Accounting Policies of Jindal Photo Ltd. Company
Mar 31, 2023
1 COMPANY INFORMATION
Jindal Photo Limited (''the Company'') is a Public Listed Company incorporated under the Companies Act,1956 and regulated by Ministery of Corporate Affairs (''MCA'') and the Securities and Exchange Board of India (SEBI). It is a Core Investment Company (CIC) engaged in the Business of holding Investments in the Secuirties of Group Companies and providing Mangement Consultancy.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES2.1 Statement of compliance and basis for preparation and presentation of financial statements
These standalone financial statements of the Company have been prepared in accordance with the Indian Accounting Standards as per the Companies (Indian Accounting Standards) Rules 2015 as amended and notified under Section 133 of the Companies Act, 2013 ("the Act"), in conformity with the accounting principles generally accepted in India and other relevant provisions of the Act. Any application guidance/ clarifications/ directions issued by RBI or other regulators are implemented as and when they are issued/ applicable.
2.2 Functional and presentation currency
These financial statements are presented in Indian Rupees (''INR'' or ''Rs.'') which is also the Company''s functional currency. All amounts are rounded-off to the nearest lakhs, unless otherwise indicated.
The financial statements have been prepared on the historical cost basis except for certain financial instruments which are measured at fair values.
2.4 Measurement of fair values
A number of Company''s accounting policies and disclosures require the measurement of fair values for assets and liabilities. The Company has established policies and procedures with respect to the measurement of fair values. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
- Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.
- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
2.5 Use of estimates and judgements and Estimation uncertainity
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Company''s accounting policies and the reported amounts of assets, liabilities, income, expenses and the disclosures of contingent assets and liabilities. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were issued. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
Following are areas that involved a higher degree of estimate and judgement or complexity in determining the carrying amount of some assets and liabilities.
Effective Interest Rate (EIR) Method
The Company recognizes interest income / expense using a rate of return that represents the best estimate of a constant rate of return over the expected life of the loans given / taken. This estimation, by nature, requires an
element of judgement regarding the expected behaviour and life-cycle of the instruments, as well as expected changes to other fee income/expense that are integral parts of the instrument.
Impairment of Financial Assets
The measurement of impairment losses on loan assets and commitments, requires judgement, in estimating the amount and timing of future cash flows and recoverability of collateral values while determining the impairment losses and assessing a significant increase in credit risk.
The Company''s Expected Credit Loss (ECL) calculation is the output of a complex model with a number of underlying assumptions regarding the choice of variable inputs and their interdependencies.
Provisions and other contingent liabilities
The reliable measure of the estimates and judgemets pertaining to litigations and the regulatory proceedings in the ordinary course of the Company''s business are disclosed as contingent liabilities.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
2.6 Revenue recognition :
a Recognition of interest income on loans
Interest income is recognised in Statement of profit and loss using the effective interest method for all financial instruments measured at amortised cost, debt instruments measured at FVOCI and debt instruments designated at FVTPL. The ''effective interest rate'' is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument.
The calculation of the effective interest rate includes transaction costs and fees that are an integral part of the contract. Transaction costs include incremental costs that are directly attributable to the acquisition of financial asset.
The Company calculates interest income by applying the EIR to the gross carrying amount of financial assets other than credit-impaired assets.
When a financial asset becomes credit-impaired, the Company calculates interest income by applying the effective interest rate to the net amortised cost of the financial asset. If the financial asset cures and is no longer creditimpaired, the Company reverts to calculating interest income on a gross basis.
Additional interest and interest on trade advances, are recognised when they become measurable and when it is not unreasonable to expect their ultimate collection.
Income from bill discounting is recognised over the tenure of the instrument so as to prov''de a constant periodic rate of return.
b Rental Income
Income from operating leases is recognised in the Statement of profit and loss as per contractual rentals unless another systematic basis is more representative of the time pattern in which benefit derived from the leased asset is diminished.
c Fee and commission income :
Fee based income are recognised when they become measurable and when it is probable to expect their ultimate collection.
Commission and brokerage income earned for the serv''ces rendered are recognised as and when they are due.
d Dividend and interest income on investments:
- Dividends are recognised in Statement of profit and loss only when the right to receive payment is
established, it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.
- Interest income from investments is recognised when it is certain that the economic benefits will flow to
the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable
2.7 Property, Plant and Equipments (PPE)
PPE are stated at cost of acquisition (including incidental expenses), less accumulated depreciation and accumulated impairment loss, if any. Assets held for sale or disposals are stated at the lower of their net book value and net realisable value.
Advances paid towards the acquisition of PPE outstanding at each balance sheet date are disclosed separately under other non-financial assets. Capital work in progress comprises the cost of PPE that are not ready for its intended use at the reporting date.
Depreciation on PPE is provided on straight-line basis in accordance with the useful lives specified in Schedule II to the Companies Act, 2013 on a pro-rata basis.
PPE is derecognised on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (caculated as the differnce between the net disposal proceeds and the net carrying amount of the asset) is recognised in other income / netted off from any loss on disposal in the Statement of profit and loss in the year the asset is derecognised.
Intangible assets are stated at cost less accumulated amortization and accumulated impairment loss, if any. Intangible assets is amortized over the estimated useful life.
2.9 Investments in subsidiaries, associates and holding company :
Investments in subsidiaries, associate and holding company are measured at cost/amortised cost less accumulated impairment, if any.
2.10 Foreign exchange transactions and translations :
a) Initial recognition
Transactions in foreign currencies are recognised at the prevailing exchange rates between the reporting currency and a foreign currency on the transaction date
b) Conversion
Transactions in foreign currencies are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in Statement of profit and loss.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. Thus, translation differences on non-monetary assets and liabilities such as equity instruments held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as equity investments classified as FVOCI are recognised in other comprehensive income.
Non-monetary items that are measured at historical cost in foreign currency are not retranslated at reporting date.
a) Recognition and initial measurement -
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in Statement of profit and loss.
b) Classification and Subsequent measurement of financial assets
On initial recognition, a financial asset is classified as measured at
- Amortised cost;
- FVOCI
- FVTPL
The Company''s business model is not assessed on an instrument-by-instrument basis, but at a higher level of aggregated portfolios being the level at which they are managed. The financial asset is held with the objective to hold financial asset in order to collect contractual cash flows as per the contractual terms that give rise on specified dates to cash flows that are solely payment of principal and interest (SPPI) on the principal amount outstanding.
The Company measures instruments at FVOCI when the instrument is held within a business model, the objective of which is achieved by both collecting contractual cash flows and selling financial assets.
All financial assets not classified as measured at amortised cost or FVOCI are measured at FVTPL. Subsequent measurement of financial assets
Financial assets at amortised cost are subsequently measured at amortised cost using effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in Statement of profit and loss.
Any gain and loss on derecognition is recognised in Statement of profit and loss. Debt investment at FVOCI are subsequently measured at fair value. Interest income under effective interest method, foreign exchange gains and losses and impairment are recognised in Statement of profit and loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to Statement of profit and loss.
Financial liabilities and equity instruments: Classification as debt or equity -
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by Company are recognised at the proceeds received. Transaction costs of an equity transaction are recognised as a deduction from equity.
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-fortrading or it is a derivative or it is designated as such on initial recognition. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in Statement of profit and loss. Any gain or loss on derecognition is also recognised in Statement of profit and loss.
c) Derecognition Financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.
A financial liability is derecognised when the obligation in respect of the liability is discharged, cancelled or expires. The difference between the carrying value of the financial liability and the consideration paid is recognised in tatement of profit and loss.
d) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
e) Impairment of financial instruments
Equity instruments are not subject to impairment under Ind AS 109.
The Company recognises lifetime expected credit losses (ECL) when there has been a significant increase in credit risk since initial recognition and when the financial instrument is credit impaired.
f) Write offs -
The gross carrying amount of a financial asset is written off when there is no realistic prospect of further recovery. This is generally the case when the Company determines that the debtor/ borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities under the Company''s recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in Statement of profit and loss.
a) Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
b) Contribution to provident fund and ESIC -
Company''s contribution paid/payable during the year to provident fund and ESIC is recognised in the Statement of profit and loss.
c) Gratuity -
The Company''s liability, if any, towards gratuity scheme is determined by independent actuaries, using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. Past services are recognised at the earlier of the plan amendment / curtailment and recognition of related restructuring costs/ termination benefits.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets.This cost is included in employee benefit expense in the Statement of profit and loss.
Remeasurement gains/losses - Remeasurement of defined benefit plans, comprising of actuarial gains / losses, return on plan assets excluding interest income are recognised immediately in the balance sheet with corresponding debit or credit to Other Comprehensive Income (OCI). Remeasurements are not reclassified to Statement of profit and loss in the subsequent period.
d) Leave encashment / compensated absences / sick leave -
The Company provides for the encashment / availment of leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment / availment. The
liability, if any, is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation.
Finance costs include interest expense computed by applying the effective interest rate on respective financial instruments measured at Amortised cost. Financial instruments include bank term loans, non-convertible debentures, fixed deposits mobilised, commercial papers, subordinated debts and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Finance costs are charged to the Statement of profit and loss.
2.14 Taxation - Current and deferred tax:
Income tax expense comprises of current tax and deferred tax. It is recognised in Statement of profit and loss except to the extent that it relates to an item recognised directly in equity or in other comprehensive income.
a) Current tax :
Current tax comprises amount of tax payable in respect of the taxable income or loss for the year determined in accordance with Income Tax Act, 1961 and any adjustment to the tax payable or receivable in respect of previous years. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
b) Deferred tax :
Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying values of assets and liabilities and their respective tax bases.Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequence that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary difference could be utilized. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
2.15 Impairment of assets other than financial assets :
The Company reviews the carrying amounts of its tangible and intangible assets at the end of each reporting period, to determine whether there is any indication that those assets have impaired.If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Recoverable amount is determined for an individual asset, unless the asset does not generate cash flows that are largely independent of those from other assets or group of assets.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cashgenerating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cashgenerating unit) is increased to the revised estimate of its recoverable amount such that the increased carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had been recognised for the asset (or cash-generating unit) in prior years. The reversal of an impairment loss is recognised in Statement of profit and loss.
Provisions are recognised when there is a present obligation as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Prov''sions are rev''ewed at each balance sheet date and adjusted to reflect the current best estimate.
The amount recognised as a prov''sion is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.Prov''sions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no prov''sion or disclosure is made.
2.17 Cash and cash equivalents:
Cash and cash equivalents in the balance sheet comprise cash on hand, cheques and drafts on hand, balance with banks in current accounts and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of change in value.
Basic earnings per share is calculated by divding the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Company''s earnings per share is the net profit for the period after deducting preference dividends and any attributable tax thereto for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, sub-division of shares etc. that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders is divided by the weighted average number of equity shares outstanding during the period, considered for deriving basic earnings per share and weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
Mar 31, 2018
1 Significant accounting policies:-
a) Method of Accounting
i) The accounts of the company are prepared under the historical cost convention using the accrual method of accounting unless otherwise stated hereinafter.
ii) Accounting policies not significantly referred to are in consistence with the generally accepted accounting principles.
b) Fixed Assets
Fixed Assets are stated at cost of acquisition, inclusive of inward freight, duties, taxes and incidental expenses related to acquisition and are net of modvat/cenvat wherever applicable. In respect of projects involving construction, related pre-operational expenses are capitalised and form part of the value of the assets capitalised. Fixed assets other than leasehold land acquired on lease are not reflected in the accounts and the lease rent is charged to profit & loss account as and when accrued.
c) Investments
Non Current investments are stated at cost of acquisition. Provision for diminution in the value of Non Current investments is made only if such a decline is other than temporary in the opinion of the management.
d) Depreciation
Depreciation is calculated on fixed assets (other than leased out assets) on straight line method in accordance with Schedule II of Companies Act, 2013. In respect of leased assets, the cost of the same is being amortized fully during the primary period of the lease. Software is depreciated on straight line method at the rates specified in schedule II of the Companies Act.
e) Accounting for interest in Joint ventures :-
Interest in Joint ventures are accounted as follows
f) Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense, in the period in which they are incurred. Capitalisation of borrowing costs ceases when substantially all activities necessary to prepare the qualifying asset for its intended use or sale are complete.
g) Revenue recognition
All revenues, costs, duties, assets & liabilities are accounted for on accrual basis.
h) Income from Investments/Deposits
Income from Investments is credited to revenue in the year in which it accrues. Income is stated in full with the tax thereon being accounted for under Income tax deducted at source. Dividend income when the owner âs right to receive its investments payment in shares established.
i) Leases
Lease agreements represent agreements entered into prior to 31st March,2001.Assets under lease agreements are transferred in favour of the lessee on receipt of the final installment as per agreement. Lease rents are recognised on accrual basis over the period of lease agreement. The initial direct cost relatable to lease transactions is recognised in the profit & loss account in the year such cost is incurred.
j) Taxation
Provision for taxation is based on assessable profits of the company as determined under Income Tax Act, 1961. Deferred taxation is provided using the liability method in respect of taxation effect arising from all material timing difference between accounting and tax treatment of income and expenditure which are expected with reasonable probability to crystallize in the foreseeable future. Deferred tax benefits are recognized in the financial statements only to extent of any deferred tax liability or when such benefits are reasonably expected to be realizable in the near future.
k) Earnings per share
Basic earning per share is calculated by dividing the net profit for the year attributable to equity shareholders(after deducting the preference share dividend, if any) by the weighted average number of equity shares outstanding during the year. Diluted earning per share is calculated by dividing the net profits attributable to equity shareholders (after deducting dividend on redeemable preference shares) by the weighted average number of equity shares outstanding during the year(adjusted for the effects of dilutive options).
l) Impairment of assets
In accordance with the Accounting Standard (AS-28) on âImpairment of Assetsâ impairment analysis of assets carried out every year and if recoverable amount arrives less than the carrying amount, impairment loss is recognized.
m) Contingent Liabilities
Contingent Liabilities as defined in Accounting Standard-29 are disclosed by way of notes to accounts. Provision is made if it becomes probable that an outflow of future economic benefit will be required for an item previously dealt with as a contingent liability.
Mar 31, 2016
1 Significant accounting policies:
a) Method of Accounting
i) The accounts of the company are prepared under the historical cost convention using the accrual method of accounting unless otherwise stated hereinafter.
ii) Accounting policies not significantly referred to are in consistence with the generally accepted accounting principles.
b) Fixed Assets
Fixed Assets are stated at cost of acquisition, inclusive of inward freight, duties, taxes and incidental expenses related to acquisition and are net of modvat/cenvat wherever applicable. In respect of projects involving construction, related pre-operational expenses are capitalized and form part of the value of the assets capitalized. Fixed assets other than leasehold land acquired on lease are not reflected in the accounts and the lease rent is charged to profit & loss account as and when accrued.
c) Investments
Non Current investments are stated at cost of acquisition. Provision for diminution in the value of Non Current investments is made only if such a decline is other than temporary in the opinion of the management.
d) Depreciation
Depreciation is calculated on fixed assets (other than leased out assets) on straight line method in accordance with Schedule II of Companies Act, 2013. In respect of leased assets, the cost of the same is being amortized fully during the primary period of the lease. Software is depreciated on straight line method at the rates specified in schedule II of the Companies Act.
e) Accounting for interest in Joint ventures :-Interest in Joint ventures are accounted as follows
Type of Joint Venture Accounting Treatment
Jointly Controlled Entities i) Integrated Joint Ventures :
a) Company''s share in profits or losses of integrated ventures is accounted on determination of profit and losses by Joint Ventures.
b) Investments in integrated Joint Ventures are carried at net of company''s share in recognised profit or loss.
ii) Incorporated jointly controlled entities
a) Income on investments in incorporated jointly controlled entities, recognised when the right to receive the same is established.
b) Investment in such joint ventures is carried at original cost providing for any permanent diminution in value.
f) Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense, in the period in which they are incurred. Capitalization of borrowing costs ceases when substantially all activities necessary to prepare the qualifying asset for its intended use or sale are complete.
g) Revenue recognition
i) All revenues, costs, duties, assets & liabilities are accounted for on accrual basis.
h) Income from Investments/Deposits
Income from Investments is credited to revenue in the year in which it accrues. Income is stated in full with the tax thereon being accounted for under Income tax deducted at source. Dividend income when the owner ''s right to receive its investments payment in shares established.
i) Leases
Lease agreements represent agreements entered into prior to 31st March,2001. Assets under lease agreements are transferred in favour of the lessee on receipt of the final installment as per agreement. Lease rents are recognized on accrual basis over the period of lease agreement. The initial direct cost relatable to lease transactions is recognised in the profit & loss account in the year such cost is incurred.
j) Taxation
Provision for taxation is based on assessable profits of the company as determined under Income Tax Act, 1961. Deferred taxation is provided using the liability method in respect of taxation effect arising from all material timing difference between accounting and tax treatment of income and expenditure which are expected with reasonable probability to crystallize in the foreseeable future. Deferred tax benefits are recognized in the financial statements only to extent of any deferred tax liability or when such benefits are reasonably expected to be realizable in the near future.
k) Earnings per share
Basic earnings per share is calculated by dividing the net profit for the year attributable to equity shareholders(after deducting the preference share dividend, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is calculated by dividing the net profits attributable to equity shareholders (after deducting dividend on redeemable preference shares) by the weighted average number of equity shares outstanding during the year(adjusted for the effects of dilutive options).
l) Contingent Liabilities
Contingent Liabilities as defined in Accounting Standard-29 are disclosed by way of notes to accounts. Provision is made if it becomes probable that an outflow of future economic benefit will be required for an item previously dealt with as a contingent liability.
Mar 31, 2014
A) Method of Accounting
i) The accounts of the company are prepared under the historical cost
convention using the accrual method of accounting unless otherwise
stated hereinafter.
ii) Accounting policies not significantly referred to are in consistence
with the generally accepted accounting principles.
b) Fixed Assets
Fixed Assets are stated at cost of acquisition, inclusive of inward
freight, duties, taxes and incidental expenses related to acquisition
and are net of modvat/cenvat wherever applicable. In respect of
projects involving construction, related pre-operational expenses are
capitalised and form part of the value of the assets capitalised. Fixed
assets other than leasehold land acquired on lease are not refected in
the accounts and the lease rent is charged to profit & loss account as
and when accrued.
The company capitalizes software where it is reasonably estimated that
the software has an enduring useful life. Consideration is given at
each balance sheet date to determine whether there is any indication of
impairment of the carrying amount of the company''s fixed assets. If any
indication exists, an asset''s recoverable amount is estimated. An
impairment loss is recognized whenever the carrying amount of an asset
exceeds its recoverable amount. Recoverable amount is the greater of
the net selling price and value in use. Value in use is the present
value of its estimated future cash flows expected to arise from the
continuing use of an asset from its disposal at the end of its useful
life.
c) Investments
Non Current investments are stated at cost of acquisition. Provision
for diminution in the value of Non Current investments is made only if
such a decline is other than temporary in the opinion of the
management.
d) Inventories
Inventories are valued at cost or net realisable value, whichever is
lower, Cost is determined on frst in frst out (FIFO) basis/Weighted
Average basis. Finished goods and work in process include cost of
convention and other costs incurred in bringing the inventories to
their present location and conditions
e) Foreign currency transactions
All foreign currency liabilities relating to acquisition of fixed assets
are restated at the rates ruling at the year end and exchange
differences arising on such transactions are dealt with in the profit &
loss account. Investments in foreign currency are reported using the
exchange rate at the date of transaction. Other foreign currency assets
and liabilities outstanding at the close of the year are valued at the
year end exchange rates. The fuctuations are refected under the
appropriate revenue head.
f) Depreciation
Depreciation is calculated on fixed assets (other than leased out
assets) on straight line method in accordance with Schedule XIV of
Companies Act, 1956. In respect of leased assets, the cost of the same
is being amortized fully during the primary period of the lease.
Software is depreciated on straight line method at the rates specified
in schedule XIV of the Companies Act.
g) Research & Development
Revenue expenditure on research and development is charged against the
profit of the year in which it is incurred. Capital expenditure on
research and development is shown as an addition to fixed assets.
h) Retirement benefits
i) Short term Employee benefits
All employee benefits payable only within twelve months of rendering the
service are classified as short term employee benefits. benefits such as
salaries,wages etc. and the expected cost of bonus, exgratia and
incentives are recognised in the period during which the employee
renders the related service.
ii) Post employment benefits
a) Defined Contribution Plans
State Government Provident Fund Scheme is a Defined contribution plan.
The contribution paid/ payable under the scheme is recognized in the
profit & loss account during the period during which the employee
renders the related service.
b) Defined benefit Plans
The employee Gratuity Fund Scheme managed by a trust is a Defined benefit
plan. The present value of obligation under such Defined benefit plan is
determined based on actuarial valuation under the projected unit credit
method which recognizes each period of service as giving rise to
additional unit of employees benefits entitlement and measures each unit
separately to build up the final obligation.
The obligation is measured at the present value of future cash flows.
The discount rates used for determining the present value of the
obligation under Defined benefit plans is based on the market yields on
government securities as at balance sheet date ,having maturity periods
approximated to the returns 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 planned assets is reduced from
the gross obligation under the Defined benefit plans to recognise the
obligation on net basis.
c) The obligation for leave encashment is provided for and paid on
yearly basis.
i) Accounting for interest in Joint ventures :-
Interest in Joint ventures are accounted as follows
Type of Joint Venture
Jointly Controlled Entities
Accounting Treatment
i) Integrated Joint Ventures :
a) Company''s share in profits or losses of integrated ventures is
accounted on determination of profit and losses by Joint Ventures.
b) Investments in integrated Joint Ventures are carried at net of
company''s share in recognized profit or loss.
ii) Incorporated jointly controlled entities
a) Income on investments in incorporated jointly controlled entities
recognized when the right to receive the same is established.
b) Investment in such joint ventures is carried at original cost
providing for any permanent diminution in value.
j) Borrowing costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of the cost of that asset. Other borrowing costs are recognized as
an expense, in the period in which they are incurred. Capitalization of
borrowing costs ceases when substantially all activities necessary to
prepare the qualifying asset for its intended use or sale are complete.
k) Excise & Other Duties
Whereas excise duty in respect of fnished goods lying in factory
premises is provided and included in the valuation of inventory. Custom
duty on goods lying in custom bonded warehouse is accounted on
clearance thereof. Modvat benefit is accounted for by reducing the
purchase cost of the materials/fixed assets.
l) Claims and benefits
Claims receivable is accounted on accrual basis to the extent
considered receivable.
m) Revenue recognition
Sales are accounted for ex-factory on despatch. Sales are net of
returns. Export sales are accounted on the basis of the date of bill of
lading/ airway bill.
Interest income from deposits and others is recognized on accrual
basis. Dividend income is recognized when the right to receive the
dividend is unconditionally established. profit/loss on sale/redemption
of investments is recognized on the date of transaction of
sale/redemption and is computed with reference to the original cost of
the investments sold.
n) Income from Investments/Deposits
Income from Investments is credited to revenue in the year in which it
accrues. Income is stated in full with the tax thereon being accounted
for under Income tax deducted at source.
o) Revenue from Maintenance contracts
Revenue from maintenance contracts are recognized pro-rata over the
period of the contract as and when services are rendered.
p) Product warranties
The company gives warranties on certain products and services
undertaking to repair or replace the items that fails to perform
satisfactorily during the warranty period. Provisions are made towards
expected cost of meeting such obligations of rectifcation/replacement.
Warranty provisions are made for expected future cash outflows and
computed on total sales made during the year,based on past experience.
Provision has been computed on the total sales made during the
year,based on past experience.
q) Leases
Lease agreements represent agreements entered into prior to 31st
March,2001. Assets under lease agreements are transferred in favour of
the lessee on receipt of the final installment as per agreement. Lease
rents are recognized on accrual basis over the period of lease
agreement. The initial direct cost relatable to lease transactions is
recognized in the profit & loss account in the year such cost is
incurred.
r) Grant & Subsidies
Grants received from Government agencies against Specific assets are
adjusted to the cost of the assets and capital grants for the Project
Capital Subsidy are credited to Capital Reserve. Revenue Grants for the
expenses incurred are reduced from the respective expenses.
s) Taxation
Provision for taxation is based on assessable profits of the company as
determined under Income Tax Act, 1961. Deferred taxation is provided
using the liability method in respect of taxation effect arising from
all material timing difference between accounting and tax treatment of
income and expenditure which are expected with reasonable probability
to crystallize in the foreseeable future. Deferred tax benefits are
recognized in the financial statements only to extent of any deferred
tax liability or when such benefits are reasonably expected to be
realizable in the near future.
t) Earnings per share
Basic earning per share is calculated by dividing the net profit for the
year attributable to equity shareholders(after deducting the preference
share dividend, if any) by the weighted average number of equity shares
outstanding during the year. Diluted earning per share is calculated by
dividing the net profits attributable to equity shareholders (after
deducting dividend on redeemable preference shares) by the weighted
average number of equity shares outstanding during the year(adjusted
for the effects of dilutive options).
u) Contingent Liabilities
Contingent Liabilities as Defined in Accounting Standard - 29 are
disclosed by way of notes to accounts. Provision is made if it becomes
probable that an outflow of future economic benefit will be required for
an item previously dealt with as a contingent liability.
Mar 31, 2013
A) Method of Accounting
i) The accounts of the company are prepared under the historical cost
convention using the accrual method of accounting unless otherwise
stated hereinafter.
ii) Accounting policies not significantly referred to are in
consistence with the generally accepted accounting principles.
b) Fixed Assets
Fixed Assets are stated at cost of acquisiton, inclusive of inward
freight, duties, taxes and incidental expenses related to acquisition
and are net of modvat/cenvat wherever applicable. In respect of
projects involving construction, related pre-operational expenses are
capitalised and form part of the value of the assets capitalised. Fixed
assets other than leasehold land acquired on lease are not reflected in
the accounts and the lease rent is charged to profit & loss account as
and when accrued.
The company capitalises sof tware where it is reasonably estimated that
the software has an enduring useful life. Consideration is given at
each balance sheet date to determine whether there is any indication of
impairment of the carrying amount of the company''s fixed assets. If any
indication exists, an asset''s recoverable amount is estimated. An
impairment loss is recognized whenever the carrying amount of an asset
exceeds its recoverable amount. Recoverable amount is the greater of
the net selling price and value in use.Value in use is the present
value of its estimated future cash flows expected to arise from the
continuing use of an asset from its disposal at the end of its useful
life.
c) Investments
Non Current investments are stated at cost of acquisition. Provision
for diminution in the value of Non Current investments is made only if
such a decline is other than temporary in the opinion of the
management.
d) Inventories
Inventories are valued at cost or net realisable value, whichever is
lower, Cost is determined on first in first out (FIFO) basis/Weighted
Average basis. Finished goods and work in process include cost of
convention and other costs incurred in bringing the inventories to
their present location and conditions
e) Foreign currency transactions
All foreign currency liabilities relating to acquisition of fixed
assets are restated at the rates ruling at the year end and exchange
differences arising on such transactions are dealt with in the profit &
loss account. Investments in foreign currency are reported using the
exchange rate at the date of transaction. Other foreign currency assets
and liabilities outstanding at the close of the year are valued at the
year end exchange rates. The fluctuations are reflected under the
appropriate revenue head.
f) Depreciation
Depreciation is calculated on fixed assets (other than leased out
assets) on straight line method in accordance with Schedule XIV of
Companies Act, 1956. In respect of leased assets, the cost of the same
is being amortized fully during the primary period of the lease.
Software is depreciated on straight line method at the rates specified
in schedule XIV of the Companies Act.
g) Research & Development
Revenue expenditure on research and development is charged against the
profit of the year in which it is incurred. Capital expenditure on
research and development is shown as an addition to fixed assets.
h) Retirement benefits
i) Short term Employee Benefits
All employee benefits payable only within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries,wages etc. and the expected cost of bonus, exgratia
and incentives are recognised in the period during which the employee
renders the related service.
ii) Post employment Benefits
a) Defined Contribution Plans
State Government Provident Fund Scheme is a defined contribution plan.
The contribution paid/ payable under the scheme is recognised in the
profit & loss account during the period during which the employee
renders the related service.
b) Defined Benefit Plans
The employee Gratuity Fund Scheme managed by a trust is a defined
benefit plan. The present value of obligation under such defined
benefit plan is determined based on actuarial valuation under the
projected unit credit method which recognises each period of service as
giving rise to additional unit of employees benefits entitlement and
measures each unit separately to build up the final obligation.
The obligation is measured at the present value of future cash flows.
The discount rates used for determining the present value of the
obligation under defined benefit plans is based on the market yields on
government securities as at balance sheet date ,having maturity periods
approximated to the returns of related obligations. Actuarial gains and
losses are recognised immediately in the profit & loss account. In case
of funded plans the fair value of the planned assets is reduced from
the gross obligation under the defined benefit plans to recognise the
obligation on net basis.
c) The obligation for leave encashment is provided for and paid on
yearly basis.
i) Accounting for interest in Joint ventures :-
Interest in Joint ventures are accounted as follows
Type of Joint Venture Accounting Treatment
Jointly Controlled Entities i) Integrated Joint Ventures :
a) Company''s share in profits or losses of integrated ventures is
accounted on determination of profit and losses by Joint Ventures.
b) Investments in integrated Joint Ventures are carried at net of
company''s share in recognised profit or loss.
ii) Incorporated jointly controlled entities
a) Income on investments in incorporated jointly controlled entities.
recognised when the right to receive the same is established.
b) Investment in such joint ventures is carried at original cost
providing for any permanent diminution in value.
j) Borrowing costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of the cost of that asset. Other borrowing costs are recognized as
an expense, in the period in which they are incurred. Capitalisation of
borrowing costs ceases when substantially all activities necessary to
prepare the qualifying asset for its intended use or sale are complete.
k) Excise & Other Duties
Whereas excise duty in respect of finished goods lying in factory
premises is provided and included in the valuation of inventory. Custom
duty on goods lying in custom bonded warehouse is accounted on
clearance thereof. Modvat benefit is accounted for by reducing the
purchase cost of the materials/fixed assets.
l) Claims and benefits
Claims receivable is accounted on accrual basis to the extent
considered receivable.
m) Revenue recognition
Sales are accounted for ex-factory on despatch. Sales are net of
returns. Export sales are accounted on the basis of the date of bill of
lading/ airway bill.
Interest income from deposits and others is recognised on accrual
basis. Dividend income is recognised when the right to receive the
dividend is unconditionally established. Profit/loss on sale/redemption
of investments is recognised on the date of transaction of
sale/redemption and is computed with reference to the original cost of
the investments sold.
n) Income from Investments/Deposits
Income from Investments is credited to revenue in the year in which it
accrues. Income is stated in full with the tax thereon being accounted
for under Income tax deducted at source.
o) Revenue from Maintenance contracts
Revenue from maintenance contracts are recognised pro-rata over the
period of the contract as and when services are rendered.
p) Product warranties
The company gives warranties on certain products and services
undertaking to repair or replace the items that fails to perform
satisfactorily during the warranty period. Provisions are made towards
expected cost of meeting such obligations of rectification/replacement.
Warranty provisions are made for expected future cash outflows and
computed on total sales made during the year,based on past experience.
Provision has been computed on the total sales made during the
year,based on past experience.
q) Leases
Lease agreements represent agreements entered into prior to 31st
March,2001.Assets under lease agreements are transferred in favour of
the lessee on receipt of the final installment as per agreement. Lease
rents are recognised on accrual basis over the period of lease
agreement. The initial direct cost relatable to lease transactions is
recognised in the profit & loss account in the year such cost is
incurred.
r) Grant & Subsidies
Grants received from Government agencies against specific assets are
adjusted to the cost of the assets and capital grants for the Project
Capital Subsidy are credited to Capital Reserve. Revenue Grants for the
expenses incurred are reduced from the respective expenses.
s) Taxation
Provision for taxation is based on assessable profits of the company as
determined under Income Tax Act, 1961. Deferred taxation is provided
using the liability method in respect of taxation effect arising from
all material timing difference between accounting and tax treatment of
income and expenditure which are expected with reasonable probability
to crystallize in the foreseeable future. Deferred tax benefits are
recognized in the financial statements only to extent of any deferred
tax liability or when such benefits are reasonably expected to be
realizable in the near future.
t) Earnings per share
Basic earning per share is calculated by dividing the net profit for
the year attributable to equity shareholders(after deducting the
preference share dividend, if any) by the weighted average number of
equity shares outstanding during the year. Diluted earning per share is
calculated by dividing the net profits attributable to equity
shareholders (after deducting dividend on redeemable preference shares)
by the weighted average number of equity shares outstanding during the
year (adjusted for the effects of dilutive options).
u) Contingent Liabilities
Contingent Liabilities as defined in Accounting Standard-29 are
disclosed by way of notes to accounts. Provision is made if it becomes
probable that an outflow of future economic benefit will be required
for an item previously dealt with as a contingent liability.
Mar 31, 2012
A) Method of Accounting
i) The accounts of the company are prepared under the historical cost
convention using the accrual method of account- ing unless otherwise
stated hereinafter.
ii) Accounting policies not significantly referred to are in
consistence with the generally accepted accounting principles.
b) Fixed Assets
Fixed Assets are stated at cost of acquisiton, inclusive of inward
freight, duties, taxes and incidental expenses related to acquisition
and are net of modvat/cenvat wherever applicable. In respect of
projects involving construction, related pre-operational expenses are
capitalised and form part of the value of the assets capitalised. Fixed
assets other than leasehold land acquired on lease are not reflected in
the accounts and the lease rent is charged to profit & loss account as
and when accrued.
The company capitalises software where it is reasonably estimated that
the software has an enduring useful life. Consideration is given at
each balance sheet date to determine whether there is any indication of
impairment of the carrying amount of the company's fixed assets. If any
indication exists, an asset's recoverable amount is estimated. An
impairment loss is recognized whenever the carrying amount of an asset
exceeds its recoverable amount. Recover- able amount is the greater of
the net selling price and value in use. Value in use is the present
value of its estimated future cash flows expected to arise from the
continuing use of an asset from its disposal at the end of its useful
life.
c) Investments
Non Current investments are stated at cost of acquisition. Provision
for diminution in the value of Non Current investments is made only if
such a decline is other than temporary in the opinion of the
management.
d) Inventories
Inventories are valued at cost or net realisable value, whichever is
lower, Cost is determined on first in first out (FIFO) basis/Weighted
Average basis. Finished goods and work in process include cost of
convention and other costs incurred in bringing the inventories to
their present location and conditions.
e) Foreign currency transactions
All foreign currency liabilities relating to acquisiton of fixed assets
are restated at the rates ruling at the year end and exchange
differences arising on such transactions are dealt with in the profit &
loss account.Investments in foreign currency are reported using the
exchange rate at the date of transaction. Other foreign currency assets
and liabilites outstanding at the close of the year are valued at the
year end exchange rates. The fluctuations are reflected under the
appropriate revenue head.
f) Depreciation
Depreciation is calculated on fixed assets (other than leased out
assets) on straight line method in accordance with Schedule XIV of
Companies Act, 1956.In respect of leased assets, the cost of the same
is being amortized fully during the primary period of the lease.
Software is depreciated on straight line method at the rates specified
in schedule XIV of the Companies Act.
g) Research & Development
Revenue expenditure on research and development is charged against the
profit of the year in which it is incurred. Capital expenditure on
research and development is shown as an addition to fixed assets.
h) Retirement benefits
i) Short term Employee Benefits
All employee benefits payable only within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries,wages etc. and the expected cost of bonus, exgratia
and incentives are recognised in the period during which the employee
renders the related service.
ii) Post employment Benefits
a) Defined Contribution Plans
State Government Provident Fund Scheme is a defined contribution plan.
The contribution paid/payable under the scheme is recognised in the
profit & loss account during the period during which the employee
renders the related service.
b) Defined Benefit Plans
The employee Gratuity Fund Scheme managed by a trust is a defined
benefit plan. The present value of obliga- tion under such defined
benefit plan is determined based on acturial valuation under the
projected unit credit method which recognises each period of service as
giving rise to additional unit of employees benefits entitlement and
measures each unit seperately to build up the final obligation.
The obligation is measured at the present value of future cash flows.
The discount rates used for determining the present value of the
obligation under defined benefit plans is based on the market yields on
government securities as at balance sheet date ,having maturity periods
approximated to the returns of related obligations. Acturial gains and
losses are recognised immediately in the profit & loss account. In case
of funded plans the fair value of the planned assets is reduced from
the gross obligation under the defined benefit plans to recognise the
obligation on net basis.
c) The obligation for leave encashment is provided for and paid on
yearly basis.
j) Borrowing costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of the cost of that asset. Other borrowing costs are recognized as
an expense, in the period in which they are incurred. Capitalisation of
borrowing costs ceases when substantially all activities necessary to
prepare the qualifying asset for its intended use or sale are complete.
k) Excise & Other Duties
Whereas excise duty in respect of finished goods lying in factory
premises is provided and included in the valuation of inventory. Custom
duty on goods lying in custom bonded warehouse is accounted on
clearance thereof. Modvat benefit is accounted for by reducing the
purchase cost of the materials/fixed assets.
l) Claims and benefits
Claims receivable is accounted on accrual basis to the extent
considered receivable.
m) Revenue recognition
Sales are accounted for ex-factory on despatch. Sales are net of
returns. Export sales are accounted on the basis of the date of bill of
lading/ airway bill.
n) Income from Investments/Deposits
Income from Investments is credited to revenue in the year in which it
accrues. Income is stated in full with the tax thereon being accounted
for under Income tax deducted at source.
o) Revenue from Maintenance contracts
Revenue from maintenance contracts are recognised pro-rata over the
period of the contract as and when services are rendered.
p) Product warranties
The company gives warranties on certain products and services
undertaking to repair or replace the items that fails to perform
satisfactorily during the warranty period. Provisions are made towards
expected cost of meeting such obligations of rectification/replacement.
Warranty provisions are made for expected future cash outflows and
computed on total sales made during the year, based on past experience.
Provision has been computed on the total sales made during the year,
based on past experience.
q) Leases
Lease agreements represent agreements entered into prior to 31st
March,2001. Assets under lease agreements are transferred in favour of
the lessee on receipt of the final installment as per agreement. Lease
rents are recognised on accrual basis over the period of lease
agreement. The initial direct cost relatable to lease transactions is
recognised in the profit & loss account in the year such cost is
incurred.
r) Grant & Subsidies
Grants received from Government agencies against specific assets are
adjusted to the cost of the assets and capital grants for the Project
Capital Subsidy are credited to Capital Reserve. Revenue Grants for the
expenses incurred are reduced from the respective expenses.
s) Taxation
Provision for taxation is based on assessable profits of the company as
determined under Income Tax Act, 1961. Deferred taxation is provided
using the liability method in respect of taxation effect arising from
all material timing difference between accounting and tax treatment of
income and expenditure which are expected with reasonable probability
to crystallize in the foreseeable future. Deferred tax benefits are
recognized in the financial statements only to extent of any deferred
tax liability or when such benefits are reasonably expected to be
realizable in the near future.
t) Earnings per share
Basic earning per share is calculated by dividing the net profit for
the year attributable to equity shareholders(after deducting the
preference share dividend, if any) by the weighted average number of
equity shares outstanding during the year. Diluted earning per share is
calculated by dividing the net profits attributable to equity
shareholders (after deducting dividend on redeemable preference shares)
by the weighted average number of equity shares outstanding during the
year(adjusted for the effects of dilutive options).
u) Contingent Liabilities
Contingent Liabilities as defined in Accounting Standard-29 are
disclosed by way of notes to accounts. Provision is made if it becomes
probable that an outflow of future economic benefit will be required
for an item previously dealt with as a contingent liability.
Mar 31, 2011
A) Method of Accounting
i) The accounts of the company are prepared under the historical cost
convention using the accrual method of accounting unless otherwise
stated hereinafter.
ii) Accounting policies not signifi cantly referred to are in
consistence with the generally accepted accounting principles.
b) Fixed Assets
Fixed Assets are stated at cost of acquisiton, inclusive of inward
freight, duties, taxes and incidental expenses related to acquisition
and are net of modvat/cenvat wherever applicable. In respect of
projects involving construction, related pre-operational expenses are
capitalised and form part of the value of the assets capitalised.
Fixed assets other than leasehold land acquired on lease are not refl
ected in the accounts and the lease rent is charged to Profit & loss
account as and when accrued.
The company capitalises software where it is reasonably estimated that
the software has an enduring useful life. Consideration is given at
each balance sheet date to determine whether there is any indication of
impairment of the carrying amount of the company's fi xed assets. If
any indication exists, an asset's recoverable amount is estimated. An
impairment loss is recognized whenever the carrying amount of an asset
exceeds its recoverable amount. Recoverable amount is the greater of
the net selling price and value in use. Value in use is the present
value of its estimated future cash fl ows expected to arise from the
continuing use of an asset from its disposal at the end of its useful
life.
c) Investments
Long term investments are stated at cost of acquisition. Provision for
diminution in the value of long term investments is made only if such a
decline is other than temporary in the opinion of the management.
d) Inventories
Inventories are valued at cost or net realisable value, whichever is
lower, Cost is determined on fi rst in fi rst out (FIFO) basis/Weighted
Average basis. Finished goods and work in process include cost of
convention and other costs incurred in bringing the inventories to
their present location and conditions.
e) Foreign currency transactions
All foreign currency liabilities relating to acquisiton of fi xed
assets are restated at the rates ruling at the year end and exchange
differences arising on such transactions are dealt with in the Profit &
loss account.
Investments in foreign currency are reported using the exchange rate at
the date of transaction. Other foreign currency assets and liabilites
outstanding at the close of the year are valued at the year end
exchange rates. The fl uctuations are refl ected under the appropriate
revenue head.
f) Depreciation
Depreciation is calculated on fi xed assets (other than leased out
assets) on straight line method in accordance with Schedule XIV of
Companies Act, 1956. In respect of leased assets, the cost of the same
is being amortized fully during the primary period of the lease.
Software is depreciated on straight line method at the rates specifi ed
in schedule XIV of the Companies Act.
g) Research & Development
Revenue expenditure on research and development is charged against the
Profit of the year in which it is incurred. Capital expenditure on
research and development is shown as an addition to fi xed assets.
h) Retirement benefits
i) Short term Employee Benefits
All employee benefits payable only within twelve months of rendering
the service are classifi ed as short term employee benefits. Benefits
such as salaries,wages etc. and the expected cost of bonus,
exgratia,incentives are recognised in the period during which the
employee renders the related service.
ii) Post employment Benefits
a) Defi ned Contribution Plans
State Government Provident Fund Scheme is a defi ned contribution plan.
The contribution paid/payable under the scheme is recognised in the
Profit & loss account during the period during which the employee
renders the related service.
b) Defi ned Benefit Plans
The employee Gratuity Fund Scheme managed by a trust is a defi ned
benefit plan. The present value of obligation under such defi ned
benefit plan is determined based on acturial valuation under the
projected unit credit method which recognises each period of service as
giving rise to additional unit of employees benefits entitlement and
measures each unit seperately to build up the fi nal obligation.
The obligation is measured at the present value of future cash fl ows.
The discount rates used for determining the present value of the
obligation under defi ned benefit plans is based on the market yields
on government securities as at balance sheet date, having maturity
periods approximated to the returns of related obligations.
Acturial gains and losses are recognised immediately in the Profit &
loss account.
In case of funded plans the fair value of the planned assets is reduced
from the gross obligation under the defi ned benefit plans to recognise
the obligation on net basis.
c) The obligation for leave encashment is provided for and paid on
yearly basis. i) Accounting for interest in Joint ventures :-
Interest in Joint ventures are accounted as follows
Type of Joint Venture Accounting Treatment
Jointly Controlled Entities i) Integrated Joint Ventures :
a) Company's share in Profits or losses of integrated ventures is
accounted on determination of Profit and losses by Joint Ventures.
b) Investments in integrated Joint Ventures are carried at net of
company's share in recognised Profit or loss.
ii) Incorporated jointly controlled entities
a) Income on investments in incorporated jointly controlled entities
recognised when the right to receive the same is established.
b) Investment in such joint ventures is carried at original cost
providing for any permanant diminution in value.
j) Borrowing costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of the cost of that asset. Other borrowing costs are recognized as
an expense, in the period in which they are incurred. Capitalisation of
borrowing costs ceases when substantially all activities necessary to
prepare the qualifying asset for its intended use or sale are complete.
k) Excise & Other Duties
Whereas excise duty in respect of fi nished goods lying in factory
premises is provided and included in the valuation of inventory. Custom
duty on goods lying in custom bonded warehouse is accounted on
clearance thereof. Modvat benefit is accounted for by reducing the
purchase cost of the materials/fi xed assets.
l) Claims and benefits
Claims receivable is accounted on accrual basis to the extent
considered receivable.
m) Revenue recognition
Other sales are accounted for ex-factory on despatch. Sales are net of
returns.
n) Income from Investments/Deposits
Income from Investments is credited to revenue in the year in which it
accrues. Income is stated in full with the tax thereon being accounted
for under Income tax deducted at source.
o) Revenue from Maintenace contracts
Revenue from maintenance contracts are recognised pro-rata over the
period of the contract as and when services are rendered.
p) Product warranties
The company gives warranties on certain products and services
undertaking to repair or replace the items that fails to perform
satisfactorily during the warranty period. Provisions are made towards
expected cost of meeting such obligations of rectifi
cation/replacement.
Warranty provisions are made for expected future cash outfl ows and
computed on total sales made during the year,based on past experience.
Provision has been computed on the total sales made during the year,
based on past experience.
q) Leases
Lease agreements represent agreements entered into prior to 31st
March,2001. Assets under lease agreements are transferred in favour of
the lessee on receipt of the fi nal instalment as per agreement. Lease
rents are recognised on accrual basis over the period of lease
agreement. The initial direct cost relatable to lease transactions is
recognised in the Profit & loss account in the year such cost is
incurred.
r) Grant & Subsidies
Grants received from Government agencies against specifi c assets are
adjusted to the cost of the assets and capital grants for the Project
Capital Subsidy are credited to Capital Reserve. Revenue Grants for the
expenses incurred are reduced from the respective expenses.
t) Taxation
Provision for taxation is based on assessable Profits of the company as
determined under Income Tax Act, 1961. Deferred taxation is provided
using the liability method in respect of taxation effect arising from
all material timing difference between accounting and tax treatment of
income and expenditure which are expected with reasonable probability
to crystalize in the foreseeable future. Deferred tax benefits are
recognized in the fi nancial statements only to extent of any deferred
tax liability or when such benefits are reasonably expected to be
realizable in the near future.
u) Earnings per share
Basic earning per share is calculated by dividing the net Profit for
the year attributable to equity shareholders (after deducting the
preference share dividend, if any) by the weighted average number of
equity shares outstanding during the year. Diluted earning per share is
calculated by dividing the net Profits attributable to equity
shareholders (after deducting dividend on redeemable preference shares)
by the weighted average number of equity shares outstanding during the
year(adjusted for the effects of dilutive options).
v) Contingent Liabilites
Contingent Liabilities as defi ned in Accounting Standard-29 are
disclosed by way of notes to accounts. Provision is made if it becomes
probable that an outfl ow of future economic benefit will be required
for an item previously dealt with as a contingent liability.
Mar 31, 2010
A) Method of Accounting
i) The accounts of the company are prepared under the historical cost
convention using the accrual method of accounting unless otherwise
stated hereinafter.
ii) Accounting policies not significantly referred to are in
consistence with the generally accepted accounting principles.
b) Fixed Assets
Fixed Assets are stated at cost of acquisiton, inclusive of inward
freight, duties, taxes and incidental expenses related to acquisition
and are net of modvat/cenvat wherever applicable. In respect of
projects involving construction, related pre-operational expenses are
capitalised and form part of the value of the assets capitalised.
Fixed assets other than leasehold land acquired on lease are not
reflected in the accounts and the lease rent is charged to profit &
loss account as and when accrued.
The company capitalises software where it is reasonably estimated that
the software has an enduring useful life. Consideration is given at
each balance sheet date to determine whether there is any indication of
impairment of the carrying amount of the companys fixed assets. If any
indication exists, an assets recoverable amount is estimated. An
impairment loss is recognized whenever the carrying amount of an asset
exceeds its recoverable amount. Recoverable amount is the greater of
the net selling price and value in use. Value in use is the present
value of its estimated future cash flows expected to arise from the
continuing use of an asset from its disposal at the end of its useful
life.
c) Investments
Long term investments are stated at cost of acquisition. Provision for
diminution in the value of long term investments is made only if such a
decline is other than temporary in the opinion of the management.
d) Inventories
Inventories are valued at cost or net realisable value, whichever is
lower, Cost is determined on first in first out (FIFO) basis/Weighted
Average basis. Finished goods and work in process include cost of
convention and other costs incurred in bringing the inventories to
their present location and conditions.
e) Foreign currency transactions
All foreign currency liabilities relating to acquisiton of fixed assets
are restated at the rates ruling at the year end and exchange
differences arising on such transactions are dealt with in the profit &
loss account.
Investments in foreign currency are reported using the exchange rate at
the date of transaction. Other foreign currency assets and liabilites
outstanding at the close of the year are valued at the year end
exchange rates. The fluctuations are reflected under the appropriate
revenue head.
f) Depreciation
Depreciation is calculated on fixed assets (other than leased out
assets) on straight line method in accordance with Schedule XIV of
Companies Act, 1956.In respect of leased assets, the cost of the same
is being amortized fully during the primary period of the lease.
Software is depreciated on straight line method at the rates specified
in schedule XIV of the Companies Act.
g) Research & Development
Revenue expenditure on research and development is charged against the
profit of the year in which it is incurred. Capital expenditure on
research and development is shown as an addition to fixed assets.
h) Retirement benefits
i) Short term Employee Benefits
All employee benefits payable only within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries,wages etc. and the expected cost of bonus,
exgratia,incentives are recognised in the period during which the
employee renders the related service.
ii) Post employment Benefits
a) Defined Contribution Plans
State Government Provident Fund Scheme is a defined contribution
plan.The contribution paid/payable under the scheme is recognised in
the profit & loss account during the period during which the employee
renders the related service.
b) Defined Benefit Plans
The employee Gratuity Fund Scheme managed by a trust is a defined
benefit plan. The present value of obligation under such defined
benefit plan is determined based on acturial valuation under the
projected unit credit method which recognises each period of service as
giving rise to additional unit of employees benefits entitlement and
measures each unit seperately to build up the final obligation.
The obligation is measured at the present value of future cash flows.
The discount rates used for determining the present value of the
obligation under defined benefit plans is based on the market yields on
government securities as at balance sheet date, having maturity periods
approximated to the returns of related obligations.
Acturial gains and losses are recognised immediately in the profit &
loss account.
In case of funded plans the fair value of the planned assets is reduced
from the gross obligation under the defined benefit plans to recognise
the obligation on net basis.
c) The obligation for leave encashment is provided for and paid on
yearly basis.
i) Miscellaneous expenditure
Preliminary expenses are being proportionately written off over a
period of five years.
j) Accounting for interest in Joint ventures :-
Interest in Joint ventures are accounted as follows
Type of Joint Venture Accounting Treatment
Jointly Controlled Entities
i) Integrated Joint Ventures :
a) Companys share in profits or losses of integrated ventures is
accounted on determination of profit and losses by Joint Ventures.
b) Investments in integrated Joint Ventures are carried at net of
companys share in recognised profit or loss.
ii) Incorporated jointly controlled entities
a) Income on investments in incorporated jointly controlled entities
recognised when the right to receive the same is established.
b) Investment in such joint ventures is carried at original cost
providing for any permanant diminution in value.
k) Borrowing costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of the cost of that asset. Other borrowing costs are recognized as
an expense, in the period in which they are incurred. Capitalisation of
borrowing costs ceases when substantially all activities necessary to
prepare the qualifying asset for its intended use or sale are complete.
l) Excise & Other Duties
Whereas excise duty in respect of finished goods lying in factory
premises is provided and included in the valuation of inventory. Custom
duty on goods lying in custom bonded warehouse is accounted on
clearance thereof. Modvat benefit is accounted for by reducing the
purchase cost of the materials/fixed assets.
m) Claims and benefits
Claims receivable is accounted on accrual basis to the extent
considered receivable.
n) Revenue recognition
Export sales are accounted on the basis of the date of bill of lading /
airway bill. Other sales are accounted for ex-factory on despatch.
Sales are net of returns.
o) Income from Investments/Deposits
Income from Investments is credited to revenue in the year in which it
accrues. Income is stated in full with the tax thereon being accounted
for under Income tax deducted at source.
p) Revenue from Maintenace contracts
Revenue from maintenance contracts are recognised pro-rata over the
period of the contract as and when services are rendered.
q) Product warranties
The company gives warranties on certain products and services
undertaking to repair or replace the items that fails to perform
satisfactorily during the warranty period. Provisions are made towards
expected cost of meeting such obligations of rectifi
cation/replacement.
Warranty provisions are made for expected future cash outflows and
computed on total sales made during the year,based on past experience.
Provision has been computed on the total sales made during the
year,based on past experience.
r) Leases
Lease agreements represent agreements entered into prior to 31st
March,2001.Assets under lease agreements are transferred in favour of
the lessee on receipt of the final instalment as per agreement.Lease
rents are recognised on accrual basis over the period of lease
agreement. The initial direct cost relatable to lease transactions is
recognised in the profit & loss account in the year such cost is
incurred.
s) Grant & Subsidies
Grants received from Government agencies against specifi c assets are
adjusted to the cost of the assets and capital grants for the Project
Capital Subsidy are credited to Capital Reserve. Revenue Grants for the
expenses incurred are reduced from the respective expenses.
t) Taxation
Provision for taxation is based on assessable profits of the company as
determined under Income Tax Act, 1961. Deferred taxation is provided
using the liability method in respect of taxation effect arising from
all material timing difference between accounting and tax treatment of
income and expenditure which are expected with reasonable probability
to crystalize in the foreseeable future. Deferred tax benefits are
recognized in the financial statements only to extent of any deferred
tax liability or when such benefits are reasonably expected to be
realizable in the near future.
u) Earnings per share
Basic earning per share is calculated by dividing the net profit for
the year attributable to equity shareholders (after deducting the
preference share dividend, if any) by the weighted average number of
equity shares outstanding during the year.Diluted earning per share is
calculated by dividing the net profits attributable to equity
shareholders (after deducting dividend on redeemable preference shares)
by the weighted average number of equity shares outstanding during the
year(adjusted for the effects of dilutive options).
v) Contingent Liabilites
Contingent Liabilities as defined in Accounting Standard-29 are
disclosed by way of notes to accounts. Provision is made if it becomes
probable that an outflow of future economic benefit will be required
for an item previously dealt with as a contingent liability.
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