Mar 31, 2015
(i) Basis of preparation of financial statements
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting following
Generally Accepted Accounting Principles in India ('GAAP') and comply
with the relevant Accounting Standards and the relevant provisions
notified under the Companies Act, 2013 to the extent applicable.
(ii) Use of estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent liabilities on the date of the financial statements. Actual
results could differ from those estimates. Any revision to accounting
estimates is recognised prospectively in current and future periods.
(iii) Fixed assets
Fixed assets are carried at cost of acquisition or construction, less
accumulated depreciation. The cost of fixed assets includes freight,
duties (net of VAT), taxes and other incidental expenses that are
directly attributable to bringing assets to their working condition for
their intended use. Intangible Assets are stated at cost of acquisition
net of accumulated depreciation / depletion and impairment loss, if
any.
(iv) Borrowing Cost
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as a part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
(v) Depreciation/Amortisation
Depreciation is provided based on useful life of assets as prescribed
in Schedule II to the Companies Act, 2013.
Leasehold properties are amortised over useful life of the assets as
estimated by management or the period of lease, whichever is lower.
Fixed assets individually costing Rs. 5,000 or less, are depreciated
fully in the year of acquisition.
Goodwill arising on amalgamation is amortised over its estimated useful
life of 5 years.
(vi) Impairment of fixed assets
At each Balance Sheet date, management assesses, using external and
internal sources, whether there is an indication that an asset may be
impaired. An impairment occurs when the carrying value of an asset
exceeds the present value of future cash flows expected to arise from
the continuing use of the asset and its eventual disposal. The
impairment loss to be expensed is determined as the excess of the
carrying amount over the present value as determined above.
(vii) Investments
Long term investments are stated at cost less amount written off where
there is a diminution in value other than temporary. Short term
investments are valued at cost or net realisable value, whichever is
lower.
(viii) Inventories
Year-end inventory of raw materials and stones are carried at cost (net
of VAT, wherever applicable). The carrying cost of raw materials and
stones is appropriately written down when there is a decline in
replacement cost of such materials and the finished products in which
they will be incorporated are expected to be sold below cost.
Year-end inventory of work in progress and finished goods are valued at
the lower of cost and net realisable value. Cost of work in progress
and finished goods comprises of direct material and labour expenses and
an appropriate portion of production overheads incurred in bringing the
inventory to their present location and condition. Fixed production
overheads are allocated on the basis of the production.
In determining cost, first in first out method is used.
Alloys and consumables are charged off to Profit and Loss Account.
(ix) Revenue recognition
Revenue from sale of goods is recognised on transfer of risk and
rewards of ownership of goods to the buyer. Sales are stated exclusive
of sales tax. Excise duty is not applicable to the company. In respect
of contract for sale of goods at prices that are yet to be fixed at the
year end, adjustments to the provisional amount billed to the customers
are recognised based on the year end closing gold rate.
Revenue from job work are recognised on an accrual basis when the
related job work is rendered.
In respect of commodity exchange transactions undertaken by the
company, net gain/loss arising from settlement of such transactions
during the year or restatement of such transactions that are pending
settlement at the year end are recognised in the Profit and Loss
account for the year. In respect of commodity exchange transaction
undertaken on behalf of customers, brokerage received/receivable is
recognised on accrual basis when transactions are entered into on
behalf of the customers.
Third party sales commission is recognised on an accrual basis in
accordance with the terms of the related agreement. Interest is
recognised on time proportion basis.
(x) Employee benefits
The Company's obligation towards various employee benefits have been
recognised as follows:
Short Term Benefits
Cost of non-accumulated compensated absences is recognised when
absences occur. Cost of other short term employee benefits are
recognised on accrual basis based on the terms of employment contract
and other relevant compensation policies followed by the Company.
Post employment benefits
Monthly contribution to Provident Funds, which is defined contribution
scheme, is charged to Profit and Loss account and deposited with the
Regional Provident Fund Authorities on a monthly basis.
The Company's gratuity scheme is a defined benefit plan. The present
value of the obligation under such defined benefit plan is determined
based on actuarial valuation carried out at the year end using the
Projected Unit Credit Method, which recognises each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation. The
obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of obligation under defined benefit plan is based on the market yield
on government securities as at the Balance Sheet date and have maturity
period approximating to the terms of the obligation. Actuarial gains
and losses are recognised immediately in the Profit and Loss Account.
(xi) Operating Leases
Lease rentals for operating leases are recognised as expenses in the
Profit and Loss Account on a straight line basis over the lease term.
(xii) Foreign exchange transactions
Transactions in foreign currency are recognised at the exchange rates
prevailing on the date of the transactions. Year-end monetary assets
and liabilities denominated in foreign currencies, other than those
covered by foreign exchange contracts, are translated at the year-end
foreign exchange rates.
Gain / loss from exchange differences arising on settlement of foreign
currency transaction or translation of year-end monetary assets and
liabilities in foreign currency are recognised in the Profit and Loss
Account for the year.
In case of forward exchange contracts, premium or discounts on such
contracts are amortised over the life of the contract and exchange
differences arising thereon in the reporting period are recognised in
the Profit and Loss Account.
Translation of integral and non integral foreign operation
The company classifies all its foreign operations as either "integral
foreign operations" or "non integral foreign operations".
The financial statements of an integral foreign operation are
translated as if the translations of the foreign operation have been
those of the Company itself.
The assets and liabilities of an non-integral foreign operation are
translated into the reporting currency at the exchange rate prevailing
at the reporting date and their statement of profit and loss are
translated at exchange rates prevailing at the dates of transactions or
weighted average weekly rates, where such rates approximate the
exchange rate at the date of transaction. The exchange difference
arising on translation are accumulated in the foreign currency
translation reserve. On disposal of a non-integral foreign operation,
the accumulated foreign currency translation reserve relating to that
foreign operation is recognized in the statement of profit and loss.
(xiii) Taxation
Income tax expense comprises current taxes (i.e. amount of taxes for
the year determined in accordance with the Income Tax Act, 1961) and
Deferred Tax charge or credit (reflecting the tax effects of timing
differences between accounting income and taxable income for the
period). The Deferred Tax charge or credit and the corresponding
Deferred Tax liabilities or assets are recognised using the tax rates
that have been enacted or substantively enacted by the Balance Sheet
date.
Deferred Tax assets are recognised only to the extent that there is
reasonable certainty that the assets can be realised in future except
for Deferred Tax assets arising from unabsorbed depreciation or
business losses brought forward from prior years that are recognised
only if there is a virtual certainty of realisation of such assets.
Deferred Tax assets are reviewed as at each Balance Sheet date and
written up or down to reflect the amount that is reasonably / virtually
certain (as the case may be) to be realised.
The Company's units, located in Special Economic Zone (SEZ) are
exempted from income tax (current tax) and one unit is partly exempted
till 31st March, 2014 under the provisions of Section 10AA of the
Income Tax Act, 1961. However Minimum Alternate Tax (MAT) is applicable
in the profits derived from units located in Special Economic Zone
(SEZ) w.e.f. 1st April, 2011. Deferred Tax pertaining to the above
units are recognised on timing differences, being the difference
between taxable income and accounting income, that originate in one
period and are capable of reversal in one or more subsequent periods
beyond the periods during which the respective units are exempt from
income tax as aforesaid. Deferred tax assets on unabsorbed depreciation
and / or carry forward of losses are recognised only if there is
virtual certainty that sufficient future taxable income will be
available against which such Deferred Tax assets will be realised. Such
assets are reviewed as at each Balance Sheet date to reassess
realisability thereof.
(xiv) Provisions and contingent liabilities
A provision is recognised in the financial statements when there exists
a present obligation as a result of a past event, the amount of which
can be reliably estimated and it is probable that an outflow of
resources will be required to settle the obligation. Contingent
liability is a possible obligation that arises from past events and the
existence of which will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly within
the control of the Company or is a present obligation that arises from
past events but is not recognised because either it is not probable
that an outflow of resources embodying economic benefits will be
required to settle the obligation, or the amount of the obligation
cannot be reliably estimated.
(xv) Earnings Per Share
Basic Earnings Per Share is computed using the weighted average number
of equity shares outstanding during the period. Diluted earnings per
share is computed using the weighted average number of shares and
dilutive equity equivalent shares outstanding during the period, except
when results would be anti dilutive.
Mar 31, 2014
(i) Basis of preparation of financial statements
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting following
Generally Accepted Accounting Principles in India (''GAAP'') and comply
with the Accounting Standards prescribed by the Companies (Accounting
Standard) Rules, 2006 and the relevant provisions of the Companies
Act., 1956 to the extent applicable.
(ii) Presentation and disclosure of financial statements
During the year end 31st March 2012, the revised Schedule VI notified
under the Companies Act 1956, has become applicable to the company, for
preparation and presentation of its financial statements. The adoption
of revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However,
it has significant impact on presentation and disclosure made in the
financial statements
(iii) Use of estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent liabilities on the date of the financial statements. Actual
results could differ from those estimates. Any revision to accounting
estimates is recognised prospectively in current and future periods.
(iv) Fixed assets
Fixed assets are carried at cost of acquisition or construction, less
accumulated depreciation. The cost of fixed assets includes freight,
duties (net of VAT), taxes and other incidental expenses that are
directly attributable to bringing assets to their working condition for
their intended use.
(v) Borrowing Cost
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as a part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
(vi) Depreciation/ Amortisation
Depreciation on fixed assets is provided under the written down value
method at rates derived from the useful lives of such assets, as
estimated by management. The rates of depreciation so derived are in
line with the rates of depreciation prescribed by Schedule XIV to the
Act.
Leasehold properties are amortised over Useful life of the assets as
estimated by management or the period of lease, whichever is lower.
Fixed assets individually costing Rs 5,000 or less, are depreciated
fully in the year of acquisition.
Goodwill arising on amalgamation is amortised over its estimated useful
life of 5 years.
(vii) Impairment of fixed assets
At each Balance Sheet date, management assesses, using external and
internal sources, whether there is an indication that an asset may be
impaired. An impairment occurs when the carrying value of an asset
exceeds the present value of future cash flows expected to arise from
the continuing use of the asset and its eventual disposal. The
impairment loss to be expensed is determined as the excess of the
carrying amount over the present value as determined above.
(viii) Investments
Long term investments are stated at cost less amount written off, where
there is a diminution in value other than temporary. Short term
investments are valued at cost or net realisable value whichever is
lower.
(ix) Inventories
Year-end inventory of raw materials and stones are carried at cost (net
of VAT, wherever applicable). The carrying cost of raw materials and
stones is appropriately written down when there is a decline in
replacement cost of such materials and the finished products in which
they will be incorporated are expected to be sold below cost.
Year-end inventory of work in progress and finished goods are valued at
the lower of cost and net realisable value. Cost of work in progress
and finished goods comprises of direct material and labour expenses and
an appropriate portion of production overheads incurred in bringing the
inventory to their present location and condition. Fixed production
overheads are allocated on the basis of the production.
In determining cost, first in first out method is used.
Alloys and consumables are charged off to Profit and Loss Account.
(x) Revenue recognition
Revenue from sale of goods is recognised on transfer of risk and
rewards of ownership of goods to the buyer. Sales are stated exclusive
of sales tax. Excise duty is not applicable to the company. In respect
of contract for sale of goods at prices that are yet to be fixed at the
year end, adjustments to the provisional amount billed to the customers
are recognised based on the year end closing gold rate.
Revenue from job work are recognised on an accrual basis when the
related job work is rendered.
In respect of commodity exchange transactions undertaken by the
company, net gain/loss arising from settlement of such transactions
during the year or restatement of such transactions that are pending
settlement at the year end are recognised in the Profit and Loss
account for the year. In respect of commodity exchange transaction
undertaken on behalf of customers, brokerage received/ receivable is
recognised on accrual basis when transactions are entered into on
behalf of the customers.
Third party sales commission is recognised on an accrual basis in
accordance with the terms of the related agreement.
Interest is recognised on time proportion basis.
(xi) Employee benefits
The Company''s obligation towards various employee benefits have been
recognised as follows:
Short Term Benefits
Cost of non-accumulated compensated absences is recognised when
absences occur. Cost of other short term employee benefits are
recognised on accrual basis based on the terms of employment contract
and other relevant compensation policies followed by the Company.
Post employment benefits
Monthly contribution to Provident Funds, which is defined contribution
scheme, is charged to Profit and Loss account and deposited with the
Regional Provident Fund Authorities on a monthly basis.
The Company''s gratuity scheme is a defined benefit plan. The present
value of the obligation under such defined benefit plan is determined
based on actuarial valuation carried out at the year end using the
Projected Unit Credit Method, which recognises each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation. The
obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of obligation under defined benefit plan is based on the market yield
on government securities as at the Balance sheet date and have maturity
period approximating to the terms of the obligation. Actuarial gains
and losses are recognised immediately in the profit and loss account.
(xii) Operating Leases
Lease rentals for operating leases are recognised as expenses in the
Profit and Loss Account on a straight line basis over the lease term.
(xiii) Foreign exchange transactions
Transactions in foreign currency are recognised at the exchange rates
prevailing on the date of the transactions. Year- end monetary assets
and liabilities denominated in foreign currencies, other than those
covered by foreign exchange contracts, are translated at the year-end
foreign exchange rates.
Gain / loss from exchange differences arising on settlement of foreign
currency transaction or translation of year-end monetary assets and
liabilities in foreign currency are recognised in the Profit and Loss
Account for the year.
In case of forward exchange contracts, premium or discounts on such
contracts are amortised over the life of the contract and exchange
differences arising thereon in the reporting period are recognised in
the Profit and Loss Account.
Translation of integral and non integral foreign operation
The company classifies all its foreign operations as either "integral
foreign operations" or "non integral foreign operations".
The financial statements of an integral foreign operation are
translated as if the translations of the foreign operation have been
those of the Company itself.
The assets and liabilities of an non-integral foreign operation are
translated into the reporting currency at the exchange rate prevailing
at the reporting date and their statement of profit and loss are
translated at exchange rates prevailing at the dates of transactions or
weighted average weekly rates, where such rates approximate the
exchange rate at the date of transaction. The exchange difference
arising on translation are accumulated in the foreign currency
translation reserve. On disposal of a non-integral foreign operation,
the accumulated foreign currency translation reserve relating to that
foreign operation is recognized in the statement of profit and loss.
(xiv) Taxation
Income tax expense comprises current taxes (i.e. amount of taxes for
the year determined in accordance with the Income-tax Act, 1961) and
deferred tax charge or credit (reflecting the tax effects of timing
differences between accounting income and taxable income for the
period). The deferred tax charge or credit and the corresponding
deferred tax liabilities or assets are recognised using the tax rates
that have been enacted or substantively enacted by the Balance Sheet
date.
Deferred tax assets are recognised only to the extent that there is
reasonable certainty that the assets can be realised in future except
for deferred tax assets arising from unabsorbed depreciation or
business losses brought forward from prior years that are recognised
only if there is a virtual certainty of realisation of such assets.
Deferred tax assets are reviewed as at each Balance Sheet date and
written up or down to reflect the amount that is reasonably / virtually
certain (as the case may be) to be realised.
The Company''s units, located in Special Economic Zone (SEZ) are
exempted from income tax (current tax) and one unit is partly exempted
till 31st March 2014 under the provisions of section 10AA of the Income
Tax Act, 1961. However Minimum Alternate Tax (MAT) is applicable in
the profits derived from units located in Special Economic Zone (SEZ)
w.e.f. 1st April 2011. Deferred tax pertaining to the above units are
recognised on timing differences, being the difference between taxable
income and accounting income, that originate in one period and are
capable of reversal in one or more subsequent periods beyond the
periods during which the respective units are exempt from income tax as
aforesaid. Deferred tax assets on unabsorbed depreciation and / or
carry forward of losses are recognised only if there is virtual
certainty that sufficient future taxable income will be available
against which such deferred tax assets will be realised. Such assets
are reviewed as at each Balance Sheet date to reassess realisability
thereof.
(xv) Provisions and contingent liabilities
A provision is recognised in the financial statements when there exists
a present obligation as a result of a past event, the amount of which
can be reliably estimated and it is probable that an outflow of
resources will be required to settle the obligation. Contingent
liability is a possible obligation that arises from past events and the
existence of which will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly within
the control of the Company or is a present obligation that arises from
past events but is not recognised because either it is not probable
that an outflow of resources embodying economic benefits will be
required to settle the obligation, or the amount of the obligation
cannot be reliably estimated.
(xvi) Earnings Per Share
Basic earnings per share is computed using the weighted average number
of equity shares outstanding during the period. Diluted earnings per
share is computed using the weighted average number of shares and
dilutive equity equivalent shares outstanding during the period, except
when results would be anti dilutive.
Mar 31, 2013
(I) Basis of preparation of financial statements
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting following
generally accepted accounting principles in India (''GAAP'') and comply
with the Accounting Standards prescribed by the Companies (Accounting
Standard) Rules, 2006 and the relevant provisions of the Companies
Act., 1956 to the extent applicable
(II) Presentation and disclosure of financial statements
During the year ending 31 March 2012, the revised Schedule VI notified
under the Companies Act 1956, has become applicable to the company, for
preparation and presentation of its financial statements. The adoption
of revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However,
it has significant impact on presentation and disclosure made in the
financial statements
(iii) Use of estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent liabilities on the date of the financial statements. Actual
results could differ from those estimates. Any revision to accounting
estimates is recognised prospectively in current and future periods
(iv) Fixed assets
Fixed assets are carried at cost of acquisition or construction, less
accumulated depreciation. The cost of fixed assets includes freight,
duties (net of VAT), taxes and other incidental expenses that are
directly attributable to bringing assets to their working condition for
their intended use
(v) Borrowing Cost
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as a part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue
(vi) Depreciation/ Amortisation
Depreciation on fixed assets is provided under the written down value
method at rates derived from the useful lives of such assets, as
estimated by management. The rates of depreciation so derived are in
line with the rates of depreciation prescribed by Schedule XIV to the
Act Leasehold properties are amortised over useful life of the assets
as estimated by management or the period of lease, whichever is lower
Fixed assets individually costingRs. 5,000 or less, are depreciated fully
in the year of acquisition Goodwill arising on amalgamation is
amortised over its estimated useful life of 5 years
(vii) Impairment of fixed assets
At each Balance Sheet date, management assesses, using external and
internal sources, whether there is an ndication that an asset may be
impaired. An impairment occurs when the carryingvalue of an asset
exceeds the present value of future cash flows expected to arise from
the continuing use of the asset and its eventual disposal. The
impairment loss to be expensed is determined as the excess of the
carrying amount over the present value as determined above
(viii) Investments
Non-current investments are stated at cost less amount written off,
where there is a diminution in value other than temporary. Current
investments are valued at cost or net realisable value whichever is
lower
(ix) Inventories
Year-end inventory of raw materials and stones are carried at cost (net
of VAT, wherever applicable)
The carrying cost of raw materials and stones is appropriately written
down when there is a decline in replacement cost of such materials and
the finished products in which they will be incorporated are expected
to be sold below cost
Year-end inventory of work in progress and finished goods are valued at
lower of cost and net realisable value. Cost of work in progress and
finished goods comprises of direct material and labour expenses and an
appropriate portion of production overheads incurred in bringingthe
inventory to their present location and condition. Fixed production
overheads are allocated on the basis of the production
In determining cost, first in first out method is used
Alloys and consumables are charged off to Profit and Loss Account
(x) Revenue recognition
Revenue from sale of goods is recognised on transfer of risk and
rewards of ownership of goods to the buyer. Sales are stated exclusive
of sales tax. Excise duty is not applicable to the company. In respect
of contract for sale of goods at prices that are yet to be fixed at the
year end, adjustments to the provisional amount billed to the customers
are recognised based on the year end closing gold rate Revenue from job
work are recognised on an accrual basis when the related job work is
rendered
In respect of commodity exchange transactions undertaken by the
company, net gain/loss arising from settlement of such transactions
during the year or restatement of such transactions that are pending
settlement at the year end are recognised in the Profit and Loss
Account for the year. In respect of commodity exchange transaction
undertaken on behalf of customers, brokerage received/ receivable is
recognised on accrual basis when transactions are entered into on
behalf of the customers
Third party sales commission is recognised on an accrual basis in
accordance with the terms of the related agreement nterest is
recognised on time proportion basis
(xi) Employee benefits
The Company''s obligations towards various employee benefits have been
recognised as follows:
Short Term Benefits
Cost of non-accumulated compensated absences is recognised when
absences occur. Cost of other short term employee benefits are
recognised on accrual basis based on the terms of employment contract
and other relevant compensation policies followed by the Company
Post employment benefits
Monthly contribution to Provident Funds, which is defined contribution
scheme, is charged to Profit and Loss account and deposited with the
Regional Provident Fund Authorities on a monthly basis The Company''s
gratuity scheme is a defined benefit plan. The present value of the
obligation under such defined benefit plan is determined based on
actuarial valuation carried out at the year end using the Projected
Unit Credit Method, which recognises each period of service as giving
rise to additional unit of employee benefit entitlement and measures
each unit separately to build up the final obligation. The obligation
is measured at the present value of the estimated future cash flows.
The discount rates used for determining the present value of obligation
under defined benefit plan is based on the market yield on government
securities as at the Balance sheet date and have maturity period
approximating to the terms of the obligation. Actuarial gains and
losses are recognised immediately in the profit and loss account
(xii) Operating Leases
Lease rentals for operating leases are recognised as expenses in the
Profit and Loss Account on a straight line basis over the lease term
(xiii) Foreign exchange transactions
Transactions in foreign currency are recognised at the exchange rates
prevailing on the date of the transactions. Year-end monetary assets
and liabilities denominated in foreign currencies, other than those
covered by foreign exchange contracts, are translated at the year-end
foreign exchange rates Cain / loss from exchange differences arising on
settlement of foreign currency transaction or translation of year- end
monetary assets and liabilities in foreign currency are recognised in
the Profit and Loss Account for the year In case of forward exchange
contracts, premium or discounts on such contracts are amortised over
the life of the contract and exchange differences arising thereon in
the reporting period are recognised in the Profit and Loss Account
Translation of integral and non-integral foreign operation
The company classifies all its foreign operations as either "integral
foreign operations" or "non-integral foreign operations"
The financial statements of an integral foreign operation are
translated as if the translations of the foreign operation have been
those of the Company itself
The assets and liabilities of a non-integral foreign operation are
translated into the reporting currency at the exchange rate prevailing
at the reporting date and their statement of profit and loss are
translated at exchange rates prevailing at the dates of transactions or
weighted average weekly rates, where such rates approximate the
exchange rate at the date of transaction. The exchange differences
arising on translation are accumulated in the foreign currency
translation reserve. On disposal of a non-integral foreign operation,
the accumulated foreign currency translation reserve relating to that
foreign operation is recognized in the statement of profit and loss
(xiv) Taxation
ncome tax expense comprises current taxes (i.e. amount of taxes for the
year determined in accordance with the Income-tax Act, 1961) and
deferred tax charge or credit (reflecting the tax effects of timing
differences between accounting income and taxable income for the
period). The deferred tax charge or credit and the corresponding
deferred tax liabilities or assets are recognised using the tax rates
that have been enacted or substantively enacted by the Balance Sheet
date
Deferred tax assets are recognised only to the extent that there is
reasonable certainty that the assets can be realised in future except
for deferred tax assets arising from unabsorbed depreciation or
business losses brought forward from prior years that are recognised
only if there is a virtual certainty of realisation of such assets.
Deferred tax assets are reviewed as at each Balance Sheet date and
written up or down to reflect the amount that is reasonably / virtually
certain (as the case may be) to be realised
The Company''s units, located in Special Economic Zone (SEZ) are
exempted from income tax (current tax) and one unit is partly exempted
till 31st March 2014 under the provisions of section 10AAof the I ncome
Tax Act, 1961. However Minimum Alternate Tax (MAT) is applicable in the
profits derived from units located in Special Economic Zone (SEZ)
w.e.f. 01.04.2011. Deferred tax pertaining to the above units are
recognised on timing differences, being the difference between taxable
income and accounting income, that originate in one period and are
capable of reversal in one or more subsequent periods beyond the
periods during which the respective units are exempt from income tax as
aforesaid. Deferred tax assets on unabsorbed depreciation and / or
carry forward of losses are recognised only if there is virtual
certainty that sufficient future taxable income will be available
against which such deferred tax assets will be realised. Such assets
are reviewed as at each Balance Sheet date to reassess readability
thereof
(xv) Provisions and contingent liabilities
A provision is recognised in the financial statements when there exists
a present obligation as a result of a past event, the amount of which
can be reliably estimated and it is probable that an outflow of
resources will be required to settle the obligation. Contingent
liability is a possible obligation that arises from past events and the
existence of which will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly within
the control of the Company or is a present obligation that arises from
past events but is not recognised because either it is not probable
that an outflow of resources embodying economic benefits will be
required to settle the obligation, or the amount of the obligation
cannot be reliably estimated
(xvi) Earnings Per Share
Basic earnings per share is computed using the weighted average number
of equity shares outstanding duringthe period. Diluted earnings per
share is computed usingthe weighted average numberof shares and
dilutive equity equivalent shares outstanding duringthe period, except
when results would be anti dilutive
Mar 31, 2012
I) Basis of preparation of financial statements
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting following
generally accepted accounting principles in India ('GAAP') and comply
with the Accounting Standards prescribed by the Companies (Accounting
Standard) Rules, 2006 and the relevant provisions of the Companies
Act., 1956 to the extent applicable.
ii) Presentation and disclosure of financial statements
During the year end 31 March 2012, the revised Schedule VI notified
under the Companies Act 1956, has become applicable to the company, for
preparation and presentation of its financial statements. The adoption
of revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However,
it has significant impact on presentation and disclosure made in the
financial statements. The company has also reclassified the previous
year figures in accordance with requirements applicable in the current
year.
iii) Use of estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent liabilities on the date of the financial statements. Actual
results could differ from those estimates. Any revision to accounting
estimates is recognised prospectively in current and future periods.
iv) Fixed assets
Fixed assets are carried at cost of acquisition or construction, less
accumulated depreciation. The cost of fixed assets includes freight,
duties (net of VAT), taxes and other incidental expenses that are
directly attributable to bringing assets to their working condition for
their intended use.
v) Borrowing Cost
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as a part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
vi) Depreciation/ Amortisation
Depreciation on fixed assets is provided under the written down value
method at rates derived from the useful lives of such assets, as
estimated by management. The rates of depreciation so derived are in
line with the rates of depreciation prescribed by Schedule XIV to the
Act.
Leasehold properties are amortised over Useful life of the assets as
estimated by management or the period of lease, whichever is lower.
Fixed assets individually costing Rs 5,000 or less, are depreciated
fully in the year of acquisition. Goodwill arising on amalgamation is
amortised over its estimated useful life of 5 years.
vii) Impairment of fixed assets
At each Balance Sheet date, management assesses, using external and
internal sources, whether there is an indication that an asset may be
impaired. An impairment occurs when the carrying value of an asset
exceeds the present value of future cash flows expected to arise from
the continuing use of the asset and its eventual disposal. The
impairment loss to be expensed is determined as the excess of the
carrying amount over the present value as determined above.
viii) Investments
Long term investments are stated at cost less amount written off, where
there is a diminution in value other than temporary. Short term
investments are valued at cost or net realisable value whichever is
lower.
ix) Inventories
Year-end inventory of raw materials and stones are carried at cost (net
of VAT, wherever applicable). The carrying cost of raw materials and
stones is appropriately written down when there is a decline in
replacement cost of such materials and the finished products in which
they will be incorporated are expected to be sold below cost.
Year-end inventory of work in progress and finished goods are valued at
the lower of cost and net realisable value. Cost of work in progress
and finished goods comprises of direct material and labour expenses and
an appropriate portion of production overheads incurred in bringing the
inventory to their present location and
condition. Fixed production overheads are allocated on the basis of the
production.
In determining cost, first in first out method is used.
Alloys and consumables are charged off to Profit and Loss Account.
x) Revenue recognition
Revenue from sale of goods is recognised on transfer of risk and
rewards of ownership of goods to the buyer. Sales are stated exclusive
of sales tax. Excise duty is not applicable to the company. In respect
of contract for sale of goods at prices that are yet to be fixed at the
year end, adjustments to the provisional amount billed to the customers
are recognised based on the year end closing gold rate.
Revenue from job work are recognised on an accrual basis when the
related job work is rendered.
In respect of commodity exchange transactions undertaken by the
company, net gain/loss arising from settlement of such transactions
during the year or restatement of such transactions that are pending
settlement at the year end are recognised in the Profit and Loss
account for the year. In respect of commodity exchange transaction
undertaken on behalf of customers, brokerage received/ receivable is
recognised on accrual basis when transactions are entered into on
behalf of the customers.
Third party sales commission is recognised on an accrual basis in
accordance with the terms of the related agreement.
Interest is recognised on time proportion basis.
xi) Employee benefits
The Company's obligation towards various employee benefits have been
recognised as follows:
Short Term Benefits
Cost of non-accumulated compensated absences is recognised when
absences occur. Cost of other short term employee benefits are
recognised on accrual basis based on the terms of employment contract
and other relevant compensation policies followed by the Company.
Post employment benefits
Monthly contribution to Provident Funds, which is defined contribution
scheme, is charged to Profit and Loss account and deposited with the
Regional Provident Fund Authorities on a monthly basis.
The Company's gratuity scheme is a defined benefit plan. The present
value of the obligation under such defined benefit plan is determined
based on actuarial valuation carried out at the year end using the
Projected Unit Credit Method, which recognises each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation. The
obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of obligation under defined benefit plan is based on the market yield
on government securities as at the Balance sheet date and have maturity
period approximating to the terms of the obligation. Actuarial gains
and losses are recognised immediately in the profit and loss account.
xii) Operating Leases
Lease rentals for operating leases are recognised as expenses in the
Profit and Loss Account on a straight line basis over the lease term.
xiii) Foreign exchange transactions
Transactions in foreign currency are recognised at the exchange rates
prevailing on the date of the transactions. Year-end monetary assets
and liabilities denominated in foreign currencies, other than those
covered by foreign exchange contracts, are translated at the year-end
foreign exchange rates.
Gain / loss from exchange differences arising on settlement of foreign
currency transaction or translation of year-end monetary assets and
liabilities in foreign currency are recognised in the Profit and Loss
Account for the year.
In case of forward exchange contracts, premium or discounts on such
contracts are ammortised over the life of the contract and exchange
differences arising thereon in the reporting period are recognised in
the Profit and Loss Account.
Translation of integral and non integral foreign operation
The company classifies all its foreign operations as either "integral
foreign operations" or "non integral foreign operations".
The financial statements of an integral foreign operation are
translated as if the translations of the foreign operation have been
those of the company itself.
The assets and liabilities of an non-integral foreign operation are
translated into the reporting currency at the exchange rate prevailing
at the reporting date and their statement of profit and loss are
translated at exchange rates prevailing at the dates of transactions or
weighted average weekly rates, where such rates approximate the
exchange rate at the date of transaction. The exchange difference
arising on translation are accumulated in the foreign currency
translation reserve. On disposal of a non-integral foreign operation,
the accumulated foreign currency translation reserve relating to that
foreign operation is recognised in the statement of profit and loss.
xiv) Taxation
Income tax expense comprises current and fringe benefit taxes (i.e.
amount of taxes for the year determined in accordance with the
Income-tax Act, 1961) and deferred tax charge or credit (reflecting the
tax effects of timing differences between accounting income and taxable
income for the period). The deferred tax charge or credit and the
corresponding deferred tax liabilities or assets are recognised using
the tax rates that have been enacted or substantively enacted by the
Balance Sheet date. (Fringe benefit tax has been abolished w.e.f. 01
April 2010)
Deferred tax assets are recognised only to the extent that there is
reasonable certainty that the assets can be realised in future except
for deferred tax assets arising from unabsorbed depreciation or
business losses brought forward from prior years that are recognised
only if there is a virtual certainty of realisation of such assets.
Deferred tax assets are reviewed as at each Balance Sheet date and
written up or down to reflect the amount that is reasonably / virtually
certain (as the case may be) to be realised.
The Company's units, located in Special Economic Zone are exempted from
income tax (current tax) till 31 March 2011 under the provisions of
sections 10A and partly exempted till 31 March 2014 under the
provisions of section 10AA of the Income Tax Act, 1961. Deferred tax
pertaining to the above units are recognised on timing differences,
being the difference between taxable income and accounting income, that
originate in one period and are capable of reversal in one or more
subsequent periods beyond the periods during which the respective units
are exempt from income tax as aforesaid. Deferred tax assets on
unabsorbed depreciation and / or carry forward of losses are recognised
only if there is virtual certainty that sufficient future taxable
income will be available against which such deferred tax assets will be
realised. Such assets are reviewed as at each Balance Sheet date to
reassess realisability thereof.
xv) Provisions and contingent liabilities
A provision is recognised in the financial statements when there exists
a present obligation as a result of a past event, the amount of which
can be reliably estimated and it is probable that an outflow of
resources will be required to settle the obligation. Contingent
liability is a possible obligation that arises from past events and the
existence of which will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly within
the control of the Company or is a present obligation that arises from
past events but is not recognised because either it is not probable
that an outflow of resources embodying economic benefits will be
required to settle the obligation, or the amount of the obligation
cannot be reliably estimated.
xvi) Earnings Per Share
Basic earnings per share is computed using the weighted average number
of equity shares outstanding during the period. Diluted earnings per
share is computed using the weighted average number of shares and
dilutive equity equivalent shares outstanding during the period, except
when results would be anti dilutive.
The Company has made an Initial Public Offer (IPO) to issue 12,136,497
Equity Shares of Rs 10 each at Rs 260 each (includes securities premium
of Rs 250 each) in the year 2009-2010. In the year 2010-2011, the
Company has issued and allotted Equity Shares. Out of the fund raised
from IPO amounting to Rs 31,554.89, apart from meeting the IPO expenses
of Rs 2,332.34, the Company has utilised the proceeds of the issue
amounting to Rs 27,877.02 (P.Y. Rs 166,06.79) for setting up and
expansion of manufacturing units, setting up of retail outlets, meeting
working capital requirements and for general corporate purposes upto
the year ended 31 March 2012. The unutilised fund of the issue
amounting to Rs 1,345.98 (P.Y. Rs 12,615.76) has been temporarily
invested in interest bearing liquid instruments including deposit with
banks and investment in mutual funds.
Mar 31, 2011
I) Basis of preparation of financial statements
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting following
generally accepted accounting principles in India ('GAAP') and comply
with the Accounting Standards prescribed by the Companies (Accounting
Standard) Rules, 2006 and the relevant provisions of the Companies
Act., 1956 to the extent applicable.
ii) Use of estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent liabilities on the date of the financial statements. Actual
results could differ from those estimates. Any revision to accounting
estimates is recognised prospectively in current and future periods.
iii) Fixed assets
Fixed assets are carried at cost of acquisition or construction, less
accumulated depreciation. The cost of fixed assets includes freight,
duties (net of VAT), taxes and other incidental expenses that are
directly attributable to bringing assets to their working condition for
their intended use.
iv) Borrowing Cost
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as a part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
v) Depreciation/ Amortisation
Depreciation on fixed assets is provided under the written down value
method at rates derived from the useful lives of such assets, as
estimated by management. The rates of depreciation so derived are in
line with' the rates of depreciation prescribed by Schedule XIV to the
Act.
Leasehold properties are amortised over Useful life of the assets as
estimated by management or the period of lease, whichever is lower.
Fixed assets individually costing Rs. 5,000 or less, are depreciated
fully in the year of acquisition.
Goodwill arising on amalgamation is amortised over its estimated useful
life of 5 years.
vi) Impairment of fixed assets
At each Balance Sheet date, management assesses, using external and
internal sources, whether there is an indication that an asset may be
impaired. An impairment occurs when the carrying value of an asset
exceeds the present value of future cash flows expected to arise from
the continuing use of the asset and its eventual disposal. The
impairment loss to be expensed is determined as the excess of the
carrying amount over the present value as determined above.
vii) Investments .
Long term investments are stated at cost less amount written off, where
there is a diminution in value other than temporary. Short term
investments are valued at cost or net realisable value whichever is
lower.
viii) Inventories
Year-end inventory of raw materials and stones are carried at cost (net
of VAT, wherever applicable). The carrying cost of raw materials and
stones is appropriately written down when there is a decline in
replacement cost of such materials and the finished products in which
they will be incorporated are expected to be sold below cost.
Year-end inventory of work in progress and finished goods are valued at
the lower of cost and net realisable value. Cost of work in progress
and finished goods comprises of direct material and labour expenses and
an appropriate portion of production overheads incurred in bringing the
inventory to their present location and condition. Fixed production
overheads are allocated on the basis of the production.
In determining cost, first in first out method is used.
Alloys and consumables are charged off to Profit and Loss Account.
ix) Revenue recognition
Revenue from sale of goods is recognised on transfer of risk and
rewards of ownership of goods to the buyer. Sales are stated exclusive
of sales tax. Excise duty is not applicable to the company. In respect
of contract for sale of goods at prices that are yet to be fixed at the
year end, adjustments to the provisional amount billed to the customers
are recognised based on the year end closing gold rate.
Revenue from job work are recognised on an accrual basis when the
related job work is rendered.
In respect of commodity exchange transactions undertaken by the
company, net gain/loss arising from settlement of such transactions
during the year or restatement of such transactions that are pending
settlement at the year end are recognised in the Profit and Loss
account for the year. In respect of commodity exchange transaction
undertaken on behalf of customers, brokerage received/ receivable is
recognised on accrual basis when transactions are entered into on
behalf of the customers.
Third party sales commission is recognised on an accrual basis in
accordance with the terms of the related agreement.
Interest is recognised on time proportion basis.
x) Employee benefits
' The Company's obligation towards various employee benefits have been
recognised as follows:
Short Term Benefits
Cost of non-accumulated compensated absences is recognised when
absences occur. Cost of other short term employee benefits are
recognised on accrual basis based on the terms of employment contract
and other relevant compensation policies followed by the Company.
Post employment benefits
Monthly contribution to Provident Funds, which is defined contribution
scheme, is charged to Profit and Loss account and deposited with the
Regional Provident Fund Authorities on a monthly basis.
The Company's gratuity scheme is a defined benefit plan. The present
value of the obligation under such defined benefit plan is determined
based on actuarial valuation carried out at the year end using the
Projected Unit Credit Method, which recognises each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation. The
obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of obligation under defined benefit plan is based on the market yield
on . government securities as at the Balance sheet date and have
maturity period approximating to the terms of the obligation. Actuarial
gains and losses are recognised immediately in the profit and loss
account.
xi) Operating Leases
Lease rentals for operating leases are recognised as expenses in the
Profit and Loss Account on a straight line basis over the lease term.
xii) Foreign exchange transactions
Transactions in foreign currency are recognised at the exchange rates
prevailing on the date of the
transactions. Year-end monetary assets and liabilities denominated in
foreign currencies, other than those covered by foreign exchange
contracts, are translated at the year-end foreign exchange rates.
Gain / loss from exchange differences arising on settlement of foreign
currency transaction or translation of year-end monetary assets and
liabilities in foreign currency are recognised in the Profit and Loss
Account for the year.
In case of forward exchange contracts, premium or discounts on such
contracts are ammortised over the life of the contract and exchange
differences arising thereon in the reporting period are recognised in
the : Profit and Loss Account.
xiii) Taxation
Income tax expense comprises current and fringe benefit taxes (i.e.
amount of taxes for the year determined in accordance with the
Income-tax Act, 1961) and deferred tax charge or credit (reflecting the
tax effects of timing differences between accounting income and taxable
income for the period). The deferred tax charge or credit and the
corresponding deferred tax liabilities or assets are recognised using
the tax rates that have been enacted or substantively enacted by the
Balance Sheet date. (Fringe benefit tax has been abolished w.e.f. 01
April 2010.
Deferred tax assets are recognised only to the extent that there is
reasonable certainty that the assets can be realised in future except
for deferred tax assets arising from unabsorbed depreciation or
business losses brought forward from prior years that are recognised
only if there is a virtual certainty of realisation of such assets.
Deferred tax assets are reviewed as at each Balance Sheet date and
written up or down to reflect the amount that is reasonably / virtually
certain (as the case may be) to be realised.
The Company's units, located in Special Economic Zone are exempted from
income tax (current tax) till 31 March 2011 under the provisions of
sections 10A and partly exempted till 31 March 2024 under the
provisions of section 10AA of the Income Tax Act, 1961. Deferred tax
pertaining to the above units are * recognised on timing differences,
being the difference between taxable income and accounting income, that
- originate in one period and are capable of reversal in one or more
subsequent periods beyond the periods during which the respective units
are exempt from income tax as aforesaid. Deferred tax assets on
unabsorbed depreciation and / or carry forward of losses are recognised
only if there is virtual certainty that . sufficient future taxable
income will be available against which such deferred tax assets will be
realised. Such assets are reviewed as at each Balance Sheet date to
reassess realisability thereof.
xiv) Provisions and contingent liabilities
A provision is recognised in the financial statements when there exists
a present obligation as a result of a past event, the amount of which
can be reliably estimated and it is probable that an outflow of
resources will be required to settle the obligation. Contingent
liability is a possible obligation that arises from past events and the
existence of which will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly within
the control of the Company or is a present obligation that arises from
past events but is not recognised because either it is not probable
that an outflow of resources embodying economic benefits will be
required to settle the obligation, or the amount of the obligation
cannot be reliably estimated.
xv) Earnings Per Share
Basic earnings per share is computed using the weighted average number
of equity shares outstanding during the period. Diluted earnings per
share is computed using the weighted average number of shares and
dilutive equity equivalent shares outstanding during the period, except
when results would be anti dilutive.
* Secured by first charge on the fixed assets of the Company to the
extent of 1.25 times of the value of non convertible debentures.
** Buyer's Credit and Gold taken on Loan are secured by lien on fixed
deposits.
*** Demand loan facility is secured by way of first charge on inventory
and book debts / current assets.
**** Post Shipment Credit is secured by first pari passu charge on the
current assets, present and future excluding assets having specific
charge of respective financing banks."
***** Vehicle loans are secured by hypothecation of the vehicles
purchased from the proceeds of the loans.
The above loans include Rs. 36,349.79 (Previous Year Rs. 28,902.78)
repayable within 1 year.
Mar 31, 2010
I) Basis of preparation of financial statements
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting following
generally accepted accounting principles in India (GAAP) and comply
with the Accounting Standards prescribed by the Companies (Accounting
Standard) Rules, 2006 and the relevant provisions of the Companies Act,
1956 to the extent applicable.
ii) Use of estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent liabilities on the date of the financial statements. Actual
results could differ from those estimates. Any revision to accounting
estimates is recognised prospectively in current and future periods.
iii) Fixed assets
Fixed assets are carried at cost of acquisition or construction, less
accumulated depreciation. The cost of fixed assets includes freight,
duties (net of VAT), taxes and other incidental expenses that are
directly attributable to bringing assets to their working condition for
their intended use.
iv) Borrowing Cost
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as a part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
v) Depreciation/ Amortisation
Depreciation on fixed assets is provided under the written down value
method at rates derived from the useful lives of such assets, as
estimated by management. The rates of depreciation so derived are in
line with the rates of depreciation prescribed by Schedule XIV to the
Act.
Leasehold properties are amortised over Useful life of the assets as
estimated by management or the period of lease, whichever is lower.
Fixed assets individually costing Rs. 5,000 or less, are depreciated
fully in the year of acquisition. Goodwill arising on amalgamation is
amortised over its estimated useful life of 5 years.
vi) Impairment of fixed assets
At each Balance Sheet date, management assesses, using external and
internal sources, whether there is an indication that an asset may be
impaired. An impairment occurs when the carrying value of an asset
exceeds the present value of future cash flows expected to arise from
the continuing use of the asset and its eventual disposal. The
impairment loss to be expensed is determined as the excess of the
carrying amount over the present value as determined above.
vii) Investments
Long term investments are stated at cost less amount written off, where
there is a diminution in value other than temporary.
viii) Inventories
Year-end inventory of raw materials and stones are carried at cost (net
of VAT, wherever applicable). The carrying cost of raw materials and
stones is appropriately written down when there is a decline in
replacement cost of such materials and the finished products in which
they will be incorporated are expected to be sold below cost.
Year-end inventory of work in progress and finished goods are valued at
the lower of cost and net realisable value. Cost of work in progress
and finished goods comprises of direct material and labour expenses and
an appropriate portion of production overheads incurred in bringing the
inventory to their present location and condition. Fixed production
overheads are allocated on the basis of the production.
In determining cost, first in first out method is used.
Alloys and consumables are charged off to Profit and Loss Account.
ix) Revenue recognition
Revenue from sale of goods is recognised on transfer of risk and
rewards of ownership of goods to the buyer. Sales are stated exclusive
of sales tax. Excise duty is not applicable to the Company. In respect
of contract for sale of goods at prices that are yet to be fixed at the
year end, adjustments to the provisional amount billed to the customers
are recognised based on the year end closing gold rate.
Revenue from job work are recognised on an accrual basis when the
related job work is rendered.In respect of commodity exchange
transactions undertaken by the Company, net gain/loss arising from
settlement of such transactions during the year or restatement of such
transactions that are pending settlement at the year end are recognised
in the Profit and Loss account for the year. In respect of commodity
exchange transaction undertaken on behalf of customers, brokerage
received/ receivable is recognised on accrual basis when transactions
are entered into on behalf of the customers.
Third party sales commission is recognised on an accrual basis in
accordance with the terms of the related agreement.
Interest is recognised on time proportion basis.
x) Employee benefits
The Companys obligation towards various employee benefits have been
recognised as follows:
Short Term Benefits
Cost of non-accumulated compensated absences is recognised when
absences occur. Cost of other short term employee benefits are
recognized on accrual basis based on the terms of employment contract
and other relevant compensation policies followed by the Company.
Post employment benefits
Monthly contribution to Provident Funds, which is defined contribution
scheme, is charged to Profit and Loss account and deposited with the
Regional Provident Fund Authorities on a monthly basis.
The Companys gratuity scheme is a defined benefit plan. The present
value of the obligation under such defined benefit plan is determined
based on actuarial valuation carried out at the year end using the
Projected Unit Credit Method, which recognises each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation. The
obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of obligation under defined benefit plan is based on the market yield
on government securities as at the Balance sheet date and have maturity
period approximating to the terms of the obligation. Actuarial gains
and losses are recognised immediately in the profit and loss account.
Other Long term benefits
Cost of long term benefit by way of accumulating compensated absences
that are expected to be availed after a period of 12 months from the
year - end are recognised when the employees render the service that
increases their entitlement to future compensated absences. The Company
determines the liability for such accumulated leaves on the basis of
actuarial valuation using the projected unit credit method as at the
year end. Actuarial gains and losses are recognised immediately in the
Profit and Loss Account.
With effect from the current year, the Company has discontinued the a
availment/encashment of accumulated compensated absences after a period
of 12 months from the year end. The impact of such change is not
significant.
xi) Operating Leases
Lease rentals for operating leases are recognised as expenses in the
Profit and Loss Account on a straight line basis over the lease term.
xii) Foreign exchange transactions
Transactions in foreign currency are recognised at the exchange rates
prevailing on the date of the transactions. Year-end monetary assets
and liabilities denominated in foreign currencies, other than those
covered by foreign exchange contracts, are translated at the year-end
foreign exchange rates.
Gain / loss from exchange differences arising on settlement of foreign
currency transaction or translation of year-end monetary assets and
liabilities in foreign currency are recognised in the Profit and Loss
Account for the year.
In case of forward exchange contracts, premium or discounts on such
contracts are ammortised over the life of the contract and exchange
differences arising thereon in the reporting period are recognised in
the Profit and Loss Account.
xiii) Taxation
Income tax expense comprises current and fringe benefit taxes (i.e.
amount of taxes for the year determined in accordance with the
Income-tax Act, 1961) and deferred tax charge or credit (reflecting the
tax effects of timing differences between accounting income and taxable
income for the period). The deferred tax charge or credit and the
corresponding deferred tax liabilities or assets are recognised using
the tax rates that have been enacted or substantively enacted by the
Balance Sheet date. (Fringe benefit tax has been abolished w.e.f. 01
April 2009.
Deferred tax assets are recognised only to the extent that there is
reasonable certainty that the assets can be realised in future except
for deferred tax assets arising from unabsorbed depreciation or
business losses brought forward from prior years that are recognised
only if there is a virtual certainty of realisation of such assets.
Deferred tax assets are reviewed as at each Balance Sheet date and
written up or down to reflect the amount that is reasonably / virtually
certain (as the case may be) to be realised.
The Companys units, located in Special Economic Zone are exempted from
income tax (current tax) till 31 March 2011 under the provisions of
sections 10A and partly exempted till 31 March 2024 under the
provisions of Section 10AA of the Income Tax Act, 1961. Deferred tax
pertaining to the above units are recognised on timing differences,
being the difference between taxable income and accounting income, that
originate in one period and are capable of reversal in one or more
subsequent periods beyond the periods during which the respective units
are exempt from income tax as aforesaid. Deferred tax assets on
unabsorbed depreciation and / or carry forward of losses are recognised
only if there is virtual certainty that sufficient future taxable
income will be available against which such deferred tax assets will be
realised. Such assets are reviewed as at each Balance Sheet date to
reassess realisability thereof.
xiv) Provisions and contingent liabilities
A provision is recognised in the financial statements when there exists
a present obligation as a result of a past event, the amount of which
can be reliably estimated and it is probable that an outflow of
resources will be required to settle the obligation. Contingent
liability is a possible obligation that arises from past events and the
existence of which will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly within
the control of the Company or is a present obligation that arises from
past events but is not recognised because either it is not probable
that an outflow of resources embodying economic benefits will be
required to settle the obligation, or the amount of the obligation
cannot be reliably estimated.
xv) Earnings Per Share
Basic earnings per share is computed using the weighted average number
of equity shares outstanding during the period. Diluted earnings per
share is computed using the weighted average number of shares and
dilutive equity equivalent shares outstanding during the period, except
when results would be anti dilutive.