Accounting Policies of Shilp Gravures Ltd. Company
Mar 31, 2018
1. Significant Accounting Policies
1.1 Revenue recognition
Revenue from sale of goods and services is measured at the fair value of the consideration received or receivable, net of estimated customer returns, rebates and other similar allowances.
Sale of goods
Revenue from the sale of goods is recognised the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods and it is probable that the economic benefits associated with the transaction will flow to the Company
Rendering of services
Revenue from rendering of services recognised when services are rendered and related cost are incurred.
Dividend and interest income
Dividend income from investments is recognised when the shareholder''s right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably).
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis.
2.2 Foreign currencies
In preparing the financial statements, transactions in currencies other than the entity''s functional currency are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in profit or loss in the period in which they arise.
3.3 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
3.4 Employee benefits Defined benefit plans
The Company has an obligation towards a defined benefit retirement plan covering eligible employees through Group Gratuity Scheme of Life Insurance Corporation of India. The Company accounts for the liability for the gratuity benefits payable in future based on an independent actuarial valuation carried out using Projected Unit Credit Method considering discounting rate relevant to Government Securities at the Balance Sheet Date.
Defined benefit costs in the nature of current and past service cost and net interest expense or income are recognized in the statement of profit and loss in the period in which they occur. Actuarial gains and losses on measurement is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur and is reflected immediately in retained earnings and not reclassified to profit or loss. Past service cost is recognized in profit and loss in the period of a plan amendment.
Defined Contribution plan
The Company recognize contribution payable to a defined contribution plan as an expenses in the Statement of profit and loss when the employee render services to the Company during the reporting period.
Compensated Absences
Provisions for Compensated Absences and its classifications between current and non-current liabilities are based on independent actuarial valuation. The actuarial valuation is done as per the projected unit credit method as at the reporting date.
Short term employee benefits:
They are recognized at an undiscounted amount in the Statement of Profit and Loss for the year in which the related services are rendered.
3.5 Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax. Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantially enacted by end of reporting periods.
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 that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
3.6 Property, plant and equipment
Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses.
Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes professional fees for qualifying assets, borrowing costs capitalised in accordance with the Company''s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Freehold land is not depreciated.
Fixtures and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is recognised so as to write off the cost of assets (other than freehold land & properties under construction) less their residual values over their useful lives, as indicated in the Companies Act, 2013, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
3.7 Impairment of tangible and intangible assets (other than goodwill)
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
3.8 Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first-in-first-out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
3.9 Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
Contingent liabilities are not recognised but are disclosed in the notes.
Contingent assets are not recognised but are disclosed in the notes where an inflow of economic benefits is probable.
3.10 Financial Instruments
Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
3 .11 Financial assets
Initial recognition and measurement
Financial assets are recognized when the Company becomes a party to the contractual provisions of the instrument. On initial recognition, a financial asset is recognized at fair value. In case of financial assets which are recognized at fair value through profit and loss (FVTPL), its transaction costs are recognized in the Statement of Profit and loss. In other cases, the transaction costs are attributed to the acquisition value of the financial asset.
Subsequent measurement
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Effective interest method
The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. Income is recognized on an effective interest basis for debt instruments other than those financial assets classified as a FVTPL. Interest income is recognized in profit or loss and is included in the "Other Income" line item.
Classification of financial assets:
Financial assets measured at amortized cost
A financial asset is measured at the amortized cost if both the following conditions are met:
a) The Company''s business model objective for managing the financial asset is to hold financial assets in order to collect contractual cash flows, and
b) The Contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
This category applies to cash and bank balances, trade receivables, loans and other financial assets of the Company. Such financial assets are subsequently measured at amortized cost using the effective interest method.
The amortized cost of a financial asset is also adjusted for loss allowances, if any.
Financial assets measured at FVTOCI
A financial asset is measured at FVTOCI if both of the following conditions are met:
a) The Company''s business model objective for managing the financial asset is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal on the principal amount outstanding.
Financial assets measured at FVTPL
A financial asset is measured at FVTPL unless it is measured at amortized cost or at FVTOCI as explained above.
This is a residual category applied to all other investments of the Company. Such financial assets are subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Statement of Profit and Loss. Dividend Income on the investments in equity instruments are recognized as ''other income'' in the Statement of Profit and Loss.
Foreign exchange gains and losses
The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. For foreign currency denominated financial assets measured at amortized cost and FVTPL, the exchange differences are recognized in profit or loss except for those which are designated as hedging instruments in a hedging relationship.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of group of similar financial assets) is derecognized (i.e. removed from the Company''s Balance Sheet) when any of the following occurs:
a) The contractual rights to cash flows from the financial assets expires,
b) The company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;
c) The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a ''pass through'' arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);
d) The Company neither transfer nor retains substantially all risk and rewards of ownership and does not retain control over the financial assets.
In cases where Company has neither transferred nor retained substantially all of the risks and rewards of the financial asset, but retains control of the financial asset, the Company continues to recognize such financial asset to the extent of its continuing involvement in the financial asset; in that case, the Company also recognizes an associated liability.
The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
On derecognition of a financial asset, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.
Impairment of financial assets
The Company applies expected credit losses (ECL) model for recognizing impairment loss on financial assets measured at amortized cost and trade receivables. In case of trade receivables, the Company follows a simplified approach wherein an amount equal to lifetime ECL is measured and recognized as loss allowance. For the purpose of measuring lifetime expected credit loss, for trade receivables, the Company has used a practical expedient as permitted under Ind AS 109. The expected credit loss allowance is computed based on a provision matrix which takes in to account historical credit loss experience and adjusted for forward looking information. For recognition of impairment loss on other financial assets and risk exposure, the company determines whether there has been a significant increase in the credit risk since initial recognition. If the credit risk has not increased significantly, 12 month ECL is used to provide for impairment loss. However, if the credit risk has increased significantly, then the impairment loss is provided based on lifetime ECL. Subsequently, if the credit quality of the financial asset improves such that there is no longer a significant increase in credit risk since initial recognition, the Company reverts to recognizing impairment loss allowance based on 12-month ECL. ECL impairment loss allowance (or reversal) recognized during the period is recognized as income / expenses in the Statement of profit and loss under the head ''Other expense''.
3.12 Financial liabilities and equity instruments
Debt and Equity Instruments:
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instruments.
Equity instruments:
An equity instruments is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities, Equity instruments issued by the Company are recognised at the proceeds received, not of direct issue costs.
Financial Liabilities:
Initial recognition and measurement
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at fair value.
Subsequent measurement
Financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.
Financial liabilities at FVTPL
A financial liability may be designated as at FVTPL upon initial recognition if:
- such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;
- the financial liability whose performance is evaluated on a fair value basis, in accordance with the Company''s documented risk management;
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.
Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in profit or loss.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the closing rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss.
Derecognition of financial liabilities
A financial liability is derecognized 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 between the carrying amount of the financial liability derecognized and the consideration paid is recognized in the Statement of Profit and Loss.
3.13 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
In respect of assets taken on operating lease, lease rentals are recognized as an expense in the Statement of Profit and Loss on straight line basis over the lease term unless another systematic basis is more representative of the time pattern in which the benefit is derived from the leased asset; or the payments to the lessor are structured to increase in the line with expected general inflation to compensate for the lessor''s expected inflationary cost increases.
3.14 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company.
3.15 Fair Value
The Company measures financial instruments at fair value in accordance with the accounting policies mentioned above. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either;
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy that categorized into three levels, described as follows, the inputs to valuation techniques used to measure value. The fair value hierarchy gives the highest priority to quoted prices in active markets for Identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).
Level 1 - quoted (unadjusted) market prices in active markets for identical assets or Liabilities.
Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 - inputs that are unobservable for the asset or liability.
For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorized at the end of each reporting period and discloses the same.
3.16 Earnings Per Share
Basic earnings per share are computed by dividing the profit after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit after tax as adjusted for the effects of dividend interest and other charges relating to the dilutive potential equity shares by weighted average number of shares plus dilutive potential equity shares.
3.17 Significant accounting judgments, estimates and assumptions Significant accounting judgements
The application of the Company''s accounting policies in the preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. The estimates and assumptions are based on historical experience and other factors that are considered to be relevant. The estimates and underlying assumptions are reviewed on an ongoing basis and any revisions thereto are recognized in the period in which they are revised or in the period of revision and future periods if the revision affects both the current and future periods. Actual results may differ from these estimates which could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. Existing circumstances and assumptions about future developments may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
(a) Fair value measurement of financial instruments
When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using ECL model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
(b) Defined benefit plans (gratuity benefits)
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
(c) Provisions and Contingent Liabilities
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. Contingent liabilities are not recognised in the financial statements. The policy for the same has been explained above in note 3.4.
4. First-time adoption - mandatory exceptions and optional exemptions
The Company has adopted Ind AS from 1st April, 2017 and the date of transition to Ind AS is 1st April, 2016. These being the first financial statements in compliance with Ind AS, the impact of transition has been accounted for in opening reserves and comparable periods have been restated in accordance with Ind AS 101 -"First-time Adoption of Indian Accounting Standards". The Company has presented a reconciliation of its equity under Previous GAAP to its equity under Ind AS as at 1st April, 2016 and 31st March, 2017 and of the total comprehensive income for the year ended 31st March, 2017 as required by Ind AS 101 in Note 49 to the financial statements.
Following are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.
(a) Deemed cost for property, plant and equipment
The Company has elected to continue with the carrying value of all of its plant and equipment, investment property, and intangible assets recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
(b) Classification and measurements of financial assets
The classification of financial assets to be measured at amortised cost or fair value through other comprehensive income is made on the basis of the facts and circumstances that existed on the date of transition to Ind AS.
(c) Derecognition of financial assets and financial liabilities
The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2016 (the transition date).
(d) Impairment of financial assets
The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.
Mar 31, 2016
1. BACKGROUND OF THE COMPANY
Shilp Gravures Limited is a public limited company, incorporated in the year 1993 under the provisions of the Companies Act, 1956. The Company has set up, the first gravure roller manufacturing house in India. The Company is engaged in engraving of rollers using three different engraving technologies i.e. electronic, laser and chemical etching. The engraved rollers are used in printing and packaging industries.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"). The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
2.2 Use of Estimates
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.
2.3 Inventories
Raw materials, packing materials, stores, spares and consumables are valued at lower of cost (net of refundable taxes and duties) or net realizable value. The cost of these items of inventory comprises of cost of purchase and other incidental costs incurred to bring the inventories to their present location and condition.
Work in progress and finished goods are valued at lower of cost or net realizable value. The cost of work in process and finished goods includes cost of conversion and other costs incurred to bring the inventories to their present location and condition.
Cost of inventories is determined on "First In First Out" basis.
Exide Duty in respect of finished goods lying in factory premises are provided for and included in valuation of inventory.
2.4 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
2.5 Cash flow statement
Cash flows are reported using the indirect method, whereby loss before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
2.6 Depreciation and amortization
Dependable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depredation on tangible fixed assets has been provided on the straight-line method as per the useful lives of assets as prescribed in Schedule II to the Companies Act, 2013.
2.7 Revenue Recognition Sale of Goods
Sales are recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax.
Income from services
Revenues from contracts priced on a time and material basis are recognized when services are rendered and related costs are incurred.
Other Income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. Dividend income from investments is recognized when the shareholders'' rights to receive payment have been established.
2.8 Tangible Fixed Assets
Fixed assets are stated at cost of acquisition / construction less accumulated depredation, amortization and impairment loss (if any). Cost comprises of purchase price, import duties and other non-refundable taxes or levies and any directly attributable cost to bring the assets ready for its intended use.
Direct expenses, as well as pro rata identifiable indirect expenses on projects during the year of construction are capitalized. Capital assets under erection / installation are stated in the Balance Sheet as "Capital Work in Progress."
2.9 Foreign Currency Transactions Initial Recognition
Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.
Measurement of foreign currency monetary items at Balance Sheet Date
Foreign currency monetary items (other than derivative contracts) of the Company, outstanding at the balance sheet date are restated at the year-end rates. Non-monetary items of the Company are carried at historical cost.
Treatment of Exchange Differences
Exchange differences arising on settlement / restatement of foreign currency monetary assets and liabilities of the Company are recognized as income or expense in the Statement of Profit and Loss.
2.10 Investments
Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments includes acquisition charges such as brokerage, fees and duties.
2.11 Employee Benefits Defined contribution plans
The Company''s contribution to provident fund is considered as defined contribution plans and is charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.
Defined benefit plans
For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested and otherwise is amortized on a straight-line basis over the average period until the benefits become vested.
Long-term employee benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognized as a liability at the present value of the defined benefit obligation as at the balance sheet.
2.12 Borrowing Costs
Borrowing costs include interest, amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan.
2.13 Segment Reporting Policy
The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organization and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit / loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.
Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors.
Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities".
2.14 Operating Lease
Leases where the lessor effectively retains substantially all the risks and benefits of the leased items are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss accounts on a straight-line basis over the lease term.
2.15 Earnings Per Share
Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date.
2.16 Provision for Tax
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws.
Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. Deferred tax assets arising from carry forward losses and unabsorbed depredation, are recognized and carried forward only to the extent that there is a virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
2.17 Impairment of assets
The carrying values of assets at each balance sheet date are reviewed for impairment if any indication of impairment exists.
If the carrying amount of the assets exceeds the estimated recoverable amount, an impairment is recognized for such excess amount. The impairment loss is recognized as an expense in the Statement of Profit and Loss, unless the asset is carried at revalued amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the extent a revaluation reserve is available for that asset.
The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.
When there is indication that an impairment loss recognized for an asset (other than a revalued asset) in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss. In case of revalued assets such reversal is not recognized.
2.18 Provisions and Contingencies
A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are not recognized in the financial statements.
Mar 31, 2015
1. BACKGROUND OF THE COMPANY
Shilp Gravures Limited is a public limited company, incorporated in the
year 1993 under the provisions of the Companies Act, 1956. Its shares
are listed on the Bombay Stock Exchange since 1995. The Company has set
up, the first gravure roller manufacturing house in India. The Company
is engaged in engraving of rollers using three different engraving
technologies i.e. electronic, laser and chemical etching. The engraved
rollers are using in printing and packaging industries.
2.1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant provisions of the
Companies Act, 2013 ("the 2013 Act"). The financial statements have
been prepared on accrual basis under the historical cost convention.
The accounting policies adopted in the preparation of the financial
statements are consistent with those followed in the previous year.
2.2 Use of Estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognized in the periods in which
the results are known / materialize.
2.3 Inventories
Raw materials, packing materials, stores, spares and consumables are
valued at lower of cost (net of refundable taxes and duties) or net
realizable value. The cost of these items of inventory comprises of
cost of purchase and other incidental costs incurred to bring the
inventories to their present location and condition.
Work in progress and finished goods are valued at lower of cost or net
realizable value. The cost of work in process and finished goods
includes cost of conversion and other costs incurred to bring the
inventories to their present location and condition.
Cost of inventories is determined on "First In First Out" basis.
Excise Duty in respect of finished goods lying in factory premises are
provided for and included in valuation of inventory.
2.4 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
2.5 Cash flow statement
Cash flows are reported using the indirect method, whereby loss before
extraordinary items and tax is adjusted for the effects of transactions
of non-cash nature and any deferrals or accruals of past or future cash
receipts or payments. The cash flows from operating, investing and
financing activities of the Company are segregated based on the
available information.
2.6 Depreciation and amortization
Depreciable amount for assets is the cost of an asset, or other amount
substituted for cost, less its estimated residual value. Depreciation
on tangible fixed assets has been provided on the straight-line method
as per the useful life prescribed in Schedule II to the Companies Act,
2013.
2.7 Revenue Recognition
Sale of Goods
Sales are recognized, net of returns and trade discounts, on transfer
of significant risks and rewards of ownership to the buyer, which
generally coincides with the delivery of goods to customers. Sales
include excise duty but exclude sales tax and value added tax.
Income from services
Revenues from contracts priced on a time and material basis are
recognized when services are rendered and related costs are incurred.
Other Income
Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate applicable.
Dividend income from investments is recognized when the shareholders'
rights to receive payment have been established.
2.8 Fixed Assets
Fixed assets are stated at cost of acquisition / construction less
accumulated depreciation, amortization and impairment loss (if any).
Cost comprises of purchase price, import duties and other
non-refundable taxes or levies and any directly attributable cost to
bring the assets ready for its intended use.
Direct expenses, as well as pro rata identifiable indirect expenses on
projects during the year of construction are capitalized.
Capital assets under erection / installation are stated in the Balance
Sheet as "Capital Work in Progress."
2.9 Intangible Fixed Assets
Intangible assets are stated at cost of acquisition / cost incurred
less accumulated amortization and impairment loss, if any.
2.10 Foreign Currency Transactions
Initial Recognition
Transactions in foreign currencies entered into by the Company are
accounted at the exchange rates prevailing on the date of the
transaction or at rates that closely approximate the rate at the date
of the transaction.
Measurement of foreign currency monetary items at Balance Sheet Date
Foreign currency monetary items (other than derivative contracts) of
the Company, outstanding at the balance sheet date are restated at the
year-end rates. Non-monetary items of the Company are carried at
historical cost.
Treatment of Exchange Differences
Exchange differences arising on settlement / restatement of foreign
currency monetary assets and liabilities of the Company are recognized
as income or expense in the Statement of Profit and Loss.
2.11 Investments
Long-term investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and
fair value. Cost of investments include acquisition charges such as
brokerage, fees and duties.
2.12 Employee Benefits
Defined contribution plans
The Company's contribution to provident fund is considered as defined
contribution plans and is charged as an expense based on the amount of
contribution required to be made and when services are rendered by the
employees.
Defined benefit plans
For defined benefit plans in the form of gratuity fund, the cost of
providing benefits is determined using the Projected Unit Credit
method, with actuarial valuations being carried out at each balance
sheet date. Actuarial gains and losses are recognized in the Statement
of Profit and Loss in the period in which they occur. Past service cost
is recognized immediately to the extent that the benefits are already
vested and otherwise is amortized on a straight-line basis over the
average period until the benefits become vested.
Long-term employee benefits
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related service are recognized as a liability at the present value of
the defined benefit obligation as at the balance sheet.
2.13 Borrowing Costs
Borrowing costs include interest, amortization of ancillary costs
incurred and exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the
loan.
2.14 Segment Reporting Policy
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organization and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit / loss amounts are evaluated regularly by the executive
Management in deciding how to allocate resources and in assessing
performance.
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of their relationship to the operating
activities of the segment.
Inter-segment revenue is accounted on the basis of transactions which
are primarily determined based on market / fair value factors.
Revenue, expenses, assets and liabilities which relate to the Company
as a whole and are not allocable to segments on reasonable basis have
been included under "unallocated revenue / expenses / assets /
liabilities".
2.15 Operating Lease
Leases where the lessor effectively retains substantially all the risks
and benefits of the leased items are classified as operating leases.
Operating lease payments are recognized as an expense in the statement
of profit and loss accounts on a straight-line basis over the lease
term.
2.16 Earnings Per Share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post-tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the profit
/ (loss) after tax (including the post-tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income (net of any attributable taxes) relating to the
dilutive potential equity shares, by the weighted average number of
equity shares considered for deriving basic earnings per share and the
weighted average number of equity shares which could have been issued
on the conversion of all dilutive potential equity shares. Potential
equity shares are deemed to be dilutive only if their conversion to
equity shares would decrease the net profit per share from continuing
ordinary operations. Potential dilutive equity shares are deemed to be
converted as at the beginning of the period, unless they have been
issued at a later date.
2.17 Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the applicable tax rates and the
provisions of the Income Tax Act, 1961 and other applicable tax laws.
Deferred tax is recognized on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantively enacted as at the reporting date. Deferred tax
liabilities are recognized for all timing differences. Deferred tax
assets are recognized for timing differences of items other than
unabsorbed depreciation and carry forward losses only to the extent
that reasonable certainty exists that sufficient future taxable income
will be available against which these can be realized. However, if
there are unabsorbed depreciation and carry forward of losses and items
relating to capital losses, deferred tax assets are recognized only if
there is virtual certainty supported by convincing evidence that there
will be sufficient future taxable income available to realize the
assets. Deferred tax assets and liabilities are offset if such items
relate to taxes on income levied by the same governing tax laws and the
Company has a legally enforceable right for such set off. Deferred tax
assets are reviewed at each balance sheet date for their reliability.
2.18 Impairment of assets
The carrying values of assets at each balance sheet date are reviewed
for impairment if any indication of impairment exists.
If the carrying amount of the assets exceeds the estimated recoverable
amount, an impairment is recognized for such excess amount. The
impairment loss is recognized as an expense in the Statement of Profit
and Loss, unless the asset is carried at revalued amount, in which case
any impairment loss of the revalued asset is treated as a revaluation
decrease to the extent a revaluation reserve is available for that
asset.
The recoverable amount is the greater of the net selling price and
their value in use. Value in use is arrived at by discounting the
future cash flows to their present value based on an appropriate
discount factor.
When there is indication that an impairment loss recognized for an
asset (other than a revalued asset) in earlier accounting periods no
longer exists or may have decreased, such reversal of impairment loss
is recognized in the Statement of Profit and Loss, to the extent the
amount was previously charged to the Statement of Profit and Loss. In
case of revalued assets such reversal is not recognized.
2.19 Provisions and Contingencies
A provision is recognized when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
balance sheet date. These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes. Contingent assets are not recognized in the
financial statements.
Mar 31, 2014
1.1 Basis of accounting and preparation of financial statements
The financial statements have been prepared in accordance with the
Generally Accepted Accounting Principles in India (Indian GAAP) to
comply with the Accounting Standards notified under Section 211(3C) of
the Companies Act, 1956 ("the 1956 Act") (which continue to be
applicable in respect of Section 133 of the Companies Act, 2013 ("the
2013 Act") in terms of General Circular dated 15/2013 dated 13th
September, 2013 of the Ministry of Coorporate Affairs) and the relevant
provisions of the 1956 Act/ 2013 Act, as applicable. The financial
statements have been prepared under the historical cost convention on
an accrual basis. The accounting policies have been consistently
applied by the Company and are consistent with those used in the
previous year.
1.2 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 reporting period. Difference
between the actual result and estimates are recognized in the period in
which the results are known / materialized.
1.3 Tangible Fixed Assets
Fixed assets are stated at cost of acquisition / construction less
accumulated depreciation, amortization and impairment loss (if any).
Cost comprises of purchase price, import duties and other
non-refundable taxes or levies and any directly attributable cost to
bring the assets ready for its intended use.
Direct expenses, as well as pro rata identifiable indirect expenses on
projects during the year of construction are capitalized. Capital
assets under erection / installation are stated in the Balance Sheet as
"Capital Work in Progress."
1.4 Intangible Assets
Intangible assets are stated at cost of acquisition / cost incurred
less accumulated amortization and impairment loss, if any.
1.5 Depreciation / Amortization
All tangible fixed assets, except freehold land, leasehold land and
capital work in progress, are depreciated on a straight line method at
the rates and in the manner prescribed in Schedule XIV of the
Companies'' Act, 1956.
Softwares are amortized over five years.
Purchased goodwill is amortized over a period of five years from the
year in which it is acquired.
1.6 Impairment of Assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the carrying amount of the
company''s each class of the fixed assets. If any indication exists, an
asset''s recoverable amount is estimated. An impairment loss is
recognized whenever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is the greater of the net
selling price and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value based
on an appropriate discount factor. When there is indication that an
impairment loss recognised for an asset in earlier accounting periods
no longer exists or may have decreased, such reversal of impairment
loss is recognised in the Statement of Profit and Loss, except in case
of revalued assets".
1.7 Investments
Current investments are carried at the lower of cost or market value
computed category wise. Long term investments are stated at cost.
Provision for diminution in the value of long term investments is made,
only if, in the opinion of the management, such a decline is regarded
as being other than temporary.
1.8 Inventories
Raw materials, packing materials, stores, spares and consumables are
valued at lower of cost (net of refundable taxes and duties) or net
realizable value. However, material and other items held for use in the
production are not written down below cost, if the finished products in
which it will be incorporated are expected to be sold above cost. The
cost of these items of inventory comprises of cost of purchase and
other incidental costs incurred to bring the inventories to their
present location and condition.
Work in progress and finished goods are valued at lower of cost or net
realizable value. The cost of work in process and finished goods
includes cost of conversion and other costs incurred to bring the
inventories to their present location and condition.
Cost of inventories is determined on "First In First Out" basis except
for MS Pipes, MS Plates and Round Bars for which the cost of
inventories are determined on "Weighted Average" basis.
Excise Duty in respect of finished goods lying in factory premises are
provided for and included in valuation of inventory.
1.9 Revenue Recognition
Revenue from sale of goods is recognized on dispatch of goods to the
customers when significant risk and rewards related to ownership of the
goods is transferred to the buyer and no significant uncertainty exists
regarding its measurability or collectability.
Revenue from sale of services is recognized once the services are
rendered on the basis of completed service contract method and when
there is no significant uncertainty regarding its measurability or
collectability.
Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate applicable.
Dividend income from investments is recognized when the shareholders''
rights to receive payment have been established.
1.10 Foreign Currency Transactions
Transactions denominated in foreign currencies are normally recorded at
the exchange rates prevailing at the date of the transaction.
Monetary items denominated in foreign currencies at the year end are
restated at the year end rates. Non - monetary items are carried at
historical costs.
Exchange difference arising on settlement of foreign currency
transactions or restatement of foreign currency denominated monetary
assets and liabilities are recognized in the Statement of Profit and
Loss.
1.11 Employee Benefits
Defined Contribution Plans:
The Company''s contribution paid / payable for the year to provident
fund, superannuation fund and ESIC are recognized in the Statement of
profit and loss.
Defined Benefit Plan:
The Company''s liabilities towards gratuity and leave encashment are
determined using the projected unit credit method which considers each
period of service as giving rise to an additional unit of benefit
entitlement and measures each unit separately to build up the final
obligation. Past services are recognized on a straight line basis over
the average period until the amended benefits become vested. Actuarial
gain and losses are recognized immediately in the Statement of profit
and loss as income or expense. Obligation is measured at the present
value of estimated future cash flows using a discounted rate that is
determined by reference to market yields at the balance sheet date on
Government bonds where the currency and terms of the Government bonds
are consistent with the currency and estimated terms of the defined
benefit obligation.
All other short-term employee benefits are recognized as an expense at
the undiscounted amount in the Statement of profit and loss of the year
in which the related service is rendered.
1.12 Segment Reporting Policy
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organization and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit / loss amounts are evaluated regularly by the Management in
deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of their relationship to the operating
activities of the segment.
Revenue, expenses, assets and liabilities which relate to the Company
as a whole and are not allocable to segments on reasonable basis have
been included under "unallocated revenue / expenses / assets /
liabilities".
1.13 Borrowing Costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of qualifying assets are capitalized as part
of the cost of such assets. All other borrowing costs are recognized as
expense in the period in which they are incurred.
1.14 Operating Lease
Leases where the lessor effectively retains substantially all the risks
and benefits of the leased items are classified as operating leases.
Operating lease payments are recognized as an expense in the statement
of profit and loss accounts on a straight-line basis over the lease
term.
1.15 Provision for Tax
Tax expenses for a year comprise of current tax and deferred tax.
Provision for current tax is determined based on assessable profits of
the Company as determined under the Income Tax Act, 1961.
Provision for deferred tax is determined based on the effect of timing
difference between the assessable profits under the Income Tax Act and
the profits as per the Statement of Profit and Loss. Deferred tax
assets, other than those from carry forward losses and unabsorbed
depreciation, are recognized only to the extent that there is
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
Deferred tax assets arising from carry forward losses and unabsorbed
depreciation, are recognized and carried forward only to the extent
that there is a virtual certainty that sufficient future taxable income
will be available against which such deferred tax assets can be
realized.
1.16 Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized for when the Company has at present, legal or
contractual obligation as a result of past events, only if it is
probable that an outflow of resources embodying economic benefits will
be required and if the amount involved can be measured reliably.
Contingent liabilities being a possible obligation as a result of past
events, the existence of which will be confirmed only by the occurrence
or non occurrence of one or more future events not wholly in the
control of the Company, are not recognized in the accounts. The nature
of such liabilities and an estimate of its financial effect are
disclosed in the Notes to Financial Statements.
Mar 31, 2013
1.1 Basis of accounting and preparation of financial statements
The financial statements have been prepared in accordance with the
Generally Accepted Accounting Principles in India (Indian GAAP) to
comply with the Accounting Standards notified by the Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
1.2 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 reporting period. Difference
between the actual result and estimates are recognized in the period in
which the results are known / materialized.
1.3 Tangible Fixed Assets
Fixed assets are stated at cost of acquisition / construction less
accumulated depreciation, amortization and impairment loss (if any).
Cost comprises of purchase price, import duties and other
non-refundable taxes or levies and any directly attributable cost to
bring the assets ready for its intended use.
Direct expenses, as well as pro rata identifiable indirect expenses on
projects during the year of construction are capitalized. Capital
assets under erection / installation are stated in the Balance Sheet as
"Capital Work in Progress."
1.4 Intangible Assets
Intangible assets are stated at cost of acquisition / cost incurred
less accumulated amortization.
1.5 Depreciation / Amortization
All tangible fixed assets, except freehold land, leasehold land and
capital work in progress, are depreciated on a straight line method at
the rates and in the manner prescribed in Schedule XIV of the
Companies'' Act, 1956. Softwares are depreciated over five years.
Purchased goodwill is amortized over a period of five years from the
year in which it is acquired.
1.6 Impairment of Assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the carrying amount of the
company''s each class of the fixed assets. If any indication exists, an
asset''s recoverable amount is estimated. An impairment loss is
recognized whenever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is the greater of the net
selling price and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value based
on an appropriate discount factor.
1.7 Investments
Current investments are carried at the lower of cost or market value
computed category wise. Long term investments are stated at cost.
Provision for diminution in the value of long term investments is made,
only if, in the opinion of the management, such a decline is regarded
as being other than temporary.
1.8 Inventories
Raw materials, packing materials, stores, spares and consumables are
valued at lower of cost (net of refundable taxes and duties) or net
realizable value. The cost of these items of inventory comprises of
cost of purchase and other incidental costs incurred to bring the
inventories to their present location and condition.
Work in progress and finished goods are valued at lower of cost or net
realizable value. The cost of work in process and finished goods
includes cost of conversion and other costs incurred to bring the
inventories to their present location and condition.
Cost of inventories is determined on "First In First Out" basis.
Excise Duty in respect of finished goods lying in factory premises are
provided for and included in valuation of inventory.
1.9 Revenue Recognition
Revenue from sale of goods is recognized on dispatch of goods to the
customers when significant risk and rewards of ownership of the goods
is transferred to the buyer and no significant uncertainty exists
regarding its measurability or collectability.
Revenue from sale of services is recognized once the services are
rendered on the basis of completed service contract method and when
there is no significant uncertainty regarding its measurability or
collectability. Interest income is accrued on a time basis, by
reference to the principal outstanding and at the effective interest
rate applicable.
Dividend income from investments is recognized when the shareholders''
rights to receive payment have been established.
1.10 Foreign Currency Transactions
Transactions denominated in foreign currencies are normally recorded at
the exchange rates prevailing at the date of the transaction.
Monetary items denominated in foreign currencies at the year end are
restated at the year end rates. Non  monetary items are carried at
historical costs.
Exchange difference arising on settlement of foreign currency
transactions or restatement of foreign currency denominated monetary
assets and liabilities are recognized in the Statement of Profit and
Loss.
1.11 Employee Benefits Defined Contribution Plans:
The Company''s contribution paid / payable for the year to provident
fund, superannuation fund and ESIC are recognized in the Statement of
profit and loss.
Defined Benefit Plan:
The Company''s liabilities towards gratuity and leave encashment are
determined using the projected unit credit method which considers each
period of service as giving rise to an additional unit of benefit
entitlement and measures each unit separately to build up the final
obligation. Past services are recognized on a straight line basis over
the average period until the amended benefits become vested. Actuarial
gain and losses are recognized immediately in the Statement of profit
and loss as income or expense. Obligation is measured at the present
value of estimated future cash flows using a discounted rate that is
determined by reference to market yields at the balance sheet date on
Government bonds where the currency and terms of the Government bonds
are consistent with the currency and estimated terms of the defined
benefit obligation. All other short-term employee benefits are
recognized as an expense at the undiscounted amount in the Statement of
profit and loss of the year in which the related service is rendered.
1.12 Segment Reporting Policy
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organization and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit / loss amounts are evaluated regularly by the Management in
deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of their relationship to the operating
activities of the segment.
Revenue, expenses, assets and liabilities which relate to the Company
as a whole and are not allocable to segments on reasonable basis have
been included under "unallocated revenue / expenses / assets /
liabilities".
1.13 Borrowing Costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of qualifying assets are capitalized as part
of the cost of such assets. All other borrowing costs are recognized as
expense in the period in which they are incurred.
1.14 Operating Lease
Leases where the lessor effectively retains substantially all the risks
and benefits of the leased items are classified as operating leases.
Operating lease payments are recognized as an expense in the statement
of profit and loss accounts on a straight-line basis over the lease
term.
1.15 Provision for Tax
Tax expenses for a year comprise of current tax and deferred tax.
Provision for current tax is determined based on assessable profits of
the Company as determined under the Income Tax Act, 1961.
Provision for deferred tax is determined based on the effect of timing
difference between the assessable profits under the Income Tax Act and
the profits as per the Statement of Profit and Loss. Deferred tax
assets, other than those from carry forward losses and unabsorbed
depreciation, are recognized only to the extent that there is
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
Deferred tax assets arising from carry forward losses and unabsorbed
depreciation, are recognized and carried forward only to the extent
that there is a virtual certainty that sufficient future taxable income
will be available against which such deferred tax assets can be
realized.
1.16 Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized for when the Company has at present, legal or
contractual obligation as a result of past events, only if it is
probable that an outflow of resources embodying economic benefits will
be required and if the amount involved can be measured reliably.
Contingent liabilities being a possible obligation as a result of past
events, the existence of which will be confirmed only by the occurrence
or non occurrence of one or more future events not wholly in the
control of the Company, are not recognized in the accounts. The nature
of such liabilities and an estimate of its financial effect are
disclosed in the Notes to Financial Statements.
Contingent assets are neither recognized nor disclosed in the financial
statements.
Mar 31, 2012
1.1 Accounting Convention
The financial statements are prepared under the historical cost
convention on the "Accrual Concept" of accountancy in accordance with
the accounting principles generally accepted in India and comply with
the accounting standards issued by the Institute of Chartered
Accountants of India to the extent applicable and with the relevant
provisions of the Companies Act, 1956.
1.2 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 reporting period. Difference
between the actual result and estimates are recognized in the period in
which the results are known / materialized.
1.3 Tangible Fixed Assets
Fixed assets are stated at cost of acquisition / construction less
accumulated depreciation, amortization and impairment loss (if any).
Cost comprises of purchase price, import duties and other
non-refundable taxes or levies and any directly attributable cost to
bring the assets ready for its intended use.
Direct expenses, as well as pro rata identifiable indirect expenses on
projects during the year of construction are capitalized.
Capital assets under erection / installation are stated in the Balance
Sheet as "Capital Work in Progress."
1.4 Intangible Assets
Intangible assets are stated at cost of acquisition / cost incurred
less accumulated amortization.
1.5 Depreciation / Amortization
All tangible fixed assets, except freehold land, leasehold land and
capital work in progress, are depreciated on a straight line method at
the rates and in the manner prescribed in Schedule XIV of the
Companies' Act, 1956.
Softwares are depreciated over five years.
Purchased goodwill is amortized over a period of five years from the
year in which it is acquired.
1.6 Impairment of Assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the carrying amount of the
company's each class of the fixed assets. If any indication exists, an
asset's recoverable amount is estimated. An impairment loss is
recognized whenever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is the greater of the net
selling price and value in use. In assessing value in use, the
estimated Future cash flows are discounted to their present value based
on an appropriate discount factor.
1.7 Investments
Current investments are carried at the lower of cost or market value
computed category wise. Long term investments are stated at cost.
Provision for diminution in the value of long term investments is made,
only if, in the opinion of the management, such a decline is regarded
as being other than temporary.
1.8 Inventories
Raw materials, packing materials, stores, spares and consumables are
valued at lower of cost (net of refundable taxes and duties) or net
realizable value. The cost of these items of inventory comprises of
cost of purchase and other incidental costs incurred to bring the
inventories to their present location and condition.
Work in progress and finished goods are valued at lower of cost or net
realizable value. The cost of work in process and finished goods
includes cost of conversion and other costs incurred to bring the
inventories to their present location and condition.
Cost of inventories is determined on "First In First Out" basis.
Excise Duty in respect of finished goods lying in factory premises are
provided for and included in valuation of inventory.
1.9 Revenue Recognition
Revenue from sale of goods is recognized on dispatch of goods to the
customers when significant risk and rewards of ownership of the goods
is transferred to the buyer and no significant uncertainty exists
regarding its measurability or collectability.
Revenue from sale of services is recognized once the services are
rendered on the basis of completed service contract method and when
there is no significant uncertainty regarding its measurability or
collectability.
Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate applicable.
Dividend income from investments is recognized when the shareholders'
rights to receive payment have been established.
1.10 Foreign Currency Transactions
Transactions denominated in foreign currencies are normally recorded at
the exchange rates prevailing at the date of the transaction.
Monetary items denominated in foreign currencies at the year end are
restated at the year end rates. Non à monetary items are carried at
historical costs.
Exchange difference arising on settlement of foreign currency
transactions or restatement of foreign currency denominated monetary
assets and liabilities are recognized in the Statement of Profit and
Loss.
1.11 Employee Benefits
Defined Contribution Plans:
The Company's contribution paid / payable for the year to provident
fund, superannuation fund and ESIC are recognized in the Statement of
profit and loss.
Defined Benefit Plan:
The Company's liabilities towards gratuity and leave encashment are
determined using the projected unit credit method which considers each
period of service as giving rise to an additional unit of benefit
entitlement and measures each unit separately to build up the final
obligation. Past services are recognized on a straight line basis over
the average period until the amended benefits become vested. Actuarial
gain and losses are recognized immediately in the Statement of profit
and loss as income or expense. Obligation is measured at the present
value of estimated future cash flows using a discounted rate that is
determined by reference to market yields at the balance sheet date on
Government bonds where the currency and terms of the Government bonds
are consistent with the currency and estimated terms of the defined
benefit obligation.
All other short-term employee benefits are recognized as an expense at
the undiscounted amount in the Statement of profit and loss of the year
in which the related service is rendered.
1.12 Borrowing Costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of qualifying assets are capitalized as part
of the cost of such assets. All other borrowing costs are recognized as
expense in the period in which they are incurred.
1.13 Provision for Tax
Tax expenses for a year comprise of current tax and deferred tax.
Provision for current tax is determined based on assessable profits of
the Company as determined under the Income Tax Act, 1961.
Provision for deferred tax is determined based on the effect of timing
difference between the assessable profits under the Income Tax Act and
the profits as per the Statement of Profit and Loss. Deferred tax
assets, other than those from carry forward losses and unabsorbed
depreciation, are recognized only to the extent that there is
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
Deferred tax assets arising from carry forward losses and unabsorbed
depreciation, are recognized and carried forward only to the extent
that there is a virtual certainty that sufficient future taxable income
will be available against which such deferred tax assets can be
realized.
1.14 Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized for when the Company has at present, legal or
contractual obligation as a result of past events, only if it is
probable that an outflow of resources embodying economic benefits will
be required and if the amount involved can be measured reliably.
Contingent liabilities being a possible obligation as a result of past
events, the existence of which will be confirmed only by the occurrence
or non occurrence of one or more future events not wholly in the
control of the Company, are not recognized in the accounts. The nature
of such liabilities and an estimate of its financial effect are
disclosed in the Notes to Financial Statements.
Contingent assets are neither recognized nor disclosed in the financial
statements.
Mar 31, 2011
1. Accounting Convention
The financial statements are prepared under the historical cost
convention on the "Accrual Concept" of accountancy in accordance with
the accounting principles generally accepted in India and comply with
the accounting standards issued by the Institute of Chartered
Accountants of India to the extent applicable and with the relevant
provisions of the Companies Act, 1956.
2. 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 reporting period. Difference
between the actual result and estimates are recognized in the period in
which the results are known / materialized.
3. Tangible Fixed Assets
Fixed assets are stated at cost of acquisition / construction less
accumulated depreciation, amortization and impairmentloss (if any).
Cost comprises of purchase price, import duties and other
non-refundable taxes or levies and any directly attributable cost to
bring the assets ready for its intended use.
Direct expenses, as well as pro rata identifiable indirect expenses on
projects during the year of construction are capitalized.
Capital assets under erection / installation are stated in the Balance
Sheet as "Capital Work in Progress."
4. Intangible Assets
Intangible assets are stated at cost of acquisition / cost incurred
less accumulated amortization.
5. Depreciation / Amortization
All tangible fixed assets, except freehold land, leasehold land and
capital work in progress, are depreciated on a straight line method at
the rates and in the manner prescribed in Schedule XIV of the
Companies' Act, 1956.
Softwares are depreciated over five years.
Purchased goodwill is amortized over a period of five years from the
year in which it is acquired.
6. Impairment of Assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the carrying amount of the
company's each class of the fixed assets. If any indication exists, an
asset's recoverable amount is estimated. An impairment loss is
recognized whenever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is the greater of the net
selling price and value in use. In assessing value in use, the
estimated Future cash flows are discounted to their present value based
on an appropriate discount factor.
7. Investments
Current investments are carried at the lower of cost or market value
computed category wise. Long term investments are stated at cost.
Provision for diminution in the value of long term investments is made,
only if, in the opinion of the management, such a decline is regarded
as being other than temporary.
8. Inventories
Raw materials, packing materials, stores, spares and consumables are
valued at lower of cost (net of refundable taxes and duties) or net
realizable value. The cost of these items of inventory comprises of
cost of purchase and other incidental costs incurred to bring the
inventories to their present location and condition.
Work in process and finished goods are valued at lower of cost or net
realizable value. The cost of work in process and finished goods
includes cost of conversion and other costs incurred to bring the
inventories to their present location and condition.
Cost of inventories is determined on "First In First Out" basis.
Excise Duty in respect of finished goods lying in factory premises are
provided for and included in valuation of inventory.
9. Revenue Recognition
Revenue from sale of goods is recognized on dispatch of goods to the
customers when significant risk and rewards of ownership of the goods
is transferred to the buyer and no significant uncertainty exists
regarding its measurability or collectability.
Revenue from sale of services is recognized once the services are
rendered on the basis of completed service contract method and when
there is no significant uncertainty regarding its measurability or
collectability. Interest income is accrued on a time basis, by
reference to the principal outstanding and at the effective interest
rate applicable.
Dividend income from investments is recognized when the shareholders'
rights to receive payment have been established.
10. Foreign Currency Transactions
Transactions denominated in foreign currencies are normally recorded at
the exchange rates prevailing at the date of the transaction.
Monetary items denominated in foreign currencies at the year end are
restated at the year end rates. Non - monetary items are carried at
historical costs.
Exchange difference arising on settlement of foreign currency
transactions or restatement of foreign currency denominated monetary
assets and liabilities are recognized in the Profit and Loss Account.
11. Employee Benefits Defined Contribution Plans:
The Company's contribution paid / payable for the year to provident
fund, superannuation fund and ESIC are recognized in the profit and
loss account.
Defined Benefit Plan:
The Company's liabilities towards gratuity and leave encashment are
determined using the projected unit credit method which considers each
period of service as giving rise to an additional unit of benefit
entitlement and measures each unit separately to build up the final
obligation. Past services are recognized on a straight line basis over
the average period until the amended benefits become vested. Actuarial
gain and losses are recognized immediately in the profit and loss
account as income or expense. Obligation is measured at the present
value of estimated future cash flows using a discounted rate that is
determined by reference to market yields at the balance sheet date on
Government bonds where the currency and terms of the Government bonds
are consistent with the currency and estimated terms of the defined
benefit obligation.
All other short-term employee benefits are recognized as an expense at
the undiscounted amount in the profit and loss account of the year in
which the related service is rendered.
12. Borrowing Costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of qualifying assets are capitalized as part
of the cost of such assets. All other borrowing costs are recognized as
expense in the period in which they are incurred.
13. Provision for Tax
Tax expenses for a year comprise of current tax and deferred tax.
Provision for current tax is determined based on assessable profits of
the Company as determined under the Income Tax Act, 1961.
Provision for deferred tax is determined based on the effect of timing
difference between the assessable profits under the Income Tax Act and
the profits as per the Profit and Loss Account. Deferred tax assets,
other than those from carry forward losses and unabsorbed depreciation,
are recognized only to the extent that there is reasonable certainty
that sufficient future taxable income will be available against which
such deferred tax assets can be realized. Deferred tax assets arising
from carryforward losses and unabsorbed depreciation, are recognized
and carried forward only to the extent that there is a virtual
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized.
14. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized for when the Company has at present, legal or
contractual obligation as a result of past events, only if it is
probable that an outflow of resources embodying economic benefits will
be required and if the amount involved can be measured reliably.
Contingent liabilities being a possible obligation as a result of past
events, the existence of which will be confirmed only by the occurrence
or non occurrence of one or more future events not wholly in the
control of the Company, are not recognized in the accounts. The nature
of such liabilities and an estimate of its financial effect are
disclosed in the Notes to Financial Statements.
Contingent assets are neither recognized nor disclosed in the financial
statements.
Mar 31, 2010
1. Accounting Convention
The financial statements are prepared under the historical cost
convention on the "Accrual Concept" of accountancy in accordance with
the accounting principles generally accepted in India and comply with
the accounting standards issued by the Institute of Chartered
Accountants of India to the extent applicable and with the relevant
provisions of the Companies Act, 1956.
2. 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 reporting period.
Difference between the actual result and estimates are recognized in
the period in which the results are known / materialized.
3. Tangible Fixed Assets
Fixed assets are stated at cost of acquisition / construction less
accumulated depreciation, amortization and impairment loss (if any).
Cost comprises of purchase price, import duties and other non-
refundable taxes or levies and any directly attributable cost to bring
the assets ready for its intended use.
Direct expenses, as well as pro rata identifiable indirect expenses on
projects during the year of construction are capitalized. Capital
assets under erection / installation are stated in the Balance Sheet as
"Capital Work in Progress."
4. Intangible Assets
Intangible assets are stated at cost of acquisition / cost incurred
less accumulated amortization.
5. Depreciation/Amortization
All tangible fixed assets, except freehold land, leasehold land and
capital work in progress, are depreciated on a straight line method at
the rates and in the manner prescribed in Schedule XIV of the
CompaniesAct, 1956.
Softwares are depreciated overfive years.
Purchased goodwill is amortized over a period of five years from the
year in which it is acquired.
6. Impairment of Assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the carrying amount of the
companys each class of the fixed assets. If any indication exists, an
assets recoverable amount is estimated. An impairment loss is
recognized whenever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is the greater of the net
selling price and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value based
on an appropriate discount factor.
7. Investments
Current investments are carried at the lower of cost or market value
computed category wise. Long term investments are stated at cost.
Provision for diminution in the value of long term investments is made,
only if, in the opinion of the management, such a decline is regarded
as being other than temporary.
8. Inventories
Raw materials, packing materials, stores, spares and consumables are
valued at lower of cost (net of refundable taxes and duties) or net
realizable value. The cost of these items of inventory comprises of
cost of purchase and other incidental costs incurred to bring the
inventories to their present location and condition.
Work in progress and finished goods are valued at lower of cost or net
realizable value. The cost of work in process and finished goods
includes cost of conversion and other costs incurred to bring the
inventories to their present location and condition. Cost of
inventories is determined on "First In First Out" basis.
Excise Duty in respect of finished goods lying in factory premises are
provided for and included in valuation of inventory.
9. Revenue Recognition
Revenue from sale of engraved rollers is recognized on dispatch of
goods to customers and when significant risk and rewards of ownership
of the goods is transferred to the buyer.
Revenue from engraving services on rollers supplied by customers is
recognized once the services are rendered on the basis of completed
service contract method.
Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate applicable.
Dividend income from investments is recognized when the shareholders
rights to receive payment have been established.
10. Foreign Currency Transactions
Transactions denominated in foreign currencies are normally recorded at
the exchange rates prevailing at the date of the transaction. Monetary
items denominated in foreign currencies at the year end are restated at
the year end rates. Non - monetary items are carried at historical
costs.
Exchange difference arising on settlement of foreign currency
transactions or restatement of foreign currency denominated monetary
assets and liabilities are recognized in the Profit and Loss Account.
11. Employee Benefits Defined Contribution Plans:
The Companys contribution paid / payable for the year to provident
fund, superannuation fund and ESIC are recognized in the profit and
loss account.
Defined Benefit Plan: The Companys liabilities towards gratuity and
leave encashment are determined using the projected unit credit method
which considers each period of service as giving rise to an additional
unit of benefit entitlement and measures each unit separately to build
up the final obligation. Past services are recognized on a straight
line basis over the average period until the amended benefits become
vested. Actuarial gain and losses are recognized immediately in the
profit and loss account as income or expense. Obligation is measured
at the present value of estimated future cash flows using a discounted
rate that is determined by reference to market yields at the balance
sheet date on Government bonds where the currency and terms of the
Government bonds are consistent with the currency and estimated terms
of the defined benefit obligation. All other short-term employee
benefits are recognized as an expense at the undiscounted amount in the
profit and loss account of the year in which the related service is
rendered.
12. Borrowing Costs
Borrowing costs that are directly attributable to the acquisition,
construction or production of qualifying assets are capitalized as part
of the cost of such assets. All other borrowing costs are recognized as
expense in the period in which they are incurred.
13. Provision for Tax
Tax expenses for a year comprise of current tax and deferred tax.
Provision for current tax is determined based on assessable profits of
the Company as determined under the Income Tax Act, 1961. Provision
for deferred tax is determined based on the effect of timing difference
between the assessable profits under the Income Tax Act and the profits
as per the Profit and Loss Account. Deferred tax assets, other than
those from carry forward losses and unabsorbed depreciation, are
recognized only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. Deferred tax assets arising from
carry forward losses and unabsorbed depreciation, are recognized and
carried forward only to the extent that there is a virtual certainty
that sufficient future taxable income will be available against which
such deferred tax assets can be realized.
14. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized for when the Company has at present, legal or
contractual obligation as a result of past events, only if it is
probable that an outflow of resources embodying economic benefits will
be required and if the amount involved can be measured reliably.
Contingent liabilities being a possible obligation as a result of past
events, the existence of which will be confirmed only by the occurrence
or non occurrence of one or more future events not wholly in the
control of the Company, are not recognized in the accounts. The nature
of such liabilities and an estimate of its financial effect are
disclosed in the Notes to Financial Statements. Contingent assets are
neither recognized nor disclosed in the financial statements.
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