Mar 31, 2018
A. Summary of Significant Accounting Policies
A.1. Compliance with Ind AS:
The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, as amended from time to time.
Up to the year ended 31 March 2017, the Company prepared its financial statements in accordance with the requirements of previous Generally Accepted Accounting Principles in India (âIndian GAAPâ), which includes standards notified under the Companies (Accounting Standards) Rules, 2014. These are the Companyâs first Ind AS financial statements. The date of transition to Ind AS is April 1, 2016 (transition date). Refer note âEâ for the details of first time adoption exemptions availed by the Company.
The financial statements are approved for issue by the Companyâs Board of Directors on 8th May 2018.
A.2. Basis for preparation of financial statements:
The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities that are measured at fair value at the end of each reporting period. Historical cost is generally based on the fair value of the considerations 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.
The financial statements are presented in INR (Rs.) and all the values are rounded off to the nearest lakh except when otherwise indicated.
A.3. Key sources of estimation:
The preparation of financial statements in conformity with Ind AS requires that management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as on the date of the financial statements. Examples of such estimates include the useful lives of tangible and intangible fixed assets, deferred tax assets, allowance for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Differences, if any, between the actual results and estimates are recognised in the period in which the results are known.
A.4. Property, plant and equipment and Other intangible assets:
Property, plant and equipment
Property, plant and equipment held for use in production or supply of goods or services or for administrative purposes are stated at cost less accumulated depreciation less accumulated impairment, if any. The cost of fixed assets comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use.
Capital work-in-progress for production, supply of administrative purposes is carried at cost less accumulated impairment loss, if any, until construction and installation are complete and the asset is ready for its intended use.
Depreciation is recognized (other than on capital work-in-progress) on a straight line method over the estimated useful lives of assets. Depreciation on assets acquired/ purchased, sold/discarded during the year is provided on a pro-rata basis from the date of each addition till the date of sale/retirement. The estimated useful lives of assets are stated below:
*Estimated Useful life of assets consistent with the useful life specified in the Schedule II of the Companies Act, 2013.
The economic useful lives of assets is assessed based on a technical evaluation, taking into account the nature of assets, the estimated usage of assets, the operating conditions of the assets, past history of replacement, anticipated technological changes, maintenance history, etc. The estimated useful life is reviewed at the end of each reporting period, with effect of any change in estimate being accounted for on a prospective basis.
Where the cost of part of the asset is significant to the total cost of the assets and the useful life of that part is different from the useful of the remaining asset, useful life of that significant part is determined separately. Depreciation of such significant part, if any, is based on the useful life of that part.
Freehold land is not depreciated.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment, determined as the difference between the sales proceeds and the carrying amount of the asset, is recognized in the Statement of Profit or Loss.
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as the deemed cost as of the transition date.
A.5. Impairment of tangible assets:
At the end of each reporting period, the Company reviews the carrying amounts of tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. When it is not possible to estimate the recoverable amount of individual asset, the Company estimates the recoverable amount of the cash generating unit to which an individual asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing, value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in the Statement of Profit or Loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. The reversal of an impairment loss is recognized immediately in the Statement of Profit or Loss.
A.6. Inventories:
Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition is accounted for as follows:
Raw materials, stores and spare parts and traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.
Finished goods and work in progress: cost includes cost of direct materials and labor and a proportion of manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Cost is determined on weighted average basis.
Net realisable value represents the estimated selling price for inventories less all estimated cost of completion and costs necessary to make the sale.
A.7. Revenue recognition:
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty and net of returns, trade allowances, rebates, value added taxes, goods and service tax and amounts collected on behalf of third parties. Revenue from sale of goods is recongnised when the substantial risks and rewards of ownership are transferred to the buyer which generally coincides with dispatch of goods from factory/stock points.
Sale of goods
Sales are recorded net of trade discounts, quantity discounts, rebates, indirect taxes. Sales include Excise duty but exclude Sales tax, value added tax and goods and service tax. Sales also include, sales of scrap, waste, rejection etc.
Interest income
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial assetâs net carrying amount on initial recognition.
A.8. Foreign currencies:
The financial statements are presented in Indian rupees, which is the functional currency of the Company.
Transactions in currencies other than the Companyâs functional currency are recognized at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the closing exchange rate prevailing as at the reporting date. Non-monetary assets and liabilities denominated in a foreign currency are translated using the exchange rate prevailing at the date of initial recognition (in case measured at historical cost) or at the rate prevailing at the date when the fair value is determined (in case measured at fair value).
Foreign exchange differences are recognized in profit or loss in the period in which they arise except for exchange difference on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest cost on those foreign currency borrowings.
A.9. Employee Benefits:
Short-term Employee Benefits:
A liability is recognized for benefits accruing to employees in respect of wages and salaries in the period the related service is rendered at the undiscounted amount of the benefit that is expected to be paid in exchange for that service.
Other long-term employee benefits
The liability for earned leave is not expected to be settled wholly within twelve months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method with actuarial valuations being carried out at each balance sheet date. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognized in other comprehensive income.
Post-employment benefits
(a) Defined contribution plans:
Payments to defined contribution retirement benefit plans are recognized as expenses when the employees have rendered the service entitling them to the contribution.
Provident fund: The employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employeesâ basic salary (currently 12% of employeesâ basic salary). The contributions as specified under the law are made to the provident fund and pension fund administered by the Regional Provident Fund Commissioner. The Company recognizes such contributions as an expense when incurred.
(b) Defined benefit plans:
For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Re-measurements, comprising actuarial gains and losses, the effect of changes to asset ceiling (if applicable) and the return on plan assets (excluding net interest), is recognized in other comprehensive income in the period in which they occur. Re-measurements recognized in other comprehensive income are reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognized in the Statement of Profit or Loss in the period of plan amendment.
Defined benefit costs comprising service cost (including current and past service cost and gains and losses on curtailments and settlements) and net interest expense or income is recognized in profit or loss.
The defined benefit obligation recognized in the balance sheet represents the actual deficit or surplus in the Companyâs defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
Gratuity: The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15/26 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company accounts for the liability for gratuity benefits payable in future based on an independent actuarial valuation carried out at each balance sheet date using the projected unit credit method and the same is unfunded.
(c) Termination Benefits:
Termination benefits such as compensation under employee separation schemes are recognised as expense in the period in which they are incurred.
A.10. Borrowing costs:
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalization. All other borrowing costs are recognized in profit or loss in the period in which they are incurred.
A.11. Taxation:
Income tax expense represents the sum of tax currently payable and deferred tax.
Current tax
The tax currently payable is based on the taxable profit for the year. Taxable profit differs from profit before tax as reported in the statement of profit or loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The current tax is calculated using the tax rates that have been enacted or substantially enacted by the end of the reporting period.
Advance taxes and provisions for current income taxes are presented in the balance sheet after offsetting advance tax paid and income tax provision arising in the same tax jurisdiction and where the relevant tax paying units intends to settle the asset and liability on net basis.
Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax asset is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.
Current tax and deferred tax for the year
Current and deferred tax are recognized in the Statement of Profit or Loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.
A.12. Provisions:
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognized as provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent liabilities and contingent assets
Contingent liabilities and contingent assets, if any, are disclosed in the notes to accounts.
A.13. Financial instruments:
Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments and are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or liabilities on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets
Initial recognition and measurement
All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.
Subsequent measurement
Financial assets carried at amortised cost (AC)
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are measured at FVTPL.
Investment in subsidiaries, Associates and Joint Ventures
The Company has accounted for its investments in subsidiaries, associates and joint venture at cost.
Other Equity Investments
All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in âOther Comprehensive Incomeâ.
Impairment of financial assets
In accordance with Ind AS 109, the Company uses âExpected Credit Lossâ (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to:
- The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
- Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For trade receivables Company applies âsimplified approachâ which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.
Financial liabilities
Initial recognition and measurement
All financial liabilities are recognized at fair value 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.
Subsequent measurement
Financial liabilities are carried at amortized 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.
De-recognition
Financial liabilities are derecognized when, and only when, the obligations are discharged, cancelled or have expired. An exchange with a lender of a debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of a financial liability derecognized and the consideration paid or payable is recognized in the Statement of Profit or Loss. Foreign exchange gains and losses
Financial liabilities denominated in a foreign currency and are measured at amortized cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortized cost of the instruments and are recognized in the Statement of Profit or Loss.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured at fair value through profit or loss, the foreign exchange component forms part of the fair value gains or losses and is recognized in the Statement of Profit and Loss.
A.14. Cash and cash equivalents:
Cash and cash equivalents comprise cash in hand and unencumbered, highly liquid bank and other balances (with original maturity of three months or less) that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value
A.15. Statement of Cash flow
Cash flow statement is prepared segregating the cash flows from operating, investing and financing activities. Cash flow from operating activities is reported using indirect method, adjusting the net profits for the effects of:
i. transactions of a non-cash nature
ii. any deferrals or accruals of past or future operating cash receipts or payments and
iii. items of income or expense associated with investing or financing cash flows
iv. Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as on the date of Balance Sheet.
A.16. Events after Reporting date
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date only of material size or nature are disclosed
A.17. Earnings per share:
The Company reports basic and diluted earnings per share (EPS) in accordance with Indian Accounting Standard 33 âEarnings per Shareâ. Basic EPS is computed by dividing the net profit or loss attributable to ordinary equity holders of the parent entity by the weighted average number of equity shares outstanding during the period. Diluted EPS is computed by dividing the net profit or loss attributable to ordinary equity holders of the parent entity by weighted average number of equity shares outstanding during the year as adjusted for the effects of the effects of all dilutive potential ordinary shares dilutive potential equity shares (except where the results are anti-dilutive).
Mar 31, 2017
(a) Basis of Preparation of Financial Statements
The financial statements are prepared and presented under the historical cost convention in accordance with the Generally Accepted Accounting Principles (GAAP) and the provisions of the Companies Act, 2013. The Company follows the mercantile system of accounting and recognizes Income and Expenditure on accrual basis. Accounting policies not referred to otherwise are consistent with the GAAP.
(b) Use of Estimates
The preparation of financial statements in conformity with GAAP requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements, the reported amounts of revenues and expenses during the reported period and the disclosures relating to contingent liabilities as of the date of the financial statements. Difference between actual results and estimates are recognized in the period in which the results are known or materialize.
(c) Fixed Assets
Fixed Assets are recorded at cost of acquisition or construction, net of CENVAT \ VAT and include amounts added /reduced on revaluation, less accumulated depreciation and impairment loss, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of fixed assets up to the date of commissioning of the assets and other incidental expenses incurred up to that date. Fixed Assets acquired and put to use for project purpose are capitalized Project under commissioning and other Capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
(d) Depreciation and Amortization
(i) Depreciation is provided as per the useful life specified in the Act or as re-assessed by the Company. Consequently, the Company has followed useful life specification as per Schedule II to the Companies Act, 2013.
(ii) Wherever the assets are impaired or significantly impaired and the written down value of those assets have been brought down to a level based on the provision for impairment of assets made as per Accounting Standards (AS) 28 on "Impairment of Assets" issued by The Institute of Chartered Accountants of India, depreciation has been worked out after reassessing the useful life of the assets from the brought down level and accordingly charged, considering brought down level as a base.
(e) Investments
Investments are classified into Current and Long-term Investments. Current investments are stated at lower of cost and fair value. Long-term investments are stated at cost. Provision for diminution in the value of Long-term investments is made only if such a decline is other than temporary.
(f) Impairment of Assets
The carrying amount of assets are reviewed at each balance sheet date in respect of Cash Generating Unit if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount exceeds its recoverable amount. The recoverable amount is the greater of the asset''s selling price and value in use.
Reversal of an impairment loss for an asset is recognized as income in the statement of profit and loss, which was earlier shown as an expense.
(g) Valuation of Inventories
Inventories are valued in accordance with the requirements of revised Accounting Standard (AS) 2 on "valuation of inventories" issued by The Institute of Chartered Accountants of India (ICAI). Mode of working of cost is weighted average while any item of inventory is valued at Net Realizable Value if the same is less than cost. Inventories are specifically identified, wherever possible in respect of traded goods.
Inventory valuation is determined on the following basis :
(i) Raw Materials, Stock in Process, Finished goods, Stock in Trade and Stores Spares & Chemicals are valued at cost or Net realizable value whichever is lower.
(ii) Waste is valued at net realizable value.
(iii) By product is valued at net realizable value.
(iv) Property under Development is valued at revalued cost of land and construction thereon at cost.
(h) Revenue Recognition
Revenue from operations includes sale value of goods, net of sales returns, discounts, rate difference and Sales Tax / Value Added Tax (VAT). Sales also include, sales of scrap, waste, rejection etc. and profits from property held as stock in trade.
(i) Accounting for Excise Duty / Service Tax and Sales Tax / Value Added Tax
(i) Excise Duty / Service tax has been accounted on the basis of both, payments made in respect of goods cleared as also provision made for goods lying in bonded warehouses and the same has been treated as part of the cost of respective stock as per the revised Guidance Note on Accounting treatment for Excise Duty. However, this has no effect on the Profit for the year. Amount of Excise Duty shown as deduction from Sales is the total Excise Duty for the year except the duty related to difference between Closing Stock & Opening Stock. Excise duty related to the difference between Closing Stock & Opening Stock is recognized separately in the Profit & Loss Account.
(j) Cenvat.
(i) The purchase cost of raw materials and other expenses have been considered net of cenvat available on inputs.
(ii) The CENVAT benefits attributable to acquisition / construction of fixed assets are netted off against the cost of fixed assets in accordance with the guidance note issued by the ICAI.
(k) Expenses
All material known liabilities are provided for, on the basis of available information /estimates.
(l) Employee Benefits :
(i) Short Term Employee Benefits
All employee benefits falling due within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, bonus, leave salary ex-gratia are recognized in the period in which employee renders the related services.
(ii) For Defined Contribution Plans (PF, FPF and ESI)
Contributions to Defined Contribution Plans are recognized as expenses in the Profit and Loss Account as they are incurred.
(iii) For Defined Benefit Plans
As per requirement defined in Accounting Standard 15 - "Employee Benefits" issued by the Institute of Chartered Accountants of India, the entity has relied on the Acturial valuation undertaken by the certified actury for the present value of obligation and the same is unfunded.
(m) Borrowing Cost
Interest and other borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Other interest and borrowing costs are charged to revenue.
(n) Provision for Current and Deferred Tax
Provision for current tax is made on the basis of the assessable income at the tax rate which is applicable to the relevant assessment year as per the Income Tax Act, 1961. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is a virtual certainty of their realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of their realization. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed for reassessment.
(o) Foreign Currency Transactions
(i) Transactions denominated in foreign currencies are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.
(ii) At each Balance Sheet date, unrealized gains or losses on foreign currency transactions on account of increase or decrease in rupee liability / asset as a result of exchange difference between the Balance sheet date rate and the transaction Date rate to items of assets and liabilities are recognized in the Statement of Profit and Loss and accordingly, related assets or liabilities are adjusted.
Mar 31, 2016
(a) Basis of Preparation of Financial Statements
The financial statements are prepared and presented under the historical cost convention in accordance with the Generally Accepted Accounting Principles (GAAP) and the provisions of The Companies Act, 2013. The Company follows the mercantile system of accounting and recognizes Income and Expenditure on accrual basis. Accounting policies not referred to otherwise are consistent with the generally accepted accounting principles.
(b) Use of Estimates
The preparation of financial statements in conformity with GAAP requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements, the reported amounts of revenues and expenses during the reported period and the disclosures relating to contingent liabilities as of the date of the financial statements. Difference between actual results and estimates are recognized in the period in which the results are known or materialize.
(c) Fixed Assets
Fixed Assets are recorded at cost of acquisition or construction, net of CENVAT \ VAT and include amounts added /reduced on revaluation, less accumulated depreciation and impairment loss, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of fixed assets up to the date of commissioning of the assets and other incidental expenses incurred up to that date. Fixed Assets acquired and put to use for project purpose are capitalized Project under commissioning and other Capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
(d) Depreciation and Amortization
(i) Consequent to the applicability of the Companies Act, 2013 with effect from 1st April, 2014, the depreciation is provided as per the useful life specified in the Act or as re-assessed by the Company. Consequently, the Company has followed useful life specification as per Schedule II to the Companies Act, 2013.
(ii) Wherever the assets are impaired or significantly impaired and the written down value of those assets have been brought down to a level based on the provision for impairment of assets made as per Accounting Standards (AS) 28 on "Impairment of Assets" issued by The Institute of Chartered Accountants of India, depreciation has been worked out after reassessing the useful life of the assets from the brought down level and accordingly charged, considering brought down level as a base.
(e) Investments
Investments are classified into Current and Long-term Investments. Current investments are stated at lower of cost and fair value. Long-term investments are stated at cost. Provision for diminution in the value of Long-term investments is made only if such a decline is other than temporary.
(f) Impairment of Assets
The carrying amount of assets are reviewed at each balance sheet date in respect of Cash Generating Unit if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount exceeds its recoverable amount. The recoverable amount is the greater of the asset''s selling price and value in use.
Reversal of an impairment loss for an asset is recognized as income in the statement of profit and loss, which was earlier shown as an expense.
(g) Valuation of Inventories
Inventories are valued in accordance with the requirements of revised Accounting Standard (AS) 2 on "valuation of inventories" issued by The Institute of Chartered Accountants of India (ICAI). Mode of working of cost is weighted average while any item of inventory is valued at Net Realizable Value if the same is less than cost. Inventories are specifically identified, wherever possible in respect of traded goods.
Inventory valuation is determined on the following basis :
(i) Raw Materials, Stock in Process, Finished goods, Stock in Trade and Stores Spares & Chemicals are valued at cost or Net realizable value whichever is lower.
(ii) Waste is valued at net realizable value.
(iii) By product is valued at net realizable value.
(iv) Property under Development is valued at revalued cost of land and construction thereon at cost.
(v) Property under Development (converted from Fixed Assets), is valued at Book Value.
(vi) Land at Vareli is valued at book cost.
Note 1 : Significant Accounting Policies (Contd.)
(h) Revenue Recogniton
Revenue from operations includes sale value of goods, net of sales returns, discounts, rate difference and Sales Tax / Value Added Tax (VAT). Sales also include, sales of scrap, waste, reject etc. and profits from property held as stock in trade.
(i) Accounting for Excise Duty / Service Tax and Sales Tax / Value Added Tax
(i) Excise Duty / Service tax has been accounted on the basis of both, payments made in respect of goods cleared as also provision made for goods lying in bonded warehouses and the same has been treated as part of the cost of respective stock as per the revised Guidance Note on Accounting treatment for Excise Duty. However, this has no effect on the Profit for the year. Amount of Excise Duty shown as deduction from Sales is the total Excise Duty for the year except the duty related to difference between Closing Stock & Opening Stock. Excise duty related to the difference between Closing Stock & Opening Stock is recognized separately in the Profit & Loss Account.
(ii) The CENVAT benefits attributable to acquisition of fixed assets is netted off against the cost of fixed assets in accordance with the guidance note issued by the Institute of Chartered Accountants of India.
(j) Cenvat.
(i) The purchase cost of raw materials and other expenses have been considered net of cenvat available on inputs.
(ii) The cenvat benefits attributable to acquisition / construction of fixed assets is netted off against the cost of fixed assets in accordance with the guidance note issued by The Institute of Chartered Accountants of India.
(k) Expenses
All material known liabilities are provided for, on the basis of available information /estimates.
(l) Employee Benefits :
(i) Short Term Employee Benefits
All employee benefits falling due within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, bonus, leave salary ex-gratia are recognized in the period in which employee renders the related services.
(ii) For Defined Contribution Plans (PF, FPF and ESI)
Contributions to Defined Contribution Plans are recognized as expenses in the Profit and Loss Account as they are incurred.
(iii) For Defined Benefit Plans
As per requirement defined in Accounting Standard 15 - "Employee Benefits" issued by the Institute of Chartered Accountants of India, the entity has relied on the Acturial valuation undertaken by the certified actuary for the present value of obligation and the same is unfunded.
(m) Borrowing Cost
Interest and other borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Other interest and borrowing costs are charged to revenue.
(n) Provision for Current and Deferred Tax
Provision for current tax is made on the basis of the assessable income at the tax rate which is applicable to the relevant assessment year as per the Income Tax Act, 1961. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is a virtual certainty of their realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of their realization. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed for reassessment.
(o) Foreign Currency Transactions
(i) Transactions denominated in foreign currencies are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.
(ii) At each Balance Sheet date, unrealized gains or losses on foreign currency transactions on account of increase or decrease in rupee liability / asset as a result of exchange difference between the Balance sheet date rate and the transaction Date rate to items of assets and liabilities are recognized in the Statement of Profit and Loss and accordingly, related assets or liabilities are adjusted.
Mar 31, 2015
(a) Basis of Preparation of Financial Statements
The financial statements are prepared and presented under the
historical cost convention in accordance with the Generally Accepted
Accounting Principles (GAAP) and the provisions of The Companies Act,
2013. The Company follows the mercantile system of accounting and
recognizes Income and Expenditure on accrual basis. Accounting policies
not referred to otherwise are consistent with the generally accepted
accounting principles.
(b) Use of Estimates
The preparation of financial statements in conformity with GAAP
requires estimates and assumptions to be made that affect the reported
amounts of assets and liabilities on the date of the financial
statements, the reported amounts of revenues and expenses during the
reported period and the disclosures relating to contingent liabilities
as of the date of the financial statements. Difference between actual
results and estimates are recognised in the period in which the results
are known or materialise.
(c) Fixed Assets
Fixed Assets are recorded at cost of acquisition or construction, net
of CENVAT VAT and include amounts added /reduced on revaluation, less
accumulated depreciation and impairment loss, if any. The cost of fixed
assets includes interest on borrowings attributable to acquisition of
fixed assets up to the date of commissioning of the assets and other
incidental expenses incurred up to that date. Fixed Assets acquired and
put to use for project purpose are capitalised Project under
commissioning and other Capital Work-in-Progress are carried at cost,
comprising direct cost, related incidental expenses and attributable
interest.
(d) Depreciation and Amortisation
(i) Consequent to the applicability of the Companies Act, 2013 with
effect from 1st April, 2014, during the year ended 31st March, 2015,
the depreciation is provided as per the useful life specified in the
Act or as re-assessed by the Company. Consequently, the Company has
followed useful life specification as per Schedule II to the Companies
Act, 2013.
(ii) Wherever the assets are impaired or significantly impaired and the
written down value of those assets have been brought down to a level
based on the provision for impairment of assets made as per Accounting
Standards (AS) 28 on "Impairment of Assets" issued by The Institute of
Chartered Accountants of India, depreciation has been worked out after
reassessing the useful life of the assets from the brought down level
and accordingly charged, considering brought down level as a base.
(e) Investments
Investments are classified into Current and Long-term Investments.
Current investments are stated at lower of cost and fair value.
Long-term investments are stated at cost. Provision for diminution in
the value of Long-term investments is made only if such a decline is
other than temporary.
(f) Impairment of Assets
The carrying amount of assets are reviewed at each balance sheet date
in respect of Cash Generating Unit if there is any indication of
impairment based on internal/external factors. An impairment loss is
recognized wherever the carrying amount exceeds its recoverable amount.
The recoverable amount is the greater of the asset's selling price
andvaluein use.
Reversal of an impairment loss for an asset is recognised as income in
the statement of profit and loss, which was earlier shown as an
expense.
(g) Valuation of Inventories
Inventories are valued in accordance with the requirements of revised
Accounting Standard (AS) 2 on "valuation of inventories" issued by The
Institute of Chartered Accountants of India (ICAI). Mode of working of
cost is weighted average while any item of inventory is valued at Net
Realisable Value if the same is less than cost. Inventories are
specifically identified, wherever possible in respect of traded goods.
Inventory valuation is determined on the following basis :
(i) Raw Materials, Stock in Process, Finished goods, Stock in Trade and
Stores Spares & Chemicals are valued at cost or Net realisable value
whichever is lower.
(ii) Waste is valued at net realisable value.
(iii) By product is valued at net realisable value.
(iv) Property under Development is valued at revalued cost of land and
construction thereon at cost.
(v) Property under Development (converted from Fixed Assets), is valued
at Book Value.
(vi) Land at Vareli is valued at book cost.
(h) Revenue Recognition
Revenue from operations includes sale value of goods, net of sales
returns, discounts, rate difference and Sales Tax/Value Added Tax
(VAT). Sales also include, sales of scrap, waste, reject etc. and
profits from property held as stock in trade.
(i) Accounting for Excise Duty / Service Tax and Sales Tax / Value
Added Tax
(i) Excise Duty / Service tax has been accounted on the basis of both,
payments made in respect of goods cleared as also provision made for
goods lying in bonded warehouses and the same has been treated as part
of the cost of respective stock as per the revised Guidance Note on
Accounting treatment for Excise Duty. However, this has no effect on the
Profit for the year. Amount of Excise Duty shown as deduction from Sales
is the total Excise Duty for the year except the duty related to
difference between Closing Stock & Opening Stock. Excise duty related to
the difference between Closing Stock & Opening Stock is recognised
separately in the Profit & Loss Account.
(ii) The CENVAT benefits attributable to acquisition of fixed assets is
netted off against the cost of fixed assets in accordance with the
guidance note issued by the Institute of Chartered Accountants of
India.
(j) Cenvat.
(i) The purchase cost of raw materials and other expenses have been
considered net of cenvat available on inputs.
(ii) The cenvat benefits attributable to acquisition / construction of
fixed assets is netted off against the cost of fixed assets in
accordance with the guidance note issued by The Institute of Chartered
Accountants of India.
(k) Expenses
All material known liabilities are provided for, on the basis of
available information /estimates.
(l) Employee Benefits:
(i) Short Term Employee Benefits
All employee benefits falling due within twelve months of rendering the
service are classified as short term employee benefits. The benefits
like salaries, wages, bonus, leave salary ex-gratia are recognised in
the period in which employee renders the related services.
(ii) For Defined Contribution Plans (PF, FPF and ESI)
Contributions to Defined Contribution Plans are recognized as expenses
in the Profit and Loss Account as they are incurred.
(iii) ForDefinedBenefitPlans
As per requirement defined in Accounting Standard 15 - "Employee
Benefits" issued by the Institute of Chartered Accountants of India,
the entity has relied on the Acturial valuation undertaken by the
certified actury for the prsent value ofobligation and the same is
unfunded.
(m) Borrowing Cost
Interest and other borrowing costs that are directly attributable to
the acquisition or construction of qualifying assets are capitalised as
part of the cost of such assets. A qualifying asset is one that
necessarily takes substantial period of time to get ready for intended
use. Other interest and borrowing costs are charged to revenue.
(n) Provision for Current and Deferred Tax
Provision for current tax is made on the basis of the assessable income
at the tax rate which is applicable to the relevant assessment year as
per the Income Tax Act, 1961. The deferred tax asset and deferred tax
liability is calculated by applying tax rate and tax laws that have
been enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets arising mainly on account of brought forward losses
and unabsorbed depreciation under tax laws, are recognised, only if
there is a virtual certainty of their realisation, supported by
convincing evidence. Deferred tax assets on account of other timing
differences are recognised only to the extent there is a reasonable
certainty of their realisation. Deferred tax asset is recognised and
carried forward only to the extent that there is a virtual certainty
that the asset will be realised in future. At each Balance Sheet date,
the carrying amount of deferred tax assets are reviewed for
reassessment.
(o) Foreign Currency Transactions
(i) Transactions denominated in foreign currencies are recorded at the
rates of exchange prevailing on the dates when the relevant
transactions take place.
(ii) At each Balance Sheet date, unrealized gains or losses on foreign
currency transactions on account of increase or decrease in rupee
liability / asset as a result of exchange difference between the
Balance sheet date rate and the transaction Date rate to items of
assets and liabilities are recognised in the Statement of Profit and
Loss and accordingly, related assets or liabilities are adjusted.
Mar 31, 2013
(a) Basis of Preparation of Financial Statements
The financial statements are prepared and presented under the
historical cost convention in accordance with the Generally Accepted
Accounting Principles (GAAP) and the provisions of The Companies Act,
1956. The Company follows the mercantile system of accounting and
recognizes Income and Expenditure on accrual basis. Accounting policies
not referred to otherwise are consistent with the generally accepted
accounting principles.
(b) Use of Estimates
The preparation of financial statements in conformity with GAAP
requires estimates and assumptions to be made that affect the reported
amounts of assets and liabilities on the date of the financial
statements and the reported amounts of revenues and expenses during the
reported period and the disclosures relating to contingent liabilities
as of the date of the financial statements. Difference between actual
results and estimates are recognised in the period in which the results
are known or materialise
(c) Fixed Assets
Fixed Assets are recorded at cost of acquisition or construction, net
of CENVAT VAT and include amounts added /reduced on revaluation, less
accumulated depreciation and impairment loss, if any. The cost of fixed
assets includes interest on borrowings attributable to acquisition of
fixed assets up to the date of commissioning of the assets and other
incidental expenses incurred up to that date. Fixed Assets acquired and
put to use for project purpose are capitalised Project under
commissioning and other Capital Work-in-Progress are carried at cost,
comprising direct cost, related incidental expenses and attributable
interest.
(d) Methord of Depreciation and Amortisation
Depreciation is provided in accordance with the provision of Section
205(2) read with Section 350 of the Companies Act, 1956 except:
(i) Depreciation on fixed assets purchased up to 1984 is provided as
per written down value method at the rates prescribed by Schedule XIV
to the Companies Act, 1956,as amended from time to time.
(ii) Depreciation on fixed assets purchased during the year 1985 and
1986 is provided as per straight-line method at the rates corresponding
to the rates applicable under Income-tax Rules at that time.
(iii) Depreciation on assets purchased during the year 1987 and onwards
has been provided as per straight-line method at the rates and on the
basis prescribed by Schedule XIV to the Companies Act, 1956 as amended
from time to time.
(iv) On assets impaired, depreciation has been provided as per (i),
(ii) and (iii) above until 31st March, 2004. However, wherever the
assets are impaired or significantly impaired and the written down
value of those assets have been brought down to a level based on the
provision for impairment of assets made as per Accounting Standards
(AS) 28 on "Impairment of Assets" issued by The Institute of Chartered
Accountants of India, depreciation has been worked out after
reassessing the useful life of the assets from the brought down level
and accordingly charged considering brought down level as a base.
(e) Investments
nvestments are classified into Current and Long-term Investments.
Current investments are stated at lower of cost and fair value.
Long-term investments are stated at cost. Provision for diminution in
the value of Long-term investments is made only if such a decline is
other than temporary.
(f) Impairment of Assets
The carrying amount of assets are reviewed at each balance sheet date
in respect of Cash Generating Unit if there is any indication of
impairment based on internal/external factors. An impairment loss is
recognized wherever the carrying amount exceeds its recoverable amount.
The recoverable amount is the greater of the asset''s selling price and
value in use.
(g) Valuation of Inventories
nventories are valued in accordance with the requirements of revised
Accounting Standard (AS) 2 on "valuation of inventories" issued by The
Institute of Chartered Accountants of India (ICAI). Mode of working of
cost is weighted average while any item of inventory is valued at Net
Realisable Value if the same is less than cost. Inventories are
specifically identified, wherever possible in respect of traded goods
nventory valuation is determined on the following basis
(i) Raw Materials, Stock in Process, Finished goods, Stock in Trade and
Stores Spares & Chemicals are valued at cost or Net realisable value
whichever is lower,
(ii) Waste is valued at net realisable value
(iii) By product is valued at net realisable value
(iv) Property under Development is valued at revalued cost of land and
construction thereon at cost (v) Land at Vareli is valued at book cost
(h) Revenue Recognition
Revenue from operations includes sale value of goods, net of sales
returns, discounts, rate difference and Sales Tax / Value Added Tax
(VAT). Sales also include, sales of scrap, waste, reject etc. and
profits from property held as stock in trade
(i) Accounting for Excise Duty / Service Tax and Sales Tax / Value
Added Tax
(i) Excise Duty / Service tax has been accounted on the basis of both,
payments made in respect of goods cleared as also provision made for
goods lying in bonded warehouses and the same has been treated as part
of the cost of respective stock as per the revised Guidance Note on
Accounting treatment for Excise Duty. However, this has no effect on
the Profit for the year. Amount of Excise Duty shown as deduction from
Sales is the total Excise Duty for the year except the duty related to
difference between Closing Stock & Opening Stock. Excise duty related
to the difference between Closing Stock & Opening Stock is recognised
separately in the Profit & Loss Account.
(ii) The CENVAT benefits attributable to acquisition of fixed assets is
netted off against the cost of fixed assets in accordance with the
guidance note issued by the Institute of Chartered Accountants of
India. (j) Cenvat.
(i) The purchase cost of raw materials and other expenses have been
considered net of cenvat available on inputs
(ii) The cenvat benefits attributable to acquisition / construction of
fixed assets is netted off against the cost of fixed assets in
accordance with the guidance note issued by The Institute of Chartered
Accountants of India. (k) Expenses
All material known liabilities are provided for, on the basis of
available information /estimates (I) Employee Benefits:
(i) Short Term Employee Benefits
All employee benefits falling due within twelve months of rendering the
service are classified as short term employee benefits. The benefits
like salaries, wages, bonus, leave salary ex-gratia are recognised in
the period in which employee renders the related services
(ii) For Defined Contribution Plans (PF, FPF and ESI) Contributions to
Defined Contribution Plans are recognized as expenses in the Profit and
Loss Account as they are incurred
(iii) For Defined Benefit Plans
As per requirement defined in Accounting Standard 15 - "Employee
Benefits" issued by the Institute of Chartered Accountants of ndia, the
entity has relied on the Acturial valuation undertaken by the certified
actury for the prsent value of obligation and the same is unfunded.
(m) Borrowing Cost
nterest and other borrowing costs that are directly attributable to the
acquisition or construction of qualifying assets are capitalised as
part of the cost of such assets. A qualifying asset is one that
necessarily takes substantial period of time to get ready for intended
use. Other interest and borrowing costs are charged to revenue.
(n) Provision for Current and Deferred Tax
Provision for current tax is made on the basis of the assessable income
at the tax rate which is applicable to the relevant assessment year as
per the Income Tax Act, 1961. The deferred tax asset and deferred tax
liability is calculated by applying tax rate and tax laws that have
been enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets arising mainly on account of brought forward losses
and unabsorbed depreciation under tax laws, are recognised, only if
there is a virtual certainty of their realisation, supported by
convincing evidence. Deferred tax assets on account of other timing
differences are recognised only to the extent there is a reasonable
certainty of their realisation. Deferred tax asset is recognised and
carried forward only to the extent that there is a virtual certainty
that the asset will be realised in future. At each Balance Sheet date,
the carrying amount of deferred tax assets are reviewed to
reassessment.
(o) Foreign Currency Transactions
(i) Transactions denominated in foreign currencies are recorded at the
rates of exchange prevailing on the dates when the relevant
transactions take place.
(ii) At each Balance Sheet date, unrealized gains or losses on foreign
currency transactions on account of increase or decrease in rupee
liability / asset as a result of exchange difference between the
Balance sheet date rate and the transaction Date rate to items of
assets and liabilities are recognised in the Statement of Profit and
Loss and accordingly, related assets or liabilities are adjusted
Mar 31, 2012
(a) Basis of Preparation of Financial Statements
The financial statements have been prepared under the historical cost
convention in accordance with the generally accepted accounting
principles and the provisions of The Companies Act, 1956. The Company
follows the mercantile system of accounting and recognises I ncome and
Expenditure on accrual basis. Accounting policies not referred to
otherwise are consistent with the generally accepted accounting
principles.
(b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Differences between actual
results and estimates are recognised in the period in which the results
are known/materialised.
(c) Fixed Assets
Fixed Assets are recorded at cost of acquisition or construction, net
of CENVAT/VAT and include amounts added/reduced on revaluation, less
accumulated depreciation and impairment loss, if any. The cost of fixed
assets includes interest on borrowings attributable to acquisition of
fixed assets up to the date of commissioning of the assets and other
incidental expenses incurred up to that date. Fixed Assets acquired and
put to use for project purpose are capitalised Project under
commissioning and other Capital Work-in-Progress are carried at cost,
comprising direct cost, related incidental expenses and attributable
interest.
(d) Method of Depreciation and Amortisation
Depreciation is provided in accordance with the provision of Section
205(2) read with Section 350 of the Companies Act,1956 except:
(i) Depreciation on fixed assets purchased up to 1984 is provided as
per written down value method at the rates prescribed by Schedule.
XIV to the Companies Act, 1956,as amended from time to time.
(ii) Depreciation on fixed assets purchased during the year 1985 and
1986 is provided as per straight-line method at the rates corresponding
to the rates applicable under Income-tax Rules at that time.
(iii) Depreciation on assets purchased during the year 1987 and onwards
has been provided as per straight-line method at the rates and on the
basis prescribed by Schedule XIV to the Companies Act,1956 as amended
from time to time.
(iv) On assets impaired, depreciation has been provided as per (i),
(ii) and (iii) above until 31st March, 2004. However, wherever the
assets are impaired or significantly impaired and the written down
value of those assets have been brought down to a level based on the
provision for impairment of assets made as per Accounting Standards
(AS) 28 on "Impairment of Assets" issued by The Institute of
Chartered Accountants of India, depreciation has been worked out after
reassessing the useful life of the assets from the brought down level
and accordingly charged considering brought down level as a base.
(e) Investments
Investments are classified into Current and Long-term Investments.
Current investments are stated at lower of cost and fair value.
Long-term investments are stated at cost. Provision for diminution in
the value of Long-term investments is made only if such a decline is
other than temporary.
(f) Impairment of Assets
The carrying amount of assets are reviewed at each balance sheet date
in respect of Cash Generating Unit if there is any indication of
impairment based on internal/external factors. An impairment loss is
recognised wherever the carrying amount exceeds its recoverable amount.
The recoverable amount is the greater of the asset's selling price
and value in use.
(g) Valuation of Inventories
Inventories are valued in accordance with the requirements of revised
Accounting Standard (AS) 2 on "valuation of inventories" issued by
The Institute of Chartered Accountants of India. Mode of working of
cost is weighted average, while any item of inventory is valued at Net
Realisable Value if the same is less than cost. Inventories are
specifically identified, wherever possible in respect of traded goods.
Inventory valuation is determined on the following basis :
(i) Raw Materials, Stock in Process, Finished goods, Stock-in-Trade and
Stores Spares & Chemicals are valued at cost or Net realisable value
whichever is lower.
(ii) Waste is valued at net realisable value.
(iii) By product is valued at net realisable value.
(iv) Property under Development is valued at revalued cost of land and
construction thereon at cost.
(v) Land at Vareli is valued at book cost
(h) Revenue Recognition
Revenue from operations includes sale value of goods, net of sales
returns, discounts, rate difference and Sales Tax/Value Added Tax
(VAT). Sales also include, sales of scrap, waste, reject etc. and
profits from property held as stock in trade.
(i) Accounting for Excise Duty/Service Tax and Sales Tax/Value Added
Tax
(i) Excise Duty/Service tax has been accounted on the basis of both,
payments made in respect of goods cleared as also provision made for
goods lying in bonded warehouses and the same has been treated as part
of the cost of respective stock as per the revised Guidance Note on
Accounting treatment for Excise Duty. However, this has no effect on
the Profit for the year. Amount of Excise Duty shown as deduction from
Sales is the total Excise Duty for the year except the duty related to
difference between Closing Stock and Opening Stock. Excise duty related
to the difference between Closing Stock & Opening Stock is recognised
separately in the Profit and Loss Account.
(ii) The CENVAT benefits attributable to acquisition of fixed assets is
netted off against the cost of fixed assets in accordance with the
guidance note issued by the Institute of Chartered Accountants of
India.
(j) Cenvat
(i) The purchase cost of raw materials and other expenses have been
considered net of cenvat available on inputs.
(ii) The cenvat benefits attributable to acquisition/construction of
fixed assets is netted off against the cost of fixed assets in
accordance with the guidance note issued by The Institute of Chartered
Accountants of India.
(k) Expenses
All material known liabilities are provided for, on the basis of
available information/estimates.
(l) Employee Benefits
(i) Short Term Employee Benefits
All employee benefits falling due within twelve months of rendering the
service are classified as short term employee benefits. The benefits
like salaries, wages, bonus, leave salary ex-gratia are recognised in
the period in which employee renders the related services.
(ii) For Defined Contribution Plans (PF, FPF and ESI)
Contributions to Defined Contribution Plans are recognized as expenses
in the Profit and Loss Account as they are incurred.
(iii) For Defined Benefit Plans
As per requirement defined in Accounting Standard 15 - "Employee
Benefits" issued by the Institute of Chartered Accountants of India,
the entity has relied on the Acturial valuation undertaken by the
certified actury for the prsent value of obligation and the same is
unfunded.
(m) Borrowing Cost
Interest and other borrowing costs that are directly attributable to
the acquisition or construction of qualifying assets are capitalised as
part of the cost of such assets. A qualifying asset is one that
necessarily takes substantial period of time to get ready for intended
use. Other interest and borrowing costs are charged to revenue.
(n) Provision for Current and Deferred Tax
Provision for current tax is made on the basis of the assessable income
at the tax rate which is applicable to the relevant assessment year as
per the Income Tax Act, 1961. The deferred tax asset and deferred tax
liability is calculated by applying tax rate and tax laws that have
been enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets arising mainly on account of brought forward losses
and unabsorbed depreciation under tax laws, are recognised, only if
there is a virtual certainty of their realisation, supported by
convincing evidence. Deferred tax assets on account of other timing
differences are recognised only to the extent there is a reasonable
certainty of their realisation. Deferred tax asset is recognised and
carried forward only to the extent that there is a virtual certainty
that the asset will be realised in future. At each Balance Sheet date,
the carrying amount of deferred tax assets are reviewed to
re-assessment.
(o) Foreign Currency Transactions
(i) Transactions denominated in foreign currencies are recorded at the
rates of exchange prevailing on the dates when the relevant
transactions take place.
(ii) At each Balance Sheet date, unrealised gains or losses on foreign
currency transactions on account of increase or decrease in rupee
liability/asset as a result of exchange difference between the Balance
sheet date rate and the transaction Date rate to items of assets and
liabilities are recognised in the Statement of Profit and Loss and
accordingly, related assets or liabilities are adjusted.
Mar 31, 2011
1. Basis of Preparation of Financial Statements
The financial statements have been prepared under the historical cost
convention in accordance with the generally accepted accounting
principles in India and the provisions of The Companies Act, 1956 read
with the Companies (Accounting Standards) Rules, 2006. The Company
follows the mercantile system of accounting and recognizes Income and
Expenditure on accrual basis. Accounting policies not referred to
otherwise are consistent with the generally accepted accounting
principles.
2. Fixed Assets
Fixed Assets are stated at cost of acquisition or construction, (Net of
Cenvat credit / Value Added Tax) except in case of certain fixed assets
which have been revalued, at its revalued amount, less accumulated
depreciation and impairment loss, if any. All costs relating to the
acquisition and installation of fiixed assets are capitalised and
include borrowing costs directly attributable to construction or
acquisition of fixed assets, upto the date the asset is put to use.
Fixed Assets acquired and put to use for project purpose are
capitalised and depreciation thereon is included in project cost till
commissioning of the project. Projects under commissioning and other
Capital Work-in-Progress are carried at cost, comprising direct cost,
related incidental expenses and attributable interest.
3. Depreciation
Depreciation on fiixed assets has been provided in accordance with the
provision of Section 205(2) read with Section 350 of the Companies
Act,1956 except:
(i) in respect of depreciation on assets purchased up to 1984, has been
provided as per written down value method at the rates prescribed in
Schedule XIV of the Companies Act, 1956,as amended from time to time.
(ii) in respect of assets purchased during the year 1985 and 1986,
depreciation has been provided as per straight-line method at the rates
corresponding to the rates applicable under Income-tax Rules at that
time.
(iii) in respect of assets purchased during the year 1987 and onwards,
depreciation has been provided as per straight-line method at the rates
and in the manner prescribed by Schedule XIV of the Companies Act,1956
as amended from time to time.
(iv) On assets impaired, depreciation has been provided as per (i),
(ii) and (iii) above until 31st March, 2004. However, wherever the
assets are impaired or significantly impaired and the written down
value of those assets have been brought down to a level based on the
provision for impairment of assets made as per AS-28 issued by The
Institute of Chartered Accountants of India, depreciation has been
worked out after reassessing the useful life of the assets from the
brought down level and accordingly charged on, considering brought down
level as a base.
4. Impairment of Assets
Impairment is ascertained at each Balance Sheet date in respect of Cash
Generating Unit. An impairment loss is recognised whenever the carrying
amount of an asset exceeds its recoverable amount. The recoverable
amount is the greater of the net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value based on an appropriate discount factor.
5. Investments
Long-term investments are carried at cost. Provision is made to
recognize a diminution, other than temporary, in the carrying amount of
long- term investments.
6. Inventories
Inventories are valued in accordance with the requirements of revised
Accounting Standard (AS2), using weighted average cost method. Any item
of inventory is valued at Net Realisable Value if the same is less than
cost. Inventories are specifically identified, wherever possible in
respect of traded goods. Inventory valuation is determined on the
following basis:
(i) Raw materials, Stock in process, Finished Goods Stores, Spare parts
& Chemicals, Packing Materials, Stock-in-trade (Art & Artifacts)
are valued at cost or net realisable value whichever is lower.
(ii)Waste is valued at net realisable value.
(iii) By product is valued at net realisable value.
(iv) Property under Development is valued at revalued cost of land and
construction thereon at cost.
(v) Land at Vareli is valued at cost.
7. Sales
Sales include sale value of goods and is net of returns, Discount, Rate
Difference and Sales Tax/VAT etc. Sales also include, sales of scrap,
waste, reject etc. and profi.ts from property held as stock in trade.
8. Accounting for Excise Duty
Excise Duty has been accounted on the basis of both payments made in
respect of goods cleared as also provision made for goods lying in
bonded warehouses and uncleared goods and the same has been treated as
part of the cost of respective stock as per the revised Guidance Note
on Accounting treatment for Excise Duty issued by The Institute of
Chartered Accountants of India. Amount of Excise Duty shown as
deduction from Sales is the total Excise Duty for the year except the
duty related to difference between Closing Stock and Opening Stock.
Excise duty related to the difference between Opening Stock and Closing
Stock of finished goods is recognised separately in the Profit and Loss
Account.
9. Cenvat
(i) The purchase cost of raw materials and other expenses has been
considered net of cenvat available on inputs.
(ii) The cenvat benefits attributable to acquisition/construction of
fiixed assets is netted off against the cost of fixed assets in
accordance with the guidance note issued by The Institute of Chartered
Accountants of India.
10. expenses
All material known liabilities are provided for on the basis of
available information/estimates.
11. Retirement Benefits
Contributions are made to Provident Fund as per the Provident Fund Act.
Contribution to Gratuity Fund are made on the basis of actuarial
valuation report as at the year end. Leave encashment benefit has been
provided in accordance with the accounting standard AS-15 ÃEmployee
BenefitsÃ. These obligations are unfunded.
12. Borrowing cost
Borrowing cost that are attributable to the acquisition, construction
or production of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for intended use. All other
borrowing cost are charged to revenue.
13. Provision for Current and Deferred tax
Provision for current tax à MAT is made after taking into consideration
benefits admissible under the provisions of the Income-tax Act, 1961.
Deferred tax asset are recognised for all deductible timing differences
and carried forward to the extent there is reasonable certainty that
sufficient future taxable profit will be available against which such
deferred tax assets can be realised. Defered tax assets to the extent
they pertain to brought forward losses and unabsorbed depreciation, are
recognised only to the extent that there is virtual certainty of
realisation, based on expected profitability in the future as estimated
by the Company.
14. Foreign Currency transactions
(i) Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction.
(ii) At each Balance Sheet date, unrealized gains or losses on foreign
currency transactions on account of increase or decrease in rupee
liability as a result of exchange difference between the Balance sheet
date rate and the transaction date rate to items of assets and
liabilities are recorded to the Profit and Loss account, and
accordingly, assets or liabilities are adjusted.
Mar 31, 2010
(a) Basis of Preparation of Financial Statements.
The financial statements have been prepared under the historical cost
convention in accordance with the generally accepted accounting
principles and the provisions of The Companies Act, 1956. The Company
follows the mercantile system of accounting and recognizes Income and
Expenditure on accrual basis. Accounting policies not referred to
otherwise are consistent with the generally accepted accounting
principles.
(b) Fixed Assets
Fixed Assets are recorded at cost of acquisition or construction, net
of CENVAT / VAT and include amounts added / reduced on revaluation,
less accumulated depreciation and impairment loss, if any. The cost of
fixed assets includes interest on borrowings attributable to
acquisition of fixed assets up to the date of commissioning of the
assets and other incidental expenses incurred up to that date. Fixed
Assets acquired and put to use for project purpose are capitalised and
depreciation thereon is included in project cost till commissioning of
the project. Projects under commissioning and other Capital
Work-in-Progress are carried at cost, comprising direct cost, related
incidental expenses and attributable interest.
(c) Depreciation
Depreciation on fixed assets has been provided in accordance with the
provision of Section 205(2) read with Section 350 of the Companies Act,
1956 except:
(i) in respect of depreciation on assets purchased up to 1984, has been
provided as per written down value method at the rates prescribed in
Schedule XIV of the Companies Act, 1956, as amended from time to time.
(ii) in respect of assets purchased during the year 1985 and 1986,
depreciation has been provided as per straight- line method at the
rates corresponding to the rates applicable under Income-tax Rules at
that time.
(iii) in respect of assets purchased during the year 1987 and onwards,
depreciation has been provided as per straight-line method at the rates
and in the manner prescribed by Schedule XIV of the Companies Act, 1956
as amended from time to time.
(iv) On assets impaired, depreciation has been provided as per (I),
(ii) and (iii) above until 31st March, 2004. However, wherever the
assets are impaired or significantly impaired and the written down
value of those assets have been brought down to a level based on the
provision for impairment of assets made as per AS - 28 issued by The
Institute of Chartered Accountants of India, depreciation has been
worked out after reassessing the useful life of the assets from the
brought down level and accordingly charged on, considering brought down
level as a base.
(d) Impairment of Assets :
Impairment is ascertained at each Balance Sheet date in respect of Cash
Generating Unit. An impairment loss is recognised whenever the carrying
amount of an asset exceeds its recoverable amount. The recoverable
amount is the greater of the net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value based on an appropriate discount factor.
(e) Investments
Long-term investments are carried at cost. Provision is made to
recognize a diminution, other than temporary, in the carrying amount of
long term investments.
(f) Inventories
Inventories are valued in accordance with the requirements of revised
Accounting Standard (AS2) on valuation of inventories using weighted
average cost method. Inventories are specifically identified, wherever
possible in respect of traded goods. Cost is determined on the
following basis:
(i) Stores, Spare parts & Chemicals are valued at cost.
(ii) Raw materials, Stock in process & Finished Goods are valued at
cost or net realisable value whichever is lower.
(iii) Waste is valued at net realisable value.
(iv) By product is valued at net realisable value.
(v) Property under Development is valued at revalued cost of land and
construction thereon at cost.
(vi) Land at Vareli is valued at book cost.
(g) Sales :
Sales include sale value of goods and is net of returns, Discount, Rate
Difference and Sales Tax / VAT, etc. Sales also include, sales of
scrap, waste, reject etc., and profits from property held as stock in
trade.
(h) Accounting for Excise Duty :
Excise Duty has been accounted on the basis of both payments made in
respect of goods cleared as also provision made for goods lying in
bonded warehouses & uncleared goods and the same has been treated as
part of the cost of respective stock as per the revised Guidance Note
on Accounting treatment for Excise Duty issued by The Institute of
Chartered Accountants of India. Amount of Excise Duty shown as
deduction from Sales is the total Excise Duty for the year except the
duty related to difference between Closing Stock & Opening Stock.
Excise duty related to the difference between Closing Stock & Opening
Stock is recognised separately in the Profit and Loss Account.
(i) Cenvat.
(i) The purchase cost of raw materials and other expenses has been
considered net of cenvat available on inputs.
(ii) The cenvat benefits attributable to acquisition / construction of
fixed assets is netted off against the cost of fixed assets in
accordance with the guidance note issued by The Institute of Chartered
Accountants of India.
(j) Expenses
All material known liabilities are provided for on the basis of
available information /estimates.
(k) Retirement Benefits :
Contributions are made to Provident Fund as per the Provident Fund Act.
Contribution to Gratuity Fund are made on the basis of actuarial
valuation report as at the year end. Leave encashment benefit has been
provided in accordance with the accounting standard AS-15 "Employee
Benefits". These obligations are unfunded.
(l) Borrowing Cost
Borrowing cost that are attributable to the acquisition, construction
or production of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for intended use. All other
borrowing cost are charged to revenue.
(m) Taxation
Income-tax expense comprises current tax / MAT. The deferred tax asset
and deferred tax liability are calculated by applying tax rate and tax
laws that have been enacted at the Balance Sheet date. Deferred tax
assets arising mainly on account of brought forward losses and
unabsorbed depreciation under tax laws, are recognised, only if there
is a virtual certainty of its realisation, supported by convincing
evidence. Deferred tax assets on account of other timing differences
are recognised only to the extent there is a reasonable certainty of
its realisation. At each Balance Sheet date, the carrying amount of
deferred tax assets are reviewed to reassure realisation.
(n) Foreign Currency Transactions
(i) Transactions denominated in foreign currencies are recorded at the
rates of exchange in force at the time transaction are affected.
(ii) At each Balance Sheet date, unrealized gains or losses on foreign
currency transactions on account of increase or decrease in rupee
liability as a result of exchange difference between the Balance sheet
date rate and the transaction date rate to items of assets and
liabilities are recorded to the Profit and Loss account, and
accordingly, assets or liabilities are adjusted.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article