Accounting Policies of Shree Krishna Paper Mills & Industries Ltd. Company
Mar 31, 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2018
1. CORPORATE INFORMATION
Shree Krishna Paper Mills & Industries Limited (hereinafter referred to as ''the Company'') is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. The Company''s equity shares are listed on the Bombay Stock Exchange. The Company is principally engaged in the manufacturing and selling of news print paper and other value-added papers.
The financial statements were authorized for issue in accordance with a resolution of the Board of Directors on May 30, 2018.
2. SIGNIFICANT ACCOUNTING POLICIES
A. STATEMENT OF COMPLIANCE
The financial statements have been prepared in accordance with Indian Accounting Standards (''Ind AS'') notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time).
For all periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with the requirements of Indian Generally Accepted Accounting Principles (GAAP), which included Standards notified under the Companies (Accounting Standards) Rules, 2006 read with Rule 7 of the Companies (Accounts) Rules, 2014 and considered as "Previous GAAP". These are the Company''s first Ind AS financial statements. The date of transition to Ind AS is April 01, 2016. Refer Note 55 for the details of significant first-time adoption exemptions availed by the Company and an explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, performance and cash flows.
B. BASIS OF PREPARATION AND PRESENTATION
The financial statements have been prepared on the historical cost basis except for certain financial instruments which have been measured at their fair values at the end of each reporting period in accordance with the relevant Ind AS. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regard less of whether that price is directly observable or estimated using another valuation technique.
The figures for the year ended March 31, 2017 and Opening Balance Sheet as at April 01, 2016 have been restated as per the requirements of the applicable Ind AS for comparative information.
C. CURRENT VERSUS NON-CURRENT CLASSIFICATION
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:
⢠Expected to be realised or intended to be sold or consumed in normal operating cycle
⢠Held primarily for the purpose of trading
⢠Expected to be realised within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current. A liability is current when:
⢠It is expected to be settled in normal operating cycle
⢠It is held primarily for the purpose of trading
⢠It is due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities. The operating cycle is the time
between the acquisition of assets for processing and their realisation in cash and cash equivalents.
The Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.
Company''s financial statements have been presented in Indian National Rupee (Rs) and all values are rounded to the nearest Lakhs, except where otherwise indicated.
D. FAIR VALUE MEASUREMENT
The Company measures financial instruments, such as derivatives and investment, at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability, or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of anon-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
⢠Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
⢠Level 2 âValuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
⢠Level 3 âValuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
This note summarises accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.
E. USE OF ESTIMATES
The preparation of the financial statements requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent Iiabilities as at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and assumptions are reviewed on an ongoing basis. Although such estimates are made on a reasonable and prudent basis taking into account all available information, actual results could differ from these estimates and such differences are recognized in the period in which results are ascertained.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. The assumptions about future developments, however, 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.
F. PROPERTY, PLANT AND EQUIPMENT
The tangible items of property, plant and equipment are carried at cost less accumulated depreciation and accumulated impairment losses, if any. Cost of an item of property, plant and equipment comprises its purchase price including non-refundable duties and taxes, net of rebate and discounts and borrowing costs for qualifying assets, including other costs that are directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to statement of profit and loss during the reporting period in which they are incurred.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. 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 disposal or retirement of an item of property, plant and equipment is determined as the difference between sales proceeds and the carrying amount of the asset and is recognised in statement of profit and loss. Fully depreciated assets still in use are retained in financial statements.
Capital Work in Progress is stated at cost. Cost includes purchase price, net of taxes where applicable and all direct costs and borrowing costs attributable to qualifying assets till they are ready for their intended use.
G. DEPRECIATION & AMORTIZATION
Depreciation on the property, plant and equipment (except for leasehold land)is provided on straight- line method ("SLM") over the useful lives of the assets as specified in Schedule II to the Companies Act, 2013. On property, plant and equipment which are added / disposed off during the year, depreciation is provided on pro-rata basis with reference to the month of addition / deletion.
The estimated useful life, 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.
Leasehold land is amortized on a straight line basis over the period of lease.
H. BORROWING COST
Borrowing costs are interest and ancillary costs incurred in connection with the arrangement of borrowings. General and specific borrowing costs attributable to acquisition and construction of any qualifying asset (one that takes a substantial period of time to get ready for its designated use or sale) are capitalised until such time as the assets are substantially ready for their intended use or sale, and included as part of the cost of that asset. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
All other borrowing costs are recognised in the Statement of Profit and Loss in the period in which they are incurred.
I. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash at banks and on hand and demand deposits with an original maturity of three months or less and short-term highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents include of balances with banks which are unrestricted for withdrawal and usage.
J. INVENTORIES
Inventories except scrap are valued at lower of cost and net realizable value after providing for obsolescence. Scrap is valued at net realizable value. Cost is determined on FIFO basis. Cost of inventories comprises of cost of purchase, cost of conversion and other costs (net of recoverable taxes and duties wherever applicable) including manufacturing overheads incurred in bringing them to their respective present location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost necessary to make the sale.
K. REVENUE RECOGNITION
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
Revenue includes excise duty. However, sales tax/value added tax (VAT)/ Goods and Service tax (GST) is not received by the Company on its own account. Rather, it is tax collected on value added to the commodity by the seller on behalf of the government. Accordingly, it is excluded from revenue. The specific recognition criteria described below must also be met before revenue is recognized
i) Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods
have passed to the buyer, usually on delivery of the goods. It is measured at the fair value of the consideration received or receivable, net of returns and trade discounts.
ii) Interest income for all debt instruments measured at amortized cost is recorded using the Effective Interest Rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.
L. FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION
Financial statements are presented in Indian Rupee, which is also the Company''s functional currency. Foreign currency transactions are recorded on initial recognition in the functional currency, using the exchange rate at the date of the transaction. At each balance sheet date, foreign currency monetary assets or liabilities are translated at exchange rate prevailing on the balance sheet date and the exchange gains or losses are recognised in the statement of profit & loss. Financial instruments designated as Hedge Instruments are marked to market at the valuation existing on the reporting date. Exchange differences arising on settlement of monetary items on actual payments / realisations and year end translations including on forward contracts are dealt with in Statement of Profit and Loss in the period in which they arise.
Non monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transaction.
The Company uses forward exchange contracts to hedge its exposure to the extent considered appropriate and premium or discount arising on such forward exchange contract is amortised as expense or income over the life of the contract. The unhedged forward contracts remaining unsettled at the year end are translated at the exchange rates prevailing on that date and the resulting gains or losses are recognized in the Statement of Profit and Loss.
M. EMPLOYEE BENEFITS EXPENSE
i) Short term employee benefits
Short-term employee benefits include employee benefits (other than termination benefits) which are expected to be settled wholly within twelve months after the end of the period in which the employees render the related service and are recognized as expense in the period in which the related service is rendered.
ii) Post-employment benefits
a) Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods. The Company makes specified monthly contributions towards Provident Fund, Superannuation Fund and Pension Scheme. The Company''s contributions to defined contribution plans are charged to the Statement of Profit and Loss as and when incurred.
b) Defined benefit plans
Funded plan: The Company has a defined benefit plan for post employment benefit in the form of gratuity, which is administered through Life Insurance Corporation of India (LIC), liability for which is provided on the basis of valuation, as at the balance sheet date, carried out by an independent actuary. The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees'' services.
Re-measurement of defined benefit plans in respect of post-employment are charged to the Other Comprehensive Income.
iii) Other long term employee benefits
Liability for compensated absences is provided on the basis of valuation as at the balance sheet date carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the projected unit credit (PUC) method.
iv) Termination benefits are recognized as an expense as and when incurred.
v) The actuarial gains and losses on defined benefit plans arising during the year are charged to the Other Comprehensive Income.
N. TAX EXPENSES
Tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current and deferred taxes are recognised in Statement of Profit and 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
Tax on income for the current period is determined on the basis on estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.
Current tax assets and current tax liabilities are off set when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis.
Deferred Tax
Deferred income tax is recognised using the Balance Sheet approach. Deferred income tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount, except when the deferred income tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.
Deferred tax assets are recognised only to the extent that it is probable that either future taxable profits or reversal of deferred tax liabilities will be available, against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Current and deferred tax are recognised as an expense or income in the statement of profit and loss, except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognised in other comprehensive income or directly in equity.
Minimum Alternate Tax (MAT) is calculated as per Section 115 JB of the Income Tax Act, 1961 and is payable when tax as per it is higher than tax as per the normal provisions of the Act. Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.
O. EARNINGS PER SHARE
Basic Earnings Per Share (EPS) is computed by dividing the net profit or loss after tax less dividend distribution tax attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the year.
Diluted EPS is computed by adjusting the profit or loss attributable to the equity shareholders and the weighted average number of ordinary equity shares, for the effects of all dilutive potential equity shares.
P. 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, where 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.
Where a provision is measured using the cash flows estimates to settle the present obligation, its carrying amount is the present value of those cash flows. Where the effect is material, the provision is discounted to net present value using an appropriate current market-based pre-tax discount rate and the unwinding of the discount is included in finance costs.
Contingent liabilities are recognised only when there is a possible obligation arising from past events, due to occurrence or non-occurrence of one or more uncertain future events, not wholly within the control of the Company, or where any present obligation cannot be measured in terms of future outflow of resources, or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.
Contingent assets are not disclosed in the financial statements unless an inflow of economic benefits is probable.
Q. LEASES
A lease is classified at the inception date as a finance lease or an operating lease. Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. All other leases are classified as operating leases.
Assets held under finance leases are initially recognised as assets of the Company at lower of their respective fair value and the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term except where another systematic basis is more representative of time pattern in which economic benefits from the leased assets are consumed.
R. IMPAIRMENT OF ASSETS
The Company assesses at each reporting date as to whether there is any indication that any property, plant and equipment and intangible assets or group of assets, called cash generating units (CGU) may be impaired. If any such indication exists the recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.
An impairment loss is recognised in the Statement of Profit and Loss to the extent, asset''s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
S. DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses derivative financial instruments, such as forward currency contracts to hedge its foreign currency risks. Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at the end of each period. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, on the nature of the item being hedged. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.
T. FINANCIAL INSTRUMENTS
Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and 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 measured on initial recognition of financial asset or financial liability.
(i) Financial Assets
Initial Recognition and Measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Financial Assets at Amortised Cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Assets At Fair Value Through Other Comprehensive Income (FVTOCI)
Financial assets are measured at fair value through other comprehensive income if such financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell such financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Assets At Fair Value Through Profit or Loss (FVTPL)
Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in profit or loss.
All equity investments are measured at fair value in the balance sheet, with value changes recognized in the statement of profit and loss, except for those equity investments for which the Company has elected an irrevocable option to present value changes in OCI.
(ii) Financial Liabilities and Equity instruments
All financial liabilities are recognized at fair value at initial recognition and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost. Financial Liabilities are subsequently measured at amortised cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
Equity Instruments
An equity instrument is a contract that evidences residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments recognised by the Company are measured at the proceeds received net off direct issue cost.
Derecognition of Financial Instruments
A financial asset is primarily derecognised when the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset and has substantially transferred all the risks and rewards of ownership of the financial assets.
A financial liability (or a part of a financial liability) is derecognized from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
Impairment of Financial Assets
The Company measures the expected credit loss associated with its assets based on historical trend, industry practices and the business environment in which the entity operates or any other appropriate basis.
The company assesses impairment based on expected credit losses (ECL) model at an amount equal to:-
⢠12 months expected credit losses, or
⢠Lifetime expected credit losses depending upon whether there has been a significant increase in credit risk since initial recognition. However, for trade receivables, the company does not track the changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss (P&L). This amount is reflected under the head ''other expenses'' in the P&L. The balance sheet presentation for various financial instruments is described below:
⢠Financial assets measured as at amortised cost and contractual revenue receivables: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount.
⢠Equity instruments measured at FVTOCI: Since financial assets are already reflected at fair value, impairment allowance is not further reduced from its value.
U. NON-CURRENT ASSETS HELD FOR SALE
Non-current assets or disposal comprising of assets and liabilities are classified as ''held for sale'' when all of the following criteria''s are met (i) decision has been made to sell (ii) the assets are available for immediate sale in its present condition (iii) the assets are being actively marketed and (iv) sale has been agreed or is expected to be conducted within 12 months of the Balance Sheet date. Subsequently, such non-current assets and disposal groups classified as held for sale are measured at lower of its carrying value and fair value less costs to sell. Non-current assets held for sale are not depreciated or amortised.
Non-current assets classified as held for sale are presented separately from the other assets in the balance sheet
V. STANDARDS ISSUED BUT NOT YET EFFECTIVE
The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.
Amendments to Ind AS 115 Revenue from Contracts with Customers
Ind AS 115 was issued on 28 March 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under Ind AS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after 1 April 2018. On transition, the effect of this changes is not expected to be material for the Company.
Amendments to Ind AS 12 Recognition of Deferred Tax Assets for Unrealised Losses
The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.
Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the changes in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact.
These amendments are effective for annual periods beginning on or after 1 April 2018. The Company will adopt the new standard on the required effective date. On transition, the effect of this changes is not expected to be material for the Company.
Appendix B to Ind AS 21 Foreign Currency Transactions and Advance Consideration
The Appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration.
Entities may apply the Appendix requirements on a fully retrospective basis. Alternatively, an entity may apply these requirements prospectively to all assets, expenses and income in its scope that are initially recognised on or after:
(i) The beginning of the reporting period in which the entity first applies the Appendix, or
(ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the Appendix.
The Appendix is effective for annual periods beginning on or after 1 April 2018. However, since the Company''s current practice is in line with the Interpretation, the Company does not expect any effect on its financial statements.
W. CRITICAL ACCOUNTING JUDGEMENTS & KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the company''s financial statements in conformity with the Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The company based its assumptions about future developments, however, 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.
Defined Benefit Plans
The cost of the defined benefit plans and other post-employment benefits and the present value of such obligations 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, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit plan is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
Contingencies & Commitments
In the normal course of business, contingent liabilities may arise from litigations and other claims against the Company. Where the potential liabilities have a low probability of crystallizing or are very difficult to quantify reliably, we treat them as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements. Although there can be no assurance regarding the final outcome of the legal proceedings, the Company do not expect them to have a materially adverse impact on our financial position or profitability.
Depreciation / amortisation and useful lives of property plant and equipment / intangible assets
Property, plant and equipment/ intangible assets are depreciated / amortised over their estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes.
Allowances for doubtful debts
The Company makes allowances for doubtful debts based on an assessment of the recoverability of trade and other receivables. The identification of doubtful debts requires use of judgement and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the period in which such estimate has been changed.
Impairment of Financial Assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2016
1) SIGNIFICANT ACCOUNTING POLICIES
a) Basis of preparation
These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain fixed assets which are stated at revalued amounts. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (''Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). All the assets and liabilities have been classified as current and non-current as per the Company''s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of activities, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.
b) Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.
c) Fixed assets Tangible assets
(i) Recognition
Tangible fixed assets are stated at cost (net of duties and taxes) less accumulated depreciation, amortization and impairment loss, if any, except in case of certain class of fixed assets which have been revalued and thus are stated at revalued amount less accumulated depreciation. All costs that are directly attributable to the acquisition and installation of fixed assets, including borrowing costs in case of qualifying fixed assets, are capitalized. Gains or losses arising from disposal of tangible assets which are carried at cost are recognized in the Statement of Profit and Loss.
(ii) Capital work-in-progress
Tangible assets not ready for the intended use on the date of balance sheet are disclosed as "Capital work-in-progress". Capital work-in-progress is stated at cost including borrowing costs in case of qualifying fixed assets and expenditure incurred in connection with the fixed assets.
(iii) Depreciation and amortization
Depreciation on tangible fixed assets is charged on straight line method over the useful life of the asset as prescribed in Schedule II of the Companies Act, 2013. Depreciation on assets purchased / acquired during the year is charged from the date of addition / purchase of the assets. Similarly, depreciation on assets sold / discarded during the year is charged up to the date of sale / discard of the assets. Depreciation on addition on account of revaluation is recouped from revaluation reserve. Leasehold land is amortized over a period of lease.
d) Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. An investment normally qualifies as a cash equivalent only when it has a short maturity of three months or less from the date of acquisition.
e) Cash flow statement
The cash flow statement reports cash flows during the period classified by operating, investing and financing activities. Cash flows from operating activities are reported using the indirect method, whereby profit/(loss) before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows.
f) Investment
Non-current investments are stated at cost. Provision is made for diminution in the value of the investments, if, in the opinion of the management, the same is considered to be other than temporary in nature.
g) Inventories
Inventories except scrap are valued at lower of cost and net realizable value. Scrap is valued at estimated realizable value. Cost is determined on FIFO basis. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost necessary to make the sale.
h) Transactions in foreign currency
Foreign currency transactions are recorded at exchange rates prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency at the balance sheet date are translated at the yearend exchange rate and the resultant exchange differences are recognized in the Statement of Profit and Loss. Non monetary items are recorded at the exchange rate prevailing on the date of the transaction.
The Company uses forward exchange contracts to hedge its exposure to the extent considered appropriate and premium or discount arising of such forward exchange contract is amortized as expense or income over the life of the contract. The unheeded forward contracts remaining unsettled at the year end, are translated at the exchange rates prevailing on that date and the resulting gains or losses are recognized in the Statement of Profit and Loss.
i) Revenue recognition
Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection:
i. Sale of goods is recognized on transfer of significant risk and reward of ownership which is generally on the dispatch of goods. Sales are disclosed net of returns and applicable sales taxes.
ii. Interest income from parties, insurance claim, excise and other claims/refunds are recognized when there is a reasonable certainty of ultimate collection on the ground of prudence.
iii. Other items of income are recognized on accrual basis. j) Employee benefits
i) Short term employee benefits
All employee benefits falling due wholly within twelve months of rendering the services are classified as short term employee benefits, which include benefits like salaries, short term compensated absences and bonus that are recognized as expenses in the period in which the employee renders the related service.
ii) Post-employment benefits
a) Defined contribution plans
The Company has a defined contribution plan for post employment benefits in the form of provident/family pension fund for all employees which is administered by Regional Provident Fund Commissioner. Provident fund and family pension fund are classified as defined contribution plans as the Company has no further obligation beyond making the contributions. The Company''s contributions to defined contribution plans are charged to the Statement of Profit and Loss as and when incurred.
b) Defined benefit plans
Funded plan: The Company has a defined benefit plan for post employment benefit in the form of gratuity, which is administered through Life Insurance Corporation of India(LIC), liability for which is provided on the basis of valuation, as at the balance sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the projected unit credit (PUC) method.
iii) Other long term employee benefits
Liability for compensated absences is provided on the basis of valuation as at the balance sheet date carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the projected unit credit (PuC) method.
iv) Termination benefits are recognized as an expense as and when incurred.
v) The actuarial gains and losses arising during the year are recognized in the Statement of Profit and Loss. k) Borrowing cost
Borrowing costs directly attributable to acquisition or construction of qualifying assets are capitalized as a part of the cost of the assets, up to the date the asset is ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred.
l) Income taxes
Tax expense for the year comprising current tax and deferred tax are considered in determining the net profit/(loss) for the year. A provision is made for current tax based on tax liability computed in accordance with relevant tax rates and tax laws applicable to the Company. A provision is made for deferred tax for all timing difference arising between taxable income and accounting income at currently enacted or substantively enacted tax rates. Deferred tax assets are recognized only if there is reasonable/virtual, as the case may be, certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.
m) Earnings per share
The basic earnings per share (''EPS'') is computed by dividing the net profit/(loss) after tax less dividend on preference shares including dividend distribution tax attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period.
Diluted EPS is computed by dividing the profit/(loss) after tax as adjusted for dividend, interest and other charges attributable to the equity shareholders for the year by the weighted average number of equity and equivalent dilutive equity shares outstanding during the year.
n) Impairment of assets
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable value is the higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. An impairment loss is charged to the Profit and Loss Statement in the year in which an asset is identified as impaired.
o) Provisions, contingent liabilities and contingent assets
(i) Provisions
Provisions are recognized in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made.
(ii) Contingent liabilities
A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may, but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote.
(iii) Contingent assets
Contingent assets are neither recognized nor disclosed in the financial statements.
p) Leased assets
For assets acquired under operating lease, rental payable are charged to Statement of Profit and Loss on a straight line basis over the lease term.
For assets acquired under finance lease, the assets are capitalized at lower of their respective fair value and the present value of minimum lease payment. Amortization of capitalized leased asset is computed on straight line method over the useful life of the asset.
Mar 31, 2015
A) BASIS OF PREPARATION
These financial statements are prepared in accordance with Indian
Generally Accepted Accounting Principles (GAAP) under the historical
cost convention on the accrual basis except for certain fixed assets
which are stated at revalued amounts. GAAP comprises mandatory
accounting standards as prescribed under Section 133 of the Companies
Act,2013 ('Act')read with Rule 7 of the Companies (Accounts) Rules,
2014, the provisions of the Act (to the extent notified) and guidelines
issued by the Securities and Exchange Board of India (SEBI). All the
Assets and Liabilities have been classified as Current and Non-Current
as per the Company's normal operating cycle and other criteria set out
in Schedule III to the Companies Act, 2013. Based on the nature of
activities, the Company has ascertained its operating cycle as 12
months for the purpose of Current and Non Current classification of
Assets and Liabilities.
b) USE OF ESTIMATES
The preparation of financial statements in conformity with Indian GAAP
requires judgements, estimates and assumptions to be made that affect
the reported amount of assets and liabilities, disclosure of contingent
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known/materialised.
c) FIXED ASSETS
(i) Recognition
Tangible Fixed Assets are stated at cost (net of duties and taxes) less
accumulated depreciation except in case of certain class of fixed
assets which have been revalued and thus are stated at revalued amount
less accumulated depreciation. All costs that are directly attributable
to the acquisition and installation of fixed assets, including
borrowing costs, are capitalized.
(ii) Capital Work-in-Progress
Capital Work-in-Progress is stated at cost including borrowing costs
and expenditure incurred in connection with the fixed assets.
(iii) Depreciation & Amortization
Depreciation on tangible fixed assets is charged on straight line
method over the useful life/remaining useful life of the asset as per
Schedule II of the Companies Act 2013. Depreciation on assets purchased
/ acquired during the year is charged from the date of addition /
purchase of the asset. Similarly, depreciation on assets sold /
discarded during the year is charged up to the date of sale / discard
of the assets. Depreciation on addition on account of revaluation is
recouped from Revaluation Reserve. Leasehold land is amortized over a
period of lease.
d) CASH & CASH EQUIVALENTS
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short term, highly liquid investments that are readily
convertible into known amounts of cash and which are subject to an
insignificant risk of changes in value. An investment normally
qualifies as a cash equivalent only when it has a short maturity of
three months or less from the date of acquisition.
e) CASH FLOW STATEMENT
The cash flow statement reports cash flows during the period classified
by operating, investing and financing activities. Cash flows from
operating activities are reported using the indirect method, whereby
net profit or loss is adjusted for the effects of transactions of a
non-cash nature, any deferrals or accruals of past or future operating
cash receipts or payments, and items of income or expense associated
with investing or financing cash flows.
f) INVESTMENT
Non-Current Investments are stated at cost. Provision is made for
diminution in the value of the investments, if, in the opinion of the
management, the same is considered to be other than temporary in
nature. On disposal of an investment, the difference between its
carrying amount and net disposal proceeds is charged or credited to the
Statement of Profit and Loss.
g) INVENTORIES
Inventories except scrap are valued at lower of cost and net realizable
value. Scrap is valued at estimated realizable value. Cost is
determined on FIFO basis. Net realizable value is the estimated selling
price in the ordinary course of business, less estimated cost necessary
to make the sale. Excise duty payable on finished goods lying in the
factory is provided for and included in closing stock of finished
goods.
h) TRANSACTIONS IN FOREIGN CURRENCY
Foreign currency transactions are recorded at exchange rates prevailing
on the date of transaction. Monetary assets and liabilities denominated
in foreign currency at the Balance Sheet date are translated at the
year end exchange rate and the resultant exchange differences are
recognised in the Statement of Profit and Loss. For foreign exchange
forward contracts, premium or discount arising at the inception of a
forward exchange contract is amortised as expense or income over the
life of the contract.
i) REVENUE RECOGNITION
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection:
i. Sale of goods is recognized on transfer of significant risk and
reward of ownership which is generally on the dispatch of goods. Sales
are disclosed net of returns and applicable sales taxes.
ii. Interest income from parties, insurance claim, excise and other
claims/refunds are recognized when there is a reasonable certainty of
ultimate collection on the ground of prudence.
iii. Other items of income are recognized on accrual basis.
j) EMPLOYEE BENEFITS
i) Short Term Employee Benefits
All employee benefits falling due wholly within twelve months of
rendering the services are classified as short term employee benefits,
which include benefits like salaries, short term compensated absences
and bonus that are recognized as expenses in the period in which the
employee renders the related service.
ii) Post-Employment Benefits
a) Defined Contribution Plans
The Company has a Defined Contribution Plan for Post Employment
Benefits in the form of Provident/Family Pension Fund for all employees
which is administered by Regional Provident Fund Commissioner.
Provident Fund and Family Pension Fund are classified as defined
contribution plans as the Company has no further obligation beyond
making the contributions. The Company's contributions to Defined
Contribution plans are charged to the Statement of Profit and Loss as
and when incurred.
b) Defined Benefit Plans
Funded Plan: The Company has a Defined Benefit Plan for Post Employment
Benefit in the form of Gratuity, which is administered through Life
Insurance Corporation of India(LIC), liability for which is provided on
the basis of valuation, as at the Balance Sheet date, carried out by an
independent actuary. The actuarial method used for measuring the
liability is the Projected Unit Credit (PUC) Method.
iii) Other Long Term Employee Benefits
Liability for compensated absences is provided on the basis of
valuation as at the Balance Sheet date carried out by an independent
actuary. The actuarial valuation method used for measuring the
liability is the Projected Unit Credit (PUC) Method.
iv) Termination benefits are recognized as an expense as and when
incurred.
v) The actuarial gains and losses arising during the year are
recognized in the Statement of Profit and Loss.
k) BORROWING COST
Borrowing costs directly attributable to acquisition or construction of
qualifying assets are capitalized as a part of the cost of the assets,
upto the date the asset is ready for its intended use. Other borrowing
costs are recognized as an expense in the period in which they are
incurred.
l) INCOME TAXES
Tax expense for the year comprising current tax and deferred tax are
considered in determining the net profit/(loss) for the year. A
provision is made for current tax based on tax liability computed in
accordance with relevant tax rates & tax laws applicable to the
Company. A provision is made for deferred tax for all timing difference
arising between taxable income & accounting income at currently enacted
or substantively enacted tax rates. Deferred tax assets are recognized
only if there is reasonable/virtual, as the case may be, certainty that
they will be realized and are reviewed for the appropriateness of their
respective carrying values at each Balance Sheet date.
m) EARNINGS PER SHARE
The basic earnings per share ('EPS') is computed by dividing the net
profit/(loss) after tax less preference dividend including dividend
distribution tax attributable to the equity shareholders for the year by
the weighted average number of equity shares outstanding during the
reporting period.
Diluted EPS is computed by dividing the profit/(loss) after tax as
adjusted for dividend, interest and other charges attributable to the
equity shareholders for the year by the weighted average number of
equity and equivalent dilutive equity shares outstanding during the
year.
n) IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. Recoverable value is the higher of an asset's
net selling price and its value in use. Value in use is the present
value of estimated future cash flows expected to arise from the
continuing use of an asset and from its disposal at the end of its
useful life. An impairment loss is charged to the Profit and Loss
Statement in the year in which an asset is identified as impaired.
o) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
(i) Provisions
Provisions are recognised in the accounts when there is a present
obligation as a result of past event(s) and it is probable that an
outflow of resources will be required to settle the obligation and a
reliable estimate can be made.
(ii) Contingent Liabilities
A contingent liability exists when there is a possible but not probable
obligation, or a present obligation that may, but probably will not,
require an outflow of resources, or a present obligation whose amount
cannot be estimated reliably. Contingent liabilities do not warrant
provisions, but are disclosed unless the possibility of outflow of
resources is remote.
(iii) Contingent Assets
Contingent Assets are neither recognized nor disclosed in the financial
statements.
p) LEASED ASSETS
For assets acquired under operating lease, rental payable are charged
to Statement of Profit and Loss on a straight line basis over the lease
term.
For assets acquired under finance lease, the assets are capitalized at
lower of their respective fair value and the present value of minimum
lease payment. Amortization of capitalized leased asset is computed on
Straight Line Method over the useful life of the asset.
Mar 31, 2014
A) BASIS OF PREPARATION
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting except
for certain classes of fixed assets which are carried at revalued
amounts. These statements comply with the applicable Accounting
Standards notified under the Companies (Accounting Standards) Rules,
2006, as amended and other pronouncements of the Institute of Chartered
Accountants of India (''ICAI''). All assets and liabilities have been
classified as current or non-current as per the Company''s normal
operating cycle and other criteria set out in Schedule VI to the
Companies Act,1956. Based on the nature of operations of the Company,
the Company has ascertained its operating cycle as 12 months for the
purpose of current/non-current classification of all assets and
liabilities.
b) USE OF ESTIMATES
The preparation of the financial statements is in conformity with India
GAAP (Generally Accepted Accounting Principles) and requires management
to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent liabilities on the
date of the financial statements. The estimates and assumptions made
and applied in preparing the financial statements are based upon
management''s best knowledge of current events and actions as on the
date of financial statements. However, due to uncertainties attached to
the assumptions and estimates made, actual results could differ from
those estimated. Any revision to accounting estimates is recognized
prospectively in current and future periods.
c) TANGIBLE FIXED ASSETS (i) Recognition
Tangible Fixed Assets are stated at cost of acquisition or construction
(net of duties and taxes that are subsequently recoverable from the
taxing authorities) less accumulated depreciation except in case of
certain class of fixed assets which have been revalued and thus are
stated at revalued amount less accumulated depreciation. All costs that
are directly attributable to the acquisition and installation of fixed
assets are capitalized and include borrowing costs directly
attributable to construction or acquisition of qualifying tangible
fixed assets.
(ii) Capital Work-in-Progress
Capital Work-in-Progress is stated at cost and includes expenditure
incurred in connection with the fixed assets and pending allocation on
acquisition of fixed assets. Borrowing costs directly attributable to
the asset are included in the cost of capital work-in-progress.
(iii) Depreciation & Amortization
Depreciation on tangible fixed assets is charged on straight line
method at the rates and in the manner prescribed in Schedule XIV to the
Companies Act,1956. Depreciation on assets purchased/acquired during
the year is charged from the date of addition/purchase of the asset.
Similarly, depreciation on assets sold/discarded during the year is
charged up to the date of sale/discard of the assets. Depreciation on
addition on account of revaluation is recouped from Revaluation
Reserve. Leasehold land is amortized over a period of lease.
d) CASH & CASH EQUIVALENTS
Cash & cash equivalents for the purpose of cash flow statement
comprises cash at bank and on hand and short-term investments with an
original maturity of three months or less.
e) CASH FLOW STATEMENT
Cash flows are reported using the indirect method, whereby net
profits/(loss) before tax is adjusted for the effects of transactions
of a 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.
f) INVESTMENT
Non-Current Investments are stated at cost. Provision is made for
diminution in the value of the investments, if, in the opinion of the
management, the same is considered to be other than temporary in
nature. On disposal of an investment, the difference between its
carrying amount and net disposal proceeds is charged or credited to the
Statement of Profit and Loss.
g) INVENTORIES
Inventories except scrap are valued at lower of cost and net realizable
value. Scrap is valued at estimated realizable value. Cost is
determined on FIFO basis. Net realizable value is the estimated selling
price in the ordinary course of business, less estimated cost necessary
to make the sale.
h) TRANSACTIONS IN FOREIGN CURRENCY
i. Transactions are recorded at exchange rates prevailing on the date
of transaction.
ii. Foreign Currency designated assets and liabilities are restated at
the year end rates and the resultant gain or loss is taken to the
Statement of Profit & Loss.
i) REVENUE RECOGNITION
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection:
i. Sale of goods is recognized on transfer of significant risk and
reward of ownership which is generally on the dispatch of goods.
ii. Interest income from parties, insurance claim, excise and other
claims/refunds are recognized when there is a reasonable certainty of
ultimate collection on the ground of prudence.
iii. Other items of income are recognized on accrual basis.
j) GOVERNMENT GRANTS AND SUBSIDIES
Grants and subsidies from the Government are recognized when there is
reasonable assurance that (i) the Company will comply with the
conditions attached to them, and (ii) the grant/subsidy will be
received.
When the grant or subsidy relates to revenue, it is recognized as
income on a systematic basis in the statement of profit and loss over
the periods necessary to match them with the related costs, which they
are intended to compensate. Where the grant relates to an asset, it is
recognized as deferred income and related to income in equal amounts
over the expected useful life of the related asset.
k) EMPLOYEE BENEFITS
i) Short Term Employee Benefits
All employee benefits falling due wholly within twelve months of
rendering the services are classified as short term employee benefits,
which include benefits like salaries, short term compensated absences
and bonus that are recognized as expenses in the period in which the
employee renders the related service.
ii) Post-Employment Benefits
a) Defined Contribution Plans
The Company has a Defined Contribution Plan for Post Employment
Benefits in the form of Provident/Family Pension Fund for all employees
which is administered by Regional Provident Fund Commissioner.
Provident Fund and Family Pension Fund are classified as defined
contribution plans as the Company has no further obligation beyond
making the contributions. The Company''s contributions to Defined
Contribution plans are charged to the Statement of Profit and Loss as
and when incurred.
b) Defined Benefit Plans
Funded Plan : The Company has a Defined Benefit Plan for Post
Employment Benefit in the form of Gratuity, which is administered
through Life Insurance Corporation of India(LIC), liability for which
is provided on the basis of valuation, as at the Balance Sheet date,
carried out by an independent actuary. The actuarial method used for
measuring the liability is the Projected Unit Credit (PUC) Method.
iii) Other Long Term Employee Benefits
Liability for compensated absences is provided on the basis of
valuation as at the Balance Sheet date carried out by an independent
actuary. The actuarial valuation method used for measuring the
liability is the Projected Unit Credit (PUC) Method.
iv) Termination benefits are recognized as an expense as and when
incurred.
v) The actuarial gains and losses arising during the year are
recognized in the Statement of Profit and Loss.
l) BORROWING COST
Borrowing costs are interest, commitment charges and other costs
incurred by an enterprise in connection with Short Term/Long Term
borrowing of funds. Borrowing costs directly attributable to
acquisition or construction of qualifying assets are capitalized as a
part of the cost of the assets, upto the date the asset is ready for
its intended use. All other borrowing costs are recognized in the
Statement of Profit and Loss in the year in which they are incurred.
m) INCOME TAXES
Tax expense for the year comprising current tax and deferred tax are
considered in determining the net profit/(loss) for the year. A
provision is made for current tax based on tax liability computed in
accordance with relevant tax rates & tax laws applicable to the
Company. A provision is made for deferred tax for all timing difference
arising between taxable income & accounting income at currently enacted
or substantively enacted tax rates. Deferred tax assets are recognized
only if there is reasonable/virtual, as the case may be, certainty that
they will be realized and are reviewed for the appropriateness of their
respective carrying values at each Balance Sheet date.
n) EARNINGS PER SHARE
The earnings in ascertaining the Company''s EPS comprises the net
profit/(loss) after tax less preference dividend including dividend
distribution tax and includes the post tax effect of any extraordinary
items. The number of shares used in computing basic EPS is the weighted
average number of shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit/(loss)
after tax (including the post tax effect of extra- ordinary items, if
any) as adjusted for dividend, interest and other charges to expense or
income relating to the dilutive potential equity shares, by the
weighted average number of equity shares which could have been issued
on 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. Dilutive potential equity shares are determined
independently for each period.
o) IMPAIRMENT OF ASSETS
Assessment is done at each Balance Sheet date as to whether there is
any indication that a tangible asset might be impaired. For the purpose
of assessing impairment, the smallest identifiable group of assets that
generates cash inflows from continuing use that are largely independent
of the cash flows from other assets or other group of assets, is
considered as a cash generating unit. If any such indication exists, an
estimate of the recoverable amount of asset/cash generating unit is
made. Assets whose carrying value exceeds their recoverable amount are
written down to recoverable amount. Recoverable amount is higher of an
asset''s or cash generating unit''s net selling price and its value in
use. Value in use is the present value of estimated future cash flows
expected to arise from the continuing use of an asset and from its
disposal at the end of its useful life. Assessment is also done at each
Balance Sheet date as to whether there is any indication that an
impairment loss recognized for an asset in prior accounting period may
no longer exist or may have decreased.
p) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
(i) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event, if 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 obligation.
(ii) Contingent Liabilities
Contingent Liabilities are disclosed when there is a possible
obligation arising from past events, the existence of which will be
confirmed only on the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the Company or
a present obligation that arises from past events where it is either
not probable that an outflow of resources will be required to settle or
a reliable estimate of the amount can not be made.
(iii) Contingent Assets
Contingent Assets are neither recognized nor disclosed in the financial
statements.
q) LEASED ASSETS
Where the Company is a Lessee
Lease where the Lessor effectively retains substantially all the risks
and benefits of ownership of the Leased Asset, are classified as
''Operating Leases''. Lease rentals with respect to assets taken on
''Operating Lease'' are charged to Statement of Profit and Loss on a
straight line basis over the lease term.
Lease which effectively transfer to the Company substantially all the
risks and benefits incidental to the ownership of the leased item are
classified as ''Finance Lease''. Assets acquired on Finance Lease which
substantially transfer all the risks and rewards of ownership to the
Company are capitalized as assets by the Company at the lower of the
fair value and the present value of the minimum lease payment and a
liability is created for an equivalent amount. Amortization of
capitalized leased asset is computed on Straight Line Method over the
useful life of the asset.
(b) Rights, preferences and restrictions attached to Shares: Equity
Shares
The Company has one class of Equity Shares referred to as Equity Shares
having at par value of Rs.10/- each. Each Shareholder is entitled to one
vote per share. In the event of liquidation, the equity-holders are
eligible to receive the remaining assets of the Company after
distribution of all preferential amounts, in proportion to their
shareholding.
Preference Shares
The Company has one class of Preference Share referred to as Preference
Shares redeemable at par value of Rs.100 each. These shares carry a
fixed cummulative dividend of 4% per annum and a preferential right in
respect of dividend and capital over Equity Shareholders. The
Preference Shares are redeemable at par on or before March 31, 2017. In
view of arrear of dividend, preference shareholders are entitled to
vote on every resolution placed before the Company.
Details of Security and Terms of Repayment:
(a) Term Loans from Banks, under consortium arrangement having Bank of
India as Lead Bank, are secured by first pari-passu charge on all
movable and immovable property (other than current assets) of Kotputli
unit both present and future, second charge on the current assets of
the Company, collaterally secured by first pari-passu charges on the
block assets of Bahadurgarh Unit and by personal guarantee of two
Directors of the Company & Mr. B.K.Pasari who has ceased to be Director
of the Company w.e.f. October 1, 2013.
(b) Term Loans are also collaterally secured by pledge of 48,20,400
(Previous Year 48,20,400) Equity Shares held by the Promoter and
promoter group.
(d) Unsecured Loans are repayable on March 31, 2017. However, the
Company has the option to repay these loans by giving prior notice of
30 days.
Mar 31, 2013
A) BASIS OF PREPARATION
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting except
for certain classes of fixed assets which are carried at revalued
amounts. These statements comply with the applicable Accounting
Standards notified under the Companies (Accounting Standards)
Rules,2006, as amended and other pronouncements of the Institute of
Chartered Accountants of India(''ICAI'').All assets and liabilities have
been classified as current or non-current as per the Company''s normal
operating cycle and other criteria set out in Schedule VI to the
Companies Act,1956. Based on the nature of operations of the Company,
the Company has ascertained its operating cycle as 12 months for the
purpose of current/non-current classification of all assets and
liabilities.
b) USE OF ESTIMATES
The preparation of the financial statements is in conformity with India
GAAP (Generally Accepted Accounting Principles) and requires management
to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent liabilities on the
date of the financial statements. The estimates and assumptions made
and applied in preparing the financial statements are based upon
management''s best knowledge of current events and actions as on the
date of financial statements. However, due to uncertainties attached to
the assumptions and estimates made, actual results could differ from
those estimated. Any revision to accounting estimates is recognized
prospectively in current and future periods.
c) TANGIBLE FIXED ASSETS
(i) Recognition
Tangible Fixed Assets are stated at cost of acquisition or construction
(net of duties and taxes that are subsequently recoverable from the
taxing authorities) less accumulated depreciation except in case of
certain class of fixed assets which have been revalued and thus are
stated at revalued amount less accumulated depreciation. All costs that
are directly attributable to the acquisition and installation of fixed
assets are capitalized and include borrowing costs directly
attributable to construction or acquisition of qualifying tangible
fixed assets.
(ii) Capital Work-in-Progress
Capital Work-in-Progress is stated at cost and includes expenditure
incurred in connection with the fixed assets and pending allocation on
acquisition of fixed assets. Borrowing costs directly attributable to
the asset are included in the cost of capital work in progress.
(iii) Depreciation & Amortization
Depreciation on tangible fixed assets is charged on straight-line
method at the rates and in the manner prescribed in Schedule XIV to the
Companies Act,1956. Depreciation on assets purchased/acquired during
the year is charged from the date of addition/purchase of the asset.
Similarly, depreciation on assets sold/discarded during the year is
charged up on the sale/discard of the assets. Depreciation on addition
on account of revaluation is recouped from Revaluation Reserve.
Leasehold land is amortized over a period of lease.
d) CASH & CASH EQUIVALENTS
Cash & cash equivalents for the purpose of cash flow statement
comprises cash at bank and in hand and short-term investments with an
original maturity of three months or less.
e) CASH FLOW STATEMENT
Cash flows are reported using the indirect method, whereby net profits
before tax is adjusted for the effects of transactions of a 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.
f) INVESTMENT
Long-Term/Non-Current Investments are stated at cost. Provision is made
for diminution in the value of the investments, if, in the opinion of
the management, the same is considered to be other than temporary in
nature. On disposal of an investment, the difference between its
carrying amount and net disposal proceeds is charged or credited to the
Statement of Profit and Loss.
g) INVENTORIES
Inventories except scrap are valued at lower of cost and net realizable
value. Scrap is valued at estimated realizable value. Cost is
determined on FIFO basis. Net realizable value is the estimated selling
price in the ordinary course of business, less estimated cost necessary
to make the sale.
h) TRANSACTIONS IN FOREIGN CURRENCY
i. Transactions are recorded at exchange rates prevailing on the date
of transaction.
ii. Foreign Currency designated assets and liabilities are restated at
the year end rates and the resultant gain or loss is taken to the
Statement of Profit & Loss.
i) REVENUE RECOGNITION
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection:
i. Sale of goods is recognized on transfer of significant risk and
reward of ownership which is generally on the dispatch of goods.
ii. Interest income from parties, insurance claim, excise and other
claims/refunds are recognized when there is a reasonable certainty of
ultimate collection on the ground of prudence.
iii. Other items of income are recognized on accrual basis.
j) GOVERNMENT GRANTS AND SUBSIDIES
Grants and subsidies from the government are recognized when there is
reasonable assurance that (i) the Company will comply with the
conditions attached to them, and (ii) the grant/subsidy will be
received.
When the grant or subsidy relates to revenue, it is recognized as
income on a systematic basis in the statement of profit and loss over
the periods necessary to match them with the related costs, which they
are intended to compensate. Where the grant relates to an asset, it is
recognized as deferred income and related to income in equal amounts
over the expected useful life of the related asset.
k) EMPLOYEE BENEFITS
i) Short Term Employee Benefits
All employee benefits falling due wholly within twelve months of
rendering the services are classified as short term employee benefits,
which include benefits like salaries, short term compensated absences
and bonus that are recognized as expenses in the period in which the
employee renders the related service.
ii) Post-Employment Benefits
a) Defined Contribution Plans
The Company has a Defined Contribution Plan for Post Employment
Benefits in the form of Provident/Family Pension Fund for all employees
which is administered by Regional Provident Fund Commissioner.
Provident Fund and Family Pension Fund are classified as defined
contribution plans as the Company has no further obligation beyond
making the contributions. The Company''s contributions to Defined
Contribution plans are charged to the Statement of Profit and Loss as
and when incurred.
b) Defined Benefit Plans
Funded Plan : The Company has a Defined Benefit Plan for Post
Employment Benefit in the form of Gratuity, which is administered
through Life Insurance Corporation of India(LIC), liability for which
is provided on the basis of valuation, as at the Balance Sheet date,
carried out by an independent actuary. The actuarial method used for
measuring the liability is the Projected Unit Credit (PUC) Method.
iii) Other Long Term Employee Benefits
Liability for compensated absences is provided on the basis of
valuation as at the Balance Sheet date carried out by an independent
actuary. The actuarial valuation method used for measuring the
liability is the Projected Unit Credit (PUC) Method.
iv) Termination benefits are recognized as an expense as and when
incurred.
v) The actuarial gains and losses arising during the year are
recognized in the Statement of Profit and Loss.
l) BORROWING COST
Borrowing costs are interest, commitment charges and other costs
incurred by an enterprise in connection with Short Term/Long Term
borrowing of funds. Borrowing costs directly attributable to
acquisition or construction of qualifying assets are capitalized as a
part of the cost of the assets, upto the date the asset is ready for
its intended use. All other borrowing costs are recognized in the
Statement of Profit and Loss in the year in which they are incurred.
m) TAXATION
Tax expenses for the year comprising current tax & deferred tax are
considered in determining the net profit for the year. A provision is
made for current tax and based on tax liability computed in accordance
with relevant tax rates & tax laws applicable to the Company. A
provision is made for deferred tax for all timing difference arising
between taxable income & accounting income at currently enacted or
substantively enacted tax rates. Deferred tax assets are recognized
only if there is reasonable/virtual, as the case may be, certainty that
they will be realized and are reviewed for the appropriateness of their
respective carrying values at each Balance Sheet date.
n) EARNINGS PER SHARE
The earnings in ascertaining the Company''s EPS comprises the net
profit/(loss) after tax less preference dividend including dividend
distribution tax and includes the post tax effect of any extraordinary
items. The number of shares used in computing basic EPS is the weighted
average number of shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit/(loss)
after tax (including the post tax effect of extra- ordinary items, if
any) as adjusted for dividend, interest and other charges to expense or
income relating to the dilutive potential equity shares, by the
weighted average number of equity shares which could have been issued
on 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. Dilutive potential equity shares are determined
independently for each period.
o) IMPAIRMENT OF ASSETS
Assessment is done at each Balance Sheet date as to whether there is
any indication that a tangible asset might be impaired. For the purpose
of assessing impairment, the smallest identifiable group of assets that
generates cash inflows from continuing use that are largely independent
of the cash flows from other assets or other group of assets, is
considered as a cash generating unit. If any such indication exists, an
estimate of the recoverable amount of asset/ cash generating unit is
made. Assets whose carrying value exceeds their recoverable amount are
written down to recoverable amount. Recoverable amount is higher of an
asset''s or cash generating unit''s net selling price and its value in
use. Value in use is the present value of estimated future cash flows
expected to arise from the continuing use of an asset and from its
disposal at the end of its useful life. Assessment is also done at each
Balance Sheet date as to whether there is any indication that an
impairment loss recognized for an asset in prior accounting period may
no longer exist or may have decreased.
p) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
(i) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event, if 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 obligation.
(ii) Contingent Liabilities
Contingent Liabilities are disclosed when there is a possible
obligation arising from past events, the existence of which will be
confirmed only on the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the Company or
a present obligation that arises from past events where it is either
not probable that an outflow of resources will be required to settle or
a reliable estimate of the amount can not be made.
(iii) Contingent Assets
Contingent Assets are neither recognized nor disclosed in the financial
statements.
q) LEASED ASSETS
Where the Company is a Lessee
Lease where the Lessor effectively retains substantially all the risks
and benefits of ownership of the Leased Asset, are classified as
''Operating Leases''. Lease rentals with respect to assets taken on
''Operating Lease'' are charged to Statement of Profit and Loss on a
straight line basis over the lease term.
Lease which effectively transfer to the Company substantially all the
risks and benefits incidental to the ownership of the leased item are
classified as ''Finance Lease''. Assets acquired on Finance Lease which
substantially transfer all the risks and rewards of ownership to the
Company are capitalized as assets by the Company at the lower of the
fair value and the present value of the minimum lease payment and a
liability is created for an equivalent amount. Amortization of
capitalized leased asset is computed on Straight Line Method over the
useful life of the asset. Lease rentals payable is apportioned between
the liability and finance charge so as to obtain a constant periodic
rate of interest on the outstanding liability for each year.
Mar 31, 2012
A) BASIS OF PREPARATION
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting, except
for certain classes of fixed assets which are carried at revalued
amounts. These statements comply with the applicable Accounting
Standards notified under the Companies (Accounting Standards) Rules,
2006, as amended and other pronouncements of the Institute of Chartered
Accountants of India ('ICAI'). All assets and liabilities have been
classified as current or non-current as per the Company's normal
operating cycle and other criteria set out in Schedule VI to the
Companies Act, 1956. Based on the nature of operations of the Company,
the Company has ascertained its operating cycle as 12 months for the
purpose of current/ non-current classification of all assets and
liabilities.
b) USE OF ESTIMATES
The preparation of the financial statements is in conformity with
Indian GAAP (Generally Accepted Accounting Principles) and requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent
liabilities on the date of the financial statements. The estimates and
assumptions made and applied in preparing the financial statements are
based upon management's best knowledge of current events and actions as
on the date of financial statements. However, due to uncertainties
attached to the assumptions and estimates made, actual results could
differ from those estimated. Any revision to accounting estimates is
recognised prospectively in current and future periods.
c) TANGIBLE FIXED ASSETS (i) Recognition
Tangible Fixed Assets are stated at cost of acquisition or construction
(net of duties and taxes that are subsequently recoverable from the
taxing authorities) less accumulated depreciation except in case of
certain class of fixed assets which have been revalued and thus are
stated at revalued amount less accumulated depreciation. All costs that
are directly attributable to the acquisition and installation of fixed
asset are capitalised and include borrowing costs directly attributable
to construction or acquisition of qualifying tangible fixed assets.
(ii) Capital Work-in-Progress
Capital Work-in-Progress is stated at cost and includes expenditure
incurred in connection with the fixed assets and pending allocation on
acquisition of fixed assets.
(iii) Depreciation & Amortisation
Depreciation on tangible fixed assets is charged on straight-line
method at the rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956. Depreciation on assets purchased / acquired during
the year is charged from the date of addition/ purchase of the asset.
Similarly, depreciation on assets sold/ discarded during the year is
charged up on the sale/ discard of the assets. Depreciation on addition
on account of revaluation is recouped from Revaluation Reserve.
Leasehold land is amortized over a period of lease.
d) CASH & CASH EQUIVALENTS
Cash & Cash equivalents for the purpose of cash flow statement
comprises cash at bank and in hand and short-term investments with an
original maturity of three months or less.
e) CASH FLOW STATEMENT
Cash flows are reported using the indirect method, whereby net profits
before tax is adjusted for the effects of transactions of a 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.
f) INVESTMENT
Long-term/ Non-Current Investments are stated at cost. Provision is
made for diminution in the value of the investments, if, in the opinion
of the management, the same is considered to be other than temporary in
nature. On disposal of an investment, the difference between its
carrying amount and net disposal proceeds is charged or credited to the
Statement of Profit and Loss.
g) INVENTORIES
Inventories are valued at lower of cost and net realizable value. Cost
is determined on FIFO basis. Net realizable value is the estimated
selling price in the ordinary course of business, less estimated cost
necessary to make the sale.
h) TRANSACTIONS IN FOREIGN CURRENCY
i. Transactions are recorded at exchange rates prevailing on the date
of the transaction. ii. Foreign Currency designated assets and
liabilities are restated at the year end rates and the resultant gain
or loss is taken to the Statement of Profit & Loss.
i) REVENUE RECOGNITION
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection:
i. Sale of goods is recognized on transfer of significant risk and
reward of ownership which is generally on the despatch of goods.
ii. Interest income from parties, insurance claim, excise and other
claims/refunds are recognized when there is a reasonable certainty of
ultimate collection on the ground of prudence.
iii. Other items of income are recognized on accrual basis.
j) GOVERNMENT GRANTS AND SUBSIDIES
Grants and subsidies from the government are recognized when there is
reasonable assurance that (i) the Company will comply with the
conditions attached to them, and (ii) the grant/subsidy will be
received. When the grant or subsidy relates to revenue, it is
recognized as income on a systematic basis in the statement of profit
and loss over the periods necessary to match them with the related
costs, which they are intended to compensate. Where the grant relates
to an asset, it is recognized as deferred income and released to income
in equal amounts over the expected useful life of the related asset.
k) EMPLOYEE BENEFITS
i) Short Term Employee Benefits
All employee benefits falling due wholly within twelve months of
rendering the services are classified as short term employee benefits,
which include benefits like salaries, short term compensated absences
and bonus that are recognised as expenses in the period in which the
employee renders the related service.
ii) Post-Employment Benefits
a) Defined Contribution Plans
The Company has a Defined Contribution Plan for Post employment
benefits in the form of Provident/Family Pension Fund for all employees
which is administered by Regional Provident Fund Commissioner.
Provident Fund and Family Pension Fund are classified as defined
contribution plans as the Company has no further obligation beyond
making the contributions. The Company's contributions to Defined
Contribution plans are charged to the Statement of Profit and Loss as
and when incurred.
b) Defined Benefit Plans
Funded Plan: The Company has a defined benefit plan for Post-employment
benefit in the form of Gratuity, which is administered through Life
Insurance Corporation of India (LIC), liability for which is provided
on the basis of valuation, as at the Balance Sheet date, carried out by
an independent actuary. The actuarial method used for measuring the
liability is the Projected Unit Credit (PUC) Method.
iii) Other Long Term Employee Benefits
Liability for compensated absences is provided on the basis of
valuation as at the Balance Sheet date carried out by an independent
actuary. The Actuarial valuation method used for measuring the
liability is Projected Unit Credit (PUC) Method.
iv) Termination benefits are recognised as an expense as and when
incurred.
v) The Actuarial gains and losses arising during the year are
recognised in the Statement of Profit and Loss.
l) BORROWING COST
Borrowing costs are interest, commitment charges and other costs
incurred by an enterprise in connection with Short Term/ Long Term
borrowing of funds. Borrowing costs directly attributable to
acquisition or construction of qualifying assets are capitalized as a
part of the cost of the assets, upto the date the asset is ready for
its intended use. All other borrowing costs are recognized in the
Statement of Profit and Loss in the year in which they are incurred.
m) TAXATION
Tax expenses for the year comprising current tax & deferred tax are
considered in determining the net profit for the year. A provision is
made for current tax and based on tax liability computed in accordance
with relevant tax rates & tax laws applicable to the Company. A
provision is made for deferred tax for all timing difference arising
between taxable income & accounting income at currently enacted or
substantively enacted tax rates. Deferred tax assets are recognized
only if there is reasonable certainty that they will be realized and
are reviewed for the appropriateness of their respective carrying
values at each Balance Sheet date.
n) EARNINGS PER SHARE
The earnings in ascertaining the Company's EPS comprises the net profit
after tax less preference dividend including dividend distribution tax
and includes the post tax effect of any extraordinary items. The number
of shares used in computing basic EPS is the weighted average number of
shares outstanding during the year. Diluted earnings per share is
computed by dividing the profit/(loss) after tax (including the post
tax effect of extra ordinary items, if any) as adjusted for dividend,
interest and other charges to expense or income relating to the
dilutive potential equity shares, by the weighted average number of
equity shares which could have been issued on 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. Dilutive
potential equity shares are determined independently for each period.
o) IMPAIRMENT OF ASSETS
Assessment is done at each Balance Sheet date as to whether there is
any indication that a tangible asset might be impaired. For the purpose
of assessing impairment, the smallest identifiable group of assets that
generates cash inflows from continuing use that are largely independent
of the cash flows from other assets or other group of assets, is
considered as a cash generating unit. If any such indication exists, an
estimate of the recoverable amount of asset/ cash generating unit is
made. Assets whose carrying value exceeds their recoverable amount are
written down to recoverable amount. Recoverable amount is higher of an
asset's or cash generating unit's net selling price and its value in
use. Value in use is the present value of estimated future cash flows
expected to arise from the continuing use of an asset and from its
disposal at the end of its useful life. Assessment is also done at each
Balance Sheet date as to whether there is any indication that an
impairment loss recognized for an asset in prior accounting period may
no longer exist or may have decreased.
p) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
(i) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event, if 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 obligation.
(ii) Contingent Liabilities
Contingent Liabilities are disclosed when there is a possible
obligation arising from past events, the existence of which will be
confirmed only on the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the Company or
a present obligation that arises from past events where it is either
not probable that an outflow of resources will be required to settle or
a reliable estimate of the amount cannot be made.
(iii) Contingent Assets are neither recognised nor disclosed in the
financial statments.
q) LEASES
Where the Company is a Lessee
Leases where the Lessor effectively retains substantially all the risks
and benefits of ownership of the Leased Asset, are classified as
'Operating Leases. Lease rentals with respect to assets taken on
'Operating Lease' are charged to Statement of Profit and Loss on a
straight line basis over the lease term. Leases which effectively
transfer to the Company substantially all the risks and benefits
incidental to the ownership of the leased item are classified as
'Finance Lease'. Assets acquired on Finance Lease which substantially
transfer all the risks and rewards of ownership to the Company are
capitalized as assets by the Company at the lower of the fair value and
the present value of the minimum lease payment and a liability is
created for an equivalent amount. Amortization of capitalized Leased
asset is computed on Straight Line Method over the useful life of the
asset. Lease rentals payable is apportioned between the liability and
finance charge so as to obtain a constant periodic rate of interest on
the outstanding liability for each year.
Mar 31, 2010
(a) Basis of Accounnting
The Company follows the mercantile system of accounting and recognizes
income and expenditure on accrual basis except otherwise stated. The-
accounts are prepared on historical cost basis except in case of
certain fixed asses which have been stated at revalued amounts, as a
going concern, and are in accordance with applicable Accounting
Standards in India.
(b) Fixed Assets
Fixed Assers are stated at cost Including freight & other attributable
expenses net of modvat (wherever recoverable) and includes amounts
added on revaluation, less accumulated depreciation.
(c) Capital Work -in Progress
Capital Work-in-Progress is started at cost and includes expenditure
incurred in connection with the fixed assets and pending allocation on
acquisition of fixed assets,
(d) Depreciation
Depreciation on fixed assets has. been provided according to the
straight line method as per rates given in Schedule XIV of the
Companies Act, 1956,
(e) Investments
Long term investments are elated at cost less provision, if any, for
diminution in the value, which is other than temporary in the opinion
of the management,
(f) Inventories
Inventories are valued on the following basis:
i. Inventories of Raw Materials and Stores & Spares are valued at
cost, arrived at on FIFO basis, or net realizable value, whichever is
lower.
ii. Stock-in-Process are valued at raw material costs,
iii. Finished Goods are valued at lower of cost or net realizable
value. iv. Waste Paper is valued at lower of cost or net realizable
value.
(g) Transactions in Foreign Currency
a) Transactions are recorded at exchange tates prevaling on the date of
the transaction.
b) foreign Currency designated assets, liabilities including fixed
assets are restated at the year end rates and the resultant gain or
loss is taken to Profit & Loss Account.
(h) Borrowing Costs
Borrowing Costs relating to acquisitions/construction of qualifying
assets are capitalized until the tone all substantial activities
necessary to prepare the qualifying assets for their intended use are
complete. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use. All other borrowing
costs are charged to revenue.
(I) Custom Duty
Custom Duty on imported materials is accounted for as and when the
liability arises.
(j) Revenue Recognition
Revenue is recognized only when ft can be reliably measured and it is
reasonable to expect ultimate collection:
i. Sales are disclosed net of sales tax/ vat and sales returns.
ii. Interest income from parties, insurance claim, excise and other
claims / refunds are recognized when there is a reasonable certainty or
ultimate collection on the ground of prudence,
iii. Grants and subsidies are recognized when there is reasonable,
certainty that the grant/subsidy will be received and all the attaching
conditions will be complied with.
(k) Employee Benefits
i) Short Term Employee Benefits -
All employee bencfits fallinng due wholly within twelve months of
rendering the sen-ices are classified as short term employee benefits
which include benefits like salary, wages, and performance incentives,
and are recognised as expenses in the period in which the employee
renders the related services.
ii) Post Employment Plans:
a) Defined Contribution Plans:
The Company has Defined Contribution Plans for post employment benefits
in the form of Provident Fund tor all employees which is administered
by- Regional Provident Fund Commissioner. Provident Fund is classified
as defined contribution plan as the Company has no further obligation
beyond making the contributions, The Companys contributions to Defined
Contribution Plans is charged to Profit & Loss Account as and when
incurred.
b) Defined Benefit Plan:
Funded Plan: The Company has a defined benefit plan for post employment
benefit in the form of Gratuity which is administered through life
insarance Corporation of India (LIC). liability for the above defined
benefit plan is provided on the basis of valuation as at the Balance
Sheet date, carried out by an independent actuary. The .actuarial
method used at measuring she liability is the Projected Unit Credit
(PUC) Method.
c) Other long Term Employee Benefit:
liability for compensated absences is provided on the basis of
valuation as at the Balance sheet date carried out by an independent
actuary, The Actuarial valuation method used for measuring the
liability is Projected Unit Credit Method.
iii) Termination benefits are recognized as an expense as and when
incurred.
iv) the actuarial gains and losses arising during the year are
recognized in the Profit and Loss Account.
(l) Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized in the accounts in respect of present
possible obligations, the amount of which can be reliably estimated.
Contingent liabilities are disclosed in respect of possible obligations
that arise from past events bur their existence is confimed by the
occurrence or non - occurrence of one or more uncertain future events
not wholly within the controls of the Company.
Contingent liabilities not admitted by the Company are not provided for
in the accounts but are disclosed by way of Notes in NOTES ON ACCOUNTS.
Contingent Assets are neither recognized nor disclosed in the
financialstatements,
(m)Earning per Share
The earning in ascertaining the Companys EPS comprises the net
profit/loss after tax and includes the post tax effect of any
extraordinary items. The number of equity shares used in computing
basic EPS is the weighted average number of equity shares outstanding
during the year,
(n) Taxation
Income Tax comprises currant tax and deterred tax. Cunrent tax is the
amount of payable as determined in accofdance with the provisions of
Income Tax Act, 1961, A procision is made for deterred Tax for all
timing difference arising between taxable income ami income at
currently enacted or substantially enacted tax rates. Deferred tax
assets are recognised only if there isreasonable certainty that they
will be realised and are reviewed for the appropriatness of their
respective carrying values at each Balance Sheet date.
(o) Impairment of assets
At each Balance Sheet date, the Company assessed whether there is any
indication that any assets may foe impaired. If arty such indication
exists, the Company estimates the recoverable amount. if the carrying
amount of the assets exceeds the recoverable amount, an impairment loss
is recognised in the accounts to the extent the carrying amount exceeds
the recoverable amount,
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