived on
weighted average basis. Tools cost is written off over a period of
three years.
g) Investment
Long term investments are stated at cost. Any diminution in the value
of Long term investments is charged to Profit and Loss Account, if such
a decline is other than temporary in the opinion of the Management.
h) Research and Development Expenditure
Expenditure incurred on Scientific Research,other than Capital
Expenditure, are written off to revenue in the year when they are
incurred. Capital Expenditure is added to the Cost of Fixed Assets and
depreciated accordingly.
i) Employee Benefits
Short term Employee benefits are charged at the undiscounted amount to
Profit and Loss account in the year in which related service is
rendered.
Contributions to defined contribution schemes towards retirement
benefits in the form of provident fund and super annuation fund for the
year are charged to profit and loss account as incurred.
Liabilities in respect of defined benefit plans are determined based on
actuarial valuation made by an independent actuary using Projected Unit
Credit Method as at the balance sheet date. Actuarial gains or losses
are recognized immediately in the profit and loss account. Obligation
for leave encashment is recognized in the same manner.
Terminal benefits are recognized as an expense as and when incurred.
j) Provision, Contingent Liabilities and Contingent Assets
Provisions are recognised when there is a present obligation as a
result of a past event it is probable that an outflow of resources will
be required to settle the obligation and in respect of which reliable
estimate can be made. Contingent Liabilities are disclosed, unless the
possibility of any outflow in settlement is remote, in the notes on
Accounts. Contingent Assets are neither recognised nor disclosed.
k) Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of Income Tax Act,
1961. Deferred Tax is recognised, on timing difference, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods. Deferred Tax assets in respect of unabsorbed depreciation and
carry forward of losses are recognised if there is virtual certainty
that there will be sufficient future taxable income available to
realise such losses.
l) Foreign Exchange Transactions
Transactions in foreign exchange are initially recognised at the rates
prevailing on the dates of transactions.
Premium or discount arising at the inception of forward contract is
amortised as income or expense over the life of the contract. Exchange
difference on such contract is recognized in the reporting period in
which exchange rates change.
Foreign Currency Liabilities/ Assets at the close of the year are
restated, adopting the contracted/year-end rates, as applicable.
Resultant exchange difference is recognized as income or expense in
that period.
m) Insurance Claims
Insurance claims are accounted on the basis of claims lodged and
accepted.
n) Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition,
construction or production of qualifying assets are capitalised as part
of the cost of that asset. Other borrowing costs are recognised as an
expense in the period in which they are incurred.
o) Impairment of Assets
Impairment loss, if any, is provided to the extent the carrying amount
of assets exceeds their recoverable amount.
p) Earnings per share
Earnings per share is calculated by dividing the net profit or loss for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
q) Segment Reporting
The accounting policies adopted for segment reporting are in line with
the accounting policy of the company.
Revenue and expenses are identified to segments on the basis of their
relationship to the operating activities of the segment. Revenue,
expenses, assets and liabilities which relate to the enterprise as a
whole and are not allocable to segments on a reasonable basis have been
included under "unallocable".
There are no inter segment revenue and therefore their basis of
measurement does not arise.
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