Accounting Policies of Manugraph India Ltd. Company
Mar 31, 2018
Notes on financial statements for the year ended March 31, 2018
CORPORATE INFORMATION
Manugraph India Limited (hereinafter referred to as "MIL" or "the company") a public company domiciled in India, was incorporated under the provisions of the Companies Act, 1956 in the year 1972.
The company is the largest manufacturer of single width web-offset printing presses in India and has a significant share of the world market for its products. The manufacturing facilities are located at Kolhapur in India. The company has its in-house R&D facilities with a combined strength of over 50 engineers. The R&D facilities are recognized by Department of Scientific and Industrial Research - Ministry of Science and Technology, Government of India.
The financial statements of the company for the year ended March 31, 2018 were authorized for issue in accordance with the resolution passed at the meeting of the Board of Directors on Thursday, May 24, 2018.
SIGNIFICANT ACCOUNTING POLICIES
This Note provides a list of the significant Accounting Policies adopted by the Company in the preparation of these Financial Statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
a) BASIS OF PREPARATION OF FINANCIAL STATEMENTS
i. Compliance with Ind-AS :
These financial statements have been prepared in accordance with Indian Accounting Standards ("Ind AS") as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (''the Act'') read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act.
The Financial Statements comply in all material respects with Indian Accounting Standards notified under Section 133 of the Companies Act, 2013 [Companies (Indian Accounting Standards) Rules, 2015], as amended and other relevant provisions of the Act.
The financial statements for the year ended March 31, 2018 are the first Ind AS financial statements of the Company. The financial statements of March 31, 2017 have been restated to give effect of Ind AS and to arrive at comparable figures as that of March 31, 2017. Reconciliation and descriptions of the effect of the transition has been summarized in Note no. 33.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
ii. Current / Non-current classification
Any asset or liability is classified as current if it satisfies any of the following conditions:
a. the asset / liability is expected to be realized / settled in the Company''s normal operating cycle;
b. the asset is intended for sale or consumption;
c. the asset / liability is held primarily for the purpose of trading;
d. the asset / liability is expected to be realized / settled within twelve months after the reporting period;
e. the asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date;
f. in the case of a liability, the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
All other assets and liabilities are classified as non-current.
For the purpose of current / non-current classification of assets and liabilities, the Company has ascertained its normal operating cycle as twelve months. This is based on the nature of services and the time between the acquisition of assets or inventories for processing and their realization in cash and cash equivalents.
iii. Historical cost convention:
The financial statements have been prepared on a historical cost basis except for the following:
- certain financial assets and liabilities that are measured at fair value
- certain assets and liabilities classified as held for sale that are measured at fair value less cost to sale.
b) FOREIGN CURRENCY TRANSACTIONS
Functional and presentation currency
Items included in the Financial Statements of the Company are measured using the currency of the primary economic environment in which the Company operates (''the functional currency''). The Financial Statements of the Company are presented in Indian Rupees (''.), which is also the functional and presentation currency of the Company.
Transactions and balances
i) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.
ii) Foreign currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchange rates in effect at the Balance Sheet date.
iii) Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.
iv) Losses arising on account of transactions covered by forward contract is recognized over the period of the contract.
v) Monetary assets and liabilities at the end of the year are converted at the year end rate and the resultant gain or loss is accounted for in the Income Statement.
vi) The company has not used any derivative instrument except forward contracts which have been used for hedging the foreign currency exposure. The company does not undertake any speculative or trading activity through derivative instruments.
c) REVENUE RECOGNITION
i) Time of recognition: Revenue from sale of goods is recognized when all the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, there is no continuing managerial involvement with the goods, the amount of revenue can be measured reliably and it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the activities of the Company. This generally happens upon dispatch of the goods to customers, except for export sales which are recognized when significant risk and rewards are transferred to the buyer as per the terms of contract.
Revenue from services is accounted on percentage completion method and is recognized in the accounting period in which the services are rendered.
Eligible export incentives are recognized in the year in which the conditions precedent are met and there is no significant uncertainty about the collectability.
ii) Measurement of revenue: Revenue is measured at the fair value of the consideration received or receivable, after the deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the Government which are levied on sales such as Goods and Services Tax (GST). Revenue is presented net of GST, with an exception that for the comparative period ended 31st March, 2017 revenue has been presented inclusive excise duty, with excise duty is presented as expense as a separate line on the face of the Statement of Profit and Loss. Discounts given include rebates, price reductions and other incentives given to customers. No element of financing is deemed present as the sales are made with a payment term which is consistent with market practice.
iii) Revenue in respect of Insurance /other claims, commission etc. are recognized only when it is reasonably certain that the ultimate collection will be made.
iv) Interest income is recognized on time proportion basis using effective interest rate method.
v) Dividend income is recognized when the right to receive the same is established.
vi) Current investments are marked to market at the end of the relevant period and the resultant gains or losses are recognized in the Income statement.
d) INCOME TAXES
The income tax expense or credit for the period is the tax payable on the taxable income of the current period based on the applicable income tax rates adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Minimum Alternate Tax (''MAT'') under the provisions of the Income Tax Act, 1961 is recognized as current tax in the Statement of Profit and Loss. The credit available under the Act in respect of MAT paid are recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the period for which the MAT credit can be carried forward for set off against the normal tax liability. Such asset is reviewed at each Balance Sheet date.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. However, deferred tax liabilities are not recognized if they arise from the initial recognition of Goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit | (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the Balance Sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in Other Comprehensive Income or directly in equity. In this case, the tax is also recognized in Other Comprehensive Income or directly in equity, respectively.
e) LEASES As a lessee:
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the less or) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the less orâs expected inflationary cost increases for the less or.
As regards land, where the lease term is for 99 years, and where the Company is lessee, the lease is considered as Finance Lease.
As a less or:
Lease income from operating leases where the Company is a less or is recognized as income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the Balance Sheet based on their nature. Leases of property, plant and equipment where the Company as a less or has substantially transferred all the risks and rewards are classified as finance lease. Finance leases are capitalized at the inception of the lease at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rent receivables, net of interest income, are included in other financial assets. Each lease receipt is allocated between the asset and interest income. The interest income is recognized in the Statement of Profit and Loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the asset for each period.
Under combined lease agreements, land and building are assessed individually. Lease rental attributable to the operating lease are charged to Statement of Profit and Loss as lease income whereas lease income attributable to finance lease is recognized as finance lease receivable and recognized on the basis of effective interest rate.
f) PROPERTY, PLANT AND EQUIPMENT
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Property, plant and equipment are stated at original cost net of tax / duty credit availed, less accumulated depreciation and accumulated impairment losses, if any. All other repair and maintenance costs are recognized in the statement of profit and loss as incurred.
Spare parts, stand-by equipment and servicing equipment are recognized as property, plant and equipment if they are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and are expected to be used during more than one period.
Capital work-in-progress includes cost of property, plant and equipment under installation / under development as at the balance sheet date. Advances paid towards the acquisition of property, plant and equipment outstanding at each Balance Sheet date is classified as ''capital advances'' under other non-current assets and the costs of assets not ready for the intended use before balance sheet date are disclosed under ''Capital work-in-progress''. Subsequent expenditures relating to property, plant and equipment are capitalized only when it is probable that it increases the future economic benefits associated with the asset beyond the previously assessed standard of performance and these will flow to the Company and the cost of the item can be measured reliably.
The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss. Assets to be disposed of are reported at the lower of the carrying value or the fair value less cost to sell, and depreciation ceases on such assets
The assets residual values, useful lives and methods of depreciation are reviewed at each financial year end, changes there in are considered as estimates and accordingly accounted for adjusted prospectively.
Cost of borrowing for assets taking substantial time to be ready for use is capitalized for the period upto the time the asset is ready to use.
Intangible assets are stated at cost of construction less accumulated amortized amount and accumulated impairment losses, if any
Transition to Ind AS:
On transition to Ind AS, the Company has exercised the option under Para D5 of Ind AS 101 , First Time Adoption of Indian Accounting Standards (Ind AS 101), and elected to measure certain land at fair value and as regards other items of property, plant and equipment, they were accounted for (retrospectively) as per Ind AS .
DEPRECIATION
Tangible Fixed Assets: Depreciation on all assets of the Company is charged on straight line method over the useful life of assets at the rates and in the manner provided in Schedule II of the Companies Act 2013 for the proportionate period of use during the year.
The Company depreciates its property, plant and equipment over the useful life in the manner prescribed in Schedule II to the Act, and management believe that useful life of assets are same as those prescribed in Schedule II to the Act.
The residual values are not more than 5% of the original cost of the asset.
The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end, changes there in are considered as change in an estimate and accordingly accounted for prospectively.
g) INTANGIBLE FIXED ASSETS
Intangible assets are amortized by straight line method over the estimated useful life of such assets. The useful life is estimated based on the evaluation of future economic benefits expected of such assets. The amortisation period and amortisation method and useful life are reviewed at least at each financial year end. If the expected useful life of assets is significantly different from previous estimates, the amortisation period is changed accordingly.
Computer Software includes enterprise resource planning project and other cost relating to software which provides significant future economic benefits. These costs comprise of license fees and cost of system integration services.
Development expenditure qualifying as an intangible asset, if any, is capitalized, to be amortized over the economic life of the product / patent.
Intangible assets are stated at cost less accumulated amortization and impairment, if any. Intangible assets are amortized by straight line method over the estimated useful life of such assets.
h) IMPAIRMENT OF ASSETS
The carrying amounts of assets are reviewed at each Balance Sheet date to assess if there is any indication of impairment based on internal / external factors. An impairment loss on such assessment will be recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount of the assets is net selling price or value in use, whichever is higher. While assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognized impairment loss is further provided or reversed depending on changes in the circumstances and to the extent that carrying amount of the assets does not exceed the carrying amount that would have been determined if no impairment loss had previously been recognized. An impairment loss is charged to the Income statement in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
Goodwill, intangible assets having indefinite useful life and intangible assets currently not in use by the company are tested for impairment annually and also whenever there are indicators of impairments.
Reversal of impairment of Goodwill is not recognized.
i) CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in hand, cash in bank, cheques on hand, demand deposits with bank and other short-term (three months or less from the date of acquisition), highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value. j) TRADE RECEIVABLE
Trade receivables are initially recognized as per Ind AS 18 ''Revenue'' and these assets are held at amortized cost. k) TRADE AND OTHER PAYABLES
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method. l) INVENTORIES
Raw materials and components, packing materials, purchased finished goods, work-in-progress, finished goods manufactured, fuel, stores and spares other than specific spares for machinery are valued at cost or net realizable value whichever is lower. Cost of inventories is ascertained on the weighted average basis.
Work -in -Progress include the cost of purchase, appropriate share of cost of conversion and other overhead incurred in bringing the inventory to its present location and condition and measured at lower of cost or net realizable value
''Cost'' comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventory to the present location and condition. Due allowances are made for slow moving and obsolete inventories based on estimates made by the Company.
Finished products are valued at lower of cost and net realizable value Cost is computed including Material, Labour and Overheads related to the manufacturing operations.
Items such as spare parts, stand-by equipment and servicing equipment which is not property, plant and machinery gets classified as inventory.
m) FINANCIAL INSTRUMENTS Classification
The company classifies its financial assets in the following measurement categories:
i) Those to be measured subsequently at fair value (either through Other Comprehensive Income, or through profit or loss)
ii) Those to be measured at amortized cost
The classification depends upon the business model of the entity for managing financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or Other Comprehensive Income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through Other Comprehensive Income.
Initial recognition and measurement
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, that are not carried at fair value through profit or loss are added to the fair value on initial recognition. Transaction costs of financial assets carried at fair value through profit or loss are expensed in the Statement of Profit and Loss.
Subsequent measurement
After initial recognition, financial assets are measured at:
i) Fair Value (either through Other Comprehensive Income (FVOCI) or through profit or loss (FVTPL) or
ii) Amortized cost
Non-derivative financial instruments
i) Financial assets carried at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, using the Effective Interest Rate (EIR) method less impairment, if any. The amortisation of EIR and loss arising from impairment, if any is recognized in the Statement of Profit and Loss.
ii) Financial assets at fair value through other comprehensive income (FVOCI)
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Fair value movements are recognized in the Other Comprehensive Income (OCI). The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model. Further, in cases where the Company has made an irrevocable election based on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income. On de-recognition, cumulative gain or loss previously recognized in OCI is reclassified from the equity to ''other income'' in the Statement of Profit and Loss.
iii) Financial assets at fair value through profit or loss (FVTPL)
A financial asset not classified as either amortized cost or FVOCI, is classified as FVTPL. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognized as ''other income'' in the Statement of Profit and Loss.
Financial liabilities
i) Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
ii) Initial recognition and measurement
Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.
Financial liabilities are initially measured at the fair value.
iii) Subsequent measurement
Financial liabilities are subsequently measured at amortized cost using the effective interest rate method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognized in the Statement of Profit and Loss.
iv) De-recognition
A financial liability is de-recognized when the obligation specified in the contract is discharged, cancelled or expires. Investment in subsidiaries
Investments in subsidiary companies are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiary companies the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.
Derivative financial instruments
The Company holds derivative financial instruments such as foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank.
Derecognition of financial instruments
A financial asset is de-recognized only when
i) The Company has transferred the rights to receive cash flows from the financial asset or
ii) Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is de-recognized. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not de-recognized.
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is de-recognized if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognized to the extent of continuing involvement in the financial asset.
Impairment
Financial assets
The Company recognizes loss allowance using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, ECLs are measured at an amount equal to 12-month ECL, unless there has been a significant increase in credit risk for initial recognition in which case those are measured at lifetime ECL. The amount of ECLs (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in profit or loss.
Non financial assets
Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
n) OFFSETTING FINANCIAL INSTRUMENTS
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
o) BORROWING COSTS
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. Other borrowing costs are expensed in the period in which they are incurred.
p) PROVISIONS AND CONTINGENT LIABILITIES
Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. These are reviewed at each year end and reflect the best current estimate. Provisions are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provision for Product related warranty costs is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims.
Provisions are measured at the present value of Management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. q) EMPLOYEE BENEFITS
Short Term Employee Benefits
All Employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognized in the period in which employee renders the related service except leave encashment. Other Long-Term Employee Benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the Balance Sheet date, determined based on actuarial valuation using Projected Unit Credit Method. The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market yields on Government Securities as at the Balance Sheet date.
Defined Contribution Plans
Defined contribution fund are government administered provident fund scheme, employee state insurance scheme for all employees. Company also contributes towards a Superannuation fund administered by the Employees Welfare trust. This scheme is funded with an insurance company in the form of a qualifying insurance policy and other permissible securities. The Company''s contribution to defined contribution plans are recognized in the Statement of Profit and Loss in the financial year to which they relate.
Defined Benefit Gratuity Plan
The Company''s gratuity benefit scheme is a defined benefit retirement plan covering eligible employees. The Company''s net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value and the fair value of any plan assets is deducted.
The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method.
The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market yields on Government Securities as at the Balance Sheet date.
Actuarial gains and losses are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income in the period in which they occur. Past service cost is recognized in the statement of profit and loss in the period of plan amendment.
r) EARNINGS PER SHARE
Basic earnings per share are computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the period. Diluted earnings per share are computed by dividing net profit attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares unless the results would be anti - dilutive. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
s) EXCEPTIONAL ITEMS
Certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the company is such that its disclosure improves the understanding of the performance of the company, such income or expense is classified as an exceptional item and accordingly, disclosed in the notes accompanying to the financial statements.
t) FAIR VALUE MEASUREMENT
In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.
u) STATEMENT OF CASH FLOW
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
v) DIVIDENDS
The final dividend on shares is recorded as a liability on the date of approval by shareholders, and interim dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.
w) RESEARCH AND DEVELOPMENT EXPENDITURE
Research expenditure on research and development is charged to profit and loss in the year in which it is incurred. Capital expenditure on research and development is included in additions to property, plant and equipment under appropriate heads.
x) OTHER INCOME
Other income is comprised primarily of interest income, dividend income, gain / loss on investments and exchange gain / loss on forward and options contracts and on translation of other assets and liabilities. Interest income is recognized using the effective interest rate method on accrual basis. Dividend income is recognized when right to receive payment is established
CRITICAL ESTIMATES AND JUDGEMENTS
Preparation of the Financial Statements requires use of accounting estimates which, by definition, will seldom equal the actual results. This Note provides an overview of the areas that involved a higher degree of judgments or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgmentsâ is included in relevant notes together with information about the basis of calculation for each affected line item in the Financial Statements. Difference between the actual results and estimates are recognized in the period in which the results are known.
The areas involving critical estimates or judgmentsâ are:
- Estimation of useful life of tangible assets: Note (g)
Estimates and judgmentsâ are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
i Pursuant to the court monitored liquidation proceedings of Manugraph Americas Inc., the Company has reassessed the impairment of investment in Manugraph Americas Inc. The Company has received report on the fair valuation of the land and building pending disposal. The other assets have been disposed off and the financial statements of the said Manugraph Americas Inc. is prepared on realizable basis. Based on the reassessment of the residual value to equity holders, the Company has made a further provision of '' 1,500 Lakhs (PY 4,500 Lakhs) during the current year resulting in aggregate provision of '' 12,000 Lakhs.
ii Manugraph Securities and Finance Limited has been struck off from the records of MCA and accordingly the investment has been written off during the previous year.
iii 6 years National Savings Certificates - VIII Issue have been written off during the previous year.
iv The investment in Manugraph Americas Inc. includes 116,968 equity shares which have been pledged with the bankers for credit facilities availed by the subsidiary Manugraph Americas Inc.
v Details of investments in subsidiaries:
Constrad Agencies (Bombay) Pvt. Ltd.
Constrad Agencies (Bombay) Pvt. Ltd. (''Constrad'') owned part of the property in Sidhwa House. As a part of the transaction to purchase this property, Constrad became a wholly owned subsidiary of the company on 01.04.2002.
Manugraph Americas Inc., USA
During the financial year 2006-07, the Company acquired Dauphin Graphics Machines Inc., a company in the United States of America at a cost of US$ 19.20 million to enter the American market. Thereafter, it became a wholly owned subsidiary of the Company and its name was changed to Manugraph DGM Inc. w.e.f. November 13, 2006. The name was changed to Manugraph Americas Inc. on Nov 5, 2012. The subsidiary was No. 1 in the US market in four page segment complementing the Company''s product range. Manugraph Americas Inc. has on June 01, 2017 applied for bankruptcy proceeding under Chapter XI in the U.S. court. Since then it has entered into court monitored liquidation.
b. Disclosure in accordance with Ind AS -19 âEmployee Benefits", of the Companies (Indian Accounting Standards) Rules, 2015.
Gratuity
The company provides gratuity to all employees. The benefit is in the form of lumpsum payments to vested employees on resignation, retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary and dearness allowance for each completed year of service. Vesting occurs upon completion of five years of service. The company makes annual contributions to fund administered by trustees and managed by Life Insurance Corporation of India, for amounts notified by it. The gratuity benefit is a defined benefit plan.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would clear in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
Risks associated with defined benefit plan
Gratuity is defined benefit plan and the Company is exposed to the following risks:
(i) Actuarial risk
It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons: Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected. Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity Benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate. Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity Benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.
(ii) Investment Risk
For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.
(iii) Liquidity Risk
Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If some of such employees resign/retire from the company there can be strain on the cash flows.
(iv) Market Risk
Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.
(v) Legislative Risk
Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation/regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be recognized immediately in the year when any such amendment is effective.
Note : Experience adjustment information is not available and hence not disclosed.
Mar 31, 2017
a Basis of preparation
The Financial Statements have been prepared to comply in all material respects with the notified accounting standards by the Companies Accounting Standards Rules, 2006 (which are specified under section 133 of the Companies Act 2013 read with rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act 2013. The financial statements have been prepared under the historical cost convention, on an accrual basis of accounting.
The classification of assets and liabilities of the Company is done into current and non-current based on the operating cycle of the business of the Company. The operating cycle of the business of the Company is less than twelve months and therefore all current and non-current classifications are done based on the status of realisability and expected settlement of the respective asset and liability within a period of twelve months from the reporting date as required by the Schedule III of the Companies Act 2013.
The accounting policies adopted in the preparation of the financial statements are consistent with those used in the previous year.
b 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 amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon managementâs best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known.
c Inflation
Assets and liabilities are shown at historical cost . No adjustments are made for changes in purchasing power of money.
d Property, Plant and Equipment (PPE)
i Property, Plant and Equipment are stated at cost net of accumulated depreciation and accumulated impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition of its intended use. The costs comprises of the purchase price, borrowings costs if capitalisation criteria are met and directly attributable costs of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the cost of the PPE. Any subsequent expenses related to a PPE is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other day to day repairs and maintenance expenditure and the cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.
ii Cost of borrowing for assets taking substantial time to be ready for use is capitalised for the period up to the time the asset is ready for use.
iii Intangible assets are stated at cost of construction less accumulated amortised amount and accumulated impairment losses, if any.
e Depreciation and Amortisation
i Depreciation on all assets of the Company is charged on straight line method over the useful life of assets at the rates and in the manner provided in Schedule II of the Companies Act 2013 for the proportionate period of use during the year.
ii The useful life of the intangible asset being computer software is determined at five years.
f Impairment of assets
Cash generating unit/ fixed assets / Investments are assessed for possible impairment at balance sheet date based on external and internal sources of information. Impairment losses, if any, are recognised as an expense in the statement of profit and loss. Impairment loss in respect of assets sold / scrapped are reversed and consequent profit or loss on such sale is accounted. Impairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Depreciation charged on assets impaired is adjusted in future period over its remaining useful life.
On annual basis, the company makes an assessment of any indicator that may lead to impairment of assets. An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable amount is higher of an assetâs net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.
An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired.
The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
g Inventories
Cost of inventories is ascertained on the weighted average basis. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
i. Raw Material & Components Raw materials and components, stores and spares are stated at lower of cost and net realisable value.
ii. Consumable Tools Consumable tools are stated at cost or below cost.
iii. Work-in-progress and manufactured Work-in-progress and manufactured components are valued at lower of components cost and net realisable value computed including Material, Labour and Overheads related to the manufacturing operations
iv. Finished Goods Finished products are valued at lower of cost and net realisable value Cost is computed including Material, Labour and Overheads related to the manufacturing operations.
Excise duty is included in the value of finished products inventory.
h Investment
i Long term investments are stated at cost less provision for diminution other than temporary in nature, if any. Current investments are stated at lower of cost and fair value.
ii Investments that are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.
i Employee Benefits
i Provident fund is a defined contribution scheme established under a State Plan. The contributions to the scheme are charged to the statement of profit and loss in the year in which the contributions to the fund are accrued.
ii Superannuation fund is a defined contribution scheme and contributions to the scheme are charged to the Statement of profit and loss in the year when the contributions accrue. The scheme is funded with an insurance company in the form of a qualifying insurance policy and other permissible securities.
iii The company has a defined benefit gratuity scheme. For the defined benefit scheme, actuarial valuations are being carried out on a projected unit credit method at each balance sheet date. Actuarial gains and losses are recognised in full in the statement of profit and loss in the period in which they occur.
iv Leave encashment benefit is provided on the basis of actuarial valuation done at the end of the year. The aforesaid leave liability is not funded.
j Research and Development
Revenue expenditure on research and development is charged to statement of profit and loss in the year in which it is incurred. Capital expenditure on research and development is included in additions to fixed assets under appropriate heads. Self manufactured R&D assets are carried at cost of manufacture.
k CENVAT Credit / Service Tax Credit
i CENVAT credit utilised during the year is accounted in excise duty and unutilised CENVAT balance at the year end is considered as advance excise duty.
ii Service tax credit utilised during the year towards excise liability is accounted in excise duty and unutilised service tax credit at the year-end is considered as advance Service Tax.
l Revenue Recognition
i Revenue from sale of goods is recognised net of returns, product expiry claims and trade discount, on transfer of significant risk and rewards in respect of ownership to the buyer which is generally on dispatch of goods. Sales include excise duty but exclude sales tax and value added tax.
ii In respect of incentives attributable to the export of goods, the Company following the accounting principle of matching revenue with the cost has recognised export incentive receivable when all conditions precedent to the eligibility of benefits have been satisfied and when it is reasonably certain of deriving the benefit.
iii Income from services and erection charges are recognised after the relevant work is completed and the right to receive the income is established
iv Revenue in respect of insurance/other claims, commission, etc. are recognised only when it is reasonably certain that the ultimate collection will be made.
v Interest income is recognised on time proportion method basis taking into account the amount outstanding and the rate applicable.
vi Dividend income is accounted when the right to receive the same is established.
m Borrowing Cost
Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalised. Other borrowing costs are recognised as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalisation during a period, any income earned on the temporary investment of those borrowings is deducted from the borrowing costs incurred.
n Foreign Exchange Transactions
i) Transactions denominated in foreign currency are recorded at the exchange rate on the date of transaction. The exchange gain/loss on settlement / negotiation during the year is recognised in the Statement of Profit and Loss.
ii) Foreign currency transactions remaining unsettled at the end of the year are converted at year-end rates. Loss arising on account of transactions covered by forward contract is recognised over the period of contracts.
iii) Monetary assets and liabilities at the end of the year are converted at the year end rate and the resultant gain or loss is accounted for in the Statement of Profit and Loss.
iv) The company has not used any derivative instrument except forward contracts which have been used for hedging its foreign currency exposure. The company does not undertake any speculative or trading activity through derivative instruments.
o Taxation
Tax expense comprises of current and deferred taxes.
Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961 and the Income Computation and Disclosure Standards issued by the Central Board of Direct Taxes.
Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities related to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
p Earnings per share
i Basic and diluted earnings per share are calculated by dividing the net profit for the year/period attributed to equity shareholders by the weighted average number of equity shares outstanding during the year/period.
ii For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q Provisions, Contingent Liabilities and Contingent Assets
i. 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 the obligation can be made.
ii. Provision for product related warranty costs is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims.
iii Contingent liability is disclosed for possible obligations which will be confirmed only by future events not wholly within the control of the company or 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.
iv Contingent assets are neither recognized nor disclosed in the financial statements.
r Operating Lease
Leases where the lessor effectively retains substantially all risks and benefits of ownership for the leased term are classified as operating leases. Operating lease payments are recognized as expense in the statement of profit and loss account on a straight line basis over the lease term.
s Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank, cheques on hand, cash in hand and short term investments with an original maturity of three months or less.
Mar 31, 2016
A BACKGROUND
Manugraph India Ltd., was established in the year 1972. The company is the largest manufacturer of single width web-offset printing presses in India and has a significant share of the world market for its products. The manufacturing facilities are located at Kolhapur in India and through its wholly owned subsidiary in Millersburg - USA. The company has its in-house R&D facilities with a combined strength of over 50 engineers at both locations. The Indian R&D facilities are recognized by Department of Scientific and Industrial Research - Ministry of Science and Technology, Government of India.
B ACCOUNTING POLICIES a Basis of preparation
The Financial Statements have been prepared to comply in all material respects with the notified accounting standards by the Companies Accounting Standards Rules, 2006 (which are specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013). The financial statements have been prepared under the historical cost convention, on an accrual basis of accounting.
The classification of assets and liabilities of the Company is done into current and non-current based on the operating cycle of the business of the Company. The operating cycle of the business of the Company is less than twelve months and therefore all current and non-current classifications are done based on the status of reliability and expected settlement of the respective asset and liability within a period of twelve months from the reporting date as required by the Schedule III of the Companies Act, 2013.
The accounting policies adopted in the preparation of the financial statements are consistent with those used in the previous year.
b 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 amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known.
c Inflation
Assets and liabilities are shown at historical cost. No adjustments are made for changes in purchasing power of money. d Fixed Assets
i Tangible assets are stated at cost net of accumulated depreciation and accumulated impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition of its intended use. The costs comprises of the purchase price, borrowings costs if capitalization criteria are met and directly attributable costs of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the cost of the tangible asset. Any subsequent expenses related to a tangible asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other day to day repairs and maintenance expenditure and the cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.
ii Cost of borrowing for assets taking substantial time to be ready for use is capitalized for the period up to the time the asset is ready for use.
iii Intangible assets are stated at cost of construction less accumulated amortized amount and accumulated impairment losses, if any.
e Depreciation and Amortization
i Depreciation on all assets of the Company is charged on straight line method over the useful life of assets at the rates and in the manner provided in Schedule II of the Companies Act, 2013 for the proportionate period of use during the year.
ii The useful life of the intangible asset being computer software is determined at five years.
f Impairment of assets
Cash generating unit/ fixed assets / Investments are assessed for possible impairment at balance sheet date based on external and internal sources of information. Impairment losses, if any, are recognized as an expense in the statement of profit and loss. Impairment loss in respect of assets sold / scrapped are reversed and consequent profit or loss on such sale is accounted. Impairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Depreciation charged on assets impaired is adjusted in future period over its remaining useful life.
On annual basis, the company makes an assessment of any indicator that may lead to impairment of assets. An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable amount is higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.
An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired.
The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
g Inventories
Cost of inventories is ascertained on the weighted average basis. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
i. Raw Material & Components Raw materials and components, stores and spares are stated at lower of cost and net realizable value.
ii. Consumable Tools Consumable tools are stated at cost or below cost.
iii. Work-in-progress and manufactured Work-in-progress and manufactured components are valued at lower of components cost and net realizable value computed including Material, Labour and
Overheads related to the manufacturing operations.
iv. Finished Goods Finished products are valued at lower of cost and net realizable value.
Cost is computed including Material, Labour and Overheads related to the manufacturing operations.
Excise duty is included in the value of finished products inventory.
h Investment
i Long term investments are stated at cost less provision for diminution other than temporary in nature, if any. Current investments are stated at lower of cost and fair value.
ii Investments that are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.
i Employee Benefits
i Provident fund is a defined contribution scheme established under a State Plan. The contributions to the scheme are charged to the statement of profit and loss in the year in which the contributions to the fund are accrued.
ii Superannuation fund is a defined contribution scheme and contributions to the scheme are charged to the Statement of profit and loss in the year when the contributions accrue. The scheme is funded with an insurance company in the form of a qualifying insurance policy and other permissible securities.
iii The company has a defined benefit gratuity scheme. For the defined benefit scheme, actuarial valuations are being carried out on a projected unit credit method at each balance sheet date. Actuarial gains and losses are recognized in full in the statement of profit and loss in the period in which they occur.
iv Leave encashment benefit is provided on the basis of actuarial valuation done at the end of the year. The aforesaid leave liability is not funded.
j Research and Development
Revenue expenditure on research and development is charged to statement of profit and loss in the year in which it is incurred. Capital expenditure on research and development is included in additions to fixed assets under appropriate heads. Self manufactured R&D assets are carried at cost of manufacture.
k CENVAT Credit / Service Tax Credit
i CENVAT credit utilized during the year is accounted in excise duty and unutilized CENVAT balance at the year end is considered as advance excise duty.
ii Service tax credit utilized during the year towards excise liability is accounted in excise duty and unutilized service tax credit at the year-end is considered as advance Service Tax.
l Revenue Recognition
i Revenue from sale of goods is recognized net of returns, product expiry claims and trade discount, on transfer of significant risk and rewards in respect of ownership to the buyer which is generally on dispatch of goods. Sales include excise duty but exclude sales tax and value added tax.
ii In respect of incentives attributable to the export of goods, the Company following the accounting principle of matching revenue with the cost has recognized export incentive receivable when all conditions precedent to the eligibility of benefits have been satisfied and when it is reasonably certain of deriving the benefit.
iii Income from services and erection charges are recognized after the relevant work is completed and the right to receive the income is established.
iv Revenue in respect of insurance/other claims, commission, etc. are recognized only when it is reasonably certain that the ultimate collection will be made.
v Interest income is recognized on time proportion method basis taking into account the amount outstanding and the rate applicable.
vi Dividend income is accounted when the right to receive the same is established.
m Borrowing Cost
Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalized. Other borrowing costs are recognized as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalization during a period, any income earned on the temporary investment of those borrowings is deducted from the borrowing costs incurred.
n Foreign Exchange Transactions
i) Transactions denominated in foreign currency are recorded at the exchange rate on the date of transaction. The exchange gain/loss on settlement / negotiation during the year is recognized in the Statement of Profit and Loss.
ii) Foreign currency transactions remaining unsettled at the end of the year are converted at year-end rates. Loss arising on account of transactions covered by forward contract is recognized over the period of contracts.
iii) Monetary assets and liabilities at the end of the year are converted at the yearend rate and the resultant gain or loss is accounted for in the Statement of Profit and Loss.
iv) The company has not used any derivative instrument except forward contracts which have been used for hedging its foreign currency exposure. The company does not undertake any speculative or trading activity through derivative instruments.
o Taxation
Tax expense comprises of current and deferred taxes.
Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961 and the Income Computation and Disclosure Standards issued by the Central Board of Direct Taxes.
Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities related to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
p Earnings per share
i Basic and diluted earnings per share are calculated by dividing the net profit for the year/period attributed to equity shareholders by the weighted average number of equity shares outstanding during the year/period.
ii For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q Provisions, Contingent Liabilities and Contingent Assets
i. 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 the obligation can be made.
ii. Provision for product related warranty costs is based on the claims received up to the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims.
iii. Contingent liability is disclosed for possible obligations which will be confirmed only by future events not wholly within the control of the company or 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.
iv. Contingent assets are neither recognized nor disclosed in the financial statements.
r Operating Lease
Leases where the lessor effectively retains substantially all risks and benefits of ownership for the leased term are classified as operating leases. Operating lease payments are recognized as expense in the statement of profit and loss account on a straight line basis over the lease term.
s Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank, cheques on hand, cash in hand and short term investments with an original maturity of three months or less.
Mar 31, 2015
(a) Basis of preparation
The Financial Statements have been prepared to comply in all material
respects with the notified accounting standards by the Companies
Accounting Standards Rules, 2006 (which are deemed to be applicable as
per section 133 of the Companies Act, 2013 read with rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant provisions of the
Companies Act, 2013. The financial statements have been prepared under
the historical cost convention, on an accrual basis of accounting.
The classification of assets and liabilities of the Company is done
into current and non-current based on the operating cycle of the
business of the Company. The operating cycle of the business of the
Company is less than twelve months and therefore all current and
non-current classifications are done based on the status of
realisability and expected settlement of the respective asset and
liability within a period of twelve months from the reporting date as
required by the Schedule III of the Companies Act, 2013.
The accounting policies adopted in the preparation of the financial
statements are consistent with those used in the previous year.
(b) 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 amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period end. Although these estimates are based upon management's best
knowledge of current events and actions, actual results could differ
from these estimates. Difference between the actual results and
estimates are recognized in the period in which the results are known.
(c) Inflation
Assets and liabilities are shown at historical cost . No adjustments
are made for changes in purchasing power of money.
(d) Fixed Assets
i. Tangible assets are stated at cost net of accumulated depreciation
and accumulated impairment losses, if any. Cost comprises the purchase
price and any attributable cost of bringing the asset to its working
condition of its intended use. The costs comprises of the purchase
price, borrowings costs if capitalisation criteria are met and directly
attributable costs of bringing the asset to its working condition for
the intended use. Any trade discounts and rebates are deducted in
arriving at the cost of the tangible asset. Any subsequent expenses
related to a tangible asset is added to its book value only if it
increases the future benefits from the existing asset beyond its
previously assessed standard of performance. All other day to day
repairs and maintenance expenditure and the cost of replacing parts,
are charged to the statement of profit and loss for the period during
which such expenses are incurred.
ii. Cost of borrowing for assets taking substantial time to be ready
for use is capitalised for the period up to the time the asset is ready
for use.
iii. Intangible assets are stated at cost of construction less
accumulated amortised amount and accumulated impairment losses, if any.
(e) Depreciation and Amortisation
i. Depreciation on all assets of the Company is charged on straight
line method over the useful life of assets at the rates and in the
manner provided in Schedule II of the Companies Act, 2013 for the
proportionate period of use during the year.
ii. The useful life of the intangible asset being computer software is
determined at five years.
(f) Impairment of assets
Cash generating unit/ fixed assets / Investments are assessed for
possible impairment at balance sheet date based on external and
internal sources of information. Impairment losses, if any, are
recognised as an expense in the statement of profit and loss.
Impairment loss in respect of assets sold / scrapped are reversed and
consequent profit or loss on such sale is accounted. Impairment loss,
if any, is provided to the extent, the carrying amount of assets
exceeds their recoverable amount. Recoverable amount is higher of an
asset's net selling price and its value in use. Value in use is the
present value of estimated future cash flows expected to arise from the
continuing use of an asset and from its disposal at the end of its
useful life. Depreciation charged on assets impaired is adjusted in
future period over its remaining useful life.
On annual basis, the company makes an assessment of any indicator that
may lead to impairment of assets. An asset is treated as impaired when
the carrying cost of asset exceeds its recoverable value. Recoverable
amount is higher of an asset's net selling price and its value in use.
Value in use is the present value of estimated future cash flows
expected to arise from the continuing use of an asset and from its
disposal at the end of its useful life.
An impairment loss is charged to the Statement of Profit and Loss in
the year in which an asset is identified as impaired.
The impairment loss recognized in prior accounting period is reversed
if there has been a change in the estimate of recoverable amount.
(g) Inventories :
Cost of inventories is ascertained on the weighted average basis. Cost
comprises all costs of purchase, costs of conversion and other costs
incurred in bringing the inventories to their present location and
condition.
i. Raw Material & Components :
Raw materials and components, stores and spares are stated at lower
of cost and net realisable value.
ii. Consumable Tools :
Consumable tools are stated at cost or below cost.
iii. Work-in-progress and manufactured components :
Work-in-progress and manufactured are valued at lower of cost
components and net realisable value computed including Material, Labour
and Overheads related to the manufacturing operations
iv. Finished Goods :
Finished products are valued at lower of cost and net realisable value
Cost is computed including Material, Labour and Overheads related to the
manufacturing operations.
Excise duty is included in the value of finished products inventory.
(h) Investment
i. Long term investments are stated at cost less provision for
diminution other than temporary in nature, if any. Current investments
are stated at lower of cost and fair value.
ii. Investments that are readily realisable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
(i) Employee Benefits
i. Provident fund is a defined contribution scheme established under a
State Plan. The contributions to the scheme are charged to the
statement of profit and loss in the year in which the contributions to
the fund are accrued.
ii. Superannuation fund is a defined contribution scheme and
contributions to the scheme are charged to the Statement of profit and
loss in the year when the contributions accrue. The scheme is funded
with an insurance company in the form of a qualifying insurance policy
and other permissible securities.
iii. The company has a defined benefit gratuity scheme. For the defined
benefit scheme, actuarial valuations are being carried out on a
projected unit credit method at each balance sheet date. Actuarial
gains and losses are recognised in full in the statement of profit and
loss in the period in which they occur.
iv. Leave encashment benefit is provided on the basis of actuarial
valuation done at the end of the year. The aforesaid leave liability is
not funded.
(j) Research and Development
Revenue expenditure on research and development is charged to statement
of profit and loss in the year in which it is incurred. Capital
expenditure on research and development is included in additions to
fixed assets under appropriate heads. Self manufactured R&D assets are
carried at cost of manufacture.
(k) CENVAT Credit / Service Tax Credit
i. CENVAT credit utilised during the year is accounted in excise duty
and unutilised CENVAT balance at the year end is considered as advance
excise duty.
ii. Service tax credit utilised during the year towards excise
liability is accounted in excise duty and unutilised service tax credit
at the year-end is considered as advance Service Tax.
(l) Revenue Recognition
i. Revenue from sale of goods is recognised net of returns, product
expiry claims and trade discount, on transfer of significant risk and
rewards in respect of ownership to the buyer which is generally on
dispatch of goods. Sales include excise duty but exclude sales tax and
value added tax.
ii. In respect of incentives attributable to the export of goods, the
Company following the accounting principle of matching revenue with the
cost has recognised export incentive receivable when all conditions
precedent to the eligibility of benefits have been satisfied and when
it is reasonably certain of deriving the benefit.
iii. Revenue in respect of insurance/other claims, commission, etc. are
recognised only when it is reasonably certain that the ultimate
collection will be made.
iv. Interest income is recognised on time proportion method basis
taking into account the amount outstanding and the rate applicable.
v. Dividend income is accounted when the right to receive the same is
established.
(m) Borrowing Cost
Borrowing costs directly attributable to the acquisition or
construction of qualifying assets are capitalised. Other borrowing
costs are recognised as expenses in the period in which they are
incurred. In determining the amount of borrowing costs eligible for
capitalisation during a period, any income earned on the temporary
investment of those borrowings is deducted from the borrowing costs
incurred.
(n) Foreign Exchange Transactions
i) Transactions denominated in foreign currency are recorded at the
exchange rate on the date of transaction. The exchange gain/loss on
settlement / negotiation during the year is recognised in the Statement
of Profit and Loss.
ii) Foreign currency transactions remaining unsettled at the end of the
year are converted at year-end rates. Gain or loss arising on account
of transactions covered by forward contract is recognised over the
period of contracts.
iii. Monetary assets and liabilities at the end of the year are
converted at the year end rate and the resultant gain or loss is
accounted for in the Statement of Profit and Loss.
iv. The company has not used any derivative instrument except forward
contracts which have been used for hedging its foreign currency
exposure. The company does not undertake any speculative or trading
activity through derivative instruments.
(o) Taxation
Tax expense comprises of current and deferred taxes.
Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Indian Income Tax Act, 1961.
Deferred income taxes reflects the impact of current year timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years. Deferred tax is
measured based on the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date. Deferred tax assets
and deferred tax liabilities are offset, if a legally enforceable right
exists to set-off current tax assets against current tax liabilities
and the deferred tax assets and the deferred tax liabilities related to
the taxes on income levied by same governing taxation laws. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the Company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The Company writes down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realized. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.
(p) Earnings per share
i. Basic and diluted earnings per share are calculated by dividing the
net profit for the year/period attributed to equity shareholders by the
weighted average number of equity shares outstanding during the
year/period.
ii. For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
(q) Provisions, Contingent Liabilities and Contingent Assets
i. 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
the obligation can be made.
ii. Contingent liability is disclosed for possible obligations which
will be confirmed only by future events not wholly within the control
of the company or 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.
iii Contingent assets are neither recognized nor disclosed in the
financial statements.
(r) Operating Lease:
Leases where the lessor effectively retains substantially all risks and
benefits of ownership for the leased term are classified as operating
leases. Operating lease payments are recognized as expense in the
statement of profit and loss account on a straight line basis over the
lease term.
(s) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank,
cheques on hand, cash in hand and short term investments with an
original maturity of three months or less.
Mar 31, 2014
(a) Basis of preparation
The financial statements have been prepared to comply in all material
respects with the notified accounting standards by the Companies
Accounting Standards Rules, 2006 and the relevant provisions of the
Companies Act, 1956 and Companies Act 2013 read with the General
Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate
Affairs in respect of section 133 of the Companies Act, 2013 and
General Circular 08/2014 dated 4th April 2014 with respect to the
Financial Statements. The financial statements have been prepared under
the historical cost convention, on an accrual basis of accounting.
The classification of assets and liabilities of the Company is done
into current and non-current based on the operating cycle of the
business of the Company. The operating cycle of the business of the
Company is less than twelve months and therefore all current and
non-current classifications are done based on the status of
realisability and expected settlement of the respective asset and
liability within a period of twelve months from the reporting date as
required by Revised Schedule VI to the Companies Act 1956.
The accounting policies adopted in the preparation of the financial
statements are consistent with those used in the previous year.
(b) 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 amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period end. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates. Difference between the actual results and
estimates are recognized in the period in which the results are known.
(c) Inflation
Assets and liabilities are shown at historical cost. No adjustments are
made for changes in purchasing power of money.
(d) Fixed Assets
i. Fixed assets are stated at cost less accumulated depreciation and
impairment losses, if any.
ii. Cost comprises the purchase price and any attributable cost of
bringing the asset to its working condition of its intended use.
iii. Borrowing costs relating to acquisition of fixed assets which take
a substantial period of time to get ready for its intended use are also
included to the extent they relate to the period till such assets are
ready to be put to use.
(e) Depreciation and Amortisation
Depreciation on all assets of the Company is charged on straight line
method over the useful life of assets estimated by the management in
the manner provided in Schedule XIV of the Companies Act, 1956 for the
proportionate period of use during the year. Intangible assets are
amortised over the economic useful life estimated by the management.
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal / external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the asset''s net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value using a pretax discount rate that reflects
current market assessments of the time value of money and the risks
specific to the asset.
(f) Impairment of assets
Cash generating unit / fixed assets / Investments are assessed for
possible impairment at balance sheet date based on external and
internal sources of information. Impairment losses, if any, are
recognised as an expense in the statement of profit and loss.
Impairment loss in respect of assets sold / scrapped are reversed and
consequent profit or loss on such sale is accounted. Impairment loss,
if any, is provided to the extent, the carrying amount of assets
exceeds their recoverable amount. Recoverable amount is higher of an
asset''s net selling price and its value in use. Value in use is the
present value of estimated future cash flows expected to arise from the
continuing use of an asset and from its disposal at the end of its
useful life. Depreciation charged on assets impaired is adjusted in
future period over its remaining useful life.
(g) Inventories
Cost of inventories is ascertained on the weighted average basis. Cost
comprises all costs of purchase, costs of conversion and other costs
incurred in bringing the inventories to their present location and
condition.
i. Raw Material & Components
Raw materials and components, stores and spares are stated at lower of
cost and net realisable value.
ii. Consumable Tools
Consumable tools are stated at cost or below cost.
iii.Work-in-progress and manufactured components
Work-in-progress and manufactured components are valued at lower of
cost manufactured components and net realisable value computed
including Material, Labour and Overheads related to the manufacturing
operations.
iv. Finished Goods
Finished products are valued at lower of cost and net realisable value
Cost is computed including Material, Labour and Overheads related to
the manufacturing operations.
Excise duty is included in the value of finished products inventory.
(h) Investment
i. Long term investments are stated at cost less provision for
diminution other than temporary in nature, if any. Current investments
are stated at lower of cost and fair value.
ii. Investments that are readily realisable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
(i) Employee Benefits
i. Provident fund is a defined contribution scheme established under a
State Plan. The contributions to the scheme are charged to the
statement of profit and loss in the year in which the contributions to
the fund are accrued.
ii. Superannuation fund is a defined contribution scheme and
contributions to the scheme are charged to the Statement of profit and
loss in the year when the contributions accrue. The scheme is funded
with an insurance company in the form of a qualifying insurance policy
and other permissible securities.
iii. The company has a defined benefit gratuity scheme. For the defined
benefit scheme, actuarial valuations are being carried out on a
projected unit credit method at each balance sheet date. Actuarial
gains and losses are recognised in full in the statement of profit and
loss in the period in which they occur.
iv. Leave encashment benefit is provided on the basis of actuarial
valuation done at the end of the year. The aforesaid leave liability is
not funded.
(j) Research and Development
Revenue expenditure on research and development is charged to statement
of profit and loss in the year in which it is incurred. Capital
expenditure on research and development is included in additions to
fixed assets under appropriate heads. Self manufactured R&D assets are
carried at cost of manufacture.
(k) CENVAT Credit / Service Tax Credit
i. CENVAT credit utilised during the year is accounted in excise duty
and unutilised CENVAT balance at the year end is considered as advance
excise duty.
ii. Service tax credit utilised during the year towards excise
liability is accounted in excise duty and unutilised service tax credit
at the year-end is considered as advance Service Tax.
(I) Revenue Recognition
i. Sales comprise of sale of goods and spare parts and are net of trade
discount and sales returns. Sales Include excise duty but exclude sales
tax and value added tax. Sales are recognised when the goods are
dispatched and all risks and rewards are transferred to the buyer.
Income from Installation and commissioning is recognised after the
service is rendered.
ii. Interest income is recognised on time proportion method basis
taking into account the amounts outstanding and the rate applicable.
iii. Dividend income is accounted when the right to receive the same is
established by the Balance sheet date .
(m) Borrowing Cost
Borrowing costs directly attributable to the acquisition or
construction of qualifying assets are capitalised. Other borrowing
costs are recognised as expenses in the period in which they are
incurred. In determining the amount of borrowing costs eligible for
capitalisation during a period, any income earned on the temporary
investment of those borrowings is deducted from the borrowing costs
incurred.
(n) Foreign Exchange Transactions
i. Transactions denominated in foreign currency are recorded at the
exchange rate on the date of transaction. The exchange gain / loss on
settlement / negotiation during the year is recognised in the Statement
of Profit and Loss.
ii. Foreign currency transactions remaining unsettled at the end of the
year are converted at year-end rates. Gain or loss arising on account
of transactions covered by forward contract is recognised over the
period of contracts.
iii. Monetary assets and liabilities at the end of the year are
converted at the year end rate and the resultant gain or loss is
accounted for in the Profit and Loss Account.
iv. The company has not used any derivative instrument except forward
contracts which have been used for hedging its foreign currency
exposure. The company does not undertake any speculative or trading
activity through derivative instruments.
(o) Taxation
Tax expense comprises of current and deferred taxes.
Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Indian Income Tax Act, 1961.
Deferred income taxes reflects the impact of current year timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years. Deferred tax is
measured based on the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date. Deferred tax assets
and deferred tax liabilities are offset, if a legally enforceable right
exists to set-off current tax assets against current tax liabilities
and the deferred tax assets and the deferred tax liabilities related to
the taxes on income levied by same governing taxation laws. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the Company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits. The carrying amount of deferred tax
assets are reviewed at each balance sheet date. The Company writes down
the carrying amount of a deferred tax asset to the extent that it is no
longer reasonably certain or virtually certain, as the case may be,
that sufficient future taxable income will be available against which
deferred tax asset can be realized. Any such write-down is reversed to
the extent that it becomes reasonably certain or virtually certain, as
the case may be, that sufficient future taxable income will be
available.
(p) Earnings per share
i. Basic and diluted earnings per share are calculated by dividing the
net profit for the year / period attributed to equity shareholders by
the weighted average number of equity shares outstanding during the
year / period.
ii. For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
(q) Provisions, Contingent Liabilities and Contingent Assets
i. 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
the obligation can be made.
ii. Contingent liability is disclosed for possible obligations which
will be confirmed only by future events not wholly within the control
of the company or 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.
iii. Contingent assets are neither recognized nor disclosed in the
financial statements.
(r) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank,
cheques on hand, cash in hand and short term investments with an
original maturity of three months or less.
Mar 31, 2013
(a) Basis of preparation
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The Comapny has prepared these financial statements to
comply in all material respects with the notified accounting standards
by Companies (Accounting Standards) Rules, 2006, (as amended), and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis of accounting and
under the historical cost convention
The classification of assets and liabilities of the Company is done
into current and non-current based on the operating cycle of the
business of the Company. The operating cycle of the business of the
Company is less than twelve months and therefore all current and
non-current classifications are done based on the status of readability
and expected settlement of the respective asset and liability within a
period of twelve months from the reporting date as required by Revised
Schedule VI to the Companies Act 1956.
The accounting policies adopted in the preparation of the financial
statements are consistent with those used in the previous year.
|b) 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 amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period end. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates. Difference between the actual results and
estimates are recognized in the period in which the results are known.
(c) Inflation
Assets and liabilities are shown at historical cost. No adjustments are
made for changes in purchasing power of money.
Fixed Assets
i. Fixed assets are stated at their original cost of acquisition
including incidental expenses related to acquisition and installation
of the concerned assets. ii. The fixed assets manufactured by the
company are stated at manufacturing cost. Fixed assets are shown net of
accumulated depreciation. iii. Intangible Assets are recorded at cost
of acquisition.
(e) Depreciation and Amortisation
Depreciation on fixed assets is provided on straight-line method at the
rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956.
Depreciation of R&D assets (being prototype) is being done over a
useful life of 5 years.
(fj Impairment of assets
Cash generating unit/ fixed assets/Investments are assessed for
possible impairment at balance sheet date based on external and
internal sources of information. Impairment losses, if any, are
recognised as an expense in the statement of profit and loss.
Impairment loss in respect of assets sold I scrapped are reversed and
consequent profit or loss on such sale is accounted. Impairment loss,
if any, is provided to the extent, the carrying amount of assets
exceeds their recoverable amount. Recoverable amount is higher of an
asset''s net selling price and its value in use.
Value in use is the present value of estimated future cash flows
expected to arise from the continuing use of an asset and from its
disposal at the end of its useful life. Depreciation charged on assets
impaired is adjusted in future period over its remaining useful life.
|g) Inventories
Cost of inventories is ascertained on the weighted average basis. Cost
comprises all costs of purchase, costs of conversion and other costs
incurred in bringing the inventories to their present location and
condition.
i. Raw Material & Components Raw materials and components, stores and
spares are stated at lower of cost and net realisable value.
ii. Consumable Tools Consumable tools are stated at cost or below
cost.
iii. Work-in-progress and manufactured components Work-in-progress and
manufactured components are valued at cost computed including Material,
Labour and Overheads related to the manufacturing operations
iv. Finished Goods Finished products are valued at lower of cost and
net realisable value Cost is computed including Material, Labour and
Overheads related to the manufacturing operations.
Excise duty is included in the value of finished products inventory.
(h) Investment
Long term investments are stated at cost less provision for diminution
other than temporary in nature, if any. Current investments are stated
at lower of cost and fair value.
(I) Employee Benefits
i. Provident fund is a defined contribution scheme established under a
State Plan. The contributions to the scheme are charged to the
statement of profit and loss in the year in which the contributions to
the fund are accrued. ii. Superannuation fund is a defined
contribution scheme and contributions to the scheme are charged to the
Statement of profit and loss in the year when the contributions accrue.
The scheme is funded with an insurance company in the form of a
qualifying insurance policy. iii. The company has a defined benefit
gratuity scheme. For the defined benefit scheme, actuarial valuations
are being carried out on unit credit method at each balance sheet date.
Actuarial gains and losses are recognised
in full in the statement of profit and loss in the period in which they
occur. iv. Leave encashment benefit is provided on the basis of
actuarial valuation done at the end of the year. The aforesaid leave
liability is not funded.
(J) Research and Development
Revenue expenditure on research and development is charged to statement
of profit and loss in the year in which it is incurred. Capital
expenditure on research and development is included in additions to
fixed assets under appropriate heads. Self manufactured R&D assets are
carried at cost of manufacture.
(k) CENVAT Credit / Service Tax Credit
i CENVAT credit utilised during the year is accounted in excise duty
and unutilised CENVAT balance at the year end is considered as advance
excise duty. ii Service tax credit utilised during the year towards
excise liability is.accounted in excise duty and unutilised service tax
credit at the year-end is considered as advance Service Tax
(I) Revenue Recognition
i. Sales comprise of sale of goods and spare parts and are net of trade
discount and sales returns. Sales are recognised when the goods are
dispatched and all risks and rewards are transferred to the buyer.
Income from Installation and commissioning is recognised after the
service is rendered.
ii. Interest income is recognised on time proportion method basis
taking into account the amounts outstanding and the rate applicable.
iii. Dividend income is accounted when the right to receive the same
is established by the Balane sheet date
|m) Borrowing Cost
Borrowing costs directly attributable to the acquisition or
construction of qualifying assets are capitalised. Other borrowing
costs are recognised as expenses in the period in which they are
incurred. In determining the amount of borrowing costs eligible for
capitalisation during a period, any income earned on the temporary
investment of those borrowings is deducted from the borrowing costs
incurred.
(n) Foreign Exchange Transactions
i. Transactions denominated in foreign currency are recorded at the
exchange rate on the date of transaction. The exchange gain/loss on
settlement / negotiation during the year is recognised in the Statement
of Profit and Loss.
ii. Foreign currency transactions remaining unsettled at the end of the
year are converted at year-end rates. Gain or toss arising on account
of transactions covered by forward contract is recognised over the
period of contracts.
iii. Current assets and current liabilities at the end of the year are
converted at the year end rate and the resultant gain or loss is
accounted for in the Profit and Loss Account.
iv. The company has not- used any derivative instrument except forward
contracts which have been used for hedging its foreign currency
exposure. The company does not undertake any speculative or trading
activity through derivative instruments.
(o) Taxation
Tax expense comprises of current and deferred taxes.
Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Indian Income Tax Act, 1961.
Deferred income taxes reflects the impact of current year timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years. Deferred tax is
measured based on the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date. Deferred tax assets
and deferred tax liabilities are offset, if a legally enforceable right
exists to set-off current tax assets against current tax liabilities
and the deferred tax assets and the deferred tax liabilities related to
the taxes on income levied by same governing taxation laws. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the Company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
lp) Earnings per share
i. Basic and diluted earnings per share are calculated by dividing the
net profit for the year/period attributed to equity shareholders by the
weighted average number of equity shares outstanding during the
year/period.
ii. For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
(q) Provisions, Contingent Liabilities and Contingent Assets
i. 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
the obligation can be made.
ii. Contingent liability is disclosed for possible obligations which
will be confirmed only by future events not wholly within the control
of the company or 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.
iii. Contingent assets are neither recognized nor disclosed in the
financial statements.
(r) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank,
cheques on hand, cash in hand and short term investments with an
original maturity of three months or less.
Mar 31, 2012
A Basis of preparation
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material respects with the notified accounting standards
by Companies (Accounting Standards) Rules, 2006, (as amended), and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis of accounting and
under the historical cost convention.
The classification of assets and liabilities of the Company is done
into current and non-current based on the operating cycle of the
business of the Company. The operating cycle of the business of the
Company is less than twelve months and therefore all current and
non-current classifications are done based on the status of readability
and expected settlement of the respective asset and liability within a
period of twelve months from the reporting date as required by Revised
Schedule VI to the Companies Act 1956.
The accounting policies adopted in the preparation of the financial
statements are consistent with those used in the previous year.
b 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 amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period end. Although these estimates are based upon management's best
knowledge of current events and actions, actual results could differ
from these estimates. Difference between the actual results and
estimates are recognized in the period in which the results are known.
c Inflation
Assets and liabilities are shown at historical cost. No adjustments are
made for changes in purchasing power of money.
d Fixed Assets
i Fixed assets are stated at their original cost of acquisition
including incidental expenses related to acquisition and installation
of the concerned assets.
ii The fixed assets manufactured by the company are stated at
manufacturing cost. Fixed assets are shown net of accumulated
depreciation.
iii Intangible Assets are recorded at cost of acquisition.
e Depreciation and Amortization
Depreciation on fixed assets is provided on straight-line method at the
rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956.
Depreciation of R&D assets (being prototype) is being done over a
useful life of 5 years, f Impairment of assets Cash generating unit /
fixed assets / Investments are assessed for possible impairment at
balance sheet date based on external and internal sources of
information. Impairment losses, if any, are recognized as an expense in
the statement of profit and loss. Impairment loss in respect of assets
sold / scrapped are reversed and consequent
profit or loss on such sale is accounted. Impairment loss, if any, is
provided to the extent, the carrying amount of assets exceeds their
recoverable amount. Recoverable amount is higher of an asset's net
selling price and its value in use. Value in use is the present value
of estimated future cash flows expected to arise from the continuing
use of an asset and from its disposal at the end of its useful life.
Depreciation charged on assets impaired is adjusted in future period
over its remaining useful life.
g Inventories
Cost of inventories is ascertained on the weighted average basis. Cost
comprises all costs of purchase, costs of conversion and other costs
incurred in bringing the inventories to their present location and
condition.
i Raw Material & Components Raw materials and components, stores and
spares are stated at lower of cost and net realizable value.
ii Consumable Tools Consumable tools are stated at cost or below cost.
iii Work-in-progress and manufactured Work-in-progress and manufactured
components are valued at components cost computed including Material,
Labour and Overheads related to the manufacturing operations
iv Finished Goods Finished products are valued at lower of cost and net
realizable value Cost is computed including Material, Labour and
Overheads related to the manufacturing operations.
Excise duty is included in the value of finished products inventory,
h. Investment
Long term investments are stated at cost less provision for diminution
other than temporary in nature, if any. Current investments are stated
at lower of cost and fair value.
i Employee Benefits
i Provident fund is a defined contribution scheme established under a
State Plan. The contributions to the scheme are charged to the
statement of profit and loss in the year in which the contributions to
the fund are accrued.
ii Superannuation fund is a defined contribution scheme and
contributions to the scheme are charged to the Statement of profit and
loss in the year when the contributions accrue. The scheme is funded
with an insurance company in the form of a qualifying insurance policy.
iii The company has a defined benefit gratuity scheme. For the defined
benefit scheme, actuarial valuations are being carried out on unit
credit method at each balance sheet date. Actuarial gains and losses
are recognized in full in the statement of profit and loss in the
period in which they occur.
iv Leave encashment benefit is provided on the basis of actuarial
valuation done at the end of the year. The aforesaid leave liability is
not funded.
j Research and Development
Revenue expenditure on research and development is charged to statement
of profit and loss in the year in which it is incurred. Capital
expenditure on research and development is included in additions to
fixed assets under appropriate heads. Self manufactured R&D assets are
carried at cost of manufacture.
k CEIMVAT Credit / Service Tax Credit
i CENVAT credit utilized during the year is accounted in excise duty
and unutilized CENVAT balance at the year end is considered as advance
excise duty.
ii Service tax credit utilized during the year towards excise liability
is accounted in excise duty and unutilized service tax credit at the
year-end is considered as advance Service Tax.
I Revenue Recognition
i Sales comprise of sale of goods and spare parts and are net of trade
discount and sales returns. Sales are recognized when the goods are
dispatched and all risks and rewards are transferred to the buyer.
Income from Installation and commissioning is recognized after the
service is rendered.
ii Interest income is recognized on time proportion method basis taking
into account the amounts outstanding and the rate applicable.
iii Dividend income is accounted when the right to receive the same is
established by the Balane Sheet date.
m Borrowing Cost
Borrowing costs directly attributable to the acquisition or
construction of qualifying assets are capitalized. Other borrowing
costs are recognized as expenses in the period in which they are
incurred. In determining the amount of borrowing costs eligible for
capitalization during a period, any income earned on the temporary
investment of those borrowings is deducted from the borrowing costs
incurred.
n Foreign Exchange Transactions
i) Transactions denominated in foreign currency are recorded at the
exchange rate on the date of transaction. The exchange gain/ loss on
settlement/ negotiation during the year is recognised in the Statement
of Profit and Loss.
ii) Foreign currency transactions remaining unsettled at the end of the
year are converted at year-end rates. Gain or loss arising on account
of transactions covered by forward contract is recognized over the
period of contracts.
iii) Current assets and current liabilities at the end of the year are
converted at the yearend rate and the resultant gain or loss is
accounted for in the Profit and Loss Account.
iv) The company has not used any derivative instrument except forward
contracts which have been used for hedging its foreign currency
exposure. The company does not undertake any speculative or trading
activity through derivative instruments.
o Taxation
Tax expense comprises of current and deferred taxes.
Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Indian Income Tax Act, 1961.
Deferred income taxes reflects the impact of current year timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years. Deferred tax is
measured based on the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date. Deferred tax assets
and deferred tax liabilities are offset, if a legally enforceable right
exists to set-off current tax assets against current tax liabilities
and the deferred tax assets and the deferred tax liabilities related to
the taxes on income levied by same governing taxation laws. Deferred
tax assets are recognized only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized. In situations
where the Company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognized only if there is virtual
certainty supported by convincing evidence that they can be realized
against future taxable profits.
p Earnings per share
i Basic and diluted earnings per share are calculated by dividing the
net profit for the year / period attributed to equity shareholders by
the weighted average number of equity shares outstanding during the
year/ period.
ii For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
q Provisions, Contingent Liabilities and Contingent Assets
i. 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 the obligation can be made.
ii. Contingent liability is disclosed for possible obligations which
will be confirmed only by future events not wholly within the control
of the company or 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.
iii Contingent assets are neither recognized nor disclosed in the
financial statements.
r Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank,
cheques on hand, cash in hand and short term investments with an
original maturity of three months or less.
Mar 31, 2011
Basis for preparation of accounts
The financial statements have been prepared to comply in all material
respects with the notified accounting standards by 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 of accounting. The
accounting policies discussed more fully below, are consistent with
those used in the previous year.
Revenue Recognition
Sales comprise of sale of goods and spare parts and are net of trade
discount and sales returns.
Interest income is recognised on time proportion method basis taking
into account the amounts outstanding and the rate applicable.
Dividend income is accounted when the right to receive the same is
established.
Employee benefits
(i) Provident fund is a defined contribution scheme established under a
State Plan. The contributions to the scheme are charged to the profit
and loss account in the year in which the contributions to the fund are
accrued.
(ii) Superannuation fund is a defined contribution scheme and
contributions to the scheme are charged to the profit and loss account
in the year when the contributions accrue. The scheme is funded with an
insurance company in the form of a qualifying insurance policy.
(iii) The company has a defined benefit gratuity scheme. For the
defined benefit scheme, actuarial valuations are being carried out at
each balance sheet date. Actuarial gains and losses are recognised in
full in the profit and loss account in the period in which they occur.
iv) Leave encashment benefit is provided on the basis of actuarial
valuation done at the end of the year. The aforesaid leave liability is
not funded.
Research and Development
Revenue expenditure on research and development is charged to profit
and loss account in the year in which it is incurred. Capital
expenditure on research and development is included in additions to
fixed assets under appropriate heads. Self manufactured R&D assets are
carried at cost of manufacture.
Depreciation
Depreciation on fixed assets is provided on straight-line method at the
rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956.
Amortisation of R&D assets (being prototype) is being done over a
useful life of 5 years.
Transactions in foreign currencies
Transactions in foreign currencies are accounted for in the following
manner:
Transactions covered by forward contracts are accounted for by
recognising the difference between the forward rate and the exchange
rate on the date of the transaction as income or expenditure over the
life of the contract.
Transactions not covered by forward contracts are accounted for in the
following manner:
(i) Export sales and import purchases are accounted for at exchange
rates prevailing at the time of the transactions.
(ii) Gains/ losses arising out of the foreign currency transactions are
recognised in the profit and loss account.
(iii) Other assets and liabilities are restated at the rates ruling at
the year-end and the differences on such retranslation are recognised
in the profit and loss account.
The company has not used any derivative instrument except forward
contracts which have been used for hedging its foreign currency
exposure. The company does not undertake any speculative or trading
activity through derivative instruments.
Fixed assets
Fixed assets are stated at their original cost of acquisition including
incidental expenses related to acquisition and installation of the
concerned assets.
The fixed assets manufactured by the company are stated at
manufacturing cost. Fixed assets are shown net of accumulated
depreciation.
Impairment of assets
Cash generating unit/ assets are assessed for possible impairment at
balance sheet date based on external and internal sources of
information. Impairment losses, if any, are recognised as an expense in
the profit and loss account.
Investments
Long term investments are stated at cost less provision for diminution
other than temporary in nature, if any. Current investments are stated
at lower of cost and fair value, determined on a portfolio basis.
Borrowing Cost
Borrowing costs directly attributable to the acquisition or
construction of qualifying assets are capitalised. Other borrowing
costs are recognised as expenses in the period in which they are
incurred. In determining the amount of borrowing costs eligible for
capitalisation during a period, any income earned on the temporary
investment of those borrowings is deducted from the borrowing costs
incurred.
Inventories
Cost of inventories is ascertained on the weighted average basis. Cost
comprises all costs of purchase, costs of conversion and other costs
incurred in bringing the inventories to their present location and
condition.
Raw materials and components, stores and spares are stated at lower of
cost and net realisable value.
Consumable tools are stated at cost or below cost.
Work-in-progress and manufactured components are valued at cost.
Finished products are valued at lower of cost and net realisable value.
Excise duty is included in the value of finished products inventory.
Provision for doubtful debts/ advances
Sundry debtors / advances are stated after making adequate provision
for doubtful debts/advances.
Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank,
cheques on hand, cash in hand and short term investments with an
original maturity of three months or less.
Tax Expense
Tax expense comprises of current and deferred taxes.
Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Indian Income Tax Act, 1961.
Deferred income taxes reflects the impact of current year timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years after considering
the tax holiday period as required by the Accounting Standard
Interpretation issued by the Institute of Chartered Accountants of
India. Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised.
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 the
obligation can be made. Contingent liability is disclosed for:
i> possible obligations which will be confirmed only by future events
not wholly vithin 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 neither recognized nor disclosed
in the financial statements.
Mar 31, 2010
Basis for preparation of accounts
The financial statements have been prepared under the historical cost
convention, on an accrual basis of accounting in accordance with the
generally accepted accounting principles, accounting standards notified
under section 211(3C) of the Companies Act, 1956, and the relevant
provisions thereof.
Sales
Sales comprise of sale of goods and spare parts and are net of trade
discount and sales returns.
Employee benefits
(i) Provident fund is a defined contribution scheme established under a
State Plan. The contributions to the scheme are charged to the profit
and loss account in the year in which the contributions to the fund are
accrued.
(ii) Superannuation fund is a defined contribution scheme and
contributions to the scheme are charged to the profit and loss account
in the year when the contributions accrue. The scheme is funded with an
insurance company in the form of a qualifying insurance policy.
(iii) The company has a defined benefit gratuity scheme. For the
defined benefit scheme, acturial valuations are being carried out at
each balance sheet date. Acturial gains and losses are recognised in
full in the profit and loss account in the period in which they occur.
(iv) Leave encashment benefit is provided on the basis of actuarial
valuation done at the end of the year. The aforesaid leave liability is
not funded.
Research and development
Revenue expenditure on research and development is charged to profit
and loss account in the year in which it is incurred. Capital
expenditure on research and development is included in additions to
fixed assets under appropriate heads.
Depreciation
Depreciation on fixed assets is provided on straight-line method at the
rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956.
Transactions in foreign currencies
Transactions in foreign currencies are accounted for in the following
manner :
Transactions covered by forward contracts are accounted for by
recognising the difference between the forward rate and the exchange
rate on the date of the transaction as income or expenditure over the
life of the contract.
Transactions not covered by forward contracts are accounted for in the
following manner :
(i) Export sales and import purchases are accounted for at exchange
rates prevailing at the time of the transactions.
(ii) Gains/losses arising out of the foreign currency transactions are
recognised in the profit and loss account.
(iii) Other assets and liabilities are restated at the rates ruling at
the year-end and the differences on such retranslation are recognised
in the profit and loss account.
The company has not used any other derivative instrument except forward
contracts which have been used for hedging its foreign currency
exposure. The company has not undertaken any speculative or trading
activity through derivative instruments.
As at the year end the company had unutilised foreign exchange forward
contracts of USD 3,500,000 (previous year USD 9,363,530)
Fixed assests
Fixed assets are stated at their original cost of acquisition including
incidental expenses related to acquisition and installation of the
concerned assests.
The fixed assests manufactured by the company are stated at
manufacturing cost. Fixed assets are shown net of accumulated
depreciation.
Impairment of assets
Cash generating units/assets are assessed for possible impairment at
balance sheet date based on external and internal sources of
information. Impairment losses, if any, are recognised as an expense in
the profit and loss account.
Investments
Long term investments are stated at cost less other than temporary
diminution in value, if any. Currrent investments are stated at lower
of cost and fair value, determined on a portfolio basis.
Inventories
Cost of inventories is generally ascertained on the weighted average
basis. Cost comprises all costs of purchase, costs of conversion and
other costs incurred in bringing the inventories to their present
location and condition.
Raw materials and components, stores and spares are stated at lower of
cost and net realisable value.
Consumable tools are stated at cost or under.
Work-in-progress and manufactured components are valued at estimated
cost. Finished products are valued at lower of cost and net realisable
value. Excise duty is included in the value of finished products
inventory.
Provision for doubtful debts/advances
Sundry debtors/advances are stated after making adequate provision for
doubtful debts/advances.
Taxation
Provision for income-tax is made on the basis of the estimated taxable
income per the provisions of the Income-tax Act, 1961 and the relevant
Finance Act. The company provides for deferred tax using the liability
method, based on the tax effects of timing differences resulting from
the recognition of items in the financial statements and in estimating
its current income-tax provision.
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 the
obligation can be made. Contingent liability is disclosed for (i)
possible obligations 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.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on Manugraph India Ltd.
-
Manugraph India Ltd. Tools
- Bulk Deals
- Block Deals
-
Manugraph India Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- Rights
- BSE Price History
- NSE Price History
-
Manugraph India Ltd. Key Financial Ratios
- Ratios
-
Manugraph India Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Manugraph India Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Manugraph India Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Manugraph India Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
