Accounting Policies of Ruchi Infrastructure Ltd. Company
Mar 31, 2018
A. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Preparation and Statement of Compliance
The separate financial statements have been prepared in accordance with Indian Accounting standards ( Ind AS ) notified, under section 133 of the Companies Act, 201 3 (''Act) read with the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standard) Amendment Rules, 2016 and the relevant provisions of the Act.
Upto the year ended 31st March 2017, the company prepared its financial statements in accordance with the requirement of previous GAAP, which included Standards notified under the Companies (Accounting Standards) Rules, 2006. These financial statements are the first financial statements of the Company under Ind AS. The date of transition to Ind AS is 1st April, 2016.
The Company applied Ind AS 101 First-time Adoption of the Indian Accounting Standards. A statement providing an explanation of how the adoption of Ind AS has impacted on the balance sheet and results of operations of the Company if given in Note 51.
Refer Note 51 C for details of first-time adoption exemptions availed by the company.
Basis of Preparation
These financial statements have been prepared on accrual basis and under the historical cost convention except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained in the accounting policies mentioned below.
All assets and liabilities have been classified as current or non-current as per the Company s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. The Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Functional and presentation currency
These separate financial statements are presented in Indian rupees, which is the Company s functional currency. All amounts have been rounded to the nearest Rupee unless otherwise indicated.
b) Use of Estimates, Judgments and Assumptions
The preparation of financial statements in accordance with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
All the assets and liabilities have been classified as current or non-current as per the company s normal operating cycle of twelve months and other criteria set out in Schedule III to the Companies Act, 201 3.
c) Revenue
Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognized to the extent that it is probable that the economic benefit will flow to the Company and the revenue can be measured reliably and there is no continuing effective control/managerial involvement in respect of the revenue activity as described below.
i) Sale of Goods
Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods have been transferred to the buyer either at the time of dispatch or delivery or when the risk associated with ownership is transferred.
Revenue from sales is measured net of returns, trade discounts and volume rebates, VAT, GST but inclusive of excise duty wherever applicable. Further, the revenue amount is adjusted for the time value of money if that contract contains a significant financing component.
The timing of the transfer of control varies depending on the individual terms of the sales agreement. Revenue from sale of power is recognized when delivered and measured based on contractual arrangements after giving allowances for wheeling and transmission loss.
ii) Sale of Services
Revenue from sale of services are recognized when agreed contractual task has been completed or services are rendered.
iii) Interest and Dividend
Interest income is recognized on accrual basis using the effective interest method. Dividend income is recognised in profit or loss on the date on which the company s right to receive payment is established.
d) Inventories
Inventories are valued at lower of cost and net realizable value, except by-product/scrap which is valued at net realizable value. Cost of inventory is arrived at by using Moving Average Price Method. Cost of inventory generally comprises of cost of purchases, cost of conversion and other costs, incurred in bringing the inventories to their present location and condition.
e) Property, Plant and Equipment
i) Recognition and Measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses (if any).
The cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates and including acquisition or construction cost, borrowing costs or any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in statement of profit or loss.
ii) Subsequent Expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the company.
iii) Depreciation
Depreciation on property, plant and equipment is provided on Written down value method (WDV) as per the useful life of the assets in the manner as specified in Schedule II to the Companies Act, 201 3. The estimated useful life of assets and estimated residual value is taken as prescribed under Schedule II to the Companies Act, 2013.
Depreciation on additions during the year is provided on pro rata basis with reference to date of addition/ installation. Depreciation on assets disposed/discarded is charged up to the date on which such asset is sold.
f) Intangible Assets
i) Recognition and Measurement
Computer softwares have finite useful lives and are measured at cost less accumulated amortisation and any accumulated impairment losses. As on transition date i.e. April 1, 2017 the same are measured at carrying value adjusted for Ind AS.
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, when incurred is recognised in statement of profit or loss.
ii) Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives and is generally recognised in statement of profit or loss. Computer software are amortised over their estimated useful life of 3 years.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted, if required.
g) Employee benefits
i) Short Term Employee Benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
ii) Defined Benefit Plans
The liability for gratuity, a defined benefit plan is determined annually by a qualified actuary using the projected unit credit method.
The company pays gratuity to employees who have completed 5 Years of service with company at the time when the employee leaves the company as per the payment of gratuity act 1 972.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in OCI. Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset), to the net defined liability (asset) at the start of the financial year after taking into account any changes as a result of contribution and benefit payments during the year. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in Statement of Profit & Loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
iii) Other 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 obligation as at the Balance sheet date determined based on an actuarial valuation.
iv) Defined Contribution Plan
The Company s payments to the defined contribution plans are recognized as expenses during the period in which the employees perform the services that payment covers. Defined contribution plan comprise of contribution to the employees provident fund with government, Employees State Insurance and Pension Scheme.
h) Income Tax
Income tax expense comprises current and deferred tax. It is recognised in Statement of Profit & Loss except to the extent that it relates to a business combination, or items recognised directly in equity or in OCI.
i) Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends. Current Tax Assets and liabilities are Offset only if, The Company:
a) has a legally enforceable right to set off the recognised amounts; and
b) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
ii) Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the asset can be measured reliably, and it is probable that the future economic benefit associated with the asset will be realised.
Deferred Tax Assets and Liabilities are Offset only if:
a) the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
i) Foreign Currency Transactions
Transactions in foreign currencies are translated into the respective functional currencies of the company at the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Difference arising on settlement of monetary items are generally recognised in statement of profit and loss.
Non-monetary items that are measured based on historical cost in a foreign currency are not translated. Nonmonetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Exchange difference arising out of these transactions are generally recognised in statement of profit and loss.
j) Borrowing Cost
Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying asset are capitalised as part of the cost of that asset till the date it is ready for its intended use or sale. Qualifying asset are the assets that necessarily takes a substantial period of time to get ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.
k) Cash and Cash Equivalent
In cash flow statement, Cash and cash equivalent includes the cash and Cheques in hand, bank balances, demand deposits with bank and other short term, highly liquid investments with original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdraft are shown within borrowings in current liabilities in the balance sheet and forms part of financing activities in the cash flow statement. Book overdraft are shown within other financial liabilities in the balance sheet and forms part of operating activities in the cash flow statement.
l) Cash Flow Statement
Cash flows are reported using indirect method, whereby profit/ (loss) before tax is adjusted for the effect of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments and items of income or expenses associated with investing or financing cash flow. The cash flow from operating, investing and financing activities of the company is segregated based on the available information.
m) Earning Per Share
i) Basic earnings per share is arrived at based on net profit / (loss) after tax available to equity shareholders divided by Weighted average number of equity shares, adjusted for bonus elements in equity shares issued during the year (if any) and excluding treasury shares.
ii) Diluted earnings per shares is calculated by dividing Profit attributable to equity holders after tax divided by Weighted average number of shares considered for basic earning per shares including potential dilutive equity shares.
n) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation and there is reliable estimate of the amount of obligation.
A disclosure for contingent liabilities is made where there is a possible obligation arising from past events, the existence of which will be confirmed only on 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 arise from past events where it is not probable that an outflow of resources will be required to settle or a reliable estimate of the amount can not be made.
o) Leases
i) As a Lessee
A lease is classified at the inception date as finance lease or an operating lease. Leases under which the company assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception of lease, whichever is lower. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the statement of profit and loss.
Other leases are treated as operating leases, with payments are recognized as expense in the statement of profit and loss on a straight line basis over the lease term.
ii) As a Lessor
Rental Income from operating leases is recognized on straight - line basis over the term of relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Company s expected inflationary cost increases, such increases are recognized in the period in which such benefits accrue.
p) Impairment of Non Financial Assets
The company assesses at each reporting date whether there is any objective evidence that a non-financial asset or a group of non-financial assets are impaired. If any such indication exists, the company estimates the amount of impairment loss. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or group of assets is considered as cash generating unit. If any such indication exists, an estimate of the recoverable amount of the individual asset/cash generating unit is made.
An impairment loss is calculated as the difference between an asset s carrying amount and recoverable amount. Losses are recognized in Statement of Profit & Loss and reflected in an allowance account. When the company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, then the previously recognized impairment loss is reversed through Statement of Profit & Loss.
q) Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial instruments also include derivative contracts such as foreign currency foreign exchange forward contracts, interest rate swaps and currency options; and embedded derivatives in the host contract.
i) Financial Assets
1 Classification
The Company shall classify financial assets and subsequently measured at amortised cost, fair value through other comprehensive income or fair value through Statement of Profit & Loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.
2 Initial Recognition and Measurement
All financial assets are recognised initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset, in the case of financial assets not recorded at fair value through Statement of Profit & Loss. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the company commits to purchase or sell the asset.
Measured at Amortised Cost
A financial asset is measured at the amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit and loss. The losses arising from impairment are recognised in the statement of profit and loss. This category generally applies to trade and other receivables.
Measured at Fair Value Through Other Comprehensive Income (FVOCI)
A financial asset is measured at FVOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The asset s contractual cash flows represent SPPI.
Financial Asset at Fair Value Through Profit and Loss (FVTPL)
FVTPL is a residual category for financial asset. Any financial asset, which does not meet the criteria for categorization as at amortized cost or as FVOCI, is classified as at FVTPL.
In addition, the group company may elect to classify a financial asset, which otherwise meets amortized cost or FVOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch ).
Financial assets included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss.
3 Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets) is primarily derecognised (i.e. removed from the company s balance sheet) when:
a) The rights to receive cash flows from the asset have expired, or
b) The company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through arrangement; and either (a) the company has transferred substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
c) When the company has transferred its rights to receive cash flows from an asset or has entered into a passthrough arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognise the transferred asset to the extent of the company s continuing involvement. In that case, the company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained.
d) Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay.
4 Impairment of Financial Assets
In accordance with Ind-AS 1 09, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, and bank balance.
b) Trade receivables.
The Company follows ''simplified approach for recognition of impairment loss allowance on:
i. Trade receivables which do not contain a significant financing component.
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
ii. For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 1 2-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.
ii) Financial liabilities
1 Classification
The Company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, shall be subsequently measured at fair value.
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through Statement of Profit & Loss or amortised costs.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The company s financial liabilities include trade and other payables, loans and borrowings, financial guarantee contracts and derivative financial instruments.
Financial liabilities at fair value through profit or loss.
Financial liabilities at fair value through Statement of Profit & Loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the group Company that are not designated as hedging instruments in hedge relationships as defined by Ind-AS 1 09. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
2 Gains or losses on liabilities held for trading are recognised in the statement of Profit and Loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in Ind-AS 1 09 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/loss are not subsequently transferred to P&L. However, the company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss.
3 Loans and Borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit & Loss.
This category generally applies to interest-bearing loans and borrowings.
4 Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit & Loss.
5 Derivative Financial Instruments
The company uses derivative financial instruments, such as forward currency contracts, interest rate swaps and forward commodity contracts, to hedge its foreign currency risks, interest rate risks and commodity price risks, respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
6 Measurement of Fair Values
The Company s accounting policies and disclosures require the measurement of fair values, for financial instruments.
The Company has an established control framework with respect to the measurement of fair values. The management regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the management assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which such valuations should be classified.
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
r) Government Grants
Government Grants and subsidies from Government are recognised when there is reasonable certainty that the grant/subsidy will be received and all attaching conditions will be complied with. Government grant received are recognised in the Statement of Profit & Loss on a systematic basis over the period in which the Company recognises as expenses the related costs for which the grant is intended to compensate.
s) Guarantee Commission
In respect of Corporate Guarantees given by the Company on behalf of its Subsidiaries as on the Ind As transitional date, notional income is booked at rate prevalent in market for similar guarantee and the income is amortised over the period of the guarantee . The notional income for guarantees given in subsequent periods is treated as deemed investment, added to the carrying cost of investment in Subsidiary and amortised over the period of the guarantee.
(i) The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.
(ii) Significant management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income by each jurisdiction in which the relevant entity operates and the period over which deferred income tax assets will be recovered.
i) Inventories are valued at lower of cost and net realisable value, except by products/scrap, which are valued at net realisable value.
ii) The cost of inventories recognised as an expense include nil (previous year nil, as at 1 st April 201 6 nil) in respect of write down of inventory to net realisation value.
(i) The above includes debts due from firms/private companies in which director is partner/director Rs. 38,97,526/- [previous year Rs. 1,53,47,744/- , as at April 1,2016, Rs. nil].
(ii) The above balances includes balance amounting to Rs. nil (previous year Rs. nil, as at April 1, 2016 34,07,68,476/-) of parties whose bills have been discounted by Company from Bank with recourse option. The amount repayable under the working capital loan agreement is presented as borrowings. (refer note 20).
Mar 31, 2016
A. GENERAL COMPANY INFORMATION
Ruchi Infrastructure Ltd is a Public Limited Company incorporated on 28th August 1984 as Columbia Leasing and Finance Ltd. The name of the Company was changed to Ruchi Infrastructure and Finance Ltd on 2nd September 1994 and to Ruchi Infrastructure Ltd on 14th June 1995. The Company is engaged in the business of infrastructure, development and operation of Storage Tanks, Warehouses and Jetty and generation of power from wind energy. The Company is also engaged in trading of various commodities. The Registered Office of the Company is situated at 615, Tulsiani Chambers, Nariman Point, Mumbai-400021. The Company''s shares are listed on the BSE Limited and the National Stock Exchange of India Limited.
B. GENERAL INFORMATION AND STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES:
a. Basis of accounting:
The accounts have been prepared in accordance with the historical cost convention. The financial statements are prepared as a going concern under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP) in India.
These financial statements have been prepared to comply in all material aspects with the Accounting Standards notified under Rule 7 of the Companies (Accounts) Rules, 2014 in respect of section 133 of the Companies Act, 2013 and other recognized accounting practices and policies.
b. Use of estimates:
The preparation and presentation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reported period. The difference between actual results and estimates are recognized in the period in which the results are known/materialize.
c. Revenue recognition:
The company follows mercantile system of the accounting and recognizes income and expenditure on accrual basis except those with significant uncertainties.
Sales revenue is recognized on transfer of the significant risks and rewards of ownership of the goods to the buyer and stated net of sales tax, VAT, trade discounts and rebates but includes excise duty.
Income from services is recognized as they are rendered based on arrangement / agreement with the concern customers. The export incentives are accounted for on accrual basis taking into account certainty of realization and its subsequent utilization.
Interest income is recognized on time proportion basis.
Revenue from power supply is accounted for on the basis of sales to state distribution companies in terms of the power purchase agreement or on the basis of sales under merchant trading based on the contracted rate as the case may be. Dividend income on investment is accounted for as and when the right to receive the payment is established.
d. Fixed assets:
i) Fixed assets
Fixed assets (tangible and intangible) are stated at cost of acquisition or construction, development, net of tax/duty credit availed if any, including any cost attributable for bringing the assets to its working condition for its intended use, less depreciation, amortization and impairment, if any (except freehold land).
ii) Capital expenditure
Assets under erection/installation are shown as "Capital work in progress", expenditure during construction period are shown as "pre-operative expenses" to be capitalized on erection/installations of the assets.
e. Depreciation:
Depreciation on fixed assets is provided in the manner specified in Schedule II to the Companies Act, 2013. Depreciation of an asset is the difference between original cost / revalued amount and the estimated residual value, is charged to the statement of profit and loss over the useful life of an asset on written down value method. The estimated useful life of assets and estimated residual value is taken as prescribed under Schedule II to the Companies Ac, 2013. Depreciation on addition/ disposal of assets has been provided on pro rata basis with reference to date of addition / disposal. Depreciation on assets disposed /discarded is charged up to the date on which such asset is sold.
Intangible assets - computer software are amortized over a period of 3/5 years.
f. Borrowing cost:
Borrowing cost attributable to the acquisition and constructions of qualifying assets are capitalized as part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to statement of profit and loss.
g. Valuation of inventories:
Inventories are valued at lower of cost or net realizable value, except by-product/scrap is valued at net realizable value. Cost of inventory is arrived at by using moving average price method. Cost of inventory is generally comprises of cost of purchases, cost of conversion and other cost incurred in bringing the inventories to their present location and condition. The excise duty in respect of closing inventory of realizable by products is included as cost of the product.
h. Government grant:
Government grants and subsidies from Government are recognized when there is reasonable certainty that the grant/ subsidy will be received and all attaching conditions will be complied with. Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire capital assets are presented by deducting them from the carrying value of the assets. The grant is recognized as income over the life of a depreciable asset by way of a reduced depreciation charge. Government grants in the nature of promoter''s contribution like investment subsidy, where no repayment is ordinarily expected in respect thereof, are treated as capital reserve.
i. Investment:
Investment are valued at cost of acquisition. In case of long term investments, no provision is made for diminution in the value of investments, where, in the opinion of the Board of Directors such diminution is temporary.
Current investments are stated at lower of cost or market/fair value. j. Foreign currency transaction:
(i) All transactions in foreign currency are recorded at the rates of the exchange prevailing on the dates when the relevant transactions took place; any gain/ loss on account of the fluctuations in the rate of exchange is recognized in the statement of profit and loss.
(ii) Monetary items in the form of loans, current assets and current liabilities in foreign currencies at the close of the year are converted in the Indian currency at the appropriate rate of exchange prevailing on the dates of the Balance Sheet. Resultant gain or loss on account of fluctuation in the rate of exchange is recognized in the statement of profit and loss.
(iii) In respect of the Forward Exchange Contracts entered into to hedge foreign currency risks, the difference between the forward rate and exchange rate at the inception of the contract is recognized as income or expense over the life of the contract.
k. Employee benefits
(i) Post-employment benefit plans
(a) Defined contribution plan - contributions to provident fund and family pension fund are accrued in accordance with applicable statute and deposited with appropriate authorities.
(b) Defined benefit plan
(i) The liability in respect of leave encashment is determined using actuarial valuation carried out as at balance sheet date. Actuarial gains and losses are recognized in full in statement of profit and loss for the year in which they occur.
(ii) The company has opted for scheme with Life Insurance Corporation of India to cover its liabilities towards employees'' gratuity. The annual premium paid to Life Insurance Corporation of India is charged to statement of profit and loss. The company also carries out actuarial valuation of gratuity using projected unit credit method as required by Accounting Standard 15 "Employee Benefits" (Revised 2005) and difference between fair value of plan assets and liability as per actuarial valuation as at year end is recognized in statement of profit and loss.
(ii) Short term employee benefits:
The undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered by employees is recognized during the period when the employees render the services. These benefits include compensated absence also.
l. Provision, contingent liabilities and contingent Asset:
Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is possible that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.
m. Taxes on Income:
Provision for current tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.
Deferred tax is recognized on the timing difference, being the difference between taxable income and the accounting income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.
Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.
n. Segment accounting:
Following accounting policies have been followed by the company for segment reporting:
(i) The company has disclosed business segment as the primary segment. Segments have been identified taking into account the type of products, the differing risk and returns and the internal reporting system. The various segments identified by the company comprised as under:
Name of segment Comprised of
Trading - Trading in oil, castor seeds and other commodities
Infrastructure - Storage, agri warehousing, wind energy
Others - Manufacturing of soaps and other activities
By products, scrap related to each segment have been included in respective segment.
(ii) Segment revenue, segment results, segment assets and segment liabilities includes respective amounts directly identified with the segment and also an allocation on reasonable basis of amounts not directly identified. The expenses which are not directly relatable to the business segment are shown as un- allocable corporate cost. Assets and liabilities that cannot be allocated between the segments are shown as un- allocable corporate assets and liabilities respectively. Inter segment revenue are recognized at sale price.
o. Leases:
(i) As a Lessee
Leases, where risk and reward of ownership, are significantly retained by the lessor are classified as operating leases and lease rental thereon are charged to the statement of profit and loss over the period of lease.
(ii) As a Lessor
Asset subject to operating leases are included in fixed asset. Lease income is recognized in the statement of profit and loss on straight line basis over the lease term. Cost including depreciation are recognized as an expenses in the statement of profit and loss. Initial direct costs such as legal cost, brokerage cost etc. recognized immediately in the statement of profit and loss.
p. Impairment of assets:
The carrying amount of assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/ external factors.
An asset is impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. An impairment loss recognized in prior period is reversed if there has been an indication that impairment loss recognized for an asset no longer exists or may have decreased.
q. Cash flow statement:
Cash Flows are reported using indirect method, whereby profit (loss) before extraordinary items and tax is adjusted for the effect of transactions of non-cash nature and any deferrals or accruals of the past or future cash receipts or payments. The cash flow from operating, investing and financial activities of the company are segregated based on the available information.
Mar 31, 2015
A) Basis of Accounting
The Accounts have been prepared in accordance with the historical cost
convention. The financial statements are prepared as a going concern
under the historical cost convention on an accrual basis of accounting
in accordance with the Generally Accepted Accounting Principles (GAAP)
in India.
These financial statements have been prepared to comply in all material
aspects with the Accounting Standards notified under Rule 7 of the
Companies (Accounts) Rules, 2014 in respect of section 133 of the
Companies Act, 2013 and other recognized accounting practices and
policies.
b) Use of Estimates
The preparation and presentation of financial statements requires
estimates and assumptions to be made that affect the reported amounts
of assets and liabilities on the date of financial statements and the
reported amounts of revenue and expenses during the reported period.
The difference between actual results and estimates are recognized in
the period in which the results are known/materialize.
c) Revenue recognition
The Company follows mercantile system of the accounting and recognizes
income and expenditure on accrual basis except those with significant
uncertainties.
Sales revenue is recognized on transfer of the significant risks and
rewards of ownership of the goods to the buyer and stated net of sales
tax, VAT, trade discounts and rebates but includes excise duty.
Income from services is recognized as they are rendered based on
arrangement/agreement with the concern customers.
The Export incentives are accounted for on accrual basis taking into
account certainty of realization and its subsequent utilization.
Interest income is recognized on time proportion basis.
d) Fixed Assets
i) Fixed Assets
Fixed assets (Tangible and Intangible) are stated at cost of
acquisition or construction, development, net of tax/duty credit
availed if any, including any cost attributable for bringing the assets
to its working condition for its intended use, less depreciation,
amortization and impairment, if any (except freehold land).
ii) Capital Expenditure
Assets under erection/installation are shown as "Capital work in
progress", Expenditure during construction period are shown as
"pre-operative expenses" to be capitalized on erection/installations of
the assets.
e) Depreciation and amortisation
Depreciation on fixed assets is provided in the manner specified in
Schedule II to the Companies Act, 2013. Depreciation of an asset is the
difference between Original cost /revalued amount and the estimated
residual value, is charged to the statement of profit and loss over the
useful life of an asset on written down value method. The estimated
useful life of assets and estimated residual value is taken as
prescribed under Schedule II to the Companies Ac, 2013.
Depreciation on addition/disposal of assets has been provided on pro
rata basis with reference to date of addition/ disposal. Depreciation
on assets disposed/discarded is charged upto the date on which such
asset is sold.
Intangible assets - Computer software are amortized over a period of 5
years
f) Borrowing cost
Borrowing cost attributable to the acquisition and constructions of
qualifying assets are capitalized as part of the cost of such asset up
to the date when such asset is ready for its intended use. Other
borrowing costs are charged to statement of Profit and Loss.
g) Valuation of inventories
Inventories are valued at lower of cost or net realizable value, except
by-product/scrap is valued at net realizable value. Cost of inventory
is arrived at by using Moving Average Price Method. Cost of inventory
is generally comprises of cost of purchases, cost of conversion and
other cost incurred in bringing the inventories to their present
location and condition. The excise duty in respect of closing
inventory of realizable by products is included as cost of the product.
k) Government Grant
Government grants and subsidies from Government are recognized when
there is reasonable certainty that the grant/ subsidy will be received
and all attaching conditions will be complied with. Government grants
whose primary condition is that the Company should purchase, construct
or otherwise acquire capital assets are presented by deducting them
from the carrying value of the assets. The grant is recognized as
income over the life of a depreciable asset by way of a reduced
depreciation charge. Government grants in the nature of promoter's
contribution like investment subsidy, where no repayment is ordinarily
expected in respect thereof, are treated as capital reserve.
l) Investment
Investment are valued at cost of acquisition. In case of long term
investments, no provision is made for diminution in the value of
investments, where, in the opinion of the Board of Directors such
diminution is temporary.
Current Investments are stated at lower of cost or market/fair value.
m) Foreign currency transaction
a) All transactions in foreign currency are recorded at the rates of
the exchange prevailing on the dates when the relevant transactions
took place; any gain/ loss on account of the fluctuations in the rate
of exchange is recognized in the statement of Profit and Loss.
b) Monetary items in the form of loans, current assets and current
liabilities in foreign currencies at the close of the year are
converted in the Indian currency at the appropriate rate of exchange
prevailing on the dates of the Balance Sheet. Resultant gain or loss on
account of fluctuation in the rate of exchange is recognized in the
statement of Profit and Loss.
c) In respect of the Forward Exchange Contracts entered into to hedge
foreign currency risks, the difference between the Forward Rate and
Exchange Rate at the inception of the contract is recognized as income
or expense over the life of the contract. Further, the exchange
difference arising on such contracts are recognized as income or
expense along with the exchange difference on the underlying assets/
liabilities.
n) Employee Benefits
(a) Post-employment benefit plans
i) Defined Contribution Plan - Contributions to Provident Fund and
Family Pension fund are accrued in accordance with applicable statute
and deposited with appropriate authorities.
ii) Defined Benefit Plan
a. The liability in respect of leave encashment is determined using
actuarial valuation carried out as at Balance Sheet date. Actuarial
gains and losses are recognized in full in Statement of Profit and Loss
for the year in which they occur.
b. The Company has opted for scheme with Life Insurance Corporation of
India to cover its liabilities towards employees' gratuity. The annual
premium paid to Life Insurance Corporation of India is charged to
Statement of Profit and Loss. The Company also carries out actuarial
valuation of gratuity using Projected Unit Credit Method as required by
Accounting Standard 15 "Employee Benefits" (Revised 2005) and
difference between fair value of plan assets and liability as per
actuarial valuation as at year end is recognized in Statement of Profit
and Loss.
(b) Short term employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange for services rendered by employees is recognized
during the period when the employees render the services. These
benefits include compensated absence also.
o) Provision, Contingent Liabilities and Contingent Asset
Provision involving substantial degree of estimation in measurement are
recognized when there is a present obligation as a result of past
events and it is possible that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
financial statements. Contingent assets are neither recognized nor
disclosed in the financial statements.
p) Taxes on Income
Provision for Current Tax is the amount of tax payable on taxable
income for the year as determined in accordance with the provisions of
the Income Tax Act, 1961.
Deferred tax is recognized on the timing difference, being the
difference between taxable income and the accounting income for the
year and quantified using the tax rates and laws enacted or
substantively enacted as on the balance sheet date.
Deferred tax assets are recognized and carried forward to the extent
that there is a reasonable certainty that sufficient future taxable
income will be available against which such deferred tax asset can be
realized.
q) Segment Accounting
Segment Accounting Policies:- Following accounting policies have been
followed by the company for segment reporting.
(1) The Company has disclosed business segment as the primary segment.
Segments have been identified taking into account the type of products,
the differing risk and returns and the internal reporting system. The
various segments identified by the Company comprised as under:
Name of Segment Comprised of
Oils - Manufacturing and trading of Oils and Vanaspati
Other Commodities - Trading of other Commodities
Infrastructure - Storage, Agri Warehousing, Wind Energy
Others - Manufacturing of Soaps, other activities
By products related to each segment have been included in respective
segment.
(2) Segment revenue, segment results, segment assets and segment
liabilities includes respective amounts directly identified with the
segment and also an allocation on reasonable basis of amounts not
directly identified. The expenses which are not directly relatable to
the business segment are shown as un- allocable corporate cost. Assets
and liabilities that cannot be allocated between the segments are shown
as un- allocable corporate assets and liabilities respectively. Inter
segment revenue are recognized at sale price.
r) Leases
a) As a Lessee
Leases, where risk and reward of ownership, are significantly retained
by the lessor are classified as operating leases and lease rental
thereon are charged to the statement of profit and loss over the period
of lease.
b) As a Lessor
Asset subject to operating leases are included in Fixed Asset, lease
income is recognized in the statement of profit and loss on straight
line basis over the lease term. Cost including depreciation are
recognized as an expenses in the statement of profit and loss. Initial
direct costs such as legal cost, brokerage cost etc. recognized
immediately in the statement of profit and loss.
s) Impairment of Assets
The carrying amount of assets are reviewed at each Balance Sheet date,
if there is any indication of impairment based on internal/ external
factors.
An asset is impaired when the carrying cost of asset exceeds its
recoverable value. An impairment loss is charged to the statement of
profit and loss in the year in which an asset is identified as
impaired. An impairment loss recognized in prior period is reversed if
there has been an indication that impairment loss recognized for an
asset no longer exists or may have decreased.
t) Cash Flow Statement
Cash Flows are reported using indirect method, whereby Profit (loss)
before extraordinary items and tax is adjusted for the effect of
transactions of non-cash nature and any deferrals or accruals of the
past or future cash receipts or payments. The Cash Flow from Operating,
Investing and Financial activities of the Company are segregated based
on the available information.
Mar 31, 2014
A) Basis of Accounting
The Accounts have been prepared in accordance with the historical cost
convention. The financial statements are prepared as a going concern
under the historical cost convention on an accrual basis of accounting
in accordance with the Generally Accepted Accounting Principles (GAAP),
Accounting Standards Issued by the Institute of Chartered Accountants
of India, as applicable, and the relevant provisions of the Companies
Act, 1956.
b) Use of Estimates
The preparation and presentation of financial statements requires
estimates and assumptions to be made that affect the reported amounts
of assets and liabilities on the date of financial statements and the
reported amounts of revenue and expenses during the reported period.
The difference between actual results and estimates are recognized in
the period in which the results are known / materialized.
c) Revenue recognition
The Company follows mercantile system of the accounting and recognises
income and expenditure on accrual basis except those with significant
uncertainties.
Sales revenue is recognised on transfer of the significant risks and
rewards of ownership of the goods to the buyer and stated net of sales
tax, VAT, trade discounts and rebates but includes excise duty.
Income from services is recognised as they are rendered based on
arrangement / agreement with the concern customers.
The Export incentives are accounted for on accrual basis taking into
account certainty of realisation and its subsequent
utilisation.
Interest income is recognised on time proportion basis.
d) Fixed Assets
i) Fixed Assets
Fixed assets (Tangible and Intangible) are stated at cost of
acquisition or construction, development, net of tax / duty credit
availed if any, including any cost attributable for bringing the assets
to its working condition for its intended use, less depreciation,
amortization and impairment, if any (except freehold land).
ii) Capital Expenditure
Assets under erection/installation are shown as "Capital work in
progress", Expenditure during construction period are shown as
"pre-operative expenses" to be capitalized on erection/installations of
the assets.
e) Depreciation
Depreciation on fixed assets is provided on written down value method
at the rates and in the manner specified in Schedule XIV of the
Companies Act, 1956. Depreciation on assets added/disposed off during
the year has been provided on pro-rata basis with reference to the date
of addition / disposal, except for low value items costing Rs. 5,000/- or
less are written off fully in the year of purchase. Premium on Lease
hold land is amortized over the period of lease. Intangible assets -
Computer software are amortized over its useful life.
f) Borrowing cost
Borrowing cost attributable to the acquisition and constructions of
qualifying assets are capitalised as part of the cost of such asset up
to the date when such asset is ready for its intended use. Other
borrowing costs are charged to statement of Profit and Loss as an
expenses in the year in which they are incurred.
g) Valuation of inventories
Inventories are valued at lower of cost or net realisable value, except
by-product/scrap is valued at net realisable value. Cost of inventory
is arrived at by using Moving Average Price Method. Cost of inventory
of finished goods and work in progress is generally comprises of cost
of purchases, cost of conversion and other cost incurred in bringing
the inventories to their present location and condition. The excise
duty in respect of closing inventory of realizable by products is
included as cost of the product.
h) Government Grant
Government grants and subsidies from Government are recognized when
there is reasonable certainty that the grant / subsidy will be received
and all attaching conditions will be complied with. Government grants
whose primary condition is that the Company should purchase , construct
or otherwise acquire capital assets are presented by deducting them
from the carrying value of the assets. The grant is recognized as
income over the life of a depreciable asset by way of a reduced
depreciation charge. Government grants in the nature of promotor''s
contribution like investment subsidy, where no repayment is ordinarily
expected in respect thereof, are treated as capital reserve.
i) Investment
Investment are valued at cost of acquisition. In case of long term
investments, no provision is made for diminution in the value of
investments, where, in the opinion of the Board of Directors such
diminution is temporary. Current Investments are stated at lower of
cost or market/fair value.
j) Foreign currency transaction
a) All transactions in foreign currency are recorded at the rates of
the exchange prevailing on the dates when the relevant transactions
took place; any gain/ loss on account of the fluctuations in the rate
of exchange is recognized in the statement of Profit and Loss.
b) Monetary items in the form of loans, current assets and current
liabilities in foreign currencies at the close of the year are
converted in the Indian currency at the appropriate rate of exchange
prevailing on the dates of the Balance Sheet. Resultant gain or loss on
account of fluctuation in the rate of exchange is recognized in the
statement of Profit and Loss .
c) In respect of the Forward Exchange Contracts entered into to hedge
foreign currency risks, the difference between the Forward Rate and
Exchange Rate at the inception of the contract is recognized as income
or expense over the life of the contract. Further, the exchange
difference arising on such contracts are recognized as income or
expense along with the exchange difference on the underlying assets/
liabilities.
k) Employee Benefits.
(a) Post-employment benefit plans
i) Defined Contribution Plan - Contributions to Provident Fund and
Family Pension fund are accrued in
accordance with applicable statute and deposited with appropriate
authorities. ii) Defined Benefit Plan
a. The liability in respect of leave encashment is determined using
actuarial valuation carried out as at Balance Sheet date. Actuarial
gains and losses are recognized in full in Statement of Profit and Loss
for the year in which they occur.
b. The Company has opted for scheme with Life Insurance Corporation of
India to cover its liabilities towards employees gratuity. The annual
premium paid to Life Insurance Corporation of India is charged to
Statement of Profit and Loss. The Company also carries out actuarial
valuation of gratuity using Projected Unit Credit Method as required by
Accounting Standard 15 "Employee Benefits" (Revised 2005) and
difference between fair value of plan assets and liability as per
actuarial valuation as at year end is recognized in Statement of Profit
and Loss.
(b) Short term employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange for services rendered by employees is recognized
during the period when the employees render the services. These
benefits include compensated absence also.
l) Provision, Contingent Liabilities and Contingent Asset
Provision involving substantial degree of estimation in measurement are
recognized when there is a present obligation as a result of past
events and it is possible that there will be an outflow of resources .
Contingent liabilities are not recognized but are disclosed in the
Financial statements. Contingent assets are neither recognized nor
disclosed in the financial statements.
m) Taxes on Income
Provision for Current Tax is the amount of tax payable on taxable
income for the year as determined in accordance with the provisions of
the Income Tax Act, 1961.
Deferred tax is recognised on the timing difference, being the
difference between taxable income and the accounting income for the
year and quantified using the tax rates and laws enacted or
substantively enacted as on the balance sheet date.
Deferred tax assets are recognised and carried forward to the extent
that there is a reasonable certainty that sufficient future taxable
income will be available against which such deferred tax asset can be
realized.
n) Segment Accounting
Segment Accounting Policies :- Following accounting policies have been
followed by the company for segment reporting.
(1) The Company has disclosed business segment as the primary segment.
Segments have been identified taking into account the type of products,
the differing risk and returns and the internal reporting system. The
various segments identified by the Company comprised as under :
Name of Segment Comprised of
Oils  Manufacturing and trading of Oils and Vanaspati
Other Commodities  Trading of other commodity
Infrastructure  Storage, Agri Warehousing, Wind Energy
Others  Manufacturing of Soaps, other.
By products related to each segment have been included in respective
segment.
(2) Segment revenue, segment results, segment assets and segment
liabilities includes respective amounts directly identified with the
segment and also an allocation on reasonable basis of amounts not
directly identified. The expenses which are not directly relatable to
the business segment are shown as un-allocable corporate cost. Assets
and liabilities that cannot be allocated between the segments are shown
as un-allocable corporate assets and liabilities respectively. Inter
segment revenue are recognised at sale price.
o) Impairment of Assets
The carrying amount of assets are reviewed at each Balance Sheet date,
if there is any indication of impairment based on internal/ external
factors.
An asset is impaired when the carrying cost of asset exceeds its
recoverable value. An impairment loss is charged to the statement of
profit and loss in the year in which an asset is identified as
impaired. An impairment loss recognized in prior period is reversed if
there has been an indication that impairment loss recognised for an
asset no longer exists or may have decreased.
p) Leases
a) As a Lessee
Leases, where risk and reward of ownership, are significantly retained
by the lessor are classified as operating leases and lease rental
thereon are charged to the statement of profit and loss over the period
of lease.
b) As a Lessor
Assets subject to operating leases are included in fixed assets, lease
income is recognized in the statement of profit and loss on straight
line basis over the lease term. Cost including depreciation are
recognized as an expenses in the statement of profit and loss. Initial
direct costs such as legal cost, brokerage cost etc. recognized
immediately in the statement of profit and loss account.
q) Cash Flow Statement
Cash Flows are reported using indirect method, whereby Profit ( loss )
before extraordinary items and tax is adjusted for the effect of
transactions of non cash nature and any deferrals or accruals of the
past or future cash receipts or payments. The Cash Flow from Operating
, Investing and Financial activities of the Company are segregated
based on the available information.
Mar 31, 2013
A) Basis of Accounting
The financial statements are prepared as a going concern under the
historical cost convention on an accrual basis of accounting in
accordance with the Generally Accepted Accounting Principles (GAAP),
Accounting Standards Issued by the Institute of Chartered Accountants
of India, as applicable, and the relevant provisions of the Companies
Act, 1956.
b) Use of Estimates
The preparation and presentation of financial statements requires
estimates and assumptions to be made that affect the reported amounts
of assets and liabilities on the date of financial statements and the
reported amounts of revenue and expenses during the reported period.
The difference between actual results and estimates are recognized in
the period in which the results are known / materialize.
c) Revenue recognition
The Company follows mercantile system of the accounting and recognises
income and expenditure on accrual basis except those with significant
uncertainties.
Sales revenue is recognised on transfer of the significant risks and
rewards of ownership of the goods to the buyer and stated net of sales
tax, VAT, trade discounts and rebates but includes excise duty.
Income from services is recognised as they are rendered based on
arrangement / agreement with the concern customers.
The Export incentives are accounted for on accrual basis taking into
account certainty of realisation and its subsequent utilisation.
Interest income is recognised on time proportion basis.
d) Fixed Assets
i) Fixed Assets
Fixed assets (Tangible and Intangible) are stated at cost of
acquisition or construction, development, net of tax /duty credit
availed if any, including any cost attributable for bringing the assets
to its working condition for its intended use, less depreciation,
amortization and impairment, if any (except freehold land).
ii) Capital Expenditure
Assets under erection/installation are shown as "Capital work in
progress", Expenditure during construction period are shown as
"pre-operative expenses" to be capitalized on erection/installations of
the assets.
e) Depreciation
Depreciation on fixed assets is provided on written down value method
at the rates and in the manner specified in Schedule XIV of the
Companies Act, 1956. Depreciation on assets added/disposed off during
the year has been provided on pro-rata basis with reference to the date
of addition / disposal, except for low value items costing Rs. 5,000/- or
less are written off fully in the year of purchase. Premium on Lease
hold land is amortized over the period of lease.
Intangible assets - Computer software are amortized over its useful
life.
f) Borrowing cost
Borrowing cost attributable to the acquisition and constructions of
qualifying assets are capitalised as part of the cost of such asset up
to the date when such asset is ready for its intended use. Other
borrowing costs are charged to statement of Profit and Loss.
g) Valuation of inventories
Inventories are valued at lower of cost or net realisable value, except
by-product/scrap is valued at net realisable value. Cost of inventory
is arrived at by using Moving Average Price Method. Cost of inventory
of finished goods and work-in- progress generally comprises of cost of
purchases, cost of conversion and other cost incurred in bringing the
inventories to their present location and condition. The excise duty in
respect of closing inventory of realisable by products is included as
cost of the product.
k) Government Grant
Government grants and subsidies from Government are recognised when
there is reasonable certainity that the grant / subsidy will be
received and all attaching conditions will be complied with. Government
grants whose primary condition is that the Company should purchase,
construct or otherwise acquire capital assets are presented by
deducting them from the carrying value of the assets. The grant is
recognized as income over the life of a depreciable asset by way of a
reduced depreciation charge. Government grants in the nature of
promotor''s contribution like investment subsidy, where no repayment is
ordinarily expected in respect thereof, are treated as capital reserve.
l) Investment
Investment are valued at cost of acquisition. In case of long term
investments, no provision is made for diminution in the value of
investments, where, in the opinion of the Board of Directors such
diminution is temporary.
Current Investments are stated at lower of cost or market/fair value.
m) Foreign currency transaction
a) All transactions in foreign currency are recorded at the rates of
the exchange prevailing on the dates when the relevant transactions
took place; any gain/ loss on account of the fluctuations in the rate
of exchange is recognized in the statement of Profit and Loss.
b) Monetary items in the form of loans, current assets and current
liabilities in foreign currencies at the close of the year are
converted in the Indian currency at the appropriate rate of exchange
prevailing on the dates of the Balance Sheet. Resultant gain or loss on
account of fluctuation in the rate of exchange is recognized in the
statement of Profit and Loss.
c) In respect of the Forward Exchange Contracts entered into to hedge
foreign currency risks, the difference between the Forward Rate and
Exchange Rate at the inception of the contract is recognized as income
or expense over the life of the contract. Further, the exchange
difference arising on such contracts are recognized as income or
expense along with the exchange difference on the underlying assets/
liabilities.
n) Employee Benefits
a) Post-employment benefit plans
i) Defined Contribution Plan - Contributions to Provident Fund and
Family Pension fund are accrued in accordance
with applicable statute and deposited with appropriate authorities.
ii) Defined Benefit Plan
a. The liability in respect of leave encashment is determined using
actuarial valuation carried out as at Balance Sheet date. Actuarial
gains and losses are recognized in full in Statement of Profit and Loss
for the year in which they occur.
b. The Company has opted for scheme with Life Insurance Corporation of
India to cover its liabilities towards employees gratuity. The annual
premium paid to Life Insurance Corporation of India is charged to
Statement of Profit and Loss. The Company also carries out actuarial
valuation of gratuity using Projected Unit Credit Method as required by
Accounting Standard 15 "Employee Benefits" (Revised 2005) and
difference between fair value of plan assets and liability as per
actuarial valuation as at year end is recognized in Statement of Profit
and Loss.
b) Short term employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange for services rendered by employees is recognized
during the period when the employees render the services. These
benefits include compensated absence also.
o) Provision, Contingent Liabilities and Contingent Asset
Provision involving substantial degree of estimation in measurement are
recognized when there is a present obligation as a result of past
events and it is possible that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
Financial statements. Contingent assets are neither recognized nor
disclosed in the financial statements.
p) Taxes on Income
Provision for Current Tax is the amount of tax payable on taxable
income for the year as determined in accordance with the provisions of
the Income Tax Act, 1961.
Deferred tax is recognised on the timing difference, being the
difference between taxable income and the accounting income for the
year and quantified using the tax rates and laws enacted or
substantively enacted as on the balance sheet date.
Deferred tax assets are recognised and carried forward to the extent
that there is a reasonable certainty that sufficient future taxable
income will be available against which such deferred tax asset can be
realized.
q) Segment Accounting
Segment Accounting Policies :- Following accounting policies have been
followed by the company for segment reporting.
(1) The Company has disclosed business segment as the primary segment.
Segments have been identified taking into account the type of products,
the differing risk and returns and the internal reporting system. The
various segments identified by the Company comprised as under :
Name of Segment Comprised of
Oils  Manufacturing and trading of Oils and Vanaspati
Infrastructure  Storage, Agri Warehousing, Wind Energy
Others  Manufacturing of Soaps and trading of other commodity
By-products related to each segment have been included in respective
segment.
(2) Segment revenue, segment results, segment assets and segment
liabilities includes respective amounts directly identified with the
segment and also an allocation on reasonable basis of amounts not
directly identified. The expenses which are not directly relatable to
the business segment are shown as un-allocable corporate cost. Assets
and liabilities that cannot be allocated between the segments are shown
as un-allocable corporate assets and liabilities respectively. Inter
segment revenue are recognised at sale price.
r) Impairment of Assets
The carrying amount of assets are reviewed at each Balance Sheet date,
if there is any indication of impairment based on internal/ external
factors.
An asset is impaired when the carrying cost of asset exceeds its
recoverable value. An impairment loss is charged to the statement of
profit and loss in the year in which an asset is identified as
impaired. An impairment loss recognized in prior period is reversed if
there has been an indication that impairment loss recognised for an
asset no longer exists or may have decreased.
s) Cash Flow Statement
Cash Flows are reported using indirect method, whereby Profit (loss)
before extraordinary items and tax is adjusted for the effect of
transactions of non-cash nature and any deferrals or accruals of the
past or future cash receipts or payments. The Cash Flow from
Operating, Investing and Financial activities of the Company are
segregated based on the available information.
Mar 31, 2012
A) Accounting Convention
The Accounts have been prepared in accordance with the historical cost
convention.
b) Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reported period. Difference
between the actual results and the estimates are recognized in the
period in which the results are known / materialized.
c) Revenue recognition
The Company follows mercantile system of the accounting and recognises
income and expenditure on accrual basis except those with significant
uncertainties.
d) Fixed Assets
i) Fixed Assets
Fixed assets are stated at cost of acquisition or construction, net of
tax / duty credit availed if any, including any cost attributable for
bringing the assets to its working condition for its intended use, less
depreciation (except freehold land).
ii) Capital Expenditure
Assets under erection/installation and advance given for Capital
Expenditure are shown as "Capital work in progress", Expenditure during
construction period are shown as "pre-operative expenses" to be
capitalized on erection/ installations of the assets.
iii) Leasehold Land
Cost of Lease hold land is amortized over the period of lease.
e) Depreciation
Depreciation on fixed assets is provided on written down value method
at the rates and in the manner specified in Schedule XIV of the
Companies Act, 1956. Depreciation on assets added/disposed off during
the year has been provided on pro-rata basis with reference to the date
of addition / disposal, except for low value items costing Rs.5,000/- or
less are written off fully in the year of purchase.
f) Expenses on issue of Shares
Expenses on issue of shares are charged to profit and loss account.
g) Borrowing cost
Borrowing cost attributable to the acquisition and constructions of
assets are capitalised as part of the cost of such asset up to the date
when such asset is ready for its intended use. Other borrowing costs
are charged to Profit and Loss Account.
h) Premium on Foreign Currency Convertible Bonds (FCCBs)
As a prudent accounting policy, premium payable on the FCCBs even
though contingent upon non conversion of the FCCBs into Equity Shares,
is proportionately charged to the profit and loss account on pro-rata
basis over the life of the FCCBs and the corresponding amount is
included in the outstanding amount of FCCBs shown under Unsecured
Loans. In the event of conversion of FCCBs into Equity Shares the
proportionate amount is written back on pro-rata basis.
i) Valuation of inventories
Inventories are valued at lower of cost or net realisable value, except
by-product/scrap is valued at net realisable value. Cost of inventory
is arrived at by using Moving Average Price Method. Cost of inventory
is generally comprises of cost of purchases, cost of conversion and
other cost incurred in bringing the inventories to their present
location and condition.
j) Export Incentive
The Export incentives are accounted for on accrual basis taking into
account certainty of realisation and its subsequent utilisation.
k) Government Grant
Government grants whose primary condition is that the Company should
purchase, construct or otherwise acquire capital assets are presented
by deducting them from the carrying value of the assets. The grant is
recognized as income over the life of a depreciable asset by way of a
reduced depreciation charge. Government grants in the nature of
promotor's contribution like investment subsidy, where no repayment is
ordinarily expected in respect thereof, are treated as capital reserve.
l) Investment
Investment are valued at cost of acquisition. In case of long term
investments, no provision is made for diminution in the value of
investments, where, in the opinion of the Board of Directors such
diminution is temporary.
Current Investments are stated at lower of cost or market / fair value.
m) Foreign currency transaction
a) All transactions in foreign currency are recorded at the rates of
the exchange prevailing on the dates when the relevant transactions
took place; any gain / loss on account of the fluctuations in the rate
of exchange is recognized in the statement of Profit & Loss.
b) Monetary items in the form of loans, current assets and current
liabilities in foreign currencies at the close of the year are
converted in the Indian currency at the appropriate rate of exchange
prevailing on the dates of the Balance Sheet. Resultant gain or loss on
account of fluctuation in the rate of exchange is recognized in the
statement of Profit & Loss.
c) In respect of the Forward Exchange Contracts entered into to hedge
foreign currency risks, the difference between the Forward Rate and
Exchange Rate at the inception of the contract is recognized as income
or expense over the life of the contract. Further, the exchange
difference arising on such contracts are recognized as income or
expense along with the exchange difference on the underlying assets /
liabilities.
n) Employee Benefits
(a) Post-employment benefit plans
i) Defined Contribution Plan - Contributions to Provident Fund and
Family Pension fund are accrued in accordance with applicable statute
and deposited with appropriate authorities.
ii) Defined Benefit Plan:
a. The liability in respect of leave encashment is determined using
actuarial valuation carried out as at Balance Sheet date. Actuarial
gains and losses are recognized in full in Profit and Loss Account for
the year in which they occur.
b. The Company has opted for scheme with Life Insurance Corporation of
India to cover its liabilities towards employees gratuity. The annual
premium paid to Life Insurance Corporation of India is charged to
Profit and Loss Account. The Company also carries out actuarial
valuation of gratuity using Projected Unit Credit Method as required by
Accounting Standard 15 "Employee Benefits" (Revised 2005) and
difference between fair value of plan assets and liability as per
actuarial valuation as at year end is recognized in Profit and Loss
Account.
(b) Short term employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange for services rendered by employees is recognized
during the period when the employees render the services. These
benefits include compensated absence also.
o) Provision, Contingent Liabilities and Contingent Asset
Provision involving substantial degree of estimation in measurement are
recognized when there is a present obligation as a result of past
events and it is possible that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
Financial statements. Contingent assets are neither recognized nor
disclosed in the financial statements.
p) Taxes on Income
Provision for Current Tax is the amount of tax payable on taxable
income for the year as determined in accordance with the provisions of
the Income Tax Act, 1961.
Deferred tax is recognised on the timing difference, being the
difference between taxable income and the accounting income for the
year and quantified using the tax rates and laws enacted or
substantively enacted as on the balance sheet date.
Deferred tax assets are recognised and carried forward to the extent
that there is a reasonable certainty that sufficient future taxable
income will be available against which such deferred tax asset can be
realized.
q) Segment Accounting
Segment Accounting Policies :-
Following accounting policies have been followed by the company for
segment reporting.
(1) The Company has disclosed business segment as the primary segment.
Segments have been identified taking into account the type of products,
the differing risk and returns and the internal reporting system. The
various segments identified by the Company comprised as under:
Name of Segment Comprised of Oils - Crude Oils, Refined Oils, Vanaspati
Infrastructure - Storage, Agri Warehousing, Wind Energy
Other - Soaps
By products related to each segment have been included in respective
segment.
(2) Segment revenue, segment results, segment assets and segment
liabilities includes respective amounts directly identified with the
segment and also an allocation on reasonable basis of amounts not
directly identified. The expenses which are not directly relatable to
the business segment are shown as unallocable corporate cost. Assets
and liabilities that cannot be allocated between the segments are shown
as unallocable corporate assets and liabilities respectively. Inter
segment revenue are recognised at sale price.
r) Impairment of Assets
The carrying amount of assets are reviewed at each Balance Sheet date,
if there is any indication of impairment based on internal/external
factors.
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the profit and
loss account in the year in which an asset is identified as impaired.
An impairment loss recognised in prior accounting period is reversed if
there has been a change in the estimate of recoverable amount.
s) Cash Flow Statement
Cash Flows are reported using indirect method, whereby Profit (loss)
before extraordinary items and tax is adjusted for the effect of
transactions of non cash nature and any deferrals or accruals of the
past or future cash receipts or payments. The Cash Flow from
Operating, Investing and Financial activities of the Company are
segregated based on the available information.
Mar 31, 2011
A) Accounting Convention
The Accounts have been prepared in accordance with the historical cost
convention.
b) Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reported period. Difference
between the actual results and the estimates are recognized in the
period in which the results are known/materialized.
c) Revenue recognition
The Company follows mercantile system of the accounting and recognises
income and expenditure on accrual basis except those with significant
uncertainties.
d) Fixed Assets
i) Fixed Assets
Fixed assets are stated at cost of acquisition or construction, net of
tax/duty credit availed if any, including any cost attributable for
bringing the assets to its working condition for its intended use, less
depreciation (except freehold land).
ii) Capital Expenditure
Assets under erection/installation and advance given for capital
expenditure are shown as "Capital work in progress".
Expenditure during construction period are shown as "pre-operative
expenses" to be capitalized on erection/ installations of the assets.
iii) Leasehold Land
Cost of Lease hold land is amortized over the period of lease.
e) Depreciation
Depreciation on fixed assets is provided on written down value method
at the rates and in the manner specified in Schedule XIV to the
Companies Act, 1956. Depreciation on assets added/disposed off during
the year has been provided on pro-rata basis with reference to the date
of addition/disposal, except for low value items costing Rs.5,000/- or
less are written off fully in the year of purchase.
f) Expenses on issue of Shares
Expenses on issue of shares are charged to profit and loss account.
g) Expenses on issue of Foreign Currency Convertible Bonds
Expenses on issue of Foreign Currency Convertible Bonds are charged to
profit and loss account over the life of the Bonds.
h) Borrowing cost
Borrowing cost attributable to the acquisition and constructions of
assets are capitalised as part of the cost of such asset up to the date
when such asset is ready for its intended use. Other borrowing costs
are charged to Profit and Loss Account.
i) Premium on Foreign Currency Convertible Bonds (FCCBs)
As a prudent accounting policy, premium payable on the FCCBs even
though contingent upon non conversion of the FCCBs into Equity Shares,
is proportionately charged to the profit and loss account on pro-rata
basis over the life of the FCCBs and the corresponding amount is
included in the outstanding amount of FCCBs shown under Unsecured
Loans. In the event of conversion of FCCBs into Equity Shares the
proportionate amount will be written back on pro-rata basis.
j) Valuation of inventories
Inventories are valued at lower of cost or net realisable value, except
by-product is valued at net realisable value. Cost of inventory is
arrived at by using Moving Average Price Method. Cost of inventory is
generally comprises of cost of purchases, cost of conversion and other
cost incurred in bringing the inventories to their present location and
condition.
k) Export Incentive
The Export incentives are accounted for on accrual basis taking into
account certainty of realisation and its subsequent utilisation.
I) Government Grant
Government grant are recognized when there is reasonable assurance that
the same will be received. Capital grant relating to specific assets
are reduced from the gross value of fixed assets and revenue grants are
recognized in the Profit and Loss Account.
m) Investment
Investment are valued at cost of acquisition. In case of long term
investments, no provision is made for diminution in the value of
investments, where, in the opinion of the Board of Directors such
diminution is temporary.
Current Investments are stated at lower of cost and market/fair value.
n) Foreign currency transaction
a) All transactions in foreign currency are recorded at the rates of
the exchange prevailing on the dates when the relevant transactions
took place; any gain/ loss on account of the fluctuations in the rate
of exchange is recognized in the Profit & Loss Account. In case of the
sale and purchase the same is included in the respective heads.
b) Monetary items in the form of loans, current assets and current
liabilities in foreign currencies at the close of the year are
converted in the Indian currency at the appropriate rate of exchange
prevailing on the dates of the Balance Sheet. Resultant gain or loss
on account of fluctuation in the rate of exchange is recognized in the
Profit & Loss Account.
c) In respect of the Forward Exchange Contracts entered into to hedge
foreign currency risks, the difference between the Forward Rate and
Exchange Rate at the inception of the contract is recognized as income
or expense over the life of the contract. Further, the exchange
difference arising on such contracts are recognized as income or
expense along with the exchange difference on the underlying assets/
liabilities.
o) Employee Benefits
(a) Post-employment benefit plans
i) Defined Contribution Plan - Contributions to Provident Fund and
Family Pension fund are accrued in accordance with applicable statute
and deposited with appropriate authorities.
ii) Defined Benefit Plan
a. The liability in respect of leave encashment is determined using
actuarial valuation carried out as at Balance Sheet date. Actuarial
gains and losses are recognized in full in Profit and Loss Account for
the year in which they occur.
b. The Company has opted for scheme with Life Insurance Corporation of
India to cover its liabilities towards employees gratuity. The annual
premium paid to Life Insurance Corporation of India is charged to
Profit and Loss Account. The Company also carried out actuarial
valuation of gratuity using Projected Unit Credit Method as required by
Accounting Standard 15 "Employee Benefits" (Revised 2005) and
difference between fair value of plan assets and liability as per
actuarial valuation as at year end is recognized in the Profit and Loss
Account.
(b) Short term employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange for services rendered by employees is recognized
during the period when the employees render the services. These
benefits include compensated absence also.
p) Contingent Liabilities
Contingent Liabilities not provided for in the accounts are disclosed
by way of notes.
q) Taxes on Income
Provision for Current Tax is the amount of tax payable on taxable
income for the year as determined in accordance with the provisions of
the Income Tax Act, 1961.
Deferred tax is recognised on the timing difference, being the
difference between taxable income and the accounting income for the
year and quantified using the tax rates and laws enacted or
substantively enacted as on the balance sheet date.
Deferred tax assets are recognised and carried forward to the extent
that there is a reasonable certainty that sufficient future taxable
income will be available against which such deferred tax asset can be
realized.
r) Segment Accounting
Segment Accounting Policies :
Following accounting policies have been followed by the company for
segment reporting.
(1) The Company has disclosed business segment as the Primary Segment.
Segments have been identified taking into account the type of products,
the differing risk and returns and the internal reporting system. The
various segments identified by the Company comprised as under:
Name of Segment Comprised of Oils - Crude Oils, Refined Oils, Vanaspati
Infrastructure - Storage, Agri Warehousing, Wind Energy
Other - Soap
By products related to each segment have been included in respective
segment.
(2) Segment revenue, segment results, segment assets and segment
liabilities includes respective amounts directly identified with the
segment and also an allocation on reasonable basis of amounts not
directly identified. The expenses which are not directly relatable to
the business segment are shown as unallocable corporate cost. Assets
and liabilities that cannot be allocated between the segments are shown
as unallocable corporate assets and liabilities respectively. Inter
segment revenue are recognised at sale price.
s) Impairment of Assets
The carrying amount of assets are reviewed at each Balance Sheet date,
if there is any indication of impairment based on internal/external
factors.
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the profit and
loss account in the year in which an asset is identified as impaired.
An impairment loss recognised in prior accounting period is reversed if
there has been a change in the estimate of recoverable amount.
Mar 31, 2010
A. Basis of Accounting
The accounts have been prepared on the basis of historical cost
convention on accrual basis.
b. Fixed Assets
Fixed assets are stated at cost less depreciation. Costs comprise the
purchase price and any attributable cost of bringing the asset to
working condition for its intended use.
c. Depreciation
The depreciation is provided on Written Down Value method, at the rate
specified in Schedule -XIV of the Companies Act,1956 on pro rata basis
d. Inventories
Inventories are valued at cost or market value, whichever is lower.
Cost is arrived at on Moving Averge Price basis.
e. Sales
Sales are exclusive of excise duty & sales tax.
f. Foreign Exchange Transactions
Foreign Currency Transactions are accounted at the exchange rate
prevailing on the date of the transaction. Year end receivables and
payables are translated at year end rate of exchange except for
transactions covered by forward foreign exchange contracts which are
translated at the contracted rate. In line with the notification dated
31st March, 2009 issued by the Ministry of Corporate Affairs, amending
Accounting Standard AS-11 ÃEffects of Changes in Foreign Exchange
RatesÃ, the Company has chosen to exercise the option under paragraph
46 inserted in the standard by the notification.
Accordingly, exchange differences on long term monetary items related
to Foreign Currency Liabilities and Assets in so far as they are
related to acquisition of Fixed Assets has been added/deducted from the
cost of the relevent fixed assets and depreciation has been charged in
the books of accounts after taking the effect of such changes. In
respect of long term Foreign Currency Monetary Items relating to other
than acquisition of Fixed Assets, the exchange differences are
accumulated in Foreign Currency Monetary Item Translation Difference
Account and amortised over the life of the monetary item but not beyond
31st March 2011.
g. Taxation
Provision for current tax is made on the current tax rates based on
assessable income.
Deferred Tax is provided for by computing the tax effect of timing
differences resulting from the recognition of items in the financial
statements and in estimating current tax provision. h. Employee
Benefits
Employee benefits are recognised in accordance with revised Accounting
Standard 15 as under :
(a) Short term employee benefits are recognised as expense in the
profit and loss account of the year in which service is rendered.
(b) Contribution to defined contribution schemes such as Provident
Fund, Family Pension Fund and Superannuation Fund are charged to the
profit and loss acount.
(c) The defined benefit obligations in respect of gratuity and leave
encashment are recognised on the basis on valuation done by an
independent actury applying Project Unit Credit Method. The acturial
gain / loss arising during the year are recognised in the profit and
loss account of the year.
i. Investments
Current Investments are valued at lower of cost or market value. Long
term investments are valued at cost. No provision is made for
dimunition in value of long term investments if in the opinion of the
Board of Directors, such dimunition is temporary.
j. Expenses on issue of shares
Expenses on issue of shares are either charged to the Profit & Loss
Account or charged to the Share Premium Account.
k. Expenses on issue of Foreign Currency Convertible Bonds
Expenses on issue of Foreign Currency Convertible Bonds is charged to
the Profit & Loss Account over the life of the bonds.
l. Premium on Foreign Currency Convertible Bonds (FCCBÃs)
As a prudent accounting policy, premium payable on the FCCBÃs even
though contingent upon non conversion of the FCCBs into Equity Shares,
is proportionately charged to the Profit and Loss Account on pro-rata
basis over the life of the FCCBs, and the corrosponding amount is
included in the outstanding amount of FCCBs shown under Unsecured
Loans. In the event of conversion of FCCBs into Equity Shares the
proportionate amount will be written back on pro-rata basis.
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