Mar 31, 2018
1 (i) Significant accounting policies
a. Statement of Compliance
The financial statements of the company have been prepared in accordance with the Indian Accounting Standards(Ind AS) specified under section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standard) Rules, 2015.
The company has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101 First time adoption of Indian Accounting standards. Up to the year ended 31 March, 2017, the company prepared its financial statements in accordance with the requirements of Previous GAAP which includes accounting standards notified under the Companies (Accounting Standard) Rules, 2006. These are companyâs first Ind AS financial statement. The date of transition to Ind AS is April 1, 2016. The detail of optional exemption and certain exemption availed on first time adoption are mentioned in Note 39.
b. Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention on accrual basis except for certain financial instruments which are measured at fair value, the provisions of the Companies Act, 2013( âthe Actâ) (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
c. Functional and presentation currency
The functional currency of the company is Indian rupee (INR). These financial statements are presented in Indian rupee.
d. Use of estimates and judgements
The preparation of financial statements, in conformity with Ind AS requires management to make estimates, judgements and assumptions. These estimates, judgements and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. The application of accounting policies that require critical accounting estimates involving complex and subjective judgement and use of assumption in these financial statements have been disclosed in notes. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management become aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made, and if material their effects are disclosed in the notes to the financial statements.
e. Revenue Recognition
i) Sale of goods:
Revenue from sale of goods is recognised at the time of transfer of all significant risks and rewards of ownership to the buyer and when the company does not retain effective control on the goods transferred to a degree usually associated with ownership; and cost has been incurred and it is probable that the economic benefit will flow to the company and the amount of revenue can be measured reliably.
In accordance with Ind AS 18 on âRevenueâ and Schedule III to the Companies Act, 2013, sales for the previous year ended 31 March 2017 and for the period 1 April to 30 June 2017 were reported gross of Excise Duty and net of VAT/ CST. Excise Duty was reported as a separate expense line item. Consequent to the introduction of Goods and Services Tax (GST) with effect from 1 July 2017, VAT/CST, Excise Duty etc. have been subsumed into GST and accordingly the same is not recognised as part of sale of goods.
ii) Export incentives
The revenue in respect of export benefits is recognised on post export basis at the rate at which the entitlements accrue.
iii) Dividend
Dividend income from investment is recognised when the right to receive the payment is established.
iv) Interest
Interest from customer
Revenue from interest is recognised on a time proportion basis taking into account the amount outstanding and rate applicable.
Other Interest
Interest income is recognised using effective interest rate (EIR).
v) Insurance and other claims
Insurance and other claims are recognized when there exist no significant uncertainty with regard to the amount to be realized and the ultimate collection thereof.
f. Employee benefits
i) Provident Fund:
Employees receive benefit in the form of provident fund which is a defined contribution plan. The company has no obligation, other than the contribution payable to the provident fund. The company recognises contribution payable to the provident fund scheme as an expense, when an employee renders the related service.
ii) Gratuity:
The Company provides for gratuity a defined benefit retirement plan âThe gratuity planâ covering eligible employees. The gratuity plan provides for lump sum payment to vested employee at retirement, death, incapacitation or termination of employee of an amount based on the respective employeesâ salary and the tenure of employment with the company.
Liability with regard to gratuity plan is determined by actuarial valuation, performed by an independent actuary at each Balance sheet date using the project unit credit method.
The company fully contributes all ascertained liabilities to the IOL Chemicals and Pharmaceuticals Limited Group Gratuity Trust. Contributions are invested in a scheme with Life Corporation of India as permitted by Indian Law.
The company recognises the net obligation of a defined plan in its balance sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability/(asset) are recognized in other comprehensive income and are not reclassified to profit or loss in subsequent periods. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligations is recognized in other comprehensive income.
iii) Compensated absences
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as a liability at the balance sheet date, the cost of providing benefit is determined based on actuarial valuation using projected unit credit method. Actuarial gain /loss are recognised in the statement of profit or loss in the period in which they occur.
g. Property, plant and equipment
As transition to Ind AS, the company has elected to continue with the carrying value of all items of its property, plant and equipment measured as per previous GAAP as at 1 April, 2016 as the deemed cost on the date of transition.
Freehold land is stated at cost and not depreciated. All other items of property, plant and equipment are stated at cost less accumulated depreciation and impairment if any. The cost of an item of property, plant and equipment comprises:
a) its purchase price net of recoverable taxes where applicable and any attributable expenditure (directly or indirectly) for bringing the asset to its working condition for its intended use.
b) Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the company and the cost of the item can be measured reliably.
c) Initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, if any, the obligation for which an entity incurs either where the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period.
Depreciation on property plant and equipment is provided on straight line method on the basis of useful lives of such assets specified in Part C of Schedule II to the Companies Act, 2013.
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets and the cost of assets not put to use before such date are disclosed under âcapital work-in-progressâ. The depreciation method, useful lives and residual value are reviewed periodically and at the end of each reporting period.
h. Intangible assets
Intangible assets are stated at cost less accumulated amount of amortisation and impairment if any. Intangible assets are amortised over their respective individual estimated useful lives on a straight line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence etc. The amortization method, estimated useful lives are reviewed periodically and at end of each reporting period.
i. Inventories
Inventories are valued at cost or net realisable value whichever is lower. The cost in respect of various items of inventories is computed as under:
j. Government Grants
The government grants are recognised only when there is a reasonable assurance of compliance that conditions attached to such grants shall be complied with and it is reasonably certain that the ultimate collection will be made.
Government grants related to revenue are recognised on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs which they are intended to compensate. Government grant in relation to fixed asset is treated as deferred income and is recognised in the statement of profit and loss on a systematic basis over the useful life of the asset.
k. Borrowing costs
Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalised as a part of cost of such asset. Qualifying asset is one that takes substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expenditure in the period in which these are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange difference to the extent regarded as an adjustment to the borrowing cost.
l. Segment information
Segment information is prepared in conformity with the accounting policies adopted for preparing and presenting the financial of the enterprise as a whole.
m. Leases
Leases under which the company assumes substantially all the risks and rewards of ownership are classified as finance leases. All other leases are classified as operating lease.
Lease payments under operating leases are recognized as an expense on a straight line basis in the statement of profit and loss over the term of lease. n. Foreign currency transactions
Transactions in foreign currency are recorded, on initial recognition in the functional currency, by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Monetary items denominated in foreign currency are reported using the closing exchange rate as on balance sheet date.
Exchange differences arising on the settlement of monetary items or on reporting of monetary items at rates different from rates at which these were translated on initial recognition during the period or reported in previous financial statements as recognised in the statement of profit or loss in the period in which they arise.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statements of profit and loss, within finance cost. All other foreign exchange gains and losses are presented in the statement of profit and loss on net basis. Non-monetary items are measured in terms of historical cost in a foreign currency is translated using the exchange rate at the date of the transaction.
o. Accounting for taxes on income
Income tax expense comprises of current and deferred income tax. Income tax expense is recognized in net profit in the statement of profit and loss except to the extent that it relates to items recognised directly in equity, or items is recognized in other comprehensive income. In such cases, the income tax expense is also recognised in the other comprehensive income or directly in the equity as applicable.
Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.
Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date.
A deferred income tax asset is recognized only to the extent that it is probable that future taxable profit will be available against which such assets can be realised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
The company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period for which the MAT credit can be carried forward for set off against the normal tax liability. The said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT credit entitlement grouped with deferred tax assets (net) in the financial statement.
p. Earnings per share
Basic earnings per share are computed by dividing the net profit or loss for the period 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 shareholder and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares, if any. q. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
i. Initial recognition and measurement
All financial assets and liabilities are recognized at fair value on initial recognition.
Transaction cost in relation to financial assets and financial liabilities other than those carried at fair value through profit or loss (FVTPL) are added to the fair value on initial recognition.
Transaction cost that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are carried at fair value through profit or loss are immediately recognized in the statement of profit or loss.
ii. Subsequent measurement
- Non-derivative financial instruments
1. Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
2. Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The company has made an irrevocable election for its investment which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model. Further, in cases where the company has made an irrevocable election based on its business model, for its investment which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.
3. Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the above categories is subsequently measured at fair value through profit or loss.
4. Financial liabilities
The financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
- Financial assets or financial liability at fair value through profit or loss
This category has financial assets or liabilities which are not designated as hedges.
Although the company believes that these derivatives constitute hedges from an economic perspective, they may not qualify for hedge accounting under Ind AS 109, âFinancial Instrumentsâ. Any derivative that is either not designated a hedge, or is so designated but is ineffective as per Ind AS-109, is categorized as a financial asset or financial liability, at fair value through profit or loss.
Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are recognized in net profit in the statement of profit and loss when incurred. Subsequent to initial recognition, these derivatives are measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income. Assets/ liabilities in this category are presented as current assets/current liabilities if they are either held for trading or are expected to be realized within 12 months after the balance sheet date.
- Cash flow hedge
The Company has not designated derivative financial instruments as cash flow hedges.
- Equity share capital Equity Shares
Equity shares issued by the company are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.
De-recognition of financial instruments A financial asset is derecognized when the contractual rights to the cash flows from
the financial asset expire or it transfers the financial asset and the transfer qualifies for De-recognition under Ind AS 109.
A financial liability is derecognized when the obligation specified in the contract is discharged or cancelled or expires.
Fair value of financial instruments
The fair value of financial instruments is determined using the valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
Based on the three level fair value hierarchy, the methods used to determine the fair value of financial assets and liabilities include quoted market price, discounted cash flow analysis and valuation certified by the external valuer.
In case of financial instruments where the carrying amount approximates fair value due to the short maturity of those instruments, carrying amount is considered as fair value. r. Impairment of assets
i) Financial assets
The company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss.
Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in statement of profit or loss.
ii) Impairment of property, plant and equipment and intangible assets
Property, plant and equipment and intangible assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU (Cash Generating unit) to which the asset belongs. If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated depreciation) had no impairment loss been recognized for the asset in prior years.
s. Cash flow statement
The cash flow statement is prepared in accordance with the Indian Accounting Standard (Ind AS) - 7 âStatement of Cash flowsâ using the indirect method for operating activities.
t. Cash and cash equivalent
Cash and cash equivalent for the purpose of statement of cash flows include bank balances, where the original maturity is three months or less. Other short term highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are included as a component of cash and cash equivalent for the purpose of statement of cash flow.
u. Provisions and contingent liabilities
A provision is recognized if, as a result of past event, the company has a present obligation (legal or constructive) and on management judgement that is reasonably estimable and it is probable that an outflow of economic benefits will be required to settle the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as finance cost.
Contingent liability is disclosed in the case of:
- A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;
- A present obligation arising from past events, when no reliable estimate is possible;
- A possible obligation arising from past events, unless the probability of outflow of resources is remote.
Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets. Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
v. Current and non -current classification
The company has ascertained its operating cycle as twelve months for the purpose of current / non-current classification of assets and liabilities. This is based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents.
Mar 31, 2016
1. Corporate information
IOL Chemicals and Pharmaceuticals Limited (The Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956 on 29th September 1986. Its shares are listed on two stock exchanges in India. The Company is engaged in the manufacturing and selling of Organic Chemicals and Bulk Drugs. The Company caters to both domestic and international market.
2. Significant accounting policies and notes on accounts
a. Basis of preparation of financial statements:
The financial statements are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rule 2014.
b. Use of estimates
The preparation of financial statements, in conformity with the generally accepted accounting principles, require estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results known materialize.
c. Revenue Recognition
i) Sale:
Sales comprise sale of goods and export incentives. Revenue from sale of goods is recognized:
a) when all significant risks and rewards of ownership is transferred to the buyer and the Company retains no effective control of the goods transferred to a degree usually associated with ownership; and
b) no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of the goods.
ii) Export Incentives
Revenue in respect of export incentives is recognized on post export basis.
iii) Dividend
Dividend income from investment is recognized when the right to receive the payment is established.
iv) Interest
Revenue from interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
v) Insurance and other claims
Revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realized and the ultimate collection thereof.
d. Employee Benefits
a) Short Term Employee Benefits:
Short Term Employee Benefits are recognized as an expense on an undiscounted basis in the statement of profit and loss for the year in which the related service is rendered.
b) Post Employment Benefits:
i) Defined Contribution Plans:
Provident Fund:
The Employerâs Contributions to provident fund are made in accordance with the provisions of the Employeeâs Provident Fund and Miscellaneous Provisions Act, 1952 and is recognized as an expense in the statement of profit and loss.
ii) Defined Benefit Plans:
Gratuity:
The Group Gratuity Cash Accumulation Scheme, managed by Life Insurance Corporation of India is a defined benefit plan. The liability for gratuity is provided on basis of actuarial valuation carried out by an independent actuary as at the Balance Sheet date. The Present Value of the Companyâs obligation is determined on the basis of actuarial valuation at the yearend using the projected unit credit method and the fair value of plan assets is reduced from the gross obligations under the gratuity scheme to recognize the obligation on a net basis.
c) Leave encashment:
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the Balance Sheet date, determined based on actuarial valuation using Projected Unit Credit Method. The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market yields on Government Securities as at the Balance Sheet date.
d) The actuarial gain or loss:
The actuarial gain or loss is recognized in statement of profit and loss in the period in which they occur.
e. Tangible fixed assets
a) Fixed assets are stated at historical cost less accumulated depreciation.
b) The cost of fixed asset comprises of its purchase price and any attributable expenditure (directly or indirectly) for bringing the asset to its working condition for its intended use.
c) The exchange differences arising on reinstatement/ settlement of long term foreign currency borrowings related to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of these assets.
d) Expenditure incurred on renovation/modernization of the existing fixed assets is added to the book value of these assets where such renovation/modernization increases the future benefit from them beyond their previously assessed standard of performance.
f. Intangible assets
Intangible assets are stated at cost less accumulated amount of amortization.
g. Depreciation on tangible fixed assets
i) Depreciation on tangible fixed assets is provided on Straight Line Method on the basis of useful lives of such assets specified in Schedule II to the Companies Act, 2013.
ii) Depreciation on assets costing Rs. 5,000/- or below is charged @ 100% per annum.
iii) The lease hold land is amortized over the lease period, i.e. 99 years.
iv) Addition or deduction to the fixed assets arising from exchange rate variation is depreciated over the residual life of the respective fixed assets.
v) The Intangible fixed assets acquired prior to 01 April 2014 are amortized over the revised useful life of the assets based on the indicative useful life of the assets mandated by Schedule II to the Companies Act, 2013.
h. Amortization
Intangible assets are amortized on straight line method. These assets are amortized over their estimated useful life.
i. Investments
Long term investments are carried at cost less provisions, if any, for diminution in the value of such investments, which is other than temporary. Current Investments are carried at lower of cost and fair value.
j. Inventories
Inventories are valued at cost or net realizable value whichever is lower. The cost in respect of various items of inventories is computed as under:
k. Cenvat Credit
Cenvat credit on excise duty/service tax paid on inputs, capital assets and input services is recognized in accordance with the Cenvat Credit Rules, 2004. l. Government Grants and Subsidies
Government grants available to the Company are recognized when there is a reasonable assurance of compliance with the conditions attached to such grants and when benefits in respect thereof have been earned and it is reasonably certain that the ultimate collection will be made. Government subsidy in the nature of promoterâs contribution is credited to capital reserve. Government subsidy related to specific fixed assets is deducted from the gross value of the assets concerned. m. Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as a part of cost of such asset. Qualifying asset is one that takes substantial period of time to get ready for its intended use. All other borrowing costs are recognized as expenditure in the period in which these are incurred. n. Segment information
Segment information is prepared in conformity with the accounting policies adopted for preparing and presenting the financial of the enterprise as a whole.
o. Operating lease
Assets acquired on leases wherein a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals paid for such leases are recognized as an expense on systematic basis over the term of lease.
p. Foreign currency transactions
a. Foreign currency transactions are recorded on initial recognition in the reporting currency by applying to the foreign currency amount, the exchange rate between the reporting currency and the foreign currency, at the date of transaction.
b. Foreign currency monetary items are reported using the closing rate. Exchange differences arising on the settlement of monetary items or on reporting the same at rate different from those at which these were initially recorded during the period or reported in previous financial statement are recognized as income or expense in the period in which they arise except in case of long term liabilities which relate to acquisition of fixed assets, these exchange differences are adjusted to the carrying cost of such fixed assets.
c. The premium or discount arising at the inception of a forward exchange contracts is amortized as an expense or income over the life of the contract. Exchange difference on such contract is recognized in the statement of profit and loss in the reported period in which the exchange rate changes profit or loss arising on cancellation or renewal of such contracts is recognized as income or expense in the period in which they arise. q. Accounting for taxes on income
Provision for taxation for the year comprises of current tax and deferred tax. Current tax is amount of Income-tax determined to be payable in accordance with the provisions of Income tax Act 1961. Deferred Tax is the tax effect of timing differences between taxable income and accounting income for the period that originate in one period and are capable of reversal in one or more subsequent periods.
r. Earnings Per Share
Basic Earnings per share is computed by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by taking into account weighted average number of equity shares outstanding during the period and the weighted average number of equity shares which would be issued on conversion of all dilutive potential equity shares into equity shares.
s. Impairment of fixed assets
At each Balance Sheet date an assessment is made whether any indication exists that an asset has been impaired, if any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of account. t. Cash flow statement
The cash flow statement has been in accordance with the Accounting Standard (AS) - 3 âCash flow statementsâ issued by the Companies (Accounting Standard) Rules, 2006.
u. Provisions and Contingent Liabilities
i. Provisions are recognized (for liabilities that can be measured by using substantial degree of estimate) when;
a) the Company has a present obligation as a result of a past event:
b) a probable outflow of resources embodying economic benefits is expected to settle the obligation; and
c) the amount of the obligation can be reliably estimated.
ii. Contingent liability is disclosed in case there is:
a) (i) Possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the enterprise; or
(ii) a reliable estimate of the amount of the obligation cannot be made.
b) a present obligation arising from a past event but is not recognized
(i) when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
(ii) a reliable estimate of the amount of the obligation cannot be made.
b. Terms/rights attached to equity shares
The Company presently has one class of equity shares having a par value of Rs. 10/- each. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
The Company has not declared dividend during the year ended 31 March 2016.
c. Terms/rights attached to preference shares 7% non-cumulative Preference shares 50,00,000 of Rs. 10 each
During the previous year Company had converted 50,00,000 7% non-cumulative redeemable Preference Shares of Rs. 10/- each into 17,85,714 equity shares of face value of Rs. 10/- each at a premium of Rs. 18/- per share aggregating to Rs. 5 Crore on 21 June 2014 in accordance with the terms and conditions of the preference shares. The earliest date of redemption of these preference shares was 30 June 2015.
1% non-cumulative Preference shares 1,50,10,000 of Rs. 10 each
During the previous year Company had converted 1,50,10,000 1% non-cumulative redeemable Preference Shares of Rs. 10/- each into 53,60,713 equity shares of face value of Rs. 10/- each at a premium of Rs. 18/- per share aggregating to Rs. 15.01 crore on 21 June 2014 in accordance with the terms and conditions of the preference shares. These preference shares were redeemable at par on expiry of 10 years from the date of allotment i.e. 05 November 2013
d. Terms/rights attached to Share warrants
On 04 July 2014, the Company had allotted 1,10,00,000 Share warrants to non-promoter Company with an option to subscribe to an equity share of face value of Rs. 10/- at a premium of Rs. 18/- per share within the period of 18 months from the date of allotment of warrants.
Out of above the Company had allotted 24,50,000 equity shares of Rs. 10/- each at premium of Rs. 18/- per share during the previous year on exercising of its option by the warrant holders.
Whereas the balance 85,50,000 share warrants have been converted into 85,50,000 equity share of Rs. 10/- each during the year on exercise of option by its warrant holders.
e. Details of shares held by holding company or the ultimate holding company or their subsidiaries and associates
There is no holding Company of the Company and therefore no subsidiary/ associate of holding /ultimate holding Company.
a. Details of security for term loans
1. Term loans from banks and financial institutions are secured by way of equitable mortgage of all present and future immovable properties of the Company ranking pari-passu charge by way of hypothecation of all the Companyâs movable properties, save and except Book Debts but including movable machinery, spares, tools and accessories both present and future subject to prior charges created / to be created in favour of the Companyâs Bankers on specified movable properties for securing borrowings for working capital requirements.
2. Further, the term loans from banks and financial institutions are secured by second pari-passu charge on all current assets present and future and the personal guarantee of the Managing Director of the Company and corporate guarantee by a promoter Company.
3. Term loan from others are secured by hypothecation of vehicles purchased against these loans.
c. Unsecured Loan granted by Bank on the security provided by Related party under the head Other Loans & Advances (Unsecured).
d. Interest has been accounted for based upon terms of restructuring of facilities sanctioned by the respective lenders. The Funded Interest Term Loans (FITLs) has been created on certain credit facilities.
Mar 31, 2015
A. Basis of preparation of financial statements:
The financial statements are prepared on accrual basis under the
historical cost convention in accordance with the accounting standards
referred to in section 133 of the Companies Act, 2013 read with Rule 7
of the Companies (Accounts) Rule 2014.
b. Use of estimates
The preparation of financial statements, in conformity with the
generally accepted accounting principles, require estimates and
assumptions to be made that affect the reported amount of assets and
liabilities as of the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results known materialise.
c. Revenue Recognition
i) Sale:
Sales comprise sale of goods and export incentives. Revenue from sale
of goods is recognised:
a) when all significant risks and rewards of ownership is transferred
to the buyer and the company retains no effective control of the goods
transferred to a degree usually associated with ownership; and
b) no significant uncertainty exists regarding the amount of the
consideration that will be derived from the sale of the goods.
ii) Export Incentives
Revenue in respect of export incentives is recognised on post export
basis.
iii) Dividend
Dividend income from investment is recognised when the right to receive
the payment is established.
iv) Interest
Revenue from interest is recognised on a time proportion basis taking
into account the amount outstanding and the rate applicable.
v) Insurance and other claims
Revenue in respect of claims is recognized when no significant
uncertainty exists with regard to the amount to be realized and the
ultimate collection thereof.
d. Employee Benefits
a) Short Term employee Benefits:
Short Term Employee Benefits are recognised as an expense on an
undiscounted basis in the statement of profit and loss for the year in
which the related service is rendered.
b) Post employment Benefits:
i) Defined contribution Plans:
Provident Fund:
The Employer's Contributions to provident fund are made in accordance
with the provisions of the Employee's Provident Fund and
Miscellaneous Provisions Act, 1952 and is recognised as an expense in
the statement of profit and loss.
ii) Defined Benefit Plans:
Gratuity:
The Group Gratuity Cash Accumulation Scheme, managed by Life Insurance
Corporation of India is a defined benefit plan. The liability for
gratuity is provided on basis of actuarial valuation carried out by an
independent actuary as at the Balance Sheet date. The Present Value of
the company's obligation is determined on the basis of actuarial
valuation at the year end using the projected unit credit method and
the fair value of plan assets is reduced from the gross obligations
under the gratuity scheme to recognize the obligation on a net basis.
c) Leave encashment:
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognised as a liability at the present value of
the defined benefit obligation at the Balance Sheet date, determined
based on actuarial valuation using Projected Unit Credit Method. The
discount rates used for determining the present value of the obligation
under defined benefit plan, are based on the market yields on
Government Securities as at the Balance Sheet date.
d) The actuarial gain or loss:
The actuarial gain or loss is recognised in statement of profit and
loss in the period in which they occur.
e. tangible fixed assets
a) Fixed assets are stated at historical cost less accumulated
depreciation.
b) The cost of fixed asset comprises of its purchase price and any
attributable expenditure (directly or indirectly) for bringing the
asset to its working condition for its intended use.
c) The exchange differences arising on reinstatement/ settlement of
long term foreign currency borrowings related to acquisition of
depreciable fixed assets are adjusted to the cost of the respective
assets and depreciated over the remaining useful life of these assets.
d) Expenditure incurred on renovation/modernisation of the existing
fixed assets is added to the book value of these assets where such
renovation/modernisation increases the future benefit from them beyond
their previously assessed standard of performance.
f. Intangible assets
Intangible assets are stated at cost less accumulated amount of
amortisation.
g. Depreciation on tangible fixed assets
i) Depreciation on tangible fixed assets is provided on Straight Line
Method on the basis of useful lives of such assets specified in
Schedule II to the Companies Act, 2013.
ii) Depreciation on assets costing Rs. 5,000/- or below is charged @ 100%
per annum.
iii) The lease hold land is amortised over the lease period, i.e. 99
years.
iv) Addition or deduction to the fixed assets arising from exchange
rate variation is depreciated over the residual life of the respective
fixed assets.
v) The Intangible fixed assets acquired prior to 1st April 2014 are
amortised over the revised useful life of the assets based on the
indicative useful life of the assets mandated by Schedule II to the
Companies Act, 2013.
h. Amortisation
Intangible assets are amortised on straight line method. These assets
are amortised over their estimated useful life.
i. Investments
Long term investments are carried at cost less provisions, if any, for
diminution in the value of such investments, which is other than
temporary. Current Investments are carried at lower of cost and fair
value.
j. Inventories
Inventories are valued at cost or net realisable value which ever is
lower. The cost in respect of various items of inventories is computed
as under:
a) Raw Material
First in First out method plus direct expenses
b) Stores and Spares
Weighted Average method plus direct expenses
c) Work-in- progress
Cost of material plus appropriate share of overheads thereon at
different stage of completion.
d) Finished Goods
Cost of material plus conversion cost, packing cost, excise duty and
other overheads incurred to bring the goods to their present conditions
and location.
e) Material in Transit
Actual cost plus direct expenses to the extent incurred.
k. Cenvat Credit
Cenvat credit on excise duty/service tax paid on inputs, capital assets
and input services is recognised in accordance with the Cenvat Credit
Rules, 2004.
l. Government Grants and Subsidies
Government grants available to the company are recognised when there is
a reasonable assurance of compliance with the conditions attached to
such grants and when benefits in respect thereof have been earned and
it is reasonably certain that the ultimate collection will be made.
Government subsidy in the nature of promoter's contribution is
credited to capital reserve. Government subsidy related to specific
fixed assets is deducted from the gross value of the assets concerned.
m. Borrowing costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised as a
part of cost of such asset. Qualifying asset is one that takes
substantial period of time to get ready for its intended use. All other
borrowing costs are recognised as expenditure in the period in which
these are incurred.
n. Segment information
Segment information is prepared in conformity with the accounting
policies adopted for preparing and presenting the financial of the
enterprise as a whole.
o. Operating lease
Assets acquired on leases wherein a significant portion of the risks
and rewards of ownership are retained by the lessor are classified as
operating leases. Lease rentals paid for such leases are recognised as
an expense on systematic basis over the term of lease.
p. Foreign currency transactions
a. Foreign currency transactions are recorded on initial
recognition in the reporting currency by applying to the foreign
currency amount, the exchange rate between the reporting currency and
the foreign currency, at the date of transaction.
b. Foreign currency monetary items are reported using the closing rate.
Exchange differences arising on the settlement of monetary items or on
reporting the same at rate different from those at which these were
initially recorded during the period or reported in previous financial
statement are recognised as income or expense in the period in which
they arise except in case of long term liabilities which relate to
acquisition of fixed assets, these exchange differences are adjusted to
the carrying cost of such fixed assets.
c. The premium or discount arising at the inception of a forward
exchange contracts is amortised as an expense or income over the life
of the contract. Exchange difference on such contract is recognised in
the statement of profit and loss in the reported period in which the
exchange rate changes profit or loss arising on cancellation or renewal
of such contracts is recognised as income or expense in the period in
which they arise.
q. Accounting for taxes on income
Provision for taxation for the year comprises of current tax and
deferred tax. Current tax is amount of Income-tax determined to be
payable in accordance with the provisions of Income tax Act 1961.
Deferred Tax is the tax effect of timing differences between taxable
income and accounting income for the period that originate in one
period and are capable of reversal in one or more subsequent periods.
r. Earning Per Share
Basic Earning per share is computed by dividing the net profit or loss
for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. Diluted
earning per share is computed by taking into account weighted average
number of equity shares outstanding during the period and the weighted
average number of equity shares which would be issued on conversion of
all dilutive potential equity shares into equity shares.
s. Impairment of fixed assets
At each Balance Sheet date an assessment is made whether any indication
exists that an asset has been impaired, if any such indication exists,
an impairment loss i.e. the amount by which the carrying amount of an
asset exceeds its recoverable amount is provided in the books of
account.
t. cash flow statement
The cash flow statement has been in accordance with the Accounting
Standard (AS) - 3 "Cash flow statements" issued by the Companies
(Accounting Standard) Rules, 2006.
u. Provisions and contingent Liabilities
i. Provisions are recognised (for liabilities that can be measured by
using substantial degree of estimate) when;
a) the company has a present obligation as a result of a past event:
b) a probable outflow of resources embodying economic benefits is
expected to settle the obligation; and
c) the amount of the obligation can be reliably estimated.
ii. Contingent liability is disclosed in case there is:
a) (i) Possible obligation that arises from past events and existence
of which will be confirmed only by the occurrence or non occurrence of
one or more uncertain future events not wholly within the control of
the enterprise; or
(ii) a reliable estimate of the amount of the obligation cannot be
made.
b) a present obligation arising from a past event but is not recognised
(i) when it is not probable that an outflow of resources embodying
economic benefits will be required to settle the obligation; or
(ii) a reliable estimate of the amount of the obligation cannot be
made.
Mar 31, 2014
A. Basis of preparation of financial statements:
The financial statements are prepared on accrual basis under the
historical cost convention in accordance with the applicable accounting
standards referred to in sub section (3C) of section 211 and other
relevant provisions of the Companies Act, 1956.
b. Use of estimates
The preparation of fi nancial statements, in conformity with the
generally accepted accounting principles, require estimates and
assumptions to be made that affect the reported amount of assets and
liabilities as on the date of fi nancial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between actual results and estimates are recognised in the period in
which the results known/materialise.
c. Revenue Recognition
i) Sale:
Sales comprise sale of goods and export incentives. Revenue from sale
of goods is recognised:
a) when all signifi cant risks and rewards of ownership is transferred
to the buyer and the company retains no effective control of the goods
transferred to a degree usually associated with ownership; and
b) no signifi cant uncertainty exists regarding the amount of the
consideration that will be derived from the sale of the goods.
ii) Export Incentives
The revenue in respect of the export incentives is recognised on post
export basis.
iii) Dividend
Dividend income is recognised when the right to receive the payment is
established.
iv) Interest
Interest Income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
v) Insurance and other claims
Revenue in respect of claims is recognized when no signifi cant
uncertainty exists with regard to the amount to be realized and the
ultimate collection thereof.
d. Employee Benefi ts
a) Short Term Employee Benefi ts:
Short Term Employee Benefi ts are recognised as an expense on an
undiscounted basis in the statement of profi t and loss for the year in
which the related service is rendered.
b) Post Employment Benefi ts:
i) Defi ned Contribution Plans:
Provident Fund: Contributions to provident fund are made in accordance
with the provisions of the Employee''s Provident Fund and Miscellaneous
Provisions Act, 1952 and are charged to the statement of profi t and
loss in the period in which such contributions fall due.
ii) Defi ned Benefi t Plans:
Gratuity: The Group Gratuity Cash Accumulation Scheme, managed by Life
Insurance Corporation of India is a defi ned benefi t plan. The
liability for gratuity is provided on actuarial basis. The Present
Value of the company''s obligation is determined on the basis of
actuarial valuation at the year end using the projected unit credit
method and the fair value of plan assets is reduced from the gross
obligations under the gratuity scheme to recognize the obligation on a
net basis.
c) Leave encashment:
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognised as a liability at the present value of
the defi ned benefi t obligation at the Balance Sheet date, determined
based on actuarial valuation using Projected Unit Credit Method. The
discount rates used for determining the present value of the obligation
under defi ned benefi t plan, are based on the market yields on
Government Securities as at the Balance Sheet date.
d) The actuarial gain or loss:
The actuarial gain or loss is recognised in statement of profi t and
loss in the period in which they occur.
e. Tangible fi xed assets
a) Fixed assets are stated at historical cost less accumulated
depreciation.
b) The cost of fi xed asset comprises of its purchase price and any
attributable expenditure (directly or indirectly) for bringing the
asset to its working condition for its intended use.
c) The exchange differences arising on reinstatement/ settlement of
long term foreign currency borrowings related to acquisition of
depreciable fi xed assets are adjusted to the cost of the respective
assets and depreciated over the remaining useful life of these assets.
f. Intangible assets
Intangible assets are stated at cost less accumulated amount of
amortisation.
g. Depreciation on tangible fi xed assets
i) Depreciation on all fi xed assets is provided on the straight line
method in accordance with and in the manner specifi ed in Schedule XIV
to the Companies Act, 1956.
ii) Depreciation on assets costing Rs. 5,000/- or below is charged @ 100%
per annum.
iii) The lease hold land is amortised over the lease period, i.e. 99
years.
iv) Addition or deduction to the fi xed assets arising from exchange
rate variation is depreciated over the residual life of the respective
fixed assets.
h. Amortisation
Intangible assets are amortised on straight line method. These assets
are amortised over their estimated useful life.
i. Investments
Long term investments are carried at cost less provisions, if any, for
diminution in the value of such investments, which is other than
temporary. Current Investments are carried at lower of cost and fair
value.
j. Inventories
Inventories are valued at cost or net realisable value which ever is
lower. The cost in respect of various items of inventories is computed
as under:
k. Cenvat Credit
Cenvat credit on excise duty/service tax paid on inputs, capital assets
and input services is recognised in accordance with the Cenvat Credit
Rules, 2004.
l. Government Grants and Subsidies
Government grants available to the Company are recognised when there is
a reasonable assurance of compliance with the conditions attached to
such grants and when benefi ts in respect thereof have been earned and
it is reasonably certain that the ultimate collection will be made.
Government subsidy in the nature of promoter''s contribution is credited
to capital reserve. Government subsidy related to specifi c fi xed
assets is deducted from the gross value of the assets concerned.
m. Borrowing costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised as a
part of cost of such asset. Qualifying asset is one that takes
substantial period of time to get ready for its intended use. All other
borrowing costs are recognised as expenditure in the period in which
these are incurred.
n. Segment information
Segment information is prepared in conformity with the accounting
policies adopted for preparing and presenting the fi nancial of the
enterprise as a whole.
o. Operating lease
Assets acquired on leases wherein a signifi cant portion of the risks
and rewards of ownership are retained by the lessor are classifi ed as
operating leases. Lease rentals paid for such leases are recognised as
an expense on systematic basis over the term of lease.
p. Foreign currency transactions
a. Foreign currency transactions are recorded on initial recognition
in the reporting currency by applying to the foreign currency amount,
the exchange rate between the reporting currency and the foreign
currency, at the date of transaction.
b. Foreign currency monetary items are reported using the closing
rate. Exchange differences arising on the settlement of monetary items
or on reporting the same at rate different from those at which these
were initially recorded during the period or reported in previous fi
nancial statement are recognised as income or expense in the period in
which they arise except in case of long term liabilities which relate
to acquisition of fi xed assets, these exchange differences are
adjusted to the carrying cost of such fi xed assets.
c. The premium or discount arising at the inception of a forward
exchange contracts is amortised as an expense or income over the life
of the contract. Exchange difference on such contract is recognised in
the statement of profi t and loss in the reported period in which the
exchange rate changes profi t or loss arising on cancellation or
renewal of such contracts is recognised as income or expense in the
period in which they arise.
q. Accounting for taxes on income
Provision for taxation for the year comprises of current tax and
deferred tax. Current tax is amount of Income-tax determined to be
payable in accordance with the provisions of Income tax Act 1961.
Deferred Tax is the tax effect of timing differences between taxable
income and accounting income for the period that originate in one
period and are capable of reversal in one or more subsequent periods.
r. Earning Per Share
Basic Earning per share is computed by dividing the net profi t or loss
for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. Diluted
earning per share is computed by taking into account weighted average
number of equity shares outstanding during the period and the weighted
average number of equity shares which would be issued on conversion of
all dilutive potential equity shares into equity shares.
s. Impairment of fixed assets
At each Balance Sheet date an assessment is made whether any indication
exists that an asset has been impaired, if any such indication exists,
an impairment loss i.e. the amount by which the carrying amount of an
asset exceeds its recoverable amount is provided in the books of
account.
t. Cash flow statement
The cash flow statement has been in accordance with the Accounting
Standard (AS) Â 3 "Cash fl ow statements" issued by the Companies
(Accounting Standard) Rules, 2006.
u. Provisions and Contingent Liabilities
i. Provisions are recognised when;
a) the Company has a present obligation as a result of a past event:
b) a probable outfl ow of resources embodying economic benefi ts is
expected to settle the obligation; and
c) the amount of the obligation can be reliably estimated.
ii. Contingent liability is disclosed in case there is:
a) Possible obligation that arises from past events and existence of
which will be confi rmed only by the occurrence or non occurrence of
one or more uncertain future events not wholly within the control of
the enterprise; or
b) a present obligation arising from a past event but is not recognised
(i) when it is not probable that an outfl ow of resources embodying
economic benefi ts will be required to settle the obligation; or
(ii) a reliable estimate of the amount of the obligation cannot be
made.
b. Terms/rights attached to equity shares
The Company presently has one class of equity shares having a par value
of Rs. 10/- each. Each holder of equity shares is entitled to one vote
per share. The dividend proposed by the Board of Directors is subject
to the approval of the shareholders in the ensuing Annual General
Meeting.
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive any of the remaining assets of the
Company, after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held
by the shareholders.
The Company has not declared dividend during the period ended 31 March
2014.
Increase in equity share capital
The Company has issued 26,64,000 equity shares of face value of Rs. 10/-
each at a premium of Rs. 68/- per share aggregating to Rs. 20,77,92,000 on
5 November 2013 to Promoter Group entities on conversion of unsecured
loan, brought in by them.
Consequent upon the issue of the above 26,64,000 equity shares, the
total paid-up capital of the Company stands increased to 2,88,15,164
fully paid equity shares of Rs. 10/- each.
c. Terms/rights attached to preference shares
7% Non-Cumulative Preference Shares 50,00,000 of Rs. 10/- each
The Company has extended the redemption of 50,00,000, 7% non-cumulative
redeemable preference shares of Rs. 10/- each from 20 March 2014 to 30
June 2015 with an option to convert these preference shares into equity
shares at the price calculated under SEBI formula. The earlier date of
redemption is 30 June 2015 (Previous year 20 March 2014)
The preference shares shall carry a right to a non-cumulative
preference dividend of 7% per annum, in case the dividend not declared
for any year, it will cease to accrue and lapse and will not be
cumulated and carry forward. The preference shareholder shall have
preferential right of repayment of amount of capital.
1% Non-Cumulative Preference Shares 1,50,10,000 of Rs. 10/- each
The Company has allotted 1,50,10,000, 1% non cumulative redeemable
preference shares of Rs. 10/- each to the promoter/promoter group
companies. These preference shares shall be redeemable at par on expiry
of 10 years from the date of allotment i.e. 5 November 2013.
The preference shares shall carry a right to a non-cumulative
preference dividend of 1% per annum, in case the dividend not declared
for any year, it will cease to accrue and lapse and will not be
cumulated and carry forward. The preference shareholders shall have
preferential right of repayment of amount of capital.
d. Details of shares held by holding company or the ultimate holding
company or their subsidiaries and associates There is no holding
company of the Company and therefore no subsidiary/ associate of
holding /ultimate holding Company.
The Company has issued zero coupon unsecured foreign currency
convertible bonds (FCCB) aggregating to US $ 7 Million.
The Company has option to convert all outstanding bonds into equity
shares at the prevailing conversion price i.e. Rs. 78 per share at any
time on or after 28 November 2014 but on or before 28 May 2015.
The bond holders have also option to convert into equity shares of the
Company at price of Rs. 78 per share (subject to adjustment, if any) with
a fi xed exchange rate of Rs. 47.57 per US $ at any time on or after 28
May 2010 but on or before 28 May 2015 subject to satisfaction of
certain conditions.
a. Details of security for term loans
1 Term loans from banks and fi nancial institutions are secured by way
of equitable mortgage of all present and future immovable properties of
the Company ranking pari-passu charge by way of hypothecation of all
the Company''s movable properties, save and except Book Debts but
including movable machinery, spares, tools and accessories both present
and future subject to prior charges created / to be created in favour
of the Company''s Bankers on specifi ed movable properties for securing
borrowings for working capital requirements.
2 Further, the term loans from banks and fi nancial institutions are
secured by second pari-passu charge on all current assets present and
future and the personal guarantee of the Managing Director of the
Company.
3 Term loan from others are secured by hypothecation of vehicles
purchased against these loans.
c. Varinder Foundation a related party alongwith Company as
co-applicant borrowed a sum of Rs. 10 Crore from Corporation Bank on
behalf of the Company, to meet the additional working capital
requirements of the Company. The said loan is shown under the head
unsecured loan, from related party.
Security of such loan to bank is provided by the said party.
d. Foreign Currency Convertible Bonds at the beginning and at the end
of the reporting period
e. Terms of repayment of Foreign Currency Convertible Bonds
Foreign Currency Convertible Bonds are redeemable on 5 June 2015 at a
premium of 41.25% of their principal amount unless previously redeemed,
repurchased and cancelled or converted.
Details of security
Loans repayable on demand from banks are secured by way of fi rst
pari-passu charge on all present and future fi nished goods,
work-in-progress, raw materials, stores and spares, book debts and
second pari-passu charge on fi xed assets and further secured by
personal guarantee of the Managing Director.
Security of unsecured loan from bank is provided by a third party.
Mar 31, 2013
A. Basis of preparation of fnancial statements:
The accounts are prepared on accrual basis under the historical cost
convention in accordance with the applicable accounting standards
referred to in sub section (3C) of section 211 and other relevant
provisions of the Companies Act, 1956.
b. Use of estimates
The preparation of fnancial statements, in conformity with the
generally accepted accounting principles require estimates and
assumptions to be made that affect the reported amount of asset and
liabilities as on the date of fnancial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between actual results and estimates are recognised in the period in
which the results materialise.
c. Revenue recognition
i) Sale:
Sales comprise sale of goods and export incentives. Revenue from sale
of goods is recognised:
a) when all signifcant risks and rewards of ownership is transferred to
the buyer and the Company retains no effective control of the goods
transferred to a degree usually associated with ownership and
b) no signifcant uncertainty exists regarding the amount of the
consideration that will be derived from the sale of the goods.
ii) Export Incentives
The revenue in respect of the export incentives is recognised on post
export basis.
iii) Dividend
Dividend income is recognised when the right to receive the payment is
established.
iv) Interest
Interest Income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
v) Insurance and other claims
Revenue in respect of claims is recognized when no signifcant
uncertainty exists with regard to the amount to be realized and the
ultimate collection thereof.
d. Employee benefts
a) Short term employee benefts:
Short term employee benefts are recognised as an expense on an
undiscounted basis in the statement of proft and loss for the year in
which the related service is rendered.
b) Post employment benefts:
i) Defned contribution plans:
Provident fund: Contributions to provident fund are made in accordance
with the provisions of the Employee''s Provident Fund and Miscellaneous
Provisions Act, 1952 and are charged to the statement of proft and loss
in the period in which such contributions fall due.
ii) Defned beneft plans:
Gratuity: Provision for gratuity liability to employees is made on the
basis of actuarial valuation as at close of the year.
c) Leave encashment:
Provision for leave encashment with wages and long term compensated
absences is made on the basis of actuarial valuation as at close of the
year.
d) The actuarial gain or loss:
The actuarial gain or loss is recognised in statement of proft and loss
account.
e. Tangible fxed assets
a) Fixed assets are stated at historical cost less accumulated
depreciation.
b) The cost of fxed asset comprises of its purchase price and any
attributable expenditure (directly or indirectly) for bringing the
asset to its working condition for its intended use.
c) The exchange differences arising on reinstatement/ settlement of
long term foreign currency borrowings related to acquisition of
depreciable fxed assets are adjusted to the cost of the respective
assets and depreciated over the remaining useful life of these assets.
f. Intangible assets
Intangible assets are stated at cost less accumulated amount of
amortisation.
g. Depreciation on tangible fxed assets
i) Depreciation on all fxed assets is provided on the straight line
method in accordance with and in the manner specifed in Schedule XIV to
the Companies Act, 1956.
ii) Depreciation on assets costing Rs. 5,000/- or below is charged @ 100%
per annum.
iii) The lease hold land is amortised over the lease period, i.e. 99
years.
iv) Addition or deduction to the fxed assets arising from exchange rate
variation is depreciated over the residual life of the respective fxed
assets.
h. Amortisation
Intangible assets are amortised on straight line method over their
estimated useful life.
i. Investments
Long term investments are carried at cost less provisions, if any, for
diminution in value which is other than temporary. Current investments
are carried at lower of cost and fair value.
j. Inventories
Inventories are valued at cost or net realisable value which ever is
lower. The cost in respect of various items of inventories is computed
as under:
a) Raw Material First in First out method plus direct expenses
b) Stores and Spares Weighted Average method plus direct expenses
c) Work-in-progress Cost of material plus appropriate share of
overheads thereon at different stage of completion.
d) Finished Goods Cost of material plus conversion cost, packing cost,
excise duty and other overheads incurred to bring the goods to their
present conditions and location.
e) Material in Transit Actual cost plus direct expenses to the extent
incurred.
k. Cenvat credit
Cenvat credit of excise duty paid on inputs, capital assets and input
services is recognised in accordance with the Cenvat Credit Rules,
2004.
l. Government grants and subsidies
Government grants available to the Company are recognised when there is
a reasonable assurance of compliance with the conditions attached to
such grants and where benefts in respect thereof have been earned and
it is reasonably certain that the ultimate collection will be made.
Government subsidy in the nature of promoter''s contribution is credited
to capital reserve. Government subsidy received for a specifc asset is
reduced from the cost of the said asset.
m. Borrowing costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised as
part of cost of such asset. Other borrowing costs are recognised as an
expense in the period in which they are incurred.
n. Segment information
Segment information is prepared in conformity with the accounting
policies adopted for preparing and presenting the fnancial of the
enterprise as a whole.
o. Operating lease
Assets acquired on leases wherein a signifcant portion of the risks and
rewards of ownership are retained by the lessor are classifed as
operating leases. Lease rentals paid for such leases are recognised as
an expense on systematic basis over the term of lease.
p. Foreign currency transactions
a. Foreign currency transactions are recorded on initial recognition
in reporting currency by applying to the foreign currency amount, the
exchange rate between the reporting currency and the foreign currency,
at the date of transaction.
b. Foreign currency monetary items are reported using the closing
rate. Exchange differences arising on the settlement of monetary items
or on reporting the same at rate different from those at which these
were initially recorded during the period or reported in previous
fnancial statement are recognised as income or expense in the period in
which they arise except in case of long term liabilities which relate
to acquisition of fxed assets, these exchange differences are adjusted
to the carrying cost of such fxed assets.
c. The premium or discount arising at inception of forward exchange
contracts is amortised as an expense or income over the life of the
contract. Exchange difference on such contract is recognised in the
statement of proft and loss in the reported period in which the
exchange rate changes proft or loss arising on cancellation or renewal
of such contracts is recognised as income or expense in the period in
which they arise.
q. Accounting for taxes on income
The accounting treatment followed for taxes on income is to provide for
current tax and deferred tax. Current tax is the aggregate amount of
income tax determined to be payable in respect of taxable income for
the period. Deferred Tax is the tax effect of timing differences
between taxable income and accounting income for the period that
originate in one period and are capable of reversal in one or more
subsequent periods.
r. Earning per share
Basic earning per share is computed by dividing the net proft or loss
for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. Diluted
earning per share is computed by taking into account weighted average
number of equity shares outstanding during the period and the weighted
average number of equity shares which would be issued on conversion of
all dilutive potential equity shares into equity shares.
s. Impairment of fxed assets
At each balance sheet date an assessment is made whether any indication
exists that an asset has been impaired, if any such indication exists,
an impairment loss i.e. the amount by which the carrying amount of an
asset exceeds its recoverable amount is provided in the books of
account.
t. Provisions and contingent liabilities
i. Provisions are recognised when;
a) the Company has a present obligation as a result of a past event:
b) a probable outfow of resources embodying economic benefts is
expected to settle the obligation; and
c) the amount of the obligation can be reliably estimated.
ii. Contingent liability is disclosed in case there is:
a) Possible obligation that arises from past events and existence of
which will be confrmed only by the occurrence or non occurrence of one
or more uncertain future events not wholly within the control of the
enterprise; or
b) a present obligation arising from a past event but is not recognised
(i) when it is not probable that an outfow of resources embodying
economic benefts will be required to settle the obligation; or
(ii) a reliable estimate of the amount of the obligation cannot be
made.
Mar 31, 2012
A. Basis of preparation of financial statements:
The accounts are prepared on accrual basis under the historical cost
convention in accordance with the applicable accounting standards
referred to in sub section (3C) of Section 211 and other relevant
provisions of the Companies Act, 1956.
b. Use of estimates
The preparation of financial statements, in conformity with the
generally accepted accounting principles require estimates and
assumptions to be made that affect the reported amount of asset and
liabilities as on the date of financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between actual results and estimates are recognised in the period in
which the results materialise.
c. Revenue Recognition
i) Sale:
Sales comprise sale of goods and export incentives. Revenue from sale
of goods is recognised:
a) when all significant risks and rewards of ownership is transferred
to the buyer and the Company retains no effective control of the goods
transferred to a degree usually associated with ownership and
b) no significant uncertainty exists regarding the amount of the
consideration that will be derived from the sale of the goods.
ii) Export Incentives
The revenue in respect of the export incentives is recognised on post
export basis.
iii) Dividend
Dividend income is recognised when the right to receive the payment is
established.
iv) Interest
Interest Income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
v) Insurance and other claims
Revenue in respect of claims is recognized when no significant
uncertainty exists with regard to the amount to be realized and the
ultimate collection thereof.
d. Employee Benefits
a) Short Term Employee Benefits:
Short Term Employee Benefits are recognised as an expense on an
undiscounted basis in the statement of profit and loss for the year in
which the related service is rendered.
b) Post Employment Benefits:
i) Defined Contribution Plans:
Provident Fund: Contributions to provident fund are made in accordance
with the provisions of the Employee's Provident Fund and Miscellaneous
Provisions Act, 1952 and are charged to the statement of profit and
loss in the period in which such contributions fall due.
ii) Defined Benefit Plans:
Gratuity: Provision for gratuity liability to employees is made on the
basis of actuarial valuation as at close of the year.
c) Leave encashment:
Provision for leave encashment with wages and long term compensated
absences is made on the basis of actuarial valuation as at close of the
year.
d) The actuarial gain or loss:
The actuarial gain or loss is recognised in statement of profit and
loss account.
e. Tangible fixed assets
a) Fixed assets are stated at historical cost less accumulated
depreciation.
b) The cost of fixed asset comprises of its purchase price and any
attributable expenditure (directly or indirectly) for bringing the
asset to its working condition for its intended use.
c) The exchange difference arising on reporting of long term foreign
currency monetary items at rate different from those at which they were
initially recorded during the period or reported in previous financial
statements attributable to the acquisition of fixed assets are
capitalised.
f. Intangible assets
Intangible assets are stated at cost less accumulated amount of
amortisation.
g. Depreciation on tangible fixed assets
i) Depreciation on all fixed assets is provided on the straight line
method in accordance with and in the manner specified in Schedule XIV
to the Companies Act, 1956.
ii) Depreciation on assets costing Rs. 5,000/- or below is charged @ 100%
per annum.
iii) The lease hold land is amortised over the lease period, i.e. 99
years.
iv) Addition or deduction to the fixed assets arising from exchange
rate variation is depreciated over the residual life of the respective
fixed assets.
h. Amortisation
Intangible assets are amortised on straight line method over their
estimated useful life.
i. Investments
Long term investments are carried at cost less provisions, if any, for
diminution in value which is other than temporary. Current Investments
are carried at lower of cost and fair value.
j. Inventories
Inventories are valued at cost or net realisable value which ever is
lower. The cost in respect of various items of inventories is computed
as under:
a) Raw Material First in First out method plus direct expenses
b) Stores and Spares Weighted Average method plus direct expenses
c) Work-in-progress Cost of material plus appropriate share of
overheads thereon at different stage of completion.
d) Finished Goods Cost of material plus conversion cost, packing
cost, excise duty and other overheads incurred to bring the goods to
their present conditions and location.
e) Material in Transit Actual cost plus direct expenses to the
extent incurred.
k. Cenvat Credit
Cenvat credit of excise duty paid on inputs, capital assets and input
services is recognised in accordance with the Cenvat Credit Rules,
2004.
l. Government Grants and Subsidies
Government grants available to the Company are recognised when there is
a reasonable assurance of compliance with the conditions attached to
such grants and where benefits in respect thereof have been earned and
it is reasonably certain that the ultimate collection will be made.
Government subsidy in the nature of promoter's contribution is credited
to capital reserve. Government subsidy received for a specific asset is
reduced from the cost of the said asset.
m. Borrowing costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised as
part of cost of such asset. Other borrowing costs are recognised as an
expense in the period in which they are incurred.
n. Segment information
Segment information is prepared in conformity with the accounting
policies adopted for preparing and presenting the financial of the
enterprise as a whole.
o. Operating lease
Assets acquired on leases wherein a significant portion of the risks
and rewards of ownership are retained by the lessor are classified as
operating leases. Lease rentals paid for such leases are recognised as
an expense on systematic basis over the term of lease.
p. Foreign currency transactions
a. Foreign currency transactions are recorded on initial recognition
in reporting currency by applying to the foreign currency amount, the
exchange rate between the reporting currency and the foreign currency,
at the date of transaction.
b. Foreign currency monetary items are reported using the closing
rate. Exchange differences arising on the settlement of monetary items
or on reporting the same at rate different from those at which these
were initially recorded during the period or reported in previous
financial statement are recognised as income or expense in the period
in which they arise except in case of long term liabilities which
relate to acquisition of fixed assets, these exchange differences are
adjusted to the carrying cost of such assets.
q. Accounting for taxes on income
The accounting treatment followed for taxes on income is to provide for
Current tax and Deferred tax. Current tax is the aggregate amount of
income tax determined to be payable in respect of taxable income for
the period. Deferred Tax is the tax effect of timing differences
between taxable income and accounting income for the period that
originate in one period and are capable of reversal in one or more
subsequent periods. r. Earning Per Share
Basic Earning per share is computed by dividing the net profit or loss
for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. Diluted
earning per share is computed by taking into account weighted average
number of equity shares outstanding during the period and the weighted
average number of equity shares which would be issued on conversion of
all dilutive potential equity shares into equity shares.
s. Impairment of fixed assets
At each Balance Sheet date an assessment is made whether any indication
exists that an asset has been impaired, if any such indication exists,
an impairment loss i.e. the amount by which the carrying amount of an
asset exceeds its recoverable amount is provided in the books of
account.
t. Provisions and Contingent Liabilities
i. Provisions are recognised (for liabilities that can be measured by
using a substantial degree of estimation) when;
a) the Company has a present obligation as a result of a past event:
b) a probable outflow of resources embodying economic benefits is
expected to settle the obligation; and
c) the amount of the obligation can be reliably estimated.
ii. Contingent liability is disclosed in case there is:
a) possible obligation that arises from past events and existence of
which will be confirmed only by the occurrence or non occurrence of one
or more uncertain future events not wholly within the control of the
enterprise; or
b) a present obligation arising from a past event but is not recognised
(i) when it is not probable that an outflow of resources embodying
economic benefits will be required to settle the obligation; or
(ii) a reliable estimate of the amount of the obligation cannot be
made.
Mar 31, 2011
A. Basis for preparation of Financial Statements
The accounts are prepared on accrual basis under the historical cost
convention in accordance with the applicable accounting standards
referred to in sub section (3C) of section 211 and other relevant
provisions of the Companies Act, 1956.
B. Use of Estimates
The preparation of financial statement conforming to generally accepted
accounting principals require estimates and assumptions to be made that
affect the reported amount of asset and liabilities as on the date of
financial statements and the reported amount of revenues and expenses
during the reporting period. Difference between actual results and
estimates are recognised in the period in which the results
materialise.
C. Revenue Recognition
i. Sales
Sales comprise sale of goods and export incentives. Revenue from sale
of goods is recognised:
a) when all significant risks and rewards of ownership is transferred
to the buyer and the company retains no effective control of goods
transferred to a degree usually associated with ownership and
b) no significant uncertainty exists regarding the amount of the
consideration that will be derived from the sale of the goods.
ii. Export Incentives
The revenue in respect of export incentives is recognised on post
export basis.
iii. Dividend
Dividend income is recognised when the right to receive the payment is
established.
iv. Interest:
Interest Income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
v. Insurance and other claims
Revenue in respect of the claims is recognized when no significant
uncertainty exists with regard to the amount to be realized and the
ultimate collection thereof.
D. Employee Benefits
i. Short Term Employee Benefits:
Short Term Employee Benefits are recognised as an expense on an
undiscounted basis in the profit and loss account of the year in which
the related service is rendered.
ii. Post Employment Benefits: a) Defined Contribution Plans: Provident
Fund:
Contributions to provident fund are made in accordance with the
provisions of the Employee's Provident Fund and Miscellaneous
Provisions Act, 1952 and are charged to profit and loss account in the
period in which such contributions fall due.
b) Defined Benefit Plans:
Gratuity:
Provision for gratuity liability to employees is made on the basis of
actuarial valuation as at close of the year.
Leave encashment
Provision for leave encashment with wages and long term compensated
absences is made on the basis of actuarial valuation as at close of the
year.
c) The actuarial gain or loss:
The actuarial gain or loss is recognised in statement of profit and
loss account.
E. Fixed Assets
i) Fixed assets are stated at historical cost less accumulated
depreciation.
ii) The cost of fixed asset comprises of its purchase price and any
attributable expenditure (directly or indirectly) for bringing the
asset to its working condition for its intended use.
iii) The exchange difference arising on reporting of long term foreign
currency monetary items at rate different from those at which they were
initially recorded during the period or reported in previous financial
statements attributable to the acquisition of fixed assets are
capitalised.
F. Depreciation
i) Depreciation on all fixed assets is provided on the straight line
method in accordance with and in the manner specified in Schedule XIV
to the Companies Act, 1956.
ii) Depreciation on assets costing Rs. 5,000/- or below is charged @
100% per annum.
iii) The lease hold land is amortised over the lease period.
iv) Addition or deduction to the fixed assets arising from exchange
rate variation is depreciated over the residual life of the respective
fixed assets.
G. Investments
Long term investments are carried at cost less provisions, if any, for
diminution in value which is other than temporary. Current Investments
are carried at lower of cost and fair value.
H. Inventories:
Inventories are valued at cost or net realisable value which ever is
lower. The cost in respect of various items of inventories is computed
as under:
a) Raw Material First in First out method plus
direct expenses
b) Stores and Spares Weighted Average method plus
direct expenses
c) Work-in-process Cost of material plus appropriate
share of overheads thereon at
different stage of completion.
d) Finished Goods Cost of material plus conversion
cost, packing cost, excise duty and
other overheads incurred to bring
the goods to their present conditions
and location.
e) Material in Transit Actual cost plus direct expenses
to the extent incurred.
I. Cenvat Credit:
Cenvat credit on excise duty paid on inputs, capital assets and input
services is taken in accordance with the Cenvat Credit Rules, 2004.
J. Borrowing Costs:
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalised as
part of cost of such asset. Other borrowing costs are recognised as an
expense in the period in which they are incurred.
K. Subsidy:
Government grants available to the company are recognised when there is
a reasonable assurance of compliance with the conditions attached to
such grants and it is reasonably certain that the ultimate collection
will be made. Government subsidy in the nature of promoter's
contribution is credited to capital reserve. Government subsidy
received for a specific asset is reduced from the cost of the said
asset.
L. Foreign Exchange Transactions
i. Foreign currency transactions are recorded on initial recognition in
reporting currency by applying foreign currency amount, the exchange
rate, between the reporting currency and the foreign currency, at the
date of transaction.
ii. Foreign currency monetary items are reported using the closing
rate. Exchange differences arising on the settlement of monetary items
or on reporting the same at rate different from those at which these
were initially recorded during the period or reported in previous
financial statement are recognised as income or expense in the period
in which they arise except in case of long term liabilities which
relate to acquisition of fixed assets, these exchange differences are
adjusted to the carrying cost of such assets.
M. Accounting for Taxes on Income
Tax expense comprises of Current tax and Deferred tax. Current tax is
the aggregate amount of income tax determined to be payable in respect
of taxable income for the period. Deferred Tax is the tax effect of
timing differences between taxable income and accounting income for the
period that originate in one period and are capable of reversal in one
or more subsequent periods.
N. Impairment of Assets
At each Balance Sheet date an assessment is made whether any indication
exists that an asset has been impaired, if any such indication exists,
an impairment loss i.e. the amount by which the carrying amount of an
asset exceeds its recoverable amount is provided in the books of
account.
O. Earning Per Share
Basic Earning per share is computed by dividing the net profit or loss
for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. Diluted
earning per share is computed by taking into account weighted average
number of equity shares outstanding during the period and the weighted
average number of equity shares which would be issued on conversion of
all dilutive potential equity shares into equity shares.
P. Operating Lease
Assets acquired on leases wherein a significant portion of the risks
and rewards of ownership are retained by the lessor are classified as
operating leases. Lease rentals paid for such leases are recognised as
an expense on systematic basis over the term of lease.
Q. Provisions and Contingent Liabilities
i. Provisions are recognised for liabilities that can be measured by
using a substantial degree of estimation, if:
a) the company has present obligation as a result of a past event:
b) a probable outflow of resources embodying economic benefits is
expected to settle the obligation; and
c) the amount of the obligation can be reliably estimated.
ii. Contingent liability is disclosed in the case of:
a) Possible obligation that arises from past events and existence of
which will be confirmed only by the occurrence or non occurrence of one
or more uncertain future events not wholly within the control of the
enterprise; or
b) a present obligation arising from a past event but is not recognised
(i) when it is not probable that an outflow of resources embodying
economic benefits will be required to settle the obligation; or
(ii) a reliable estimate of the amount of the obligation cannot be
made.
Mar 31, 2010
A. Accounting Convention
The accounts are prepared on accrual basis under the historical cost
convention in accordance with the applicable Accounting Standards
referred to in sub section (3C) of Section 211 and other relevant
provisions of the Companies Act, 1956.
B. Use of estimates
The preparation of financial statement conforming to generally accepted
accounting principals require estimates and assumptions to be made that
effect the reported amount of asset and liabilities as on the date of
financial statements and the reported amount of revenues and expenses
during the reporting period. Difference between actual results and
estimates are recognised in the period in which the results
materialise.
C. Revenue Recognition
i. Sales Sales comprise sale of goods and export incentives. Revenue
from sale of goods is recognised:
a) When all significant risks and rewards of ownership is transferred
to the buyer and the company retains no effective control of goods
transferred to a degree usually associated with ownership and;
b) No significant uncertainty exists regarding the amount of the
consideration that will be derived from the sale of the goods.
c) The revenue in respect of export incentives is recognised a post
export basis.
ii. Interest
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
iii. Insurance and other claims
Revenue in respect of the claims is recognized when no significant
uncertainty exists with regard to the amount to be realized and the
ultimate collection thereof.
D. Employee Benefits
i. Short Term Employee Benefits
Short term employee benefits are recognised as an expense on an
undiscounted basis in the Profit and Loss Account of the year in which
the related service is rendered.
ii. Post Employment Benefits
a) Defined Contribution Plans Provident Fund
Contributions to provident fund are made in accordance with the
provisions of the Employees Provident Fund and Miscellaneous
Provisions Act, 1952 and are charged to Profit and Loss Account in the
period in which such contributions fall due.
b) Defined Benefit Plans Gratuity
Provision for gratuity liability to employees is made on the basis of
actuarial valuation as at close of the year.
Leave encashment
Provision for leave with wages and long term compensated absences is
made on the basis of actuarial valuation as at close of the year. c)
The actuarial gain/loss
The actuarial gain/loss is recognised in statement of Profit and Loss
Account.
E. Fixed Assets
Fixed assets are stated at historical cost less accumulated
depreciation.
F. Expenditure incurred during construction period
In respect of new/major expansion cost incurred which are directly
attributable to bringing the assets to their working condition are
capitalized on various categories of fixed assets on proportionate
basis.
G. Depreciation
i) Depreciation on all fixed assets is provided on the straight line
method in accordance with and in the manner specified in Schedule XIV
to the Companies Act, 1956.
ii) Depreciation on assets costing Rs 5,000/- or below is charged @
100% per annum.
iii) The lease hold land is amortised over the lease period.
H. Inventories
Inventories are valued at cost or net realisable value which ever is
lower. The cost in respect of various items of inventories is computed
as under:
I. Cenvat Credit
Cenvat credit on excise duty paid on inputs, capital assets and input
services is taken in accordance with the Cenvat Credit Rules, 2004. J.
Borrowing Costs
Borrowing costs that are directly attributable to the acquisition,,
construction or production of a qualifying asset are capitalised as
part of cost of such asset. Other borrowing costs are recognised as an
expense in the period in which they are incurred.
L. Accounting for Taxes on Income
Tax expense comprises of Current tax and Deferred tax. Current tax is
the aggregate amount of income tax determined to be payable in respect
of taxable income for the period. Deferred Tax is the tax effect of
timing differences between taxable income and accounting income for the
period that originate in one period and are capable of reversal in one
or more subsequent periods.
M. Impairment of Assets
At each Balance Sheet date an assessment is made whether any indication
exists that an asset has been impaired, if any such indication exists,
an impairment loss i.e. the amount by which the carrying amount of an
asset exceeds its recoverable amount is provided in the books of
account.
N. Earning Per Share
Basic earning per share is computed by dividing the net profit or loss
for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. Diluted
earning per share is computed by taking into account weighted average
number of equity shares outstanding during the period and the weighted
average number of equity shares which would be issued on conversion of
all dilutive potential equity shares into equity shares.
O. Operating Lease
Assets acquired on leases wherein a significant portion of the risks
and rewards of ownership are retained by the lessor are classified as
operating leases. Lease rentals paid for such leases are recognised as
an expense on systematic basis over the term of lease.
P. Provisions and Contingent Liabilities
i. Provisions are recognised for liabilities that can be measured by
using a substantial degree of estimation, if:
a) the Company has present obligation as a result of a past event:
b) a probable outflow of resources embodying economic benefits is
expected to settle the obligation; and
c) the amount of the obligation can be reliably estimated.
ii. Contingent liability is disclosed in the case of:
a) Possible obligation that arises from past events and existence of
which will be confirmed only by the occurrence or non occurrence of one
or more uncertain future events not wholly within the control of the
enterprise; or
b) a present obligation arising from a past event
(i) when it is not probable that an outflow of resources embodying
economic benefits will be required to settle the obligation; or
(ii) a reliable estimate of the amount of the obligation cannot made.
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