Mar 31, 2019
A. SIGNIFICANT ACCOUNTING POLICIES:
I. General Information and Statement of compliance
The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the âInd ASâ) as notified by Ministry of Corporate Affairs (âMCAâ) under Section 133 of the Companies Act, 2013 (ââthe Actââ) read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant provisions of the Act. The Company has uniformly applied the accounting policies during the periods presented.
II. Basis of preparation and presentation
The financial statements have been prepared on going concern basis in accordance with accounting principles generally accepted in India.
The financial statements have been prepared on historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes in to account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
III. Use of Estimates
The preparation of financial statements is in conformity with generally accepted accounting principles which require the management of the Company to make judgements, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the end of the reporting period. Although these estimates are based upon the managementâs best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future period. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Application of accounting policies that require significant accounting estimates involving complex and subjective Judgements and the use of assumptions in these financial statements have been disclosed separately under the heading âSignificant accounting Judgements, estimates and assumptionâ.
Functional and presentation currency
These financial statements are presented in Indian Rupees (INR), which is the companyâs functional currency. All financial information presented in INR has been rounded to the nearest lakhs (upto two decimals).
These financial statements are approved for issue by the Companyâs Board of Directors on 30th April, 2019.
IV. Current versus non - current classification
The entity presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is classified as current, when:
-It is expected to be realised or intended to be sold or consumed in normal operating cycle.It is held primarily for the purpose of trading.
-It is expected to be realised within twelve months after the reporting period, or
-It is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
-All other assets are classified as non-current.
A liability is classified as current, when:
-It is expected to be settled in normal operating cycle.
-It is held primarily for the purpose of trading.
-It is due to be settled within twelve months after the reporting period, or
-There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
-The entity classifies all other liabilities as noncurrent. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
V. Revenue Recognition Sale of goods
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue on sale of goods is recognised when the risk and rewards of ownership is transferred to the buyer, which generally coincides with the despatch of the goods or as per the inco-terms agreed with the customers.
Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment. It comprises of invoice value of goods including excise duty and after deducting discounts, volume rebates and applicable taxes on sale. It also excludes value of self-consumption.
Income from Service
Income from sale of services is recognised when the services are rendered as per the terms of the agreement and when no significant uncertainty as to its determination or realisation exists.
In respect of the exports made by the Company, the related export entitlements from Government authorities are recognised in the statement of profit and loss when the right to receive the incentives/ entitlements as per the terms of the scheme is established and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
Interest Income
Interest income is recorded using the effective interest rate (EIR) method. EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.
Dividend income
Dividend income is recognized when the companyâs right to receive dividend is established by the reporting date, which is generally when shareholders approve the dividend.
VI. Property, Plant and Equipment
Property, Plant and Equipment (PPE) being fixed assets are tangible items held for use or for administrative purposes and are measured at cost less accumulated depreciation and any accumulated impairment. Cost comprises of the purchase price including import duties and non-refundable purchase taxes after deducting trade discounts and rebates and any costs attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the Management. Financing costs relating to acquisition of assets which take substantial period of time to get ready for intended use are also included to the extent they relate to the period up to such assets are ready for their intended use. Items of stores and spares that meet the definition of PPE are capitalized at cost and depreciated over its useful life. The Carrying amount of an item of PPE is derecognized on disposal or when no future economic benefits are expected from its use or disposal. Gains or losses arising from de-recognition of Property, Plant and Equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized. Depreciation on Property, Plant and Equipment (PPE) are provided under straight line method as per the useful lives and manner prescribed under Schedule II to the Companies Act, 2013, except for building and medical equipments, which are depreciated over the useful life as estimated by the management.
The management believes that the useful life adopted reflect the expected pattern of consumption of future economic benefit:
Where the cost of a part of the PPE is significant to the total cost of the PPE and if that part of the PPE has a different useful life than the main PPE, the useful life of that part is determined separately for depreciation.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
The depreciation method applied to an asset is reviewed at each financial year-end and if there has been a significant change in the expected pattern of consumption of future economic benefits embodied in the asset, depreciation is charged to reflect the changed pattern.
VII. Intangible Assets
Intangible assets are recognised only if it is probable that future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably.
Computer software licenses are capitalised on the basis of costs incurred to acquire and bring to use the specific software. Operating software is capitalised and amortised along with the related fixed asset. Other software is amortised, on a straight line method, over a period of three years based on managementâs assessment of useful life.
In June 2018, the company has acquired a unit from Supreme Automech Private Limited in Pondicherry. During the course of acquisition, the company incurred Goodwill and Business Intellectual Property Rights which is amortised on a straight line method, over a period of five years based on managementâs assessment of useful life.
Useful lives of Intangible Assets
VIII. Impairment of Property, Plant and Equipment and Intangible Assets
The carrying amounts of its tangible and Intangible assets are reviewed, as at each balance sheet date, to determine if there is any indication of impairment based on internal / external factors. An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. The recoverable amount is greater of the assetâs net selling price and value in use. In assessing value in use, the estimated future cash flows as a cash generating unit are discounted to the present value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss for an asset is reversed if, and only if, the reversal can be related objectively to an extent occuring after the impairment loss was recongnised.
The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognised for the asset in prior years.
IX. Inventories
Inventories are valued at lower of cost and net realizable value. Cost includes all direct costs and applicable production overheads, to bring the goods to the present location and condition.
i) Costs of raw materials, packing materials, tools and dies and Store & Spare Parts are computed on weighted average basis.
ii) Costs of finished goods and semi-finished goods are computed on weighted average basis.
iii) Agriculture Produce is valued at estimate realizable value.
iv) Cost of stock held for trading are computed on weighted average basis.
X. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
a) Financial assets
Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
(i) Debt instruments at amortized cost.
(ii) Debt instruments at fair value through other comprehensive income (FVTOCI);
(iii) Debt instruments and equity instruments at fair value through profit or loss (FVTPL);
(iv) Equity instruments measured at fair value through other comprehensive income (FVTOCI).
Debt instruments at amortized cost
A âdebt instrumentâ is measured at the amortized cost if both the following conditions are met: -The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and -Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.
Debt instrument at FVTOCI
A âdebt instrumentâ is classified as at the FVTOCI if both of the following criteria are met:
The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
The assetâs contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI).
Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss. In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ).
De-recognition of Financial Assets
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily de-recognized when:
The rights to receive cash flows from the asset have expired, or
The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpassthroughâ arrangement and either
(a) the Company has transferred substantially all the risks and rewards of the asset, or
(b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a passthrough arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership.
When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Companyâs continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
b) Financial Liabilities
Initial recognition and measurement
All financial liabilities are recognized initially at fair value and transaction cost (if any) that is attributable to the acquisition of the financial liabilities is also adjusted
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
i. Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the Effective Interest Rate (EIR) method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
ii. Trade and other payables
These amounts represent liabilities for goods or services provided to the Company which are unpaid at the end of the reporting period. Trade and other payables are presented as current liabilities when the payment is due within a period of 12 months from the end of the reporting period. For all trade and other payables classified as current, the carrying amounts approximate fair value due to the short maturity of these instruments. Other payables falling due after 12 months from the end of the reporting period are presented as non-current liabilities and are measured at amortized cost unless designated as fair value through profit and loss at the inception.
iii. Other financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Gains or losses on liabilities held for trading are recognized in the profit or loss.
De-recognition of Financial Liabilities
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or Modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
c) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
d) Compound Financial Instruments
A financial instrument that comprises of both the liability and equity components are accounted as compound financial instruments. The fair value of the liability component is separated from the compound instrument and is subsequently measured at amortized cost. The residual value is recognized as equity component of other financial instrument and is not re-measured after initial recognition.
The transaction costs related to compound instruments are allocated to the liability and equity components in the proportion to the allocation of gross proceeds. Transaction costs related to equity component is recognized directly in equity and the cost related to liability component is included in the carrying amount of the liability component and amortized using effective interest method.
XI. Impairment of Financial assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses or at an amount equal to the life time expected credit losses, if the credit risk on the financial asset has increased significantly since initial recognition.
XII. Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
-In the principal market for the asset or liability, or
-In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participantâs would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable, or
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the
Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level Input that is significant to the fair value measurement as a whole) at the end of each reporting period
XIII. Foreign currencies
a) Initial recognition
Foreign currency transactions are recorded in the functional currency, by applying to the exchange rate between the functional currency and the foreign currency at the date of the transaction.
b) Conversion
Foreign currency monetary items are converted to functional currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or any other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
Foreign currency monetary items are reported using closing foreign exchange rate. Non-monetary items, which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of transaction.
Exchange differences arising on the settlement of monetary items or on reporting companyâs monetary items at rates different from those at which they were initially recorded during the year or reported in previous financial statements are recognized as income or as expenses in the year in which they arise.
XIV. Borrowing costs
Borrowing costs attributable to the acquisition or construction of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use.
All the other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.
XV. Employee benefits
a) Retirement benefit costs and termination benefits
Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.
Liabilities with regard to the Gratuity plan AND Long term Comprensated absences are determined by actuarial valuation, performed by an independent actuary, at each Balance sheet date using the projected unit credit method. Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:
Service cost (including current service cost, past service cost, as well as gains losses on curtailments and settlements);
Net interest expense or income; and
Re-measurement of acturial gain/losses
The Company presents the first two components of defined benefit costs in the statement of Profit and Loss in the line item âEmployee benefits expenseâ.
The retirement benefit obligation recognized in the balance sheet represents the actual deficit or surplus in the Companyâs defined plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
b) Short-term and other long-term employee benefits
A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. Liability recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service. Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
XVI. Lease
a) Company as a Lessor
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Companyâs net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
b) Company as a Lessee
Assets acquired under lease where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such lease is capitalized at the inception of the lease at lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each period.
Assets acquired on lease where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating lease. Lease rentals on assets taken on operating lease are recognized as an expense in the statement of profit and loss on a straight line basis over the lease term.
XVII. Taxation
Income tax expense comprises current tax and the net change in the deferred tax asset or liability during the year.
a) Current Tax
Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961, and based on the expected outcome of assessments/appeals.
b) Deferred Tax
Deferred tax is recognized on temporary differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exist to set off current tax assets against current tax liabilities and deferred tax assets/deferred tax liabilities relate to same taxable entity and same taxation authority.
The carrying amount of deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.
XVIII. Provisions
A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value unless otherwise required by the standard and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
XIX. Earnings per share
a) Basic earnings per share are computed by dividing profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year.
b) For the purpose of calculating diluted earnings per share, the profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
XX. Cash and Cash Equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts as they are considered an integral part of the Companyâs cash management.
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with the recognition and measurement principles of Ind AS requires management to make Judgements, estimates and assumptions that affect the reported balances of revenues, expenses, assets and liabilities and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
The following are the areas of estimation uncertainty and critical judgements that the management has made in the process of applying the companyâs accounting policies :
a) Useful lives of depreciable assets
Management reviews the useful lives of depreciable assets at each reporting period. As at March 31, 2019 management assessed that the useful lives represent the expected utility of the assets to the Company. Such lives are dependent upon an assessment of both the technical lives of the asset and also their economic lives based on various internal and external factors including efficiency and operating costs. Accordingly depreciation lives are reviewed annually using the best information available to the management.
b) Evaluation of indicators for impairment of assets
The evaluation of applicable indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets
c) Recognition of deferred tax liability
Significant management judgement is required to determine the amount of deferred tax asset that can be recognised based on the likely timing and the level of future taxable profits together with future tax planning strategies.
d) Provision and contingent liability
Provisions and liabilities are recognised in the period when it becomes probable that there will be future outflows of funds from past events that can reasonably be estimated. The timing of recognition requires application of judgement to existing facts and circumstances which may be subject to change.
On an ongoing basis, the Company reviews pending cases, claims by third parties and other contingencies. For contingent losses that are considered probable, an estimated loss is recorded as an accrual in financial statements. Loss contingencies that are considered possible are not provided for but disclosed as Contingent liabilities in the financial statements. Contingencies, the likelihood of which is remote, are not disclosed in the financial statements.
e) Defined benefit obligation
Managementâs estimate of the Defined Benefit obligation is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may impact the obligation amount and the annual defined benefit expenses.
f) Fair value measurements
Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument.
Mar 31, 2018
A SIGNIFICANT ACCOUNTING POLICIES:
I. General Information and Statement of compliance
The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs (''MCA'') under Section 133 of the Companies Act, 2013 (''the Act'') read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant provisions of the Act. The Company has uniformly applied the accounting policies during the periods presented.
These financial statements for the year ended 31 March 2018 are the first financial statements which the Company has prepared in accordance with Ind AS. For all periods up to and including the year ended 31 March 2017, the Company had prepared its financial statements in accordance with Accounting Standards notified under Section 133 of the Act, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP), which have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS, with the date of transition to Ind AS being 1st April 2016. For the purpose of comparatives, financial statements for the year ended 31 March 2017 and opening balance sheet as at 1 April 2016 are also prepared as per Ind AS.
II. Basis of preparation and presentation
The financial statements have been prepared on going concern basis in accordance with accounting principles generally accepted in India.
The financial statements have been prepared on historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes in to account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/ or disclosure purposes in these financial statements is determined on such a basis, except for share based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurements in its entirety, which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
III. Use of Estimates
The preparation of financial statements is in conformity with generally accepted accounting principles which require the management of the Company to make judgements, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the end of the reporting period. Although these estimates are based upon the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future period. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Application of accounting policies that require significant accounting estimates involving complex and subjective Judgements and the use of assumptions in these financial statements have been disclosed separately under the heading Significant accounting Judgements, estimates and assumption.
IV. Current versus non - current classification
The entity presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is classified as current, when:
-It is expected to be realised or intended to be sold or consumed in normal operating cycle.It is held primarily for the purpose of trading.
-It is expected to be realised within twelve months after the reporting period, or
-It is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
-All other assets are classified as non-current.
A liability is classified as current, when:
-It is expected to be settled in normal operating cycle.
-It is held primarily for the purpose of trading.
-It is due to be settled within twelve months after the reporting period, or
-There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
-The entity classifies all other liabilities as noncurrent. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
V. Revenue Recognition
Sale of goods
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue on sale of goods is recognised when the risk and rewards of ownership is transferred to the buyer, which generally coincides with the despatch of the goods or as per the inco-terms agreed with the customers.
Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment. It comprises of invoice value of goods including excise duty and after deducting discounts, volume rebates and applicable taxes on sale. It also excludes value of self-consumption.
Income from Service
Income from sale of services is recognised when the services are rendered as per the terms of the agreement and when no significant uncertainty as to its determination or realisation exists.
In respect of the exports made by the Company, the related export entitlements from Government authorities are recognised in the statement of profit and loss when the right to receive the incentives/ entitlements as per the terms of the scheme is established and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
Interest Income
Interest income is recorded using the effective interest rate (EIR) method. EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.
Dividend income
Dividend income is recognized when the company s right to receive dividend is established by the reporting date, which is generally when shareholders approve the dividend.
VI. Property, Plant and Equipment
Property, Plant and Equipment (PPE) being fixed assets are tangible items held for use or for administrative purposes and are measured at cost less accumulated depreciation and any accumulated impairment. Cost comprises of the purchase price including import duties and non-refundable purchase taxes after deducting trade discounts and rebates and any costs attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the Management. Financing costs relating to acquisition of assets which take substantial period of time to get ready for intended use are also included to the extent they relate to the period up to such assets are ready for their intended use. Items of stores and spares that meet the definition of PPE are capitalized at cost and depreciated over its useful life. The Carrying amount of an item of PPE is derecognized on disposal or when no future economic benefits are expected from its use or disposal. Gains or losses arising from de-recognition of Property, Plant and Equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized. Depreciation on Property, Plant and Equipment (PPE) are provided under straight line method as per the useful lives and manner prescribed under Schedule II to the Companies Act, 2013, except for building and medical equipments, which are depreciated over the useful life as estimated by the management.
The management believes that the useful life adopted reflect the expected pattern of consumption of future economic benefit:
Where the cost of a part of the PPE is significant to the total cost of the PPE and if that part of the PPE has a different useful life than the main PPE, the useful life of that part is determined separately for depreciation.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
The depreciation method applied to an asset is reviewed at each financial year-end and if there has been a significant change in the expected pattern of consumption of future economic benefits embodied in the asset, depreciation is charged to reflect the changed pattern.
VII. Intangible Assets
Intangible assets are recognised only if it is probable that future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably.
Computer software licenses are capitalised on the basis of costs incurred to acquire and bring to use the specific software. Operating software is capitalised and amortised along with the related fixed asset. Other software is amortised, on a straight line method, over a period of three years based on management''s assessment of useful life.
Useful lives of Intangible Assets
Class of Assets Years
Software 3 Years
VIII. Impairment of Property, Plant and Equipment and Intangible Assets
The carrying amounts of its tangible and Intangible assets are reviewed, as at each balance sheet date, to determine if there is any indication of impairment based on internal / external factors. An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. The recoverable amount is greater of the asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows as a cash generating unit are discounted to the present value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss for an asset is reversed if, and only if, the reversal can be related objectively to an extent occuring after the impairment loss was recognised.
The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognised for the asset in prior years.
IX. Inventories
Inventories are valued at lower of cost and net realizable value. Cost includes all direct costs and applicable production overheads, to bring the goods to the present location and condition.
i) Costs of raw materials, packing materials, tools and dies and Store & Spare Parts are computed on weighted average basis.
ii) Costs of finished goods and semi-finished goods are computed on weighted average basis.
iii) Agriculture Produce is valued at estimate realizable value.
iv) Cost of stock held for trading are computed on weighted average basis.
X. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
a) Financial assets
Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
(i) Debt instruments at amortized cost.
(ii) Debt instruments at fair value through other comprehensive income (FVOCI);
(iii) Debt instruments and equity instruments at fair value through profit or loss (FVTPL);
(iv) Equity instruments measured at fair value through other comprehensive income (FVOCI).
Debt instruments at amortized cost
A ''debt instrument'' is measured at the amortized cost if both the following conditions are met:
-The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
-Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.
Debt instrument at FVOCI
A ''debt instrument'' is classified as at the FVOCI if both of the following criteria are met:
The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
The asset''s contractual cash flows represent SPPI.
Debt instruments included within the FVOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI).
Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVOCI, is classified as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss. In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch'').
De-recognition of Financial Assets
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily de-recognized when:
The rights to receive cash flows from the asset have expired, or
The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass through'' arrangement and either
(a) the Company has transferred substantially all the risks and rewards of the asset, or
(b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership.
When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
b) Financial Liabilities
Initial recognition and measurement
All financial liabilities are recognized initially at fair value and transaction cost (if any) that is attributable to the acquisition of the financial liabilities is also adjusted
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
i. Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the Effective Interest Rate (EIR) method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
ii. Trade and other payables
These amounts represent liabilities for goods or services provided to the Company which are unpaid at the end of the reporting period. Trade and other payables are presented as current liabilities when the payment is due within a period of 12 months from the end of the reporting period. For all trade and other payables classified as current, the carrying amounts approximate fair value due to the short maturity of these instruments. Other payables falling due after 12 months from the end of the reporting period are presented as non-current liabilities and are measured at amortized cost unless designated as fair value through profit and loss at the inception.
iii. Other financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Gains or losses on liabilities held for trading are recognized in the profit or loss.
De-recognition of Financial Liabilities
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or Modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
c) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
d) Compound Financial Instruments
A financial instrument that comprises of both the liability and equity components are accounted as compound financial instruments. The fair value of the liability component is separated from the compound instrument and is subsequently measured at amortized cost. The residual value is recognized as equity component of other financial instrument and is not re-measured after initial recognition.
The transaction costs related to compound instruments are allocated to the liability and equity components in the proportion to the allocation of gross proceeds. Transaction costs related to equity component is recognized directly in equity and the cost related to liability component is included in the carrying amount of the liability component and amortized using effective interest method.
XI. Impairment of Financial assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses or at an amount equal to the life time expected credit losses, if the credit risk on the financial asset has increased significantly since initial recognition.
XII. Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
-In the principal market for the asset or liability, or
-In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participant''s would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable, or
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level Input that is significant to the fair value measurement as a whole) at the end of each reporting period
XIII. Foreign currencies
a) Initial recognition
Foreign currency transactions are recorded in the functional currency, by applying to the exchange rate between the functional currency and the foreign currency at the date of the transaction.
b) Conversion
Foreign currency monetary items are converted to functional currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or any other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
Foreign currency monetary items are reported using closing foreign exchange rate. Non-monetary items, which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of transaction.
Exchange differences arising on the settlement of monetary items or on reporting company''s monetary items at rates different from those at which they were initially recorded during the year or reported in previous financial statements are recognized as income or as expenses in the year in which they arise.
XIV. Borrowing costs
Borrowing costs attributable to the acquisition or construction of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use.
All the other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.
XV. Employee benefits
a) Retirement benefit costs and termination benefits
Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.
Liabilities with regard to the Gratuity plan AND Long term Comprensated absences are determined by actuarial valuation, performed by an independent actuary, at each Balance sheet date using the projected unit credit method. Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:
Service cost (including current service cost, past service cost, as well as gains losses on curtailments and settlements);
Net interest expense or income; and Re-measurement of acturial gain/losses
The Company presents the first two components of defined benefit costs in the statement of Profit and Loss in the line item ''Employee benefits expense''.
The retirement benefit obligation recognized in the balance sheet represents the actual deficit or surplus in the Company''s defined plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
b) Short-term and other long-term employee benefits
A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. Liability recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service. Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
a) Company as a Lessor
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
b) Company as a Lessee
Assets acquired under lease where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such lease is capitalized at the inception of the lease at lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each period.
Assets acquired on lease where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating lease. Lease rentals on assets taken on operating lease are recognized as an expense in the statement of profit and loss on a straight line basis over the lease term.
XVII. Taxation
Income tax expense comprises current tax and the net change in the deferred tax asset or liability during the year.
a) Current Tax
Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961, and based on the expected outcome of assessments/appeals.
b) Deferred Tax
Deferred tax is recognized on temporary differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exist to set off current tax assets against current tax liabilities and deferred tax assets/deferred tax liabilities relate to same taxable entity and same taxation authority.
The carrying amount of deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.
XVIII. Provisions
A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value unless otherwise required by the standard and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
XIX. Earnings per share
a) Basic earnings per share are computed by dividing profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year.
b) For the purpose of calculating diluted earnings per share, the profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
XX. Cash and Cash Equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with the recognition and measurement principles of Ind AS requires management to make Judgements, estimates and assumptions that affect the reported balances of revenues, expenses, assets and liabilities and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
The following are the areas of estimation uncertainty and critical judgements that the management has made in the process of applying the company''s accounting policies :
a) Useful lives of depreciable assets
Management reviews the useful lives of depreciable assets at each reporting period. As at March 31, 2018 management assessed that the useful lives represent the expected utility of the assets to the Company. Such lives are dependent upon an assessment of both the technical lives of the asset and also their economic lives based on various internal and external factors including efficiency and operating costs. Accordingly depreciation lives are reviewed annually using the best information available to the management.
b) Evaluation of indicators for impairment of assets
The evaluation of applicable indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets
c) Recognition of deferred tax liability
Significant management judgement is required to determine the amount of deferred tax asset that can be recognised based on the likely timing and the level of future taxable profits together with future tax planning strategies.
d) Provision and contingent liability
Provisions and liabilities are recognised in the period when it becomes probable that there will be future outflows of funds from past events that can reasonably be estimated. The timing of recognition requires application of judgement to existing facts and circumstances which may be subject to change.
On an ongoing basis, the Company reviews pending cases, claims by third parties and other contingencies. For contingent losses that are considered probable, an estimated loss is recorded as an accrual in financial statements. Loss contingencies that are considered possible are not provided for but disclosed as Contingent liabilities in the financial statements. Contingencies, the likelihood of which is remote, are not disclosed in the financial statements.
e) Defined benefit obligation
Management''s estimate of the Defined Benefit obligation is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may impact the obligation amount and the annual defined benefit expenses.
f) Fair value measurements
Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument.
Mar 31, 2017
Corporate Information
LGB Forge Limited was incorporated on 07.06.2006. The company is into manufacturing of Cold and Hot forged components and has its manufacturing unit at Coimbatore, Tamilnadu and Mysore, Karnataka. The company concentrates in manufacturing high volume Auto, Electrical & Transmission forged components for automobiles, non automotive segments like Valve Industry and infrastructure equipment industry including machining for customers in automotive, off-road and non-automotive segments.
1 SIGNIFICANT ACCOUNTING POLICIES
i. Basis of preparation
The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP) and comply in all material respects with the accounting standards specified under section 133 of Companies act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.
ii. Use of estimates
The preparation of financial statements in conformity with Indian Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, disclosures relating to contingent liabilities and assets as at the balance sheet date and the reported amounts of income and expenses during the year. Difference between the actual amounts and the estimates are recognized in the year in which the events become known / are materialized. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
iii. Property, Plant and Equipment
Property, plant and equipment (PPE), being fixed assets are tangible items held for use or for administrative purposes and are measured at cost less accumulated depreciation and any accumulated impairment. Cost comprises of the purchase price including import duties and non-refundable purchase taxes after deducting trade discounts and rebates and any costs attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the Management. Financing costs relating to acquisition of assets which take substantial period of time to get ready for intended use are also included to the extent they relate to the period up to such assets are ready for their intended use.
Gains or losses arising from derecognition of Property, Plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
iv. Depreciation
Depreciation on Property, plant and equipment (PPE) are provided under straight line method as per the useful lives and manner prescribed under Schedule II to the Companies Act, 2013.
The Company has used the following useful lives to provide depreciation on its Property, Plant and Equipment
Particulars Useful Life
Factory Buildings 30 years
Plant & Machinery 7.5 years
( Triple Shift)
Furniture & Fixtures 10 years
Vehicles 8 years
Other Equipments 15 years
Where the cost of a part of the PPE is significant to the total cost of the PPE and if that part of the PPE has a different useful life than the main PPE, the useful life of that part is determined separately for depreciation.
The depreciation method applied to an asset is reviewed at each financial year-end and if there has been a significant change in the expected pattern of consumption of future economic benefits embodied in the asset, depreciation is charged to reflect the changed pattern.
v. Intangible assets and amortization
Intangible assets are recognized only if it is probable that future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably.
Computer software licenses are capitalized on the basis of costs incurred to acquire and bring to use the specific software. Operating software is capitalized and amortized along with the related fixed asset. Other software is amortized, on a straight line method, over a period of three years based on management''s assessment of useful life.
vi. Impairment of assets
The Company periodically assesses whether there is any indication that an asset or a group of assets comprising a cash generating unit may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. For an asset or group of assets that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost. An impairment loss is reversed only to the extent that the carrying amount of asset does not exceed the net book value that would have been determined if no impairment loss had been recognized.
vii. Valuation of Inventories
a) Inventories are valued at lower of cost and net realizable value. Cost is arrived at on weighted average basis.
b) The basis of determining cost for various categories of inventories are as follows:
i) Raw Materials, Packing Materials and Stores and spares: Weighted Average basis.
ii) Finished Goods and Work-in-Progress: Cost of Direct Material, Labour and other Manufacturing overheads.
c) Stores & Spares which do not meet the definition of Property, Plant and Equipment are accounted as inventories.
d) Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated costs necessary to make the sale.
viii. Revenue Recognition
a) The Company generally follows the mercantile system of accounting and recognizes income and expenditure on an accrual basis except those with significant uncertainties.
b) Sale of goods is recognized when the risk and rewards of ownership are passed on to the customers, which is generally on dispatch of goods.
c) Claims made by the company and those made on the company are recognized in the statement of profit and loss as and when the claims are accepted.
d) Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.
ix. Foreign Currency Transactions
a) Foreign currency transactions are recorded at exchange rates prevailing on the date of such transaction.
b) Exchange differences arising on settlement on transactions of monetary items are recognized as income / expense in the Statement of Profit & Loss in the period in which it arises.
c) Foreign currency monetary assets and liabilities at the year end are realigned at the exchange rate prevailing at the year end and difference on realignment is recognized in the Statement of Profit and Loss.
x. Employee Benefits
a) Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.
b) Post employment and other long term benefits which are defined benefit plans are recognized as an expense in the Statement of Profit and Loss for the year in which the employee has rendered service. The expense is recognized based on the present value of the obligation determined as per Projected Unit Credit Method in accordance with Revised Accounting Standard 15 on Employee Benefits. Actuarial gains & losses are charged to the Statement of Profit and Loss.
c) Payments to defined contribution schemes are charged as expense as and when incurred.
d) Termination benefits are recognized as an expense as and when incurred.
xi. Borrowing Costs
Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets. All other borrowing costs are charged to revenue. A qualifying asset is an asset that necessarily requires substantial period of time to get ready for its intended use or sale.
xii. Taxes on Income
Current tax on income for the period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessment / appeals. Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets and Deferred tax liabilities are offset if a legally enforceable right exist to set off current tax assets against current tax liabilities and deferred tax assets/deferred tax liabilities relate to same taxable entity and same taxation authority.
Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainty that sufficient future income will be available against which such deferred tax assets can be realized.
xiii. Leases
Leases are classified as finance or operating leases depending upon the terms of the lease agreements. Assets held under finance leases are recognized as assets of the Company on the date of acquisition and depreciated over their estimated useful lives. Finance costs are treated as period cost using effective interest rate method and are expensed accordingly. Rentals payable under operating leases are expensed as incurred.
xiv. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes if any) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares (if any) are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and consolidation of shares if any.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
xv. Provisions, Contingent Liabilities and Contingent Assets
a) A provision is recognized when the company has present obligation as a result of any past event, where it is probable that an outflow of resources will be required to settle the obligations, in respect of which reliable estimate can be made. Provisions are not discounted to its present value unless otherwise required by the standard and are determined based on best estimates required to settle the obligations at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
b) A Contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.
c) Contingent Assets are neither accounted for nor disclosed
xvi. Cash and Cash equivalents
Cash flows are reported using the indirect method, where by net profit before tax is adjusted for the effects of transaction of a non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow comprises regular revenue generating, investing and financing activities of the company. Cash and cash equivalents in the balance sheet comprise of cash at bank and in hand and short term, highly liquid investments having a original maturity of less than 3 months and that is readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
Mar 31, 2015
I. Basis of preparation
The financial statements have been prepared to comply in all material
respects with the accounting standards specified under Section 133 of
Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules,
2014. The financial statements have been prepared under the historical
cost convention on an accrual basis. The accounting policies have been
consistently applied by the Company and are consistent with those used
in the previous year except as specified in Note No. 34 in financial
statements.
ii. Use of estimates
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles requires management to make estimates
and assumptions that affect the reported amount of assets, liabilities,
disclosures relating to contingent liabilities and assets as at the
balance sheet date and the reported amounts of income and expenses
during the year. Difference between the actual amounts and the
estimates are recognized in the year in which the events become known /
are materialized.
iii. Fixed Assets & Depreciation
a) Fixed Assets are stated at original cost net of tax / duty credits
availed, if any, less accumulated depreciation, accumulated
amortization and cumulative impairment. Costs include pre-operative
expenses and all expenses
b) Own manufactured assets are capitalized at cost including an
appropriate share of overheads.
c) Depreciation on assets has been provided on Straight line method at
useful lives specified in the Schedule II of the Companies Act, 2013.
d) As at each balance sheet date, the carrying amount of assets is
tested for impairment so as to determine:
i) the provision for impairment loss, if any, required or;
ii) the reversal, if any, required of impairment loss recognised in
previous periods. Impairment loss is recognised when the carrying
amount of an asset exceeds its recoverable amount.
iv. Valuation of Inventories
a) Inventories are valued at lower of cost and estimated net realizable
value. Cost is arrived at on weighted average basis.
b) Excise Duty is added in the Closing Inventory of Finished Goods &
Scrap.
c) The basis of determining cost for various categories of inventories
are as follows:
i) Raw Materials, Packing Materials and Stores and spares: Weighted
Average basis.
ii) Finished Goods and Work-in-Progress: Cost of Direct Material,
Labour and other Manufacturing overheads.
v. Revenue Recognition
a) The Company generally follows the mercantile system of accounting
and recognizes income and expenditure on an accrual basis except those
with significant uncertainties.
b) Sale of goods is recognized when the risk and rewards of ownership
are passed on to the customers, which is generally on despatch of
goods.
c) Claims made by the Company and those made on the Company are
recognized in the Statement of Profit and Loss as and when the claims
are accepted.
d) Interest income is recognized on time proportion basis taking into
account the amount outstanding and the rate applicable .
vi. Foreign Currency Transactions
a) Foreign currency transactions are recorded at exchange rates
prevailing on the date of such transaction.
b) Foreign currency monetary assets and liabilities at the year end are
realigned at the exchange rate prevailing at the year end and
difference on realignment is recognized in the Statement of Profit and
Loss.
vii. Research and Development
Revenue expenditure on Research and Development is charged under
respective heads of account. Capital expenditure on research and
development is included as part of fixed assets and depreciated on the
same basis as other fixed assets.
viii. Employee Benefits
a) Short term employee benefits are recognized as an expense at the
undiscounted amount in the Statement of Profit and Loss for the year in
which the related service is rendered.
b) Post employment and other long term benefits which are defined
benefit plans are recognized as an expense in the Statement of Profit
and Loss for the year in which the employee has rendered service. The
expense is recognized based on the present value of the obligation
determined in accordance with Revised Accounting Standard 15 on
Employee Benefits. Actuarial gains & losses are charged to the
Statement of Profit and Loss.
c) Payments to defined contribution schemes are charged as expense as
and when incurred.
d) Termination benefits are recognized as an expense as and when
incurred.
ix. Borrowing Costs
Borrowing costs attributable to the acquisition or construction of
qualifying assets are capitalized as part of such assets. All other
borrowing costs are charged to revenue. A qualifying asset is an asset
that necessarily requires substantial period of time to get ready for
its intended use or sale.
x. Taxes on Income
Current tax on income for the period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the
Income Tax Act, 1961 and based on the expected outcome of assessment /
appeals. Deferred tax is recognized on timing differences between the
accounting income and the taxable income for the year and quantified
using the tax rates and laws enacted or substantively enacted as on the
Balance Sheet date.
Deferred tax assets are recognized and carried forward to the extent
that there is a virtual certainty that sufficient future income will be
available against which such deferred tax assets can be realized.
xi. Leases
Leases are classified as finance or operating leases depending upon the
terms of the lease agreements. Assets held under finance leases are
recognised as assets of the Company on the date of acquisition and
depreciated over their estimated useful lives. Finance costs are
treated as period cost using effective interest rate method and are
expensed accordingly. Rentals payable under operating leases are
expensed as incurred.
xii. CENVAT/Service Tax
CENVAT credit on materials purchased / services availed for production
/ Input services are taken into account at the time of purchase. CENVAT
credit on purchase of capital items wherever applicable are taken into
account as and when the assets are acquired. The CENVAT credits so
taken are utilized for payment of excise duty on goods manufactured /
Service tax on Output services. The unutilized CENVAT credit is carried
forward in the books.
xiii. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes if any) by the
weighted average number of equity shares outstanding during the period.
Partly paid equity shares (if any) are treated as a fraction of an
equity share to the extent that they were entitled to participate in
dividends relative to a fully paid equity share during the reporting
period. The weighted average number of equity shares outstanding during
the period are adjusted for events of bonus issue; bonus element in a
rights issue to existing shareholders; share split; and consolidation
of shares if any.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
xiv. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised only when there is a present obligation as a
result of past events and when a reliable estimate of the amount of
obligation can be made. Contingent liability is disclosed for
(i) Possible obligation which will be confirmed only by future events
not wholly within the control of the Company or
(ii) Present obligations arising from past events where it is not
probable that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount of the obligation cannot
be made. Contingent assets are not recognised in the financial
statements since this may result in the recognition of income that may
never be realized.
xv. Cash and Cash equivalents
Cash flow are reported using the indirect method, where by net profit
before tax is adjusted for the effects of transaction of a non cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flow comprises regular revenue generating, investing
and financing activities of the Company. Cash and cash equivalents in
the balance sheet comprise of cash at bank and in hand and short term,
highly liquid investments that are readily convertible into known
amounts of cash and which are subject to an insignificant risk of
changes in value.
Mar 31, 2014
I. Basis of Preparation
The Financial Statements have been prepared to comply in all material
respects with the Accounting Standards notified under the companies
(Accounting Standards) Rules, 2006 and the relevant provisions of the
Companies Act, 1956.The Financial statements have been prepared under
the historical cost convention on an accrual basis. The accounting
policies have been consistently applied by the Company and are
consistent with those used in the previous year.
II. Use of estimates
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles requires management to make estimates
and assumptions that affect the reported amount of assets, liabilities,
disclosures relating to contingent liabilities and assets as at the
balance sheet date and the reported amounts of Income and expenses
during the year. Difference between the actual amounts and the
estimates are recognized in the year in which the events become known/
are materialized. iii. Fixed Assets & Depreciation
a) Fixed Assets are stated at original cost net of tax / duty credits
availed, if any, less accumulated depreciation, accumulated
amortization and cumulative impairment. Costs include pre-operative
expenses and all expenses related to acquisition and installation of
the assets concerned.
b) Own manufactured assets are capitalized at cost including an
appropriate share of overheads.
c) Depreciation on Plant and Machinery, Motor Cars, Trucks and Vans has
been provided on straight-line method at the rates specified in the
Schedule XIV of the Companies Act, 1956. Tools and Dies are
depreciated at 20% p.a. based on the estimated useful life as
determined by the Company. Depreciation in respect of other assets has
been calculated on written down value method as per the rates specified
in Schedule XIV of the Companies Act, 1956.
Based on technical opinion, windmill is considered as a continuous
process plant and depreciation is provided at the rate applicable
thereto, on straight line method.
d) As at each Balance Sheet date, the carrying amount of assets is
tested for impairment so as to determine;
i) the provision for impairment loss, if any, required or;
ii) the reversal, if any, required for impairment loss recognised in
previous periods. Impairment loss is recognised when the carrying
amount of an asset exceeds its recoverable amount.
iv. Valuation of Inventories
a) Inventories are valued at lower of cost and estimated net realizable
value. Cost is arrived at on weighted average basis.
b) Excise Duty is added in the Closing Inventory of Finished Goods.
c) The basis of determining cost for various categories of inventories
are as follows:
i) Raw Materials, Packing Materials and Stores and spares : Weighted
Average basis.
ii) Finished Goods and Work-in-Progress :Cost of Direct, Material,
Labour and other Manufacturing overheads.
v. Revenue Recognition
a) The Company generally follows the mercantile system of accounting
and recognizes income and expenditure on an accrual basis except those
with significant uncertainties.
b) Sale of goods is recognized when the risk and rewards of ownership
are passed on to the customers, which is generally on despatch of
goods.
c) Claims made by the Company and those made on the Company are
recognized in the Statement of Profit and Loss as and when the claims
are accepted.
vi. Foreign Currency Transactions
a) Foreign currency transactions are recorded at exchange rates
prevailing on the date of such transaction.
b) Foreign currency assets and liabilities at the year end are
realigned at the exchange rate prevailing at the year end and
difference on realignment is recognized in the Statement of Profit and
Loss.
vii. Research and Development
Revenue expenditure on Research and Development is charged under
respective heads of account. Capital expenditure on Research and
Development is included as part of fixed assets and depreciated on the
same basis as other fixed assets. viii. Employee Benefits
a) Short term employee benefits are recognized as an expense at the
undiscounted amount in the Statement of Profit and Loss for the year in
which the related service is rendered.
b) Post employment and other long term benefits which are defined
benefit plans are recognized as an expense in the Statement of Profit
and Loss for the year in which the employee has rendered service. The
expense is recognized based on the present value of the obligation
determined in accordance with Revised Accounting Standard 15 on
Employee Benefits. Actuarial gains & losses are charged to the
Statement of Profit and Loss
c) Payments to defined contribution schemes are charged as expense as
and when incurred.
d) Termination benefits are recognized as an expense as and when
incurred.
ix. Borrowing Costs
Borrowing costs attributable to the acquisition or construction of
qualifying assets are capitalized as part of such assets. All other
borrowing costs are charged to revenue. A qualifying asset is an asset
that necessarily requires substantial period of time to get ready for
its intended use or sale.
x. Taxes on Income
Current tax on income for the period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act, 1961 and based on the expected
outcome of assessment / appeals. Deferred tax is recognized on timing
differences between the accounting income and the taxable income for
the year and quantified using the tax rates and laws enacted or
substantively enacted as on the Balance Sheet date.
Deferred tax assets are recognized and carried forward to the extent
that there is a reasonable certainty that sufficient future income will
be available against which such deferred tax assets can be realised.
xi. Leases
Leases are classified as finance or operating leases depending upon the
terms of the lease agreements. Assets held under finance leases are
recognised as assets of the Company on the date of acquisition and
depreciated over their estimated useful lives. Finance costs are
treated as period cost using effective interest rate method and are
expensed accordingly. Rentals payable under operating leases are
expensed as incurred.
xii. CENVAT/Service Tax
CENVAT credit on materials purchased / services availed for production
/ input services are taken into account at the time of purchase. CENVAT
credit on purchase of capital items wherever applicable are taken into
account as and when the assets are acquired. The CENVAT credits so
taken are utilized for payment of excise duty on goods manufactured /
Service tax on Output services. The unutilized CENVAT credit is carried
forward in the books.
xiii. Earnings per Share
Basic earnings per share are calculated by dividing net profit and loss
for the period attributable to equity share holders (after deducting
preference dividend and attributable taxes if any) by the weighted
average no of equity shares outstanding during the period. Partly paid
equity shares (if any) are treated as a fraction of an equity shares to
the extent that they were entitled to participate in dividends relative
to a fully paid equity share during the reporting period. The weighted
average no of equity shares outstanding during the period are adjusted
for extent of bonus issue; bonus element in a right issue to existing
shareholders'' shares split and consolidation of shares if any.
For the purpose of calculating diluted earning per share, the net
profit or loss for the period attributable to Equity Shareholders and
the weighted average no. of shares outstanding during the period are
adjusted for the effects of all dilutive potential Equity Shares.
xiv. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised only when there is a present obligation as a
result of past events and when a reliable estimate of the amount of
obligation can be made. Contingent liability is disclosed for
(i) Possible obligation which will be confirmed only by future events
not wholly within the control of the Company or
(ii) Present obligations arising from past events where it is not
probable that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount of the obligation
cannot be made. Contingent assets are not recognised in the financial
statements since this may result in the recognition of income that may
never be realized.
xv. Cash and cash equivalents
Cash flow are reported using the indirect method , where by net profit
before tax is adjusted for the effects of transaction of a n non cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flow comprises regular revenue generating, investing
and financing activities of the Company. Cash and cash equivalents in
investments that are readily convertible into known amounts of cash and
which are subject to an insignificant risk of changes in value.
a. Terms/Rights attached to Equity shares
The Company has one class of issued shares referred to as equity shares
having a par value of Rs. 1. Each holder of equity shares is entitled to
one vote per share. The dividend proposed by the board of Directors, if
any, is subject to the approval of shareholders in Annual General
Meeting. In the event of liquidation of the Company the holder of the
equity shares will be entitled to receive remaining assets of the
Company after settlement of all preferential amounts. The distribution
will be in proportion to the number of equity shares held by the equity
shareholders.
Mar 31, 2013
I. Accounting Convention
The financial statements have been prepared under Historical Cost
Convention on the basis of going concern and in accordance with the
accounting standards referred to in Section 211 (3C) of the Companies
Act, 1956, wherever applicable.
ii. Fixed Assets & Depreciation
a) Fixed Assets are stated at original cost net of tax / duty credits
availed, if any, less accumulated depreciation, accumulated
amortization and cumulative impairment. Costs include pre-operative
expenses and all expenses related to acquisition and installation of
the assets concerned.
b) Own manufactured assets are capitalized at cost including an
appropriate share of overheads.
c) Depreciation on Plant and Machinery, Motor Cars, Trucks and Vans has
been provided on straight-line method at the rates specified in the
Schedule XIV of the Companies Act, 1956. Tools and dies are
depreciated at 20% p.a. based on the estimated useful life as
determined by the Company. Depreciation in respect of other assets has
been calculated on written down value method as per the rates specified
in Schedule XIV of the Companies Act, 1956.
Based on technical opinion, windmill is considered as a continuous
process plant and depreciation is provided at the rate applicable
thereto, on straight line method.
d) As at each Balance Sheet date, the carrying amount of assets is
tested for impairment so as to determine;
i) the provision for impairment loss, if any, required or;
ii) the reversal, if any, required for impairment loss recognised in
previous periods. Impairment loss is recognised when the carrying
amount of an asset exceeds its recoverable amount.
iii. Valuation of Inventories
a) Inventories are valued at lower of cost and estimated net realizable
value. Cost is arrived at on weighted average basis.
b) Excise Duty is added in the Closing Inventory of Finished Goods.
c) The basis of determining cost for various categories of inventories
are as follows:
i) Raw Materials, Packing Materials and Stores and spares : Weighted
Average basis.
ii) Finished Goods and Work-in-Progress :Cost of Direct, Material,
Labour and other ManufActuring overheads.
iv. Revenue Recognition
a) The Company generally follows the mercantile system of accounting
and recognizes income and expenditure on an accrual basis except those
with significant uncertainties.
b) Sale of goods is recognized when the risk and rewards of ownership
are passed on to the customers, which is generally on despatch of
goods.
c) Claims made by the Company and those made on the Company are
recognized in the Statement of Profit and Loss as and when the claims
are accepted.
v. Foreign Currency TransActions
a) Foreign currency transactions are recorded at exchange rates
prevailing on the date of such transaction.
b) Foreign currency assets and liabilities at the year end are
realigned at the exchange rate prevailing at the year end and
difference on realignment is recognized in the Statement of Profit and
Loss.
vi. Research and Development
Revenue expenditure on Research and Development is charged under
respective heads of account. Capital expenditure on Research and
Development
is included as part of fixed assets and depreciated on the same basis
as other fixed assets.
vii. Employee Benefits
a) Short term employee benefits are recognized as an expense at the
undiscounted amount in the Statement of Profit and Loss of the year in
which the related service is rendered.
b) Post employment and other long term benefits which are defined
benefit plans are recognized as an expense in the Statement of Profit
and Loss for the year in which the employee has rendered service. The
expense is recognized based on the present value of the obligation
determined in accordance with Revised Accounting Standard 15 on
Employee Benefits. Actuarial gains & losses are charged to the
Statement of Profit and Loss
c) Payments to defined contribution schemes are charged as expense as
and when incurred.
d) Termination benefits are recognized as an expense as and when
incurred.
viii. Borrowing Costs
Borrowing costs attributable to the acquisition or construction of
qualifying assets are capitalized as part of such assets. All other
borrowing costs are charged to revenue. A qualifying asset is an asset
that necessarily requires substantial period of time to get ready for
its intended use or sale. ix. Taxes on Income
Current tax on income for the period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act, 1961 and based on the expected
outcome of assessment / appeals. Deferred tax is recognized on timing
differences between the accounting income and the taxable income for
the year and quantified using the tax rates and laws enacted or
substantively enacted as on the Balance Sheet date.
Deferred tax assets are recognized and carried forward to the extent
that there is a reasonable certainty that sufficient future income will
be available against which such deferred tax assets can be realised.
x. Cash Flow Statement
Cash Flow Statement has been prepared in accordance with the indirect
method prescribed in
Accounting Standard 3 issued by the Institute of Chartered Accountants
of India.
xi. Leases
Leases are classified as finance or operating leases depending upon the
terms of the lease agreements. Assets held under finance leases are
recognised as assets of the Company on the date of acquisition and
depreciated over their estimated useful lives. Finance costs are
treated as period cost using effective interest rate method and are
expensed accordingly. Rentals payable under operating leases are
expense as incurred.
xii. CENVAT/Service Tax
CENVAT credit on materials purchased / services availed for production
/ input services are taken into account at the time of purchase. CENVAT
credit on purchase of capital items wherever applicable are taken into
account as and when the assets are acquired. The CENVAT credits so
taken are utilized for payment of excise duty on goods manufactured /
Service tax on Output services. The unutilized CENVAT credit is carried
forward in the books.
xiii. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised only when there is a present obligation as a
result of past events and when a reliable estimate of the amount of
obligation can be made. Contingent liability is disclosed for
(i) Possible obligation which will be confirmed only by future events
not wholly within the control of the Company or
(ii) Present obligations arising from past events where it is not
probable that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount of the obligation
cannot be made. Contingent assets are not recognised in the financial
statements since this may result in the recognition of income that may
never be realized.
xiv. Accounting Standards
Accounting Standards prescribed under Section 211(3c) of the Companies
Act, 1956, have been followed wherever applicable.
Mar 31, 2012
I. Accounting Convention
The financial statements have been prepared under Historical Cost
Convention on the basis of going concern and in accordance with the
accounting standards referred to in Section 211 (3C) of the Companies
Act, 1956, wherever applicable.
ii. Fixed Assets & Depreciation
a) Fixed Assets are stated at original cost net of tax / duty credits
availed, if any, less accumulated depreciation, accumulated
amortization and cumulative impairment. Costs include pre-operative
expenses and all expenses related to acquisition and installation of
the assets concerned.
b) Own manufactured assets are capitalized at cost including an
appropriate share of overheads.
c) Depreciation on Plant and Machinery, Motor Cars, Trucks and Vans has
been provided on straight-line method at the rates specified in the
Schedule XIV of the Companies Act, 1956. Depreciation on tools and
dies are provided on the basis of useful life as determined by the
Company.
Depreciation in respect of other assets has been calculated on written
down value method as per the rates specified in Schedule XIV of the
Companies Act, 1956.
Based on technical opinion, windmill is considered as a continuous
process plant and depreciation is provided at the rate applicable
there to,on straight line method.
d) As at each balance sheet date, the carrying amount of assets is
tested for impairment so as to determine;
i) the provision for impairment loss, if any, required or;
ii) the reversal, if any, required for impairment loss recognised in
previous periods. Impairment loss is recognised when the carrying
amount of an asset exceeds its recoverable amount.
iii. Valuation of Inventories
a) Inventories are valued at lower of cost and estimated net realizable
value. Cost is arrived at on weighted average basis.
b) Excise Duty is added in the Closing Inventory of Finished Goods.
c) The basis of determining cost for various categories of inventories
are as follows:
i) Raw Materials, Packing Materials and Stores and spares : Weighted
Average basis.
ii) Finished Goods and Work-in-Progress :Cost of Direct, Material,
Labour and other Manufacturing overheads.
iv. Revenue Recognition
a) The company generally follows the mercantile system of accounting
and recognizes income and expenditure on an accrual basis except those
with significant uncertainties.
b) Sale of goods is recognized when the risk and rewards of ownership
are passed on to the customers, which is generally on despatch of
goods.
c) Claims made by the company and those made on the company are
recognized in the Profit and Loss Account as and when the claims are
accepted.
v. Foreign Currency Transactions
a) Foreign currency transactions are recorded at exchange rates
prevailing on the date of such transaction.
b) Foreign currency assets and liabilities at the -year end are
realigned at the exchange rate prevailing at the year end and
difference on realignment is recognized in the Profit & Loss account.
vi. Research and Development
Revenue expenditure on Research and Development is charged under
respective heads of account.
Capital expenditure on research and development is included as part of
fixed assets and depreciated on the same basis as other fixed assets.
vii. Employee Benefits
a) Short term employee benefits are recognized as an expense at the
undiscounted amount in the Profit & Loss Account of the year in which
the related service is rendered.
b) Post employment and other long term benefits which are defined
benefit plans are recognized as an expense in the Profit & Loss Account
for the year in which the employee has rendered service. The expense is
recognized based on the present value of the obligation determined in
accordance with Revised Accounting Standard 5 on Employee Benefits.
Actuarial gains & losses are charged to the Profit & Loss Account.
c) Payments to defined contribution schemes are charged as expense as
and when incurred.
d) Termination benefits are recognized as an expense as and when
incurred.
viii. Borrowing Costs
Borrowing costs attributable to the acquisition or construction of
qualifying assets are capitalized as part of such assets. All other
borrowing costs are charged to revenue. A qualifying asset is an asset
that necessarily requires substantial period of time to get ready for
its intended use or sale.
ix. Taxes on Income
Current tax on income for the period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act, 1961 and based on the expected
outcome of assessment / appeals. Deferred tax is recognized on timing
differences between the accounting income and the taxable income for
the year and quantified using the tax rates and laws enacted or
substantively enacted as on the Balance Sheet date.
Deferred tax assets are recognized and carried forward to the extent
that there is a reasonable certainty that sufficient future income will
be available against which such deferred tax assets can be realised.
x. Cash Flow Statement
Cash Flow Statement has been prepared in accordance with the indirect
method prescribed in
Accounting Standard 3 issued by the Institute of Chartered Accountants
of India.
xi. Leases
Leases are classified as finance or operating leases depending upon the
terms of the lease agreements. Assets held under finance leases are
recognised as assets of the Company on the date of acquisition and
depreciated over their estimated useful lives. Finance costs are
treated as period cost using effective interest rate method and are
expensed accordingly. Rentals payable under operating leases are
expenses as incurred.
xii. CENVAT/Service Tax
CENVAT credit on materials purchased / services availed for production
/ input services are taken into account at the time of purchase. CENVAT
credit on purchase of capital items wherever applicable are taken into
account as and when the assets are acquired. The CENVAT credits so
taken are utilized for payment of excise duty on goods manufactured /
Service tax on Output services. The unutilized CENVAT credit is carried
forward in the books.
xiii. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised only when there is a present obligation as a
result of past events and when a reliable estimate of the amount of
obligation can be made. Contingent liability is disclosed for
(i) Possible obligation which will be confirmed only by future events
not wholly within the control of the Company or
(ii) Present obligations arising from past events where it is not
probable that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount of the obligation
cannot be made. Contingent assets are not recognised in the financial
statements since this may result in the recognition of income that may
never be realized.
xiv. Accounting Standards
Accounting Standards prescribed under Section 211 (3c) of the Companies
Act, 1956, have been followed wherever applicable.
Mar 31, 2011
1. Accounting Convention
The financial statements have been prepared under Historical Cost
Convention on the basis of a going concern and in accordance with the
accounting standards referred to in Section 211 (3C) of the Companies
Act, 1956, wherever applicable.
2. Fixed Assets & Depreciation
a) Fixed Assets are stated at original cost net of tax/duty credits
availed, if any, less accumulated depreciation, accumulated
amortization and cumulative impairment. Costs include pre- operative
expenses and all expenses related to acquisition and installation of
the assets concerned.
b) Own manufactured assets are capitalized at cost including an
appropriate share of overheads.
c) Depreciation on Plant and Machinery, Motor Cars, Trucks and Vans has
been provided on straight-line method at the rates specified in the
Schedule XIV of the Companies Act, 1956. Depreciation on Tools and
Dies are provided on the basis of useful life as determined by the
Company. Depreciation in respect of other assets has been calculated on
written down value method as per the rates specified in Schedule XIV of
the Companies Act, 1956.
Based on a technical opinion, windmill is considered as a continuous
process plant and depreciation is provided at the rate applicable
thereto.
d) As at each Balance Sheet date, the carrying amount of assets is
tested for impairment so as to determine;
i) the provision for impairment loss, if any, required or;
ii) the reversal, if any, required of impairment loss recognized in
previous periods. Impairment loss is recognized when the carrying
amount of an asset exceeds its recoverable amount.
3. Valuation of Inventories
a) Inventories are valued at lower of cost and estimated net realizable
value. Cost is arrived at on weighted average basis.
b) Excise Duty is added in the Closing Inventory of Finished Goods.
c) The basis of determining cost for various categories of inventories
are as follows:
i) Raw Materials, Packing Materials and Stores and spares : Weighted
Average basis.
ii) Finished Goods and Work-in-Progress : Cost of Direct Material,
Labour and other Manufacturing overheads.
4. Revenue Recognition
a) The Company generally follows the mercantile system of accounting
and recognizes income and expenditure on an accrual basis except those
with significant uncertainties.
b) Sale of goods is recognized when the risk and rewards of ownership
are passed on to the customers, which is generally on despatch of
goods.
c) Claims made by the Company and those made on the Company are
recognized in the Profit and Loss Account as and when the claims are
accepted.
5. Foreign Currency Transactions
a) Foreign currency transactions are recorded at exchange rates
prevailing on the date of such transaction.
b) Foreign currency assets and liabilities at the year end are
realigned at the exchange rate prevailing at the year end and
difference on realignment is recognized in the Profit & Loss Account.
6. Research and Development
Revenue expenditure on Research and Development is charged under
respective heads of account. Capital expenditure on research and
development is included as part of fixed assets and depreciated on the
same basis as other fixed assets.
7. Employee Benefits
a) Short term employee benefits are recognized as an expense at the
undiscounted amount in the Profit & Loss Account of the year in which
the related service is rendered.
b) Post employment and other long term benefits which are defined
benefit plans are recognized as an expense in the Profit & Loss Account
for the year in which the employee has rendered service. The expense is
recognized based on the present value of the obligation determined in
accordance with revised Accounting Standard 15 on Employee Benefits.
Actuarial gains & losses are charged to the Profit & Loss Account.
c) Payments to defined contribution schemes are charged as expense as
and when incurred.
d) Termination benefits are recognized as an expense as and when
incurred.
8. Borrowing Costs
Borrowing costs attributable to the acquisition or construction of
qualifying assets are capitalized as part of such assets. All other
borrowing costs are charged to revenue. A qualifying asset is an asset
that necessarily requires substantial period of time to get ready for
its intended use or sale.
9. Taxes on Income
Current tax on income for the period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act, 1961, and based on the expected
outcome of assessment / appeals. Deferred tax is recognized on timing
differences between the accounting income and the taxable income for
the year and quantified using the tax rates and laws enacted or
substantively enacted as on the Balance Sheet date.
Deferred tax assets are recognized and carried forward to the extent
that there is a reasonable certainty that sufficient future income will
be available against which such deferred tax assets can be realised.
10. Cash Flow Statement
Cash Flow Statement has been prepared in accordance with the indirect
method prescribed in Accounting Standard 3.
11. Leases
Leases are classified as finance or operating leases depending upon the
terms of the lease agreements. Assets held under finance leases are
recognized as assets of the Company on the date of acquisition and
depreciated over their estimated useful lives. Finance costs are
treated as period cost using effective interest rate method and are
expensed accordingly. Rentals payable under operating leases are
expensed as and when incurred.
12. CENVAT/Service Tax
CENVAT credit on materials purchased / services availed for production
/ Input services are taken into account at the time of purchase. CENVAT
credit on purchase of capital items wherever applicable are taken into
account as and when the assets are acquired. The CENVAT credits so
taken are utilized for payment of excise duty on goods manufactured /
Service tax on Output services. The unutilized CENVAT credit is carried
forward in the books.
13. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized only when there is a present obligation as a
result of past events and when a reliable estimate of the amount of
obligation can be made. Contingent liability is disclosed for
(i) Possible obligation which will be confirmed only by future events
not wholly within the control of the Company or
(ii) Present obligations arising from past events where it is not
probable that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount of the obligation
cannot be made. Contingent assets are not recognized in the financiaf
statements since this may result in the recognition of income that may
never be realized
14. Accounting Standards
Accounting Standards prescribed under Section 211 (3c) of the Companies
Act, 1956, have been followed wherever applicable.
Mar 31, 2010
1. Accounting Convention
The financial statements have been prepared under Historical Cost
Convention on the basis of going concern and in accordance with the
accounting standards referred to in Section 211 (3C) of the Companies
Act, 1956, wherever applicable.
2. Fixed Assets & Depreciation
a) Fixed Assets are stated at original cost net of tax / duty credits
availed, if any, less accumulated depreciation, accumulated
amortization and cumulative impairment. Costs include pre-operative
expenses and all expenses related to acquisition and installation of
the assets concerned.
b) Own manufactured assets are capitalized at cost including an
appropriate share of overheads.
c) Depreciation on Plant and Machinery, Motor Cars, Trucks and Vans has
been provided on straight-line method at the rates specified in the
Schedule XIV of the Companies Act, 1956.
Depreciation on tools and Dies are provided on the basis of useful life
as determined by the Company.
Depreciation in respect of other assets has been calculated on written
down value method as per the rates specified in Schedule XIV of the
Companies Act, 1956.
Based on technical opinion, windmill is considered as a continuous
process plant and depreciation is provided at the rate applicable
thereto.
d) As at each balance sheet date, the carrying amount of assets is
tested for impairment so as to determine;
i) the provision for impairment loss, if any, required or;
ii) the reversal, if any, required of impairment loss recognised in
previous periods.
Impairment loss is recognised when the carrying amount of an asset
exceeds its recoverable amount.
3. Investments
a) Long Term Investments are stated at cost.
b) Current Investments are carried at lower of cost and fair value as
on the Balance Sheet date.
c) Provisions for diminution in value of long term investments is made,
if the diminution is other than temporary.
4. Valuation of Inventories
a) Inventories are valued at lower of cost and estimated net realizable
value. Cost is arrived at on weighted average basis.
b) Excise Duty is added in the Closing Inventory of Finished Goods.
c) The basis of determining cost for various categories of inventories
are as follows:
i) Raw Materials, Packing Materials and: Stores and spares : Weighted
Average basis.
ii) Finished Goods and Work-in-Progress : Cost of Direct, Material,
Labour and other Manufacturing overheads.
5. Revenue Recognition
a) The company generally follows the mercantile system of accounting
and recognizes income and expenditure on an accrual basis except those
with significant uncertainties.
b) Sale of goods is recognized when the risk and rewards of ownership
are passed on to the customers, which is generally on despatch of
goods.
c) Dividend Income is recognized when the right to receive the dividend
is unconditional at the Balance Sheet date.
d) Claims made by the company and those made on the company are
recognized in the profit and loss account as and when the claims are
accepted.
6. Foreign Currency Transactions
a) Foreign currency transactions are recorded at exchange rates
prevailing on the date of such transaction.
b) Foreign currency assets and liabilities at the year end are
realigned at the exchange rate prevailing at the year end and
difference on realignment is recognized in the Profit & Loss account.
c) Premium / discount in respect of Forward Contract is amortized as
expense / income over the period of contract. Exchange difference
arising on forward contracts between the exchange rate on the date of
the transaction and the exchange rate prevailing at the year end is
recognized in the Profit & Loss account.
7. Research and Development
Revenue expenditure on Research and Development is charged under
respective heads of account. Capital expenditure on research and
development is included as part of fixed assets and depreciated on the
same basis as other fixed assets.
8. Employee Benefits
a) Short term employee benefits are recognized as an expense at the
undiscounted amount in the Profit & Loss Account of the year in which
the related service is rendered.
b) Post employment and other long term benefits which are defined
benefit plans are recognized as an expense in the Profit & Loss Account
for the year in which the employee has rendered service. The expense is
recognized based on the present value of the obligation determined in
accordance with Revised Accounting Standard 15 on Employee Benefits.
Actuarial gains & losses are charged to the Profit 6t Loss Account.
c) Payments to defined contribution schemes are charged as expense as
and when incurred.
d) Termination benefits are recognized as an expense as and when
incurred.
9. Borrowing Costs
Borrowing costs attributable to the acquisition or construction of
qualifying assets are capitalized as part of such assets. All other
borrowing costs are charged to revenue.
A qualifying asset is an asset that necessarily requires substantial
period of time to get ready for its intended use or sale.
10. Taxes on Income
Current tax on income for the period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act, 1961 and based on the expected
outcome of assessment / appeals.
Deferred tax is recognized on timing differences between the accounting
income and the taxable income for the year and quantified using the tax
rates and laws enacted or substantively enacted as on the Balance Sheet
date.
Deferred tax assets are recognized and carried forward to the extent
that there is a reasonable certainty that sufficient future income will
be available against which such deferred tax assets can be realised.
11. Cash flow statement
Cash Flow Statement has been prepared in accordance with the indirect
method prescribed in Accounting Standard 3 issued by the Institute of
Chartered Accountants of India.
12. Leases
Leases are classified as finance or operating leases depending upon the
terms of the lease agreements. Assets held under finance leases are
recognised as assets of the Company on the date of acquisition and
depreciated over their estimated useful lives. Finance costs are
treated as period cost using effective interest rate method and are
expensed accordingly. Rentals payable under operating leases are
expenses as incurred.
13. CENVAT/Service Tax
CENVAT credit on materials purchased / services availed for production
/ Input services are taken into account at the time of purchase. CENVAT
credit on purchase of capital items wherever applicable are taken into
account as and when the assets are acquired. The CENVAT credits so
taken are utilised for payment of excise duty on goods manufactured /
Service tax on Output services. The unutilised CENVAT credit is carried
forward in the books.
14. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised only when there is a present obligation as a
result of past events and when a reliable estimate of the amount of
obligation can be made. Contingent liability is disclosed for
(i) Possible obligation which will be confirmed only by future events
not wholly within the control of the Company or
(ii) Present obligations arising from past events where it is not
probable that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount of the obligation
cannot be made. Contingent assets are not recognised in the financial
statements since this may result in the recognition of income that may
never be realised
15. Accounting Standards
Accounting Standards prescribed under section 211 (3c) of the companies
Act, 1956 , have been followed wherever applicable.