Accounting Policies of JCT Electronics Ltd. Company
Mar 31, 2015
Terms of repayment
a) Rate of Interest
As per BIFR sanctioned scheme interest rate of 6% p.a. is payable to
Financial Institutions and Indian Banks referred to in Note no. 3.2
above starting from 1.10.2008.
b) Repayment
i) Secured loans from Financial Institutions and Indian Banks are
repayable in 33 quarterly instalments starting from Dec., 2008 to Mar.,
2017 [Refer Note no. 28A (b)]
ii) Foreign Banks referred to in Note No. 3.1(1)(c) and 3(iv)(a) are to
be setteled by way of OTS to be paid out of the sale proceeds of land &
building at Mohali, which is yet to materialize.
Note - 3.5
An amount of Rs.750 lacs was paid to IFCI, Operating Agency, for
distribution among Financial Institutions and Indian Banks as per BIFR
orders and the same has been reduced from the amount of term loans and
working capital term loans, a sum of Rs.27.99 lacs is still lying with
the Operating Agency as undistributed amount.
Note - 3.7
As per BIFR orders no interest is being provided on the ICD. Interest
accrued and due on ICD represents balance as on 31.03.2007. These ICDs
are payable alongwith interest accued & due after the scheme period.
Note - 3.8
Non Convertible Debentures subscribed by M/s Escort Mutual Fund on
18.11.1996 for a period of 17 months and 30 days @ 21.5% p.a. which
were redeemable on 23.11.99, will be now paid as per terms of the
sanctioned scheme. As per BIFR order, no interest is being provided on
these NCDs. Interest accrued and due on NCDs represents balance as on
31.03.2007. These NCDs are payable alongwith interest accrued & due
after the scheme period.
Note - 7.1 :
The information required to be disclosed under the Micro, Small &
Medium Enterprises Development Act, 2006 (MSMED), has been determined
to the extent such parties have been identified on the basis of
information available with the company. During the year ended 31st
March, 2015, company has not received any confirmation or intimation
from any party that it is covered under the Micro Small & Medium
Enterprises Development Act, 2006 (MSMED).
Note - 7.2 :
An amount of Rs. 6,101.35 Lacs (Previous Year - Rs. 6,154.73 Lacs)
receivable from Videocon Group is adjustable against trade payable to
Videocon Group upon getting confirmation for same.
25. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
(i) The financial statements have been prepared in accordance with
Generally Accepted Accounting Principles ("GAAP") in India under the
historical cost convention on accrual basis and are in accordance with
the applicable accounting standards as prescribed under Section 133 of
the Companies Act, 2013 ('Act') read with Rule 7 of the Companies
(Accounts) Rules, 2014, the provisions of the Act (to the extent
notified) and guidelines issued by the Securities and Exchange Board of
India (SEBI). These Accounting policies have been consistently applied,
except where a newly issued Accounting Standard is initially adopted by
the company.
(ii) As required & mandated by relevant guidelines prescribed under
Companies Act, 2013, Company has prepared its financials as per
Schedule III. All assets and liabilities have been classified as
current or non-current as per the Company's normal operating cycle and
other criteria set out in the Schedule III to the Companies Act, 2013.
Based on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has considered a period of twelve months for
the purposes of classification of assets and liabilities as current and
noncurrent.
(iii) VALUATION OF INVENTORIES:
(a) Finished goods are valued at lower of cost or net realizable value.
In the case of finished goods, cost is determined by taking material,
labour and related factory overheads including depreciation and fixed
production overheads arrived at by the cost sheet of the last month of
the financial year. Relevant proportionate amount of excise duty is
also added. Fixed overheads are allocated for inclusion in the cost of
conversion on the basis of normal levels of production capacity or
actual production whichever is higher.
(b) Raw materials, stores and spares have been valued at cost by using
weighted average basis. Cost includes purchase price, freight and other
incidental expenses incurred to bring the material at the present
location.
(c) Goods in process are valued at raw material cost incurred up to the
stage of production plus conversion cost apportioned on the basis of
raw material cost of goods in process.
(d) Loose tools and stock in transit have been valued at cost. Cost
includes purchase price, freight and other incidental expenses incurred
to bring the material at the present location.
(e) As per past practice, no value is placed on stock of scrap as the
cost of such scrap material is nil. The estimated net realizable/usable
value is not accurately ascertainable.
(iv) DEPRECIATION
(a) Depreciation on fixed assets is provided on the straight-line
method in accordance with Schedule II to the Companies Act, 2013.
However, as per rehabilitation scheme approved by Board for Industrial
and Financial Reconstruction (BIFR), in respect of plant & machinery
(including electrical installation, factory equipment, storage & water
system) the estimated useful life of assets has, with retrospective
effect, been considered as 30 years. The aforesaid Plant & Machinery
does not include electrical fan, cooler, refrigerator, A.C. and other
electrical appliances given to the employee's on which depreciation
rates has been charged as per the useful lives as prescribed under Part
C of Schedule II of the Companies Act 2013. The rate of depreciation on
plant & machinery determined on the basis of life of 30 years are lower
than rates prescribed in Schedule II which are based on 15 Years. The
rate of depreciation as per Straight Line Method is being used is
3.333% as against rate of 6.67% mentioned in Schedule II of Companies
Act, 2013. Hence the useful lives for these assets are different from
the useful lives as prescribed under Part C of Schedule II of the
Companies Act 2013.
(b) In the case of purchase/sale of asset, depreciation is computed on
pro rata basis from the date of such addition or as the case may be, up
to the date on which such asset has been sold, discarded, demolished or
destroyed.
(c) Intangible assets are amortized over their respective individual
estimated useful lives on a straight-line basis within a parameters of
"Accounting Standard 26" as prescribed under Section 133 of the
Companies Act, 2013 ('Act') read with Rule 7 of the Companies
(Accounts) Rules, 2014, commencing from the date the asset is available
to the Company for its use.
Depreciation and amortization methods, useful lives and residual values
are reviewed periodically, including at each financial year end.
(v) FOREIGN CURRENCY TRANSACTION
Foreign exchange transactions are recorded at the rate of exchange
prevailing on the date of transaction. Accordingly, exchange
differences arising on foreign exchange transactions settled during the
period are recognized in the statement of profit and loss of the
period.
Monetary current assets and monetary current liabilities that are
denominated in foreign currency are translated at the exchange rate
prevalent at the date of the balance sheet. The resulting difference is
also recorded in the Statement of profit & loss.
(vi) ACCOUNTING FOR FIXED ASSETS
Fixed assets are stated at their original cost including incidental
expenses related to acquisition and installation less accumulated
depreciation. The costs of assets under installation or under
construction as at the balance sheet date are shown as capital work in
process. There has been no revaluation of fixed assets carried out
during the year.
(vii) REVENUE RECOGNITION
(a) Sales are recognized when significant risks and rewards of goods
are transferred to the customers and is stated net of returns, trade
and volume discounts, rebates and sales tax but includes excise duties.
(b) Dividend Income is recognized when the right to receive is
established.
(c) Interest revenue is recognized on a time proportion basis taking
into account the amount outstanding and the rate applicable.
(viii) EMPLOYEE BENEFITS
(a) Short Term Employee Benefits
All employee benefits falling due within twelve months of rendering the
service are classified as short term employee benefits. The benefits
like salaries, wages, short term compensated absences etc. and the
expected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
(b) Post-Employment Benefits
(i) Defined Contribution Plans
Defined Contribution Plans are provident fund scheme, officers'
superannuation scheme, employee's state insurance and government
pension fund scheme for eligible employees. The company's contribution
to the Defined Contribution Plans is recognized in the Statement of
profit & loss in the financial year to which they relate.
(ii) Defined Benefit Plans
The employee's gratuity fund scheme managed by LIC is the Company's
defined benefit plans. Wherever applicable, the present value of the
obligation under such defined benefit plans are determined based on
actuarial valuation using the Projected Unit Credit Method, which
recognizes each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build
up the final obligation.
The obligation is measured at the present value of the estimated future
cash flows. 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, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the Statement
of Profit & Loss.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligation under the defined benefit plans to recognize
the obligation or assets on the net basis.
Gains or losses on the curtailment or settlement of any defined benefit
plan are recognized when the curtailment or settlement occurs. Past
service cost is recognized as an expense on a straight-line basis over
the average period until the benefits become vested.
(c) Other Long-term Employee Benefits
The obligations for long term employee benefits such as long term
compensated leave or encashment of leave accrued up to the specified
period only at the time of retirement are recognized in the similar
manner as in the case of defined benefit plans as mentioned in (b) (ii)
above. The provision for leave encashment is accrued and provided for,
based on the actuarial valuation made by an independent Actuary as on
the Balance Sheet date.
(ix) ACCOUNTING FOR INVESTMENT
Investments are classified into current and long term investments.
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long term investments. Current
investments are stated at the lower of cost and fair value determined
on an individual basis. A provision for decline in value of Long Term
Investments is made only when the extent of loss is determinable and
diminution in value, in the opinion of the Management, is permanent.
(x) INTANGIBLE ASSETS
Intangible Assets & related expenditure are recognized as per criteria
specified in Accounting Standard-26 on "Intangible Assets" as
prescribed under Section 133 of the Companies Act, 2013 ('Act') read
with Rule 7 of the Companies (Accounts) Rules, 2014 and accounted for
as under :
(a) Intangible Assets are recognized when it is probable that the
future economic benefits that are attributable to the asset will flow
to the enterprise and the cost of the asset can be measured reliably.
(b) The cost of internally generated products is the sum of the
expenditure incurred from the time when the product first met the
recognition criteria for an intangible asset in development stage. The
expenditure incurred during research phase is directly charged to
Statement of Profit & Loss. The cost of product development comprises
its raw material cost, salary & wages, Stores & spares, including any
import duties and other taxes (other than those subsequently
recoverable by the enterprise from the taxing authorities) and any
directly attributable expenditure on making the product ready for its
use.
(c) Intangible assets are recorded at the consideration paid for
acquisition of such assets and are carried at cost less accumulated
amortization and impairment.
(xi) EXCISE DUTY
Excise duty is accounted for on the basis of removal of goods as well
as provision made for goods lying as closing stock.
(xii) DEFERRED TAXATION
Deferred tax is the effect of timing differences, being the difference
between taxable incomes and accounting income that originates in one
period and is capable of reversal in one or more subsequent periods. On
prudent grounds, deferred tax liabilities, when they arise, are
provided without any exceptions but deferred tax assets are calculated
on the accumulated timing differences as at the end of the year and are
based on tax rates and laws in force on the balance sheet date and are
recognized and carried forward only to the extent that there is a
virtual certainty of realization against future taxable income.
(xiii) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
(xiv) LEASES
Assets taken on lease under which the lessor effectively retains all
significant risks & rewards of ownership have been classified as
operating lease. Lease payments made under an operating lease are
recognized as expense in the Statement of profit & loss on straight
line basis over the primary term of the lease as mentioned in the lease
agreement.
(xv) BORROWING COSTS
Borrowing costs that are specifically attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of cost of such asset till the asset is ready for its intended
use. A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognized as an expense in the period in
which they are incurred.
(xvi) EARNINGS PER SHARE
In determining earnings per share, the Company considers the net profit
after tax and includes the post-tax effect of any extraordinary/
exceptional item. The number of shares used in computing basic earnings
per share comprises of the weighted average number of shares
outstanding during the period. The number of shares used in computing
diluted earnings per share comprises of the weighted average shares
considered for deriving basic earnings per share, and also the weighted
average number of equity shares that could have been issued on the
conversion of all dilutive potential equity shares.
(xvii) CASH FLOW STATEMENTS
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from principle revenue generating, investing
and financing activities of the Company are segregated.
Mar 31, 2014
A) Equity Shares : The company has only one class of equity shares
having face value of Rs.1/- each. Each holder of equity share is
entitled to one vote per share.
b) Share holders are entitled to dividend, if any, declared by the
company. The dividend is payable in Indian rupees. The dividend, if
any, declared by the Board of Directors is subject to the approval of
the shareholders in the ensuing Annual General Meeting.
c) Re-payment of equity share capital shall be made at the time of
winding-up of the company. The company can also partly buy back equity
as and when decided by the company in accordance with the provision of
Companies Act, 1956.
Note - 1.4
Equity shares held by holding company, ultimate holding company,
subsidiaries of the holding company, Associates of the holding company,
subsidiary of the ultimate holding company and/or Associates of the
ultimate holding company
a) Term loans (secured) from the Financial Institutions and Indian
Banks are secured by an equitable mortgage on all the immovable
properties at Mohali & Vadodara and hypothecation of the movable assets
of the company, present and future, save and except prior charges on
specified movables in favour of the bankers for working capital
requirements.
b) Working Capital term loans from Indian Banks and working capital
facilities from foreign banks are secured by first charge by way of
hypothecation of raw materials, goods-in-process, finished goods,
stores and spares, book debts and receivables of the Company, present
and future and second charge on the immovable properties at Mohali and
Vadodara.
c) In terms of the BIFR sanctioned scheme, outstanding principal amount
of the working capital facilities from banks (other than banks covered
under OTS as per sanctioned scheme) as on 31st March, 2007 have been
converted into working capital term loans. These will additionaly be
covered by a pari-pasu charge on the fixed assets along with the term
lenders, after completion of documentation in this regard.
d) Principal amount of working capital from banks covered under OTS
have been shown under working capital facilities. As mentioned in the
sanctioned scheme [Refer note no. 27(A) (c)] foreign banks are to be
paid by way of one time settelment (OTS)
Note - 3.3 : Terms of repayment
a) Rate of Interest
As per BIFR sanctioned scheme interest rate of 6% p.a. is payable to
Financial Institutions and Indian Banks referred to in Note no. 3.2
above starting from 1.10.2008.
b) Repayment
i) Secured loans from Financial Institutions and Indian Banks are
repayable in 33 quarterly instalments starting from Dec., 2008 to Mar.,
2017 [Refer Note no. 28A (b)]
ii) Foreign Banks referred to in Note No. 3.1(1)(c) and 3(iv)(a) are to
be setteled by way of OTS to be paid out of the sale proceeds of land &
building at Mohali, which is yet to materialize.
Note - 3.4 : Details of default in Repayments
The company has defaulted in payment of instalments for the period
01.04.2011 to 31.03.2012 as follows :
Note - 3.5
An amount of Rs.750 lacs was paid to IFCI, Operating Agency, for
distribution among Financial Institutions and Indian Banks as per BIFR
orders. A sum of Rs.27.99 lacs is still lying with the Operating Agency
as undistributed amount and the same has been reduced from the amount
of term loans and working capital term loans.
Note - 3.7
As per BIFR orders no interest is being provided on the ICD. Interest
accrued and due on ICD represents balance as on 31.03.2007. These ICDs
are payable alongwith interested accued & due after the scheme period.
Note - 3.8
Non Convertible Debentures subscribed by M/s Escort Mutual Fund on
18.11.1996 for a period of 17 months and 30 days @ 21.5% p.a. which
were redeemable on 23.11.99, will be now paid as per terms of the
sanctioned scheme. As per BIFR order, no interest is being provided on
these NCDs. Interest accrued and due on NCDs represents balance as on
31.03.2007. These NCDs are payable alongwith interest accrued & due
after the scheme period.
The information required to be disclosed under the Micro, Small &
Medium Enterprises Development Act, 2006 (MSMED), has been determined
to the extent such parties have been identified on the basis of
information available with the company. During the year ended 31st
March, 2014, company has not received any confirmation or intimation
from any party that it is covered under the Micro, Small & Medium
Enterprises Development Act, 2006 (MSMED).
Rs. 15.39 lacs (Previous Year 15.39 Lacs) is payable to M/s H. K.
Industries. This party is registered under the said Act to whom the
company owes an amount for more than 45 days as at the Balance Sheet
date which are carrying since 31st March, 2007. Dues of the creditors
as at 31st March, 2007 are to be addressed as per terms of sanctioned
scheme of BIFR. However, in respect of balances outstanding as at 31st
March, 2007, no provision for interest has been made in view of the
BIFR order passed under the Sick Industrial Companies (Special
Provisions) Act, 1985 (SICA), wherein it is stated that no interest on
outstanding amounts due to creditors standing as on the cut off date
i.e. 31st March, 2007, shall be payable. Besides, there are no
transactions with these parties in the reporting year. In view of
above, the information required under the Micro, Small & Medium
Enterprises Development Act, 2006 (MSMED), has not been furnished.
The information required to be disclosed under the Micro, Small &
Medium Enterprises Development Act, 2006 (MSMED), has been determined
to the extent such parties have been identified on the basis of
information available with the company. During the year ended 31st
March, 2014, company has not received any confirmation or intimation
from any party that it is covered under the Micro Small & Medium
Enterprises Development Act, 2006 (MSMED).
Note - 7.2 :
An amount of Rs. 6,154.73 Lacs (Previous Year - Rs. 5,648.35 Lacs)
receivable from Videocon Group. The same is adjustable against trade
payable to Videocon Group.
The current maturities includes defaults in payment of instalments of
Rs. 6,977.43 Lacs (Previous Year Rs. 4,105.33 Lacs) as per details
given in Note No. 3.4
Note - 8.2
Interest accrued but not due is on Term Loans from Financial
Institutions & Indian Banks and Working Capital Term Loans from Indian
Banks in view of BIFR order dated 12.11.2008.
a) Finished goods have been valued at lower of cost or net realizable
value. In the case of finished goods, cost is determined by taking
material, labour and related factory overheads including depreciation,
excise duly and fixed production overheads arrived at by the cost sheet
of the last month of the financial year. Fixed overheads are allocated
for inclusion in the cost of conversion on the basis of normal levels
of production capacity or actual production whichever is higher.
b) Raw materials, stores and spares have been valued at cost by using
weighted average basis.
c) Stock in transit have been valued at cost
d) As per past practice, no value is placed on stock of scrap since its
estimated net realizable/usable value is not accurately ascertainable.
Note - 24.1
Exchange differences arising on foreign currency transactions relating
to revenue items have been recognised as income or expense in the
period in which they arise. During the current year, there was a Profit
of Rs. 44.14 Lacs (Previous year loss of Rs.115.60 Lacs) which has been
shown as part of other income/expense.
(i) The financial statements have been prepared in accordance with
Generally Accepted Accounting Principles ("GAAP") in India under
the historical cost convention on accrual basis and are in accordance
with the applicable accounting standards issued by Ministry of
Corporate Affairs, Government of India and as prescribed in the
Companies (Accounting Standards) Rules, 2006. These Accounting policies
have been consistently applied, except where a newly issued accounting
standard is initially adopted by the company. Management evaluates the
effect of accounting standards issued on a going basis and ensures that
they are adopted as mandated by Companies Act, 1956.
(ii) As required & mandated by relevant guidelines prescribed under
Companies Act, 1956, Company has prepared its financials as per Revised
Schedule VI. All assets and liabilities have been classified as current
or non-current as per the Company''s normal operating cycle and other
criteria set out in the revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has considered a period of twelve months for
the purposes of classification of assets and liabilities as current and
non-current.
(iii) VALUATION OF INVENTORIES:
a) Finished goods are valued at lower of cost or net realizable value.
In the case of finished goods, cost is determined by taking material,
labour and related factory overheads including depreciation and fixed
production overheads arrived at by the cost sheet of the last month of
the financial year. Relevant proportionate amount of excise duty is
also added. Fixed overheads are allocated for inclusion in the cost of
conversion on the basis of normal levels of production capacity or
actual production whichever is higher.
b) Raw materials, stores and spares have been valued at cost by using
weighted average basis. Cost includes purchase price, freight and other
incidental expenses incurred to bring the material at the present
location.
c) Goods in process are valued at raw material cost incurred up to the
stage of production plus conversion cost apportioned on the basis of
raw material cost of goods in process.
d) Loose tools and stock in transit have been valued at cost. Cost
includes purchase price, freight and other incidental expenses incurred
to bring the material at the present location.
e) As per past practice, no value is placed on stock of scrap as the
cost of such scrap material is nil. The estimated net realizable/usable
value is not accurately ascertainable.
(iv) DEPRECIATION
a) Depreciation on fixed assets is provided on the straight-line method
in accordance with Schedule XIV to the Companies Act, 1956. However, as
per rehabilitation scheme approved by Board for Industrial and
Financial Reconstruction (BIFR), in respect of plant & machinery
(including electrical installation, factory equipment, storage & water
system) the estimated useful life of assets has, with retrospective
effect, been considered as 30 years. The aforesaid Plant & Machinery
does not include electrical fan, cooler, refrigerator, A.C. and other
electrical appliances given to the employee''s on which depreciation
rates has been charged as per the rates prescribed by Schedule XIV of
the Companies Act. The rate of depreciation on plant & machinery
determined on the basis of life of 30 years are lower than rates
prescribed in Schedule XIV. The rate of depreciation as per Straight
Line Method is being used is 3.333% as against rate of 4.75% mentioned
in Schedule XIV of Companies Act, 1956.
On indigenous vehicles/cycles, depreciation is provided on the written
down value method as per rates prescribed and in accordance with the
Income Tax Act, 1961. The rate of depreciation charged on vehicles is
15% p.a.
b) In the case of purchase/sale depreciation is charged for the full
month in which purchase /sale is made.
c) 100% depreciation is charged in the year of purchase on assets equal
to or less than Rs. 5,000.
(v) FOREIGN CURRENCY TRANSACTION
Foreign exchange transactions are recorded at the rate of exchange
prevailing on the date of transaction. Accordingly, exchange
differences arising on foreign exchange transactions settled during the
period are recognized in the statement of profit and loss of the
period.
Monetary current assets and monetary current liabilities that are
denominated in foreign currency are translated at the exchange rate
prevalent at the date of the balance sheet. The resulting difference is
also recorded in the Statement of profit & loss.
(vi) ACCOUNTING FOR FIXED ASSETS
Fixed assets are stated at their original cost including incidental
expenses related to acquisition and installation less accumulated
depreciation. The costs of assets under installation or under
construction as at the balance sheet date are shown as capital work in
process. There has been no revaluation of fixed assets carried out
during the year.
(vii) REVENUE RECOGNITION
a) Sales are recognized when significant risks and rewards of goods are
transferred to the customers and is stated net of returns, trade and
volume discounts, rebates and sales tax but includes excise duties.
b) Dividend Income is recognized when the right to receive is
established.
c) Interest revenue is recognized on a time proportion basis taking
into account the amount outstanding and the rate applicable.
(viii) EMPLOYEE BENEFITS
a) Short Term Employee Benefits
All employee benefits falling due within twelve months of rendering the
service are classified as short term employee benefits. The benefits
like salaries, wages, short term compensated absences etc. and the
expected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
b) Post-Employment Benefits
(i) Defined Contribution Plans
Defined Contribution Plans are provident fund scheme, officers''
superannuation scheme, employee''s state insurance and government
pension fund scheme for eligible employees. The company''s
contribution to the Defined Contribution Plans is recognized in the
Statement of profit & loss in the financial year to which they relate.
(ii) Defined Benefit Plans
The employee''s gratuity fund scheme managed by LIC is the Company''s
defined benefit plans. Wherever applicable, the present value of the
obligation under such defined benefit plans are determined based on
actuarial valuation using the Projected Unit Credit Method, which
recognizes each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build
up the final obligation.
The obligation is measured at the present value of the estimated future
cash flows. 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 having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the Statement
of Profit & Loss.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligation under the defined benefit plans to recognize
the obligation or assets on the net basis.
Gains or losses on the curtailment or settlement of any defined benefit
plan are recognized when the curtailment or settlement occurs. Past
service cost is recognized as expense on a straight-line basis over the
average period until the benefits become vested.
c) Other Long-term Employee Benefits
The obligations for long term employee benefits such as long term
compensated leave or encashment of leave accrued up to the specified
period only at the time of retirement are recognized in the similar
manner as in the case of defined benefit plans as mentioned in (b) (ii)
above. The provision for leave encashment is accrued and provided for,
based on the actuarial valuation made by an independent Actuary as on
the Balance Sheet date.
(ix) ACCOUNTING FOR INVESTMENT
Investments are classified into current and long term investments.
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long term investments. Current
investments are stated at the lower of cost and fair value determined
on an individual basis. A provision for decline in value of Long Term
Investments is made only when the extent of loss is determinable and
diminution in value, in the opinion of the Directors, is permanent.
(x) INTANGIBLE ASSETS
Intangible Assets & related expenditure are recognized as per criteria
specified in Accounting Standard-26 on "Intangible Assets" issued by
the Institute of Chartered Accountants of India and accounted for as
under :-
a) Intangible Assets are recognized when it is probable that the future
economic benefits that are attributable to the asset will flow to the
enterprise and the cost of the asset can be measured reliably.
b) The cost of internally generated products is the sum of the
expenditure incurred from the time when the product first met the
recognition criteria for an intangible asset in development stage. The
expenditure incurred during research phase is directly charged to
Statement of Profit & Loss. The cost of product development comprises
its raw material cost, salary & wages, Stores & spares, including any
import duties and other taxes (other than those subsequently
recoverable by the enterprise from the taxing authorities) and any
directly attributable expenditure on making the product ready for its
use.
c) Internally developed new products for commercial use: over a period
of 120 months from the month subsequent to the month in which it got
activated for commercial use.
(xi) EXCISE DUTY
Excise duty is accounted for on the basis of removal of goods as well
as provision made for goods lying as closing stock.
(xii) DEFERRED TAXATION
Deferred tax is the effect of timing differences, being the difference
between taxable incomes and accounting income that originates in one
period and is capable of reversal in one or more subsequent periods. On
prudent grounds, deferred tax liabilities, when they arise, are
provided without any exceptions but deferred tax assets are calculated
on the accumulated timing differences as at the end of the year and are
based on tax rates and laws in force on the balance sheet date and are
recognized and carried forward only to the extent that there is a
virtual certainty of realization against future taxable income.
(xiii) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
(xiv) LEASES
Assets taken on lease under which the lessor effectively retains all
significant risks & rewards of ownership have been classified as
operating lease. Lease payments made under an operating lease are
recognized as expense in the Statement of profit & loss on straight
line basis over the primary term of the lease as mentioned in the lease
agreement.
(xv) BORROWING COSTS
Borrowing costs that are specifically attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of cost of such asset till the asset is ready for its intended
use. A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognized as an expense in the period in
which they are incurred.
(xvi) EARNINGS PER SHARE
In determining earnings per share, the Company considers the net profit
after tax and includes the post-tax effect of any extraordinary/
exceptional item. The number of shares used in computing basic earnings
per share comprises of the weighted average number of shares
outstanding during the period. The number of shares used in computing
diluted earnings per share comprises of the weighted average shares
considered for deriving basic earnings per share, and also the weighted
average number of equity shares that could have been issued on the
conversion of all dilutive potential equity shares.
(xvii) CASH FLOW STATEMENTS
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from principle revenue generating, investing
and financing activities of the Company are segregated.
Mar 31, 2013
(i) The financial statements have been prepared in accordance with
Generally Accepted Accounting Principles ("GAAP") in India under the
historical cost convention on accrual basis and are in accordance with
the applicable accounting standards issued by Ministry of Corporate
Affairs, Government of India and as prescribed in the Companies
(Accounting Standards) Rules, 2006. These Accounting policies have been
consistently applied, except where a newly issued accounting standard
is initially adopted by the company. Management evaluates the effect of
accounting standards issued on a going basis and ensures that they are
adopted as mandated by Companies Act, 1956.
(ii) As required & mandated by relevant guidelines prescribed under
Companies Act, 1956, Company has prepared its financials as per Revised
Schedule VI. All assets and liabilities have been classified as current
or non-current as per the Company''s normal operating cycle and other
criteria set out in the revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has considered a period of twelve months for
the purposes of classification of assets and liabilities as current and
non-current.
(iii) VALUATION OF INVENTORIES:
(a) Finished goods have been valued at lower of cost or net realizable
value. In the case of finished goods, cost is determined by taking
material, labour and related factory overheads including depreciation
and fixed production overheads arrived at by the cost sheet of the last
month of the financial year. Relevant proportionate amount of excise
duty is also added. Fixed overheads are allocated for inclusion in the
cost of conversion on the basis of normal levels of production capacity
or actual production whichever is higher.
(b) Raw materials, stores and spares have been valued at cost by using
weighted average basis. Cost includes purchase price, freight and other
incidental expenses incurred to bring the material at the present
location.
(c) Goods in process have been valued at raw material cost incurred up
to the stage of production plus conversion cost apportioned on the
basis of raw material cost of goods in process.
(d) Loose tools and stock in transit have been valued at cost. Cost
includes purchase price, freight and other incidental expenses incurred
to bring the material at the present location.
(e) As per past practice, no value is placed on stock of scrap as the
cost of such sGrap material is nil. The estimated net
realizable/usable value is not accurately ascertainable.
(iv) DEPRECIATION
(a) Depreciation on fixed assets is provided on the straight-line
method in accordance with Schedule XIV to the Companies Act, 1956.
However, as per rehabilitation scheme approved by Board for Industrial
and Financial Reconstruction (BIFR), in respect of plant & machinery
(including electrical installation, factory equipment, storage & water
system) the estimated useful life of assets has, with retrospective
effect, been considered as 30 years. The aforesaid Plant & Machinery
does not include electrical fan, cooler, refrigerator, A.C. and other
electrical appliances given to the employee''s on which depreciation
rates has been charged as per the rates prescribed by Schedule XIV of
the Companies Act. The rate of depreciation on plant & machinery
determined on the basis of life of 30 years are lower than rates
prescribed in Schedule XIV. The rate of depreciation as per Straight
Line Method is being used is 3.333% as against rate of 4.75% mentioned
in Schedule XIV of Companies Act, 1956.
On indigenous vehicles/cycles, depreciation is provided on the written
down value method as per rates prescribed and in accordance with the
Income Tax Act, 1961. The rate of depreciation charged on vehicles is
15% p.a.
(b) In the case of purchase/sale depreciation is charged for the full
month in which purchase /sale is made.
(c) 100% depreciation is charged in the year of purchase on assets
equal to or less than Rs. 5,000.
(v) FOREIGN CURRENCY TRANSACTION
Foreign exchange transactions are recorded at the rate of exchange
prevailing on the date of transaction. Accordingly, exchange
differences arising on foreign exchange transactions settled during the
period are recognized in the statement of profit and loss of the
period.
Monetary current assets and monetary current liabilities that are
denominated in foreign currency are translated at the exchange rate
prevalent at the date of the balance sheet. The resulting difference is
also recorded in the Statement of profit & loss.
(vi) ACCOUNTING FOR FIXED ASSETS
Fixed assets are stated at their original cost including incidental
expenses related to acquisition and installation less accumulated
depreciation. The costs of assets under installation or under
construction as at the balance sheet date are shown as capital work in
process. There has been no revaluation of fixed assets carried out
during the year.
(vii) REVENUE RECOGNITION
(a) Sales are recognized when significant risks and rewards of goods
are transferred to the customers and is stated net of returns, trade
and volume discounts, rebates and sales tax but includes excise duties.
(b) Dividend Income is recognized when the right to receive is
established.
(c) Interest revenue is recognized on a time proportion basis taking
into account the amount outstanding and the rate applicable.
(viii) EMPLOYEE BENEFITS
(a) Short Term Employee Benefits
All employee benefits falling due within twelve months of rendering the
service are classified as short term employee benefits. The benefits
like salaries, wages, short term compensated absences etc. and the
expected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
(b) Post-Employment Benefits
(i) Defined Contribution Plans
Defined Contribution Plans are provident fund scheme, officers''
superannuation scheme, employee''s state insurance and government
pension fund scheme for eligible employees. The company''s contribution
to the Defined Contribution Plans is recognized in the Statement of
profit & loss in the financial year to which they relate.
(ii) Defined Benefit Plans
The employee''s gratuity fund scheme managed by LIC is the Company''s
defined benefit plans. Wherever applicable, the present value of the
obligation under such defined benefit plans are determined based on
actuarial valuation using the Projected Unit Credit Method, which
recognizes each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build
up the final obligation.
The obligation is measured at the present value of the estimated future
cash flows. 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, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the Statement
of Profit & Loss.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligation under the defined benefit plans to recognize
the obligation or assets on the net basis.
Gains or losses on the curtailment or settlement of any defined benefit
plan are recognized when the curtailment or settlement occurs. Past
service cost is recognized as expense on a straight-line basis over the
average period until the benefits become vested.
(c) Other Long-term Employee Benefits
The obligations for long term employee benefits such as long term
compensated leave or encashment of leave accrued up to the specified
period only at the time of retirement are recognized in the similar
manner as in the case of defined benefit plans as mentioned in (b) (ii)
above. The provision for leave encashment is accrued and provided for,
based on the actuarial valuation made by an independent Actuary as on
the Balance Sheet date.
(ix) ACCOUNTING FOR INVESTMENT
Investments are classified into current and long term investments.
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long term investments. Current
investments are stated at the lower of cost and fair value determined
on an individual basis. A provision for decline in value of Long Term
Investments is made only when the extent of loss is determinable and
diminution in value, in the opinion of the Directors, is permanent.
(x) INTANGIBLE ASSETS
Intangible Assets & related expenditure are recognized as per criteria
specified in Accounting Standard-26 on "Intangible Assets" issued by
the Institute of Chartered Accountants of India and accounted for as
under:-
(a) Intangible Assets are recognized when it is probable that the
future economic benefits that are attributable to the asset will flow
to the enterprise and the cost of the asset can be measured reliably.
(b) The cost of internally generated products is the sum of the
expenditure incurred from the time when the product first met the
recognition criteria for an intangible asset in development stage. The
expenditure incurred during research phase is directly charged to
Statement of Profit & Loss. The cost of product development comprises
its raw material cost, salary & wages, Stores & spares, including any
import duties and other taxes (other than those subsequently
recoverable by the enterprise from the taxing authorities) and any
directly attributable expenditure on making the product ready for its
use.
(c) Acquisition of software is amortized on a straight line basis over
a period of five years starting from the year of capitalization.
(d) Internally developed new products for commercial use: over a period
of 120 months from the month subsequent to the month in which it got
activated for commercial use.
(xi) EXCISE DUTY
Excise duty has been accounted for on the basis of removal of goods as
well as provision made for goods lying as closing stock.
(xii)DEFERRED TAXATION
Deferred tax is the effect of timing differences, being the difference
between taxable incomes and accounting income that originates in one
period and is capable of reversal in one or more subsequent periods. On
prudent grounds, deferred tax liabilities, when they arise, are
provided without any exceptions but deferred tax assets are calculated
on the accumulated timing differences as at the end of the year and are
based on tax rates and laws in force on the balance sheet date and are
recognized and carried forward only to the extent that there is a
virtual certainty of realization against future taxable income.
(xiii)PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
(xiv)LEASES
Assets taken on lease under which the lessor effectively retains all
significant risks & rewards of ownership have been classified as
operating lease. Lease payments made under an operating lease are
recognized as expense in the Statement of profit & loss on straight
line basis over the primary term of the lease as mentioned in the lease
agreement.
(xv) BORROWING COSTS
Borrowing costs that are specifically attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of cost of such asset till the asset is ready for its intended
use. A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognized as an expense in the period in
which they are incurred.
(xvi) EARNINGS PER SHARE
In determining earnings per share, the Company considers the net profit
after tax and includes the post-tax effect of any extraordinary/
exceptional item. The number of shares used in computing basic earnings
per share comprises of the weighted average number of shares
outstanding during the period. The number of shares used in computing
diluted earnings per share comprises of the weighted average shares
considered for deriving basic earnings per share, and also the weighted
average number of equity shares that could have been issued on the
conversion of all dilutive potential equity shares.
(xvii)CASH FLOW STATEMENTS
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from principle revenue generating, investing
and financing activities of the Company are segregated.
Mar 31, 2012
(i) The financial statements have been prepared in accordance with
Generally Accepted Accounting Principles ("GAAP") in India under the
historical cost convention on accrual basis and are in accordance with
the applicable accounting standards issued by Ministry of Corporate
Affairs, Government of India and as prescribed in the Companies
(Accounting Standards) Rules, 2006. These Accounting policies have been
consistently applied, except where a newly issued accounting standard
is initially adopted by the company. Management evaluates the effect of
accounting standards issued on a going basis and ensures that they are
adopted as mandated by Companies Act, 1956.
(ii) As required & mandated by relevant guidelines prescribed under
Companies Act, 1956, Company has prepared its financials as per Revised
Schedule VI. All assets and liabilities have been classified as current
or non-current as per the Company's normal operating cycle and other
criteria set out in the revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has considered a period of twelve months for
the purposes of classification of assets and liabilities as current and
non-current.
(iii) VALUATION OF INVENTORIES
(a) Finished goods have been valued at lower of cost or net realizable
value. In the case of finished goods, cost is determined by taking
material, labour and related factory overheads including depreciation,
excise duty and fixed production overheads arrived at by the cost sheet
of the last month of the financial year. Fixed overheads are allocated
for inclusion in the cost of conversion on the basis of normal levels
of production capacity or actual production whichever is higher.
(b) Raw materials, stores and spares have been valued at cost by using
weighted average basis.
(c) Goods in process have been valued at raw material cost incurred up
to the stage of production plus conversion cost apportioned on the
basis of raw material cost of goods in process.
(d) Loose tools and stock in transit have been valued at cost.
(e) As per past practice, no value is placed on stock of scrap since
its estimated net realizable/usable value is not accurately
ascertainable.
(iv) DEPRECIATION
(a) Depreciation on fixed assets is provided on the straight-line
method in accordance with Schedule XIV to the Companies Act, 1956.
However, as per rehabilitation scheme approved by Board tor Industrial
and Financial Reconstruction (BIFR), in respect of plant & machinery
(including electrical installation, factory equipment, storage & water
system), the estimated useful life of assets has, with retrospective
effect, been considered as 30 years. However, the rate of depreciation
on plant & machinery are lower than rates prescribed in Schedule XIV.
The rate of depreciation as per Straight Line Method is being used is
3.333% as against rate of 4.75% mentioned in Schedule XIV of Companies
Act, 1956.
On indigenous vehicles/cycles, depreciation is provided on the written
down value method as per rates prescribed and in accordance with the
Income Tax Act, 1961.
(b) In the case of purchase/sale depreciation is charged for the full
month in which purchase/sale is made.
(c) 100% depreciation is charged in the year of purchase on assets
equal to or less than Rs. 5,000.
(v) FOREIGN CURRENCY TRANSLATION
Foreign exchange transactions are recorded at the rate of exchange
prevailing on the date of transaction (i.e. bill of entry).
Accordingly, exchange differences arising on foreign exchange
transactions settled during the period are recognized in the statement
of profit and loss of the period.
Monetary current assets and monetary current liabilities that are
denominated in foreign currency are translated at the exchange rate
prevalent at the date of the balance sheet. The resulting difference is
also recorded in the Statement of profit & loss.
(vi) ACCOUNTING FOR FIXED ASSETS
(a) Fixed assets are stated at their original cost including incidental
expenses related to acquisition and installation less accumulated
depreciation. The costs of assets under installation or under
construction as at the balance sheet date are shown as capital work in
process. There has been no revaluation of fixed assets carried out
during the year.
(b) Leasehold land is written off over the period of lease.
(vii) REVENUE RECOGNITION
(a) Sales are recognized when significant risks and rewards of goods
are transferred to the customers and is stated net of returns, trade
discounts, rebates and sales tax but includes excise duties.
(b) Dividend Income is recognized when the right to receive is
established.
(c) Interest revenue is recognized on a time proportion basis taking
into account the amount outstanding and the rate applicable.
(viii) EMPLOYEE BENEFITS
(a) Short Term Employee Benefits
All employee benefits falling due within twelve months of rendering the
service are classified as short term employee benefits. The benefits
like salaries, wages, short term compensated absences etc. and the ex-
pected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
(b) Post-Employment Benefits
(i) Defined Contribution Plans
Defined Contribution Plans are provident fund scheme, officers'
superannuation scheme, employees state insurance and government pension
fund scheme for eligible employees. The company's contribution to the
Defined Contribution Plans is recognized in the Statement of profit &
loss in the financial year to which they relate.
(ii) Defined Benefit Plans
The employee's gratuity fund scheme managed by LIC is the Company's
defined benefit plans. Wherever applicable, the present value of the
obligation under such defined benefit plans are determined based on
actuarial valuation using the Projected Unit Credit Method, which
recognizes each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build
up the final obligation.
The obligation is measured at the present value of the estimated future
cash flows. 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, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the Statement
of Profit & Loss.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligation under the defined benefit plans to recognize
the obligation on the net basis.
Gains or losses on the curtailment or settlement of any defined benefit
plan are recognized when the curtailment or settlement occurs. Past
service cost is recognized as expense on a straight-line basis over the
average period until the benefits become vested.
(c) Other Long-term Employee Benefits
The obligations for long term employee benefits such as long term
compensated leave or encashment of leave accrued up to the specified
period only at the time of retirement are recognized in the similar
manner as in the case of defined benefit plans as mentioned in (b) (ii)
above. The provision for leave encashment is accrued and provided for,
based on the actuarial valuation made by an independent Actuary as on
the Balance Sheet date.
(ix) ACCOUNTING FOR INVESTMENT
Investments are classified into current and long term investments.
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long term investments. Current
investments are stated at the lower of cost and fair value determined
on an individual basis. A provision for decline in value of investments
is made only when the extent of loss is determinable and diminution in
value, in the opinion of the Directors, is permanent.
(x) INTANGIBLE ASSETS
Intangible Assets & related expenditure are recognized as per criteria
specified in Accounting Standard-26 on "Intangible Assets" issued by
the Institute of Chartered Accountants of India and accounted for as
under :-
(a) Intangible Assets are recognized when it is probable that the
future economic benefits that are attributable to the asset will flow
to the enterprise and the cost of the asset can be measured reliably.
(b) The cost of internally generated products is the sum of the
expenditure incurred from the time when the product first met the
recognition criteria for an intangible asset in development stage. The
expenditure incurred during research phase is directly charged to
Statement of Profit & Loss. The cost of product development comprises
its raw material cost, salary & wages, Stores & spares, including any
import duties and other taxes (other than those subsequently
recoverable by the enterprise from the taxing authorities) and any
directly attributable expenditure on making the product ready for its
use. Any trade discounts, rebates and realization from sale of products
during test runs are deducted in arriving at the cost.
(c) Revenue expenditure whenever incurred on research and development
is expensed as incurred.
(d) Acquisition of software is amortized on a straight line basis over
a period of five years starting from the year of capitalization.
(e) Internally developed new products for commercial use : over a
period of 120 months from the month subsequent to the month in which it
got activated for commercial use.
(xi) EXCISE DUTY
Excise duty has been accounted for on the basis of removal of goods as
well as provision made for goods lying as closing stock.
(xii) DEFERRED TAXATION
Deferred tax is the effect of timing differences, being the difference
between taxable income and accounting income that originates in one
period and is capable of reversal in one or more subsequent periods. On
prudent grounds, deferred tax liabilities, when they arise, are
provided without any exceptions but deferred tax assets are calculated
on the accumulated timing differences as at the end of the year and are
based on tax rates and laws in force on the balance sheet date and are
recognized and carried forward only to the extent that there is a
virtual certainty of realization against future taxable income.
(xiii) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
(xiv) LEASES
(a) Lease rentals on assets taken on lease prior to April 01,2001 are
charged to the Statement of profit & loss over the period of the lease.
(b) Assets taken on lease under which the lessor effectively retains
all significant risks & rewards of ownership have been classified as
operating lease. Lease payments made under an operating lease are
recognized as expense in the Statement of profit & loss on straight
line basis over the primary term of the lease as mentioned in the lease
agreement.
(xv) BORROWING COSTS
Borrowing costs that are specifically attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of cost of such asset till the asset is ready for its intended
use. A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognized as an expense in the period in
which they are incurred.
(xvi) EARNINGS PER SHARE
In determining earnings per share, the Company considers the net profit
after tax and includes the post-tax effect of any
extraordinary/exceptional item. The number of shares used in computing
basic earnings per share comprises of the weighted average number of
shares outstanding during the period. The number of shares used in
computing diluted earnings per share comprises of the weighted average
shares considered for deriving basic earnings per share, and also the
weighted average number of equity shares that could have been issued on
the conversion of all dilutive potential equity shares.
(xvii)CASH FLOW STATEMENTS
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from principle revenue generating, investing
and financing activities of the Company are segregated.
Mar 31, 2011
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared in accordance with Generally
Accepted Accounting Principles ("GAAP") in India under the historical
cost convention on accrual basis and are in accordance with the
applicable accounting standards issued by the Institute of Chartered
Accountants of India (ICAI) & prescribed in the Companies (Accounting
Standards) Rules, 2006. These Accounting policies have been
consistently applied, except where a newly issued accounting standard
is initially adopted by the company. Management evaluates the effect of
accounting standards issued on a going basis and ensures that they are
adopted as mandated by the ICAI.
2. VALUATION OF INVENTORIES:
(a) Finished goods have been valued at lower of cost or net realizable
value. In the case of finished goods, cost is determined by taking
material, labour and related factory overheads including depreciation,
excise duty and fixed production overheads arrived at by the cost sheet
of the last month of the financial year. Fixed overheads are allocated
for inclusion in the cost of conversion on the basis of normal levels
of production capacity or actual production whichever is higher.
(b) Raw materials, stores and spares have been valued at cost by using
weighted average basis.
(c) Goods in process have been valued at raw material cost incurred up
to the stage of production plus conversion cost apportioned on the
basis of raw material cost of goods in process.
(d) Loose tools and stock in transit have been valued at cost.
(e) As per past practice, no value is placed on stock of scrap since
its estimated net realizable/usable value is not accurately
ascertainable.
3. DEPRECIATION
(a) Depreciation on fixed assets is provided on the straight-line
method in accordance with Schedule XIV to the Companies Act, 1956.
However, as per rehabilitation scheme approved by Board for Industrial
and Financial Reconstruction (BIFR), in respect of plant & machinery
(including electrical installation, factory equipment, storage & water
system), the estimated useful life of assets has, with retrospective
effect, been considered as 30 years. However, the rate of depreciation
on plant & machinery are lower than rates prescribed in Schedule XIV.
The rate of depreciation as per Straight Line Method is being used is
3.333% as against rate of 4.75% mentioned in Schedule XIV of Companies
Act, 1956.
On indigenous vehicles/cycles, depreciation is provided on the written
down value method as per rates prescribed and in accordance with the
Income Tax Act, 1961.
(b) In the case of purchase/sale depreciation is charged for the full
month in which purchase/sale is made.
(c) 100% depreciation is charged in the year of purchase on assets
equal to or less than Rs. 5,000.
4. FOREIGN CURRENCY TRANSLATION
Foreign exchange transactions are recorded at the rate of exchange
prevailing on the date of transaction (i.e. bill of entry).
Accordingly, exchange differences arising on foreign exchange
transactions settled during the period are recognized in the profit and
loss account of the period.
Monetary current assets and monetary current liabilities that are
denominated in foreign currency are translated at the exchange rate
prevalent at the date of the balance sheet. The resulting difference is
also recorded in the profit & loss account.
5. ACCOUNTING FOR FIXED ASSETS
(a) Fixed assets are stated at their original cost including incidental
expenses related to acquisition and installation less accumulated
depreciation. The cost of assets under installation or under
construction as at the balance sheet date are shown as capital work in
process. There has been no revaluation of fixed assets carried out
during the year.
(b) Leasehold land is written off over the period of lease.
6. REVENUE RECOGNITION
(a) Sales are recognized when significant risks and rewards of goods
are transferred to the customers and is stated net of returns, trade
discounts, rebates and sales tax but includes excise duties.
(b) Dividend Income is recognized when the right to receive is
established.
(c) Interest revenue is recognized on a time proportion basis taking
into account the amount outstanding and the rate applicable.
7. EMPLOYEE BENEFITS
(a) Short Term Employee Benefits
All employee benefits falling due within twelve months of rendering the
service are classified as short term employee benefits. The benefits
like salaries, wages, short term compensated absences etc. and the
expected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
(b) Post-Employment Benefits
(i) Defined Contribution Plans
Defined Contribution Plans are provident fund scheme, officers'
superannuation scheme, employees state insurance and government pension
fund scheme for eligible employees. The company's contribution to the
Defined Contribution Plans is recognized in the profit & loss account
in the financial year to which they relate.
(ii) Defined Benefit Plans
The employee's gratuity fund scheme managed by LIC are the Company's
defined benefit plans.
Wherever applicable, the present value of the obligation under such
defined benefit plans are determined based on actuarial valuation using
the Projected Unit Credit Method, which recognizes each period of
service as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final
obligation.
The obligation is measured at the present value of the estimated future
cash flows. 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, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the Profit &
Loss Account.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligation under the defined benefit plans to recognize
the obligation on the net basis.
Gains or losses on the curtailment or settlement of any defined benefit
plan are recognized when the curtailment or settlement occurs. Past
service cost is recognized as expense on a straight-line basis over the
average period until the benefits become vested.
(c) Other Long-term Employee Benefits
The obligations for long term employee benefits such as long term
compensated leave or encashment of leave accrued up to the specified
period only at the time of retirement are recognized in the similar
manner as in the case of defined benefit plans as mentioned in (b) (ii)
above. The provision for leave encashment is accrued and provided for,
based on the actuarial valuation made by an independent Actuary as on
the Balance Sheet date.
8. ACCOUNTING FOR INVESTMENT
Investments are classified into current and long term investments.
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long term investments. Current
investments are stated at the lower of cost and fair value determined
on an individual basis. A provision for decline in value of investments
is made only when the extent of loss is determinable and diminution in
value, in the opinion of the Directors, is permanent.
9. INTANGIBLE ASSETS
Intangible Assets & related expenditure are recognized as per criteria
specified in Accounting Standard-26 on "Intangible Assets" issued by
the Institute of Chartered Accountants of India and accounted for as
under :- Intangible Assets are recognized when it is probable that the
future economic benefits that are attributable to the asset will flow
to the enterprise and the cost of the asset can be measured reliably.
The cost of internally generated products is the sum of the expenditure
incurred from the time when the product first met the recognition
criteria for an intangible asset in development stage. The expenditure
incurred during research phase is directly charged to Profit & Loss
Account. The cost of product development comprises its raw material
cost, salary & wages, stores & spares, including any import duties and
other taxes (other than those subsequently recoverable by the
enterprise from the taxing authorities) and any directly attributable
expenditure on making the product ready for its use. Any trade
discounts, rebates & realization from sale of products during test runs
are deducted in arriving at cost. Revenue expenditure whenever
incurred on research and development is expensed as incurred.
Acquisition of software is amortized on a straight line basis over a
period of five years starting from the year of capitalization.
Internally developed new products for commercial use : over a period of
120 months from the month subsequent to the month in which it got
activated for commercial use.
10. EXCISE DUTY
Excise duty has been accounted for on the basis of removal of goods as
well as provision made for goods' lying as closing stock.
11. DEFERRED TAXATION
Deferred tax is the effect of timing differences, being the difference
between taxable income and accounting income that originates in one
period and is capable of reversal in one or more subsequent periods. On
prudent grounds, deferred tax liabilities, when they arise, are
provided without any exceptions but deferred tax assets are calculated
on the accumulated timing differences as at the end of the year and are
based on tax rates and laws in force on the balance sheet date and are
recognized and carried forward only to the extent that there is a
virtual certainty of realization against future taxable income.
12. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
13. LEASES
(a) Lease rentals on assets taken on lease prior to April 01, 2001 are
charged to the profit & loss account over the period of the lease.
(b) Assets taken on lease under which the lessor effectively retains
all significant risks & rewards of ownership have been classified as
operating lease. Lease payments made under an operating lease are
recognized as expense in the profit & loss account on straight line
basis over the primary term of the lease as mentioned in the lease
agreement.
14. BORROWING COSTS
Borrowing costs that are specifically attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of cost of such asset till the asset is ready for its intended
use. A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognized as an expense in the period in
which they are incurred.
15. EARNINGS PER SHARE
In determining earnings per share, the Company considers the net profit
after tax and includes the post-tax effect of any extraordinary /
exceptional item. The number of shares used in computing basic earnings
per share comprises of the weighted average number of shares
outstanding during the period. The number of shares used in computing
diluted earnings per share comprises of the weighted average shares
considered for deriving basic earnings per share, and also the weighted
average number of equity shares that could have been issued on the
conversion of all dilutive potential equity shares.
16. CASH FLOW STATEMENTS
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from principle revenue generating, investing
and financing activities of the Company are segregated.
17. DISCOUNTS
Discount allowed on sale (other than trade or volume discount) is shown
under the Selling & Distribution expense schedule. Discount allowed on
purchase (other than trade or volume discount) is reduced from Raw
Material Consumed.
Mar 31, 2010
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared in accordance with
Generally Accepted Accounting Principles ("GAAP") in India under the
historical cost convention on accrual basis and are in accordance with
the applicable accounting standards issued by the Institute of
Chartered Accountants of India (ICAI) & prescribed in the Compa- nies
(Accounting Standards) Rules, 2006. These Accounting policies have been
consistently applied, except where a newly issued accounting standard
is initially adopted by the company. Management evaluates the effect of
accounting standards issued on a going basis and ensures that they are
adopted as mandated by the ICAI.
2. VALUATION OF INVENTORIES:
(a) Finished goods have been valued at lower of cost or net realizable
value. In the case of finished goods, cost is determined by taking
material, labour and related factory overheads including depreciation,
excise duty and fixed production overheads arrived at by the cost sheet
of the last month of the financial year. Fixed overheads are allocated
for inclusion in the cost of conversion on the basis of normal levels
of production capacity or actual production whichever is higher.
(b) Raw materials, stores and spares have been valued at cost by using
weighted average basis.
(c) Goods in process have been valued at raw material cost incurred up
to the stage of production plus conversion cost apportioned on the
basis of raw material cost of goods in process.
(d) Loose tools and stock in transit have been valued at cost.
(e) As per past practice, no value is placed on stock of scrap since
its estimated net realizable/usable value is not accurately
ascertainable.
3. DEPRECIATION
(a) Depreciation on fixed assets is provided on the straight-line
method in accordance with Schedule XIV to the Companies Act, 1956.
However in respect of plant & machinery (including electrical
installation, factory equipment, storage & water system), the estimated
useful life of assets has, with retrospective effect, been considered
as 30 years. However, the rate of depreciation on plant & machinery are
lower than rates prescribed in Schedule XIV.
On indigenous vehicles/cycles, depreciation is provided on the written
down value method as per rates prescribed and in accordance with the
Income Tax Act, 1961.
(b) In the case of purchase/sale depreciation is charged for the full
month in which purchase /sale is made.
(c) 100% depreciation is charged in the year of purchase on assets
equal to or less than Rs. 5,000.
4. FOREIGN CURRENCY TRANSLATION
Foreign exchange transactions are recorded at the rate of exchange
prevailing on the date of transaction (i.e. bill of entry).
Accordingly, exchange differences arising on foreign exchange
transactions settled during the period are recognized in the profit and
loss account of the period.
Monetary current assets and monetary current liabilities that are
denominated in foreign currency are translated at the exchange rate
prevalent at the date of the balance sheet. The resulting difference is
also recorded in the profit & loss account.
5. ACCOUNTING FOR FIXED ASSETS
(a) Fixed assets are stated at their original cost including incidental
expenses related to acquisition and installation less accumulated
depreciation. The cost of assets under installation or under
construction as at the balance sheet date are shown as capital work in
process. There has been no revaluation of fixed assets carried out
during the year.
(b) Leasehold land is written off over the period of lease.
6. REVENUE RECOGNITION
(a) Sales are recognized when significant risks and rewards of goods
are transferred to the customers and is stated net of returns, trade
discounts, rebates and sales tax but includes excise duties. -
(b) Export incentives are accounted for on accrual basis and includes
the estimated value of export incentives receivable under the Duty
Entitlement Pass Book Scheme and Duty Drawback Scheme.
(c) Dividend Income is recognized when the right to receive is
established.
(d) Interest revenue is recognized on a time proportion basis taking
into account the amount outstanding and the rate applicable.
7. EMPLOYEE BENEFITS
(a) Short Term Employee Benefits
All employee benefits falling due within twelve months of rendering the
service are classified as short term employee benefits. The benefits
like salaries, wages, short term compensated absences etc. and the
expected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
(b) Post-Employment Benefits
(i) Defined Contribution Plans
Defined Contribution Plans are provident fund scheme, officers
superannuation scheme, employees state insurance and government pension
fund scheme for eligible employees. The companys contri- bution to the
Defined Contribution Plans is recognized in the profit & loss account
in the financial year to which they relate.
(ii) Defined Benefit Plans
The employees gratuity fund scheme managed by LIC are the Companys
defined benefit plans. Wherever applicable, the present value of the
obligation under such defined benefit plans are deter- mined based on
actuarial valuation using the Projected Unit Credit Method, which
recognizes each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build
up the final obligation.
The obligation is measured at the present value of the estimated future
cash flows. 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, having
maturity periods approxi- mating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the Profit &
Loss Account.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligation under the defined benefit plans to recognize
the obligation on the net basis.
Gains or losses on the curtailment or settlement of any defined benefit
plan are recognized when the curtailment or settlement occurs. Past
service cost is recognized as expense on a straight-line basis over the
average period until the benefits become vested.
(c) Other Long-term Employee Benefits
The obligations for long term employee benefits such as long term
compensated leave or encashment of leave accrued up to the specified
period only at the time of retirement are recognized in the similar
manner as in the case of defined benefit plans as mentioned in (b) (ii)
above. The provision for leave encashment is accrued and provided for,
based on the actuarial valuation made by an independent Actuary as on
the Balance Sheet date.
8. ACCOUNTING FOR INVESTMENT
Investments meant to be held for a long term period are shown at cost.
A provision for decline in value of investments is made only when the
extent of loss is determinable and diminution in value, in the opinion
of the Directors, is permanent.
9. EXPENDITURE ON RESEARCH AND DEVELOPMENT
Research and development expenses which are revenue in nature are
charged off in the year in which they are incurred. Capital
expenditure is included in fixed assets under appropriate heads.
10. INTANGIBLE ASSETS
Intangible Assets are recognized when it is probable that the future
economic benefits that are attributable to the asset will flow to the
enterprise and the cost-of the asset can be measured reliably.
Intangible assets are amortized as under :-
æ Acquisition of software is amortized on a straight line basis over a
period of five years starting from the year of capitalization.
11. EXCISE DUTY
Excise duty has been accounted for on the basis of both payments made
in respect of goods cleared as well as provision made for goods lying
in bonded warehouses.
12. DEFERRED TAXATION
Deferred tax is the effect of timing differences, being the difference
between taxable income and accounting income that originates in one
period and is capable of reversal in one or more subsequent periods. On
prudent grounds, deferred tax liabilities, when they arise, are
provided without any exceptions but deferred tax assets are calculated
on the accumulated timing differences as at the end of the year and are
based on tax rates and laws in force on the balance sheet date and are
recognized and carried forward only to the extent that there is a
reasonable certainty of realization against future taxable income.
13. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
14. LEASES
(a) Lease rentals on assets taken on lease prior to April 01, 2001 are
charged to the profit & loss account over the period of the lease.
(b) Assets taken on lease under which the lessor effectively retains
all significant risks & rewards of ownership have been classified as
operating lease. Lease payments made under an operating lease are
recognized as expense in the profit & loss account on straight line
basis over the primary term of the lease as mentioned in the lease
agreement,
15. BORROWING COSTS
Borrowing costs that are specifically attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of cost of such asset till the asset is ready for its intended
use. A qualifying asset is an asset that necessarily requires a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are recognized as an expense in the period in
which they are incurred.
16. EARNINGS PER SHARE
In determining earnings per share, the Company considers the net profit
after tax and includes the post-tax effect of any extraordinary /
exceptional item. The number of shares used in computing basic earnings
per share comprises of the weighted average number of shares
outstanding during the period. The number of shares used in computing
diluted earnings per share comprises of the weighted average shares
considered for deriv- ing basic earnings per share, and also the
weighted average number of equity shares that could have been issued on
the conversion of all dilutive potential equity shares.
17. CASH FLOW STATEMENTS
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from principle revenue generating, investing
and financing activities of the Company are segregated.
18. DISCOUNTS
Discount allowed on sale (other than trade or volume discount) is shown
under the Selling & Distribution expense schedule. Discount allowed on
purchase (other than trade or volume discount) is reduced from Raw
Material Consumed.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on JCT Electronics Ltd.
-
JCT Electronics Ltd. Tools
- Bulk Deals
-
JCT Electronics Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- BSE Price History
- NSE Price History
-
JCT Electronics Ltd. Key Financial Ratios
- Ratios
-
JCT Electronics Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
JCT Electronics Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
JCT Electronics Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
JCT Electronics Ltd. Corporate Announcements
- Book Closure
- Board Meetings
