Accounting Policies of Technocraft Industries (India) Ltd. Company
Mar 31, 2023
Note-1 Company Overview
Technocraft Industries (India) Limited (âthe Companyâ), was incorporated on 28th October 1992, CIN L28120MH1992PLC069252. The company is a Public Limited company incorporated and domiciled in India and is having its registered office at Technocraft House, A-25, Road No 3, MIDC Industrial Estate, Andheri (East) Mumbai -400093, Maharashtra, India. The Company is listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India.
The Company is well diversified having its business Interest in Drum Closures (2nd Largest in the World), Scaffolding & Formworks, Yarn, Fabrics & Garments.
Authorisation of Financial Statements: The Financial Statements were authorized for issue in accordance with a resolution of the directors on 29th May 2023.
Note-2 Significant Accounting Policies:
i) Basis of Preparation and Presentation:
The Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (âActâ) read with Companies (Indian Accounting Standards) Rules, 2015 (as amended) ; and the other relevant provisions of the Act and Rules thereunder.
The Financial Statements have been prepared under historical cost convention basis except
a) Certain financial assets and financial liabilities measured at fair value (refer accounting policies for financial instruments).
b) Assets held for sale -measured at fair Value less cost to sell.
c) Defined Benefits plans -Plan assets measured at Fair Value
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
ii) Use of Estimates :
The preparation of the financial statements in conformity with Ind AS requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
iii) Revenue Recognition :
The Company derives its revenue primarily from sales of manufactured goods, traded goods and related services
Revenue is recognized on satisfaction of performance obligation upon transfer of control of promised products or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those products or services. Revenue is measured based on the transaction price (which is the Consideration, adjusted to discounts, incentives and returns etc., if any) that is allocated to that Performance Obligation. These are generally accounted for as variable consideration estimated in the same period the related sales occur. The methodology and assumptions used to estimate rebates and returns are monitored and adjusted regularly in the light of contractual and legal obligations, historical trends, past experiences and Projected Market Conditions.
The company does not expect to have any contracts where the period between the transfer of the promised goods or services to the Customer and payment by the customer exceeds one year. As a consequence, it does not adjust any of the transaction prices for the time value of Money.
The Company satisfies a performance obligation and recognizes revenue over time ,if one of the following criteria is met :
> The Company simultaneously receives and consumes the benefits provided by the Companyâs Performance as the Company performs; or
> The Companyâs Performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
> The Companyâs Performance does not create an asset with an alternative use to the Company and an entity has an enforceable right to the Payment for Performance completed to date
For performance obligations where one of the above conditions are not met revenue is recognized at the Point in time at which the Performance obligation is satisfied.
Revenue from sale of Products and services are recognized at the time of satisfaction of performance obligation The period over which the revenue is recognized is based on entity right to payment for performance completed. In determining whether an entity has right to payment, the entity shall consider whether it would have an enforceable right to demand or retain payment for performance completed to date if the contract were to be terminated before completion for reasons other than entityâs failure to perform as per the terms of Contract
Revenue in excess of invoicing are classified as Contract asset while invoicing in excess of revenues are classified as contract Liabilities
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and reflects Companyâs unconditional right to consideration ( that is , payment is due only on the passage of time) .Trade receivables are recognized initially at the transaction price as they do not contain Significant financing components
Dividend Income is recognized when the Companyâs right to receive the payment is established, which is generally when shareholders approve the dividend.
Interest Income on all debt instruments measured at amortized cost is recorded using the effective interest rate (EIR).
Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the Company and the amount of the Income can be measured reliably.
iv) Inventories :
Inventories of Raw Materials, Finished Goods, Semi-Finished Goods, Trading Goods, and Stores, Spares and other components, Packing Materials, Fuel and Oil are valued at cost or net realizable value, whichever is lower. Goods in transit are valued at cost or net realizable value, whichever is lower. Cost comprises of all cost of purchases, cost of conversion and other costs incurred in bringing the inventory to their present location and conditions. Cost is arrived at on FIFO basis. Due allowance is estimated and made for defective and obsolete items, wherever necessary.
If payment terms for inventory are on deferred basis i.e. beyond normal credit terms, then cost is determined by discounting the future cash flows at an interest rate determined with reference to the market rates. The difference between total cost and deemed cost is recognized as interest expense over the period of financing under the effective interest method.
v) Property, plant and equipment
Property, plant and equipment are stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any.
vi) Capital Work in Progress
Cost of assets not ready for use at the balance sheet date is disclosed under capital work-in-progress. Expenditure during construction period is also included under Capital Work in Progress.
vii) Intangible Assets
Intangible assets acquired are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any.
viii) Depreciation
Depreciation on Property, Plant and Equipment has been provided on the Written down Value method based on the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Leasehold Land is amortized over the period of lease. Leasehold improvements are amortized over the period of lease or estimated useful life, whichever is lower
Intangible assets are amortized on a straight line basis over the estimated useful economic life.
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or disposition of the asset and the resultant gains or losses are recognized in the statement of profit and loss.
ix) Investment Property
Investment property applies to owner-occupied property and is held to earn rentals or for capital appreciation or both. Hence such properties are reclassified from Property, Plant and Equipment to Investment property. Investment property is measured at its cost, including related transaction cost less depreciation and impairment, if any. Investment properties are depreciated using the written down value method over their estimated useful life. Any transfer to or from Investment property is done at the carrying amount of the Investment Property.
x) Non-Current assets held for Sale and discontinued operations
The Company classifies non-current assets as held for sale if their carrying amount will be recovered principally through sale rather than through continuing use Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn .The criteria for held for sale classification is met only when the assets is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such assets & its sale is highly probable .
Non-Current assets held for Sale are measured at the lower of their Carrying amount and the fair Value less cost to sell
Property, Plant and equipment and intangible assets once classified as held for sale are not depreciated or amortized.
A discontinued operation is a component of an entity that either has been disposed of, or is classified as held for sale and
a) Represents a separate major line of business or geographical area of operations
b) Is part of a single co -ordinated plan to dispose of a separate major line of business or geographical area of operations
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the statement of Profit & Loss.
xi) Government Subsidy
The Company recognizes government grants only when there is reasonable assurance that the conditions attached to them shall be complied with, and the grants will be received.
Government grants relating to the purchase of property, plant and equipment are treated as deferred income and are recognized in net profit in the statement of profit and loss on a systematic and rational basis over the useful life of the asset.
Government grants related to revenue are recognized on a systematic basis in net profit in the statement of profit and loss over the periods necessary to match them with the related costs which they are intended to compensate.
xii) Borrowings
Borrowings are initially recognized at net of transaction Cost incurred and measured at amortized Cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in the statement of Profit & Loss over the period of borrowings using the effective Interest method.
xiii) Income Tax
Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current and deferred tax are recognized in the statement of profit and 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) Current Income Tax
Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for that period. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.
Current tax assets and liabilities are offset only if, the Company:
> has a legally enforceable right to set off the recognized amounts; and
> Intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
b) Deferred Income Tax
Deferred tax is recognized for the future tax consequences of deductible temporary differences between the carrying values of assets and liabilities and their respective tax bases at the reporting date, using the tax rates and laws that are enacted or substantively enacted as on reporting date.
Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences, unused tax losses and credits can be utilized.
Deferred tax assets and liabilities are offset only if:
> Entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
> Deferred tax assets and the deferred tax liabilities relate to the income taxes levied by the same taxation authority.
At inception of Contract, the Company assesses whether the Contract is or contains a Lease. A Contract is, or contains, a lease if the Contract conveys the right to Control the use of an identified asset for a period of time in exchange for Consideration .At inception or on reassessment of a contract that contains a lease Component, the Company allocates Consideration in the contract to each lease component on the basis of their relative standalone price.
i) Right of use assets
The Company recognizes right of use assets at the commencement date of the lease .Right of use assets are measured at cost less any accumulated depreciation and impairment Losses and adjusted for any re measurement of Lease Liabilities .The Cost of right to use assets include the amount of lease Liabilities recognized, initial direct cost incurred, Lease payments made at or before commencement date less any lease incentives received. Right of use assets are depreciated on a straight Line basis over the shorter of the lease term and the estimated useful lives of the assets.
The Company presents right to use assets that do not meet the definition of Investment property in âProperty, Plant and Equipmentâ
ii) Lease Liabilities
At the Commencement date of the Lease , the Company recognizes Lease Liabilities measured at the present value of lease payments to be made over the Lease term .In Calculating the present Value of lease payments, the Company generally uses its incremental borrowing rate at the Lease Commencement date if the discount rate implicit in the lease is not readily determinable .
Lease payments included in the measurement of the Lease Liability are made up of fixed payments (including in substance, fixed) and payments arising from options reasonably certain to be exercised. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest expenses .It is re measured to reflect any reassessment or modification.
The Company presents lease Liabilities under Financial Liabilities in the Balance sheet
The Company has elected to account for short term leases and Leases of Low Value assets using the exemption given under Ind AS 116, Leases .Instead of recognizing a right of use asset and Lease Liability, the payments in relation to these are recognized as an expense in the profit or loss on a straight Line basis over the Lease term or on another systematic basis if that basis is more representative of the pattern of the Company benefit
Leases for which the Company is a Lessor is classified as Finance or operating Lease
Lease income from operating leases where the Company is a Lessor is recognized in income on a straight line basis over the Lease Term unless the receipts are structured to increase in line with expected general inflation to Compensate for the expected inflationary cost increases .The respective leased assets are included in the balance sheet based on their nature
xv) Financial Assets
a) Initial recognition and measurement
All financial assets (not measured subsequently at fair value through profit or loss) are recognised initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset. However, Trade receivables that do not contain a significant financing component are measured at transaction price.
Subsequent measurement is determined with reference to the classification of the respective financial assets. The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.
(i) Debt instruments at amortised cost
A âdebt instrumentâ is measured at the amortised cost if both the following conditions are met:
> The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
> Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the Statement of Profit & Loss. The losses arising from impairment are recognised in the Statement of Profit & Loss.
(ii) Debt instruments at Fair value through Other Comprehensive Income (FVOCI)
A âdebt instrumentâ is measured at the fair value through other comprehensive income if both the following conditions are met:
> The asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets
> Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, these assets are subsequently measured at fair value. Interest income under effective interest method, foreign exchange gains and losses and impairment are recognised in the Statement of Profit & Loss. Other net gains and losses are recognised in other comprehensive Income.
(iii) Debt instruments at Fair value through profit or loss (FVTPL)
Fair value through profit or loss is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation as at amortised cost or as FVOCI, is classified as at FVTPL.
(iv) Equity investments
All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVOCI or FVTPL. The Company makes such election on an instrument-byinstrument basis. The classification is made on initial recognition and is irrevocable.
For equity instruments classified as FVOCI, all fair value changes on the instrument, excluding dividends, are recognized in other comprehensive income (OCI).
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit & Loss.
c) De recognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Companyâs Balance Sheet) 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 or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpass-throughâ arrangement; and either:
- The Company has transferred substantially all the risks and rewards of the asset, or
- The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
d) 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 impairment methodology applied depends on whether there has been as significant increase in credit risk.
e) Income Recognition
Interest Income from debt instruments is recognised using the effective interest rate method.
xvi) Financial Liabilities
a) Initial recognition and measurement
All financial liabilities are recognised initially at fair value net of transaction costs that are attributable to the respective liabilities.
b) Subsequent measurement
Subsequent measurement is determined with reference to the classification of the respective financial liabilities. The measurement of financial liabilities depends on their classification, as described below:
> Financial Liabilities at fair value through profit or loss (FVTPL)
A financial liability is classified as at fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and changes therein, including any interest expense, are recognised in Statement of Profit & Loss.
> Financial Liabilities measured at amortised cost
After initial recognition, financial liabilities other than those which are classified as fair value through profit or loss are subsequently measured at amortised cost using the effective interest rate method (âEIRâ).
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit & Loss.
c) De recognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit & Loss.
xvii) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
xviii) Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses following hierarchy and assumptions that are based on market conditions and risks existing at each reporting date.
Fair value hierarchy:
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized 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 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
? Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
xix) Cash & Cash Equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.
Cash and cash equivalents comprise cash at banks and on hand and demand deposits with banks with an original maturity of three months or less.
xx) Investment in Subsidiaries , Joint ventures & Associates - Unquoted
Investments in equity shares of Subsidiaries, Joint Ventures & Associates are recorded at cost and reviewed for impairment at each reporting date.
xxi) Employee Benefits
? Short-term employee benefit
Short term employee benefits are recognized as an expense at an undiscounted amount in the Statement of Profit & Loss of the year in which the related services are rendered.
? Post-employment benefits
The Companyâs net obligation in respect of defined benefit plans such as gratuity is calculated separately for each plan by estimating the amount of future benefit that the employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligation is performed at each reporting period end by a qualified actuary using the projected unit credit method.
The current service cost of the defined benefit plan, recognized in the Statement of Profit & Loss as part of employee benefit expense, reflects the increase in the defined benefit obligation resulting from employee service in the current year, benefit changes, curtailments and settlements. Past service costs are recognized immediately in the Statement of Profit & Loss. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit & Loss.
Re-measurements which comprise of actuarial gains and losses, the return on plan assets (excluding net interest) and the effect of the asset ceiling (if any, excluding net interest), are recognized immediately in other comprehensive income.
> Other long-term employee benefits
Liability towards other long term employee benefits - leave encashment is determined on actuarial valuation by qualified actuary by using Projected Unit Credit method.
The current service cost of other long terms employee benefits, recognized in the Statement of Profit & Loss as part of employee benefit expense, reflects the increase in the obligation resulting from employee service in the current year, benefit changes, curtailments and settlements. Past service costs are recognized immediately in the Statement of Profit & Loss. The interest cost is calculated by applying the discount rate to the balance of the obligation. This cost is included in employee benefit expense in the Statement of Profit & Loss. Remeasurements are recognized in the Statement of Profit & Loss.
xxii) Foreign Currency Transactions:
a) Functional and Presentation Currency:
The Financial Statements are presented in Indian Rupee (?) which is Companyâs Functional and Presentation Currency. All amounts have been rounded off to the nearest lakhs, unless otherwise indicated.
b) Monetary Items
> Transactions denominated in foreign currency are normally accounted for at the exchange rate prevailing at the time of transaction.
> Monetary assets (including loans to subsidiaries) and Liabilities in foreign currency transactions remaining unsettled at the end of the year (other than forward contract transactions) are translated at the year-end rates and the corresponding effect is given to the respective account.
> Exchange differences arising on account of fluctuations in the rate of exchange are recognized in the statement of Profit & Loss.
> Exchange rate difference arising on account of conversion/translation of liabilities incurred for acquisition of Fixed Assets is recognized in the Statement of Profit & Loss.
c) Non - Monetary Items
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 transactions.
xxiii) Impairment of Non-Financial Assets:
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assetâs recoverable amount. An assets recoverable amount is the higher of an assetâs CGUâS fair value less cost of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Companies of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, or other fair value indicators
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
Provisions are not discounted to present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
xxv) Contingent Liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
xxvi) Earnings per Share
The basic earnings per share is computed by dividing the net profit attributable to equity shareholders for the period by the weighted average number of equity shares outstanding during the period.
The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares which could be issued on the conversion of all dilutive potential equity shares
xxvii) Classification of Assets and Liabilities as Current and Non-Current:
All assets and liabilities are classified as current or non-current as per the Companyâs normal operating cycle (determined at 12 months) and other criteria set out in Schedule III of the Act.
xxviii) Cash Flows
Cash flows are reported using the indirect method, where by net profit 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 item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated.
xxix) Operating Segments
Operating segments are reported in a manner consistent with the internal reporting provided to Chief Operating Decision Maker (CODM).
xxx) Exceptional Items
When items of income and expense within statement of profit and loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such material
Items are disclosed separately as exceptional items.
xxxi) Recent accounting pronouncement
The Ministry of Corporate Affairs has vide notification dated 31st March 2023 notified Companies (Indian Accounting Standards) Amendment Rules, 2023 which amends certain accounting standards, and are effective from 1 April 2023.
The Rules predominantly amend IND AS-12-Income Taxes and IND AS -1-Presentation of Financial Statements. The other amendments to Ind As notified by these rules are primarily in the nature of Clarifications
These amendments are not expected to have any material impact on the Company in the current or future reporting periods and on foreseeable future transactions
xxxii) Significant accounting judgments, estimates and assumptions:
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise Judgement in applying the Companyâs accounting policies.
The estimates and judgements involves a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed .Detailed information about each of these estimates and judgements is included in relevant notes.
Critical estimates and judgements
The areas involving critical estimates or judgements are o Estimation of current tax expenses and payable o Estimated useful life of Intangible assets o Estimation of defined benefit obligation o Estimation of Provisions and Contingencies
Mar 31, 2018
Note-1 Company Overview
Technocraft Industries (India) Limited ("the Company"), was incorporated on 28th October 1992, CIN L28120MH-1992PLC069252. The company is a Public Limited company incorporated and domiciled in India and is having its registered office at A-25, Technocraft House, MIDC Marol Industrial Area, Road No. 3, Opp ESIS Hospital, Andheri (E), Mumbai -400093, Maharashtra, India. The Company is listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India.
The Company is well diversified having its business Interest in Drum Closures (2nd Largest in the World), Scaffolding, Form-works, Cotton Yarn, Fabrics & Readymade Garments. It has its own 15 MW Captive Thermal Power Plant.
Authorisation of Financial Statements: The Financial Statements were authorized for issue in accordance with a resolution of the directors on 30th May 2018.
Note-2 Significant accounting policies:
i) Basis of Preparation and Presentation:
The Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 ("Act") read with Companies (Indian Accounting Standards) Rules, 2015 (as amended); and the other relevant provisions of the Act and Rules thereunder.
The Financial Statements have been prepared under historical cost convention basis except for certain financial assets and financial liabilities measured at fair value (refer accounting policies for financial instruments).
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
ii) Use of Estimates :
The preparation of the financial statements in conformity with Ind AS requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
iii) Fair Value Measurement:
Fair value is the price that would be received to sell an asset or settle a liability in an ordinary transaction between market participants at the measurement date. The fair value of an asset or a liability is measured using the assumption that market participants would use when pricing an asset or liability acting in their best economic interest. The Company used valuation techniques, which were appropriate in circumstances and for which sufficient data were available considering the expected loss/ profit in case of financial assets or liabilities
iv) Revenue Recognition
Revenue is recognized 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.
Incomes and Expenditures are recognized on accrual basis except in case of significant uncertainties like, Benefits on Special Import License Premium, all cash incentives and Claims Payable & receivable, which have been accounted on Acceptance basis.
Export Incentives are accounted for in the year of export.
Dividend Income on Investments is accounted for when the right to receive the payment is established.
Purchases are reported net of Trade discounts, Returns, Value Added Tax (to the extent refundable/ adjustable) & Sales (if any) made during the course of the business.
Amounts disclosed as revenue are inclusive of excise duty (up to 30th June 2017) and net of trade discounts, Quantity Discounts, Returns & Rebates, and Value added taxes (up to 30th June 2017) & Goods & Service Tax (From 1st July 2017 onwards)
v) Inventories
Inventories of Raw Materials, Finished Goods, Semi-Finished Goods, Trading Goods, and Stores, Spares and other components, Packing Materials, Fuel and Oil are valued at cost or net realizable value, whichever is lower. Goods in transit are valued at cost or net realizable value, whichever is lower. Cost comprises of all cost of purchases, cost of conversion and other costs incurred in bringing the inventory to their present location and conditions. Cost is arrived at on FIFO basis. Due allowance is estimated and made for defective and obsolete items, wherever necessary.
If payment terms for inventory are on deferred basis i.e. beyond normal credit terms, then cost is determined by discounting the future cash flows at an interest rate determined with reference to the market rates. The difference between total cost and deemed cost is recognized as interest expense over the period of financing under the effective interest method.
vi) Property , plant and equipment
Property, plant and equipment are stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any.
vii) Capital Work in Progress
Cost of assets not ready for use at the balance sheet date is disclosed under capital work-in-progress. Expenditure during construction period is included under Capital Work in Progress & the same is allocated to the respective Property, Plant and Equipment on the completion of its construction.
viii) Intangible Assets
Intangible assets acquired are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any.
ix) Depreciation
Depreciation on Property, Plant and Equipment has been provided on the Written down Value method based on the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Leasehold Land is amortized over the period of lease.
Intangible assets are amortized on a straight line basis over the estimated useful economic life.
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or disposition of the asset and the resultant gains or losses are recognized in the statement of profit and loss.
x) Investment Property
Investment property applies to owner-occupied property and is held to earn rentals or for capital appreciation or both. Hence such properties are reclassified from Property, Plant and Equipment to Investment property. Investment properties are depreciated using the written down value method over their estimated useful life.
xi) Government Subsidy
The Company recognizes government grants only when there is reasonable assurance that the conditions attached to them shall be complied with, and the grants will be received.
Government grants relating to the purchase of property, plant and equipment are treated as deferred income and are recognized in net profit in the statement of profit and loss on a systematic and rational basis over the useful life of the asset.
Government grants related to revenue are recognized on a systematic basis in net profit in the statement of profit and loss over the periods necessary to match them with the related costs which they are intended to compensate.
xii) Borrowings
Borrowings are initially recognized at net of transaction Cost incurred and measured at amortized Cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in the statement of Profit & Loss over the period of borrowings using the effective Interest method.
xiii) Income Tax
Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current and deferred tax are recognized in the statement of profit and 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) Current Income Tax
Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for that period. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.
Current tax assets and liabilities are offset only if, the Company:
- has a legally enforceable right to set off the recognized amounts; and
- Intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
b) Deferred Income Tax
Deferred tax is recognized for the future tax consequences of deductible temporary differences between the carrying values of assets and liabilities and their respective tax bases at the reporting date, using the tax rates and laws that are enacted or substantively enacted as on reporting date.
Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences, unused tax losses and credits can be utilized.
Deferred tax assets and liabilities are offset only if:
- Entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
- Deferred tax assets and the deferred tax liabilities relate to the income taxes levied by the same taxation authority.
xiv) Leases
Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower. Subsequent to initial recognition, minimum lease payments shall be apportioned between the finance charge and the reduction of the outstanding liability. The finance charge shall be allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rents shall be charged as expenses in the periods in which they are incurred.
Leases in which significant portion of the risks and rewards of ownership are not transferred to the Company, as lessee are classified as operating leases. Lease Income from operating leases where the Company is a Lessor is recognized in income on straight -line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increase.
xv) Financial Assets
a) Initial recognition and measurement
All financial assets (not measured subsequently at fair value through profit or loss) are recognised initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset.
b) Subsequent measurement
Subsequent measurement is determined with reference to the classification of the respective financial assets. The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.
(i) Debt instruments at amortised cost
A ''debt instrument'' is measured at the amortised cost if both the following conditions are met:
- The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
- Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the Statement of Profit & Loss. The losses arising from impairment are recognised in the Statement of Profit & Loss.
(ii) Debt instruments at Fair value through Other Comprehensive Income (FVOCI)
A ''debt instrument'' is measured at the fair value through other comprehensive income if both the following conditions are met:
- The asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets
- Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, these assets are subsequently measured at fair value. Interest income under effective interest method, foreign exchange gains and losses and impairment are recognised in the Statement of Profit & Loss. Other net gains and losses are recognised in other comprehensive Income.
(iii) Debt instruments at Fair value through profit or loss (FVTPL)
Fair value through profit or loss is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation as at amortised cost or as FVOCI, is classified as at FVTPL.
(iv) Equity investments
All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
For equity instruments classified as FVOCI, all fair value changes on the instrument, excluding dividends, are recognized in other comprehensive income (OCI).
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit & Loss.
c) De recognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Company''s Balance Sheet) 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 or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement; and either:
- The Company has transferred substantially all the risks and rewards of the asset, or
- The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
d) 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 impairment methodology applied depends on whether there has been as significant increase in credit risk.
e) Income Recognition
Interest Income from debt instruments is recognised using the effective interest rate method.
xvi) Financial Liabilities
a) Initial recognition and measurement
All financial liabilities are recognised initially at fair value net of transaction costs that are attributable to the respective liabilities.
b) Subsequent measurement
Subsequent measurement is determined with reference to the classification of the respective financial liabilities. The measurement of financial liabilities depends on their classification, as described below:
- Financial Liabilities at fair value through profit or loss (FVTPL)
A financial liability is classified as at fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and changes therein, including any interest expense, are recognised in Statement of Profit & Loss.
- Financial Liabilities measured at amortised cost
After initial recognition, financial liabilities other than those which are classified as fair value through profit or loss are subsequently measured at amortised cost using the effective interest rate method ("EIR").
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit & Loss.
c) De recognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit & Loss.
xvii) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
xviii)Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses following hierarchy and assumptions that are based on market conditions and risks existing at each reporting date.
Fair value hierarchy:
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized 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 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
- Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
xix) Cash & Cash Equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.
Cash and cash equivalents comprise cash at banks and on hand and demand deposits with banks with an original maturity of three months or less.
xx) Investment in Subsidiaries & Joint ventures - Unquoted
Investments in equity shares of Subsidiaries & Joint Ventures are recorded at cost and reviewed for impairment at each reporting date.
xxi) Employee Benefits
- Short-term employee benefit
Short term employee benefits are recognized as an expense at an undiscounted amount in the Statement of Profit & Loss of the year in which the related services are rendered.
- Post-employment benefits
The Company''s net obligation in respect of defined benefit plans such as gratuity is calculated separately for each plan by estimating the amount of future benefit that the employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligation is performed at each reporting period end by a qualified actuary using the projected unit credit method.
The current service cost of the defined benefit plan, recognized in the Statement of Profit & Loss as part of employee benefit expense, reflects the increase in the defined benefit obligation resulting from employee service in the current year, benefit changes, curtailments and settlements. Past service costs are recognized immediately in the Statement of Profit & Loss. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit & Loss.
Re-measurements which comprise of actuarial gains and losses, the return on plan assets (excluding net interest) and the effect of the asset ceiling (if any, excluding net interest), are recognized immediately in other comprehensive income.
- Other long-term employee benefits
Liability towards other long term employee benefits - leave encashment is determined on actuarial valuation by qualified actuary by using Projected Unit Credit method.
The current service cost of other long terms employee benefits, recognized in the Statement of Profit & Loss as part of employee benefit expense, reflects the increase in the obligation resulting from employee service in the current year, benefit changes, curtailments and settlements. Past service costs are recognized immediately in the Statement of Profit & Loss. The interest cost is calculated by applying the discount rate to the balance of the obligation. This cost is included in employee benefit expense in the Statement of Profit & Loss. Re-measurements are recognized in the Statement of Profit & Loss.
xxii) Foreign Currency Transactions:
a) Functional and Presentation Currency:
The Financial Statements are presented in Indian Rupee ('') which is Company''s Functional and Presentation Currency. All amounts have been rounded off to the nearest lakhs, unless otherwise indicated.
b) Monetary Items
- Transactions denominated in foreign currency are normally accounted for at the exchange rate prevailing at the time of transaction.
- Monetary assets (including loans to subsidiaries) and Liabilities in foreign currency transactions remaining unsettled at the end of the year (other than forward contract transactions) are translated at the year-end rates and the corresponding effect is given to the respective account.
- Exchange differences arising on account of fluctuations in the rate of exchange are recognized in the statement of Profit & Loss.
- Exchange rate difference arising on account of conversion/translation of liabilities incurred for acquisition of Fixed Assets is recognized in the Statement of Profit & Loss.
c) Non - Monetary Items
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 transactions.
xxiii) Impairment of Non-Financial Assets:
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An assets recoverable amount is the higher of an asset''s CGU''S fair value less cost of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Companies of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, or other fair value indicators.
xxiv) Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
Provisions are not discounted to present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
xxv) Contingent Liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
xxvi) Earnings per Share
The basic earnings per share is computed by dividing the net profit attributable to equity shareholders for the period by the weighted average number of equity shares outstanding during the period.
The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares which could be issued on the conversion of all dilutive potential equity shares
xxvii) Classification of Assets and Liabilities as Current and Non-Current:
All assets and liabilities are classified as current or non-current as per the Company''s normal operating cycle (determined at 12 months) and other criteria set out in Schedule III of the Act.
xxviii)Cash Flows
Cash flows are reported using the indirect method, where by net profit 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 item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated.
xxix) Operating Segments
Operating segments are reported in a manner consistent with the internal reporting provided to Chief Operating Decision Maker (CODM).
xxx) Recent accounting pronouncements:
Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On 28th March, 2018, Ministry of Corporate Affairs ("" MCA"") has notified the Companies (Indian Accounting Standards) Amendment Rules , 2018 containing Appendix B to Ind AS 21, foreign currency transactions and advance consideration which clarifies the date of the transaction for the Purpose of determining the exchange rate to use on initial recognition of the related asset , expense or income , when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from 1st April 2018.The Company is currently evaluating the requirement of the amendment and its impact on the Financial Statements.
Ind AS 115 Revenue from Contracts with Customers
In March 2018, the Ministry of Corporate Affairs has notified the Companies (Indian Accounting Standards) Amended Rules, 2018 ("amended rules").As per the amended rules, Ind AS 115 "Revenue from Contracts with Customers" supersedes Ind AS 11, " Construction contracts" and Ind AS 18, "Revenue " and is applicable for all accounting Periods commencing on or after 1st April 2018.
Ind AS 115 introduces a new framework of five step model for the analysis of revenue transactions. The model specifies that revenue should be recognized when (or as) an entity transfer control of goods or services to a customer at the amount to which the entity expects to be entitled .Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers. The new revenue standard is applicable to the Company from 1st April 2018.
The standard permits two possible methods of transition:
- Retrospective approach-Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 -Accounting Policies, Change in Accounting Estimates and Errors
- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch-up approach)
The Company is currently evaluating the requirements of the amendment and its impact on the financial statements
Amendments to Ind AS 40-Transfers of Investment Property
The amendments clarify when an entity should transfer property, including property under construction or development into or out of Investment Property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management''s intentions for the use of a property does not provide evidence of change in use.
Entities should apply the amendments prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date and, if applicable, reclassify property to reflect the conditions that exist at that date. Retrospective application in accordance with Ind AS 8 is only permitted if it is possible without the use of hindsight.
The amendments are effective for annual periods beginning on or after 1st April 2018.
The company is currently evaluating the requirement of the amendment and its impact on the Financial Statements.
xxxi) Significant accounting judgements, estimates and assumptions:
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results.Managemnet also needs to exercise Judgement in applying the Company''s accounting policies.
The estimates and judgements involves a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes.
Critical estimates and judgements
The areas involving critical estimates or judgements are
- Estimation of current tax expenses and payable
- Estimated useful life of Intangible assets
- Estimation of defined benefit obligation
- Recognition of revenue
- Estimated Fair Value of Unlisted Securities
- Estimation of Provisions and Contingencies
Estimation of Fair value :
The above valuation of the Investment Properties are in accordance with the Ready Reckoner rates as prescribed by the Government of Maharashtra for the Purpose of levying Stamp Duty. Since the Valuation is based on the Published Ready Reckoner rates , the Company has Classified the same under Level 2
Nature of Security
1) Term Loan From Bank of India Is Secured by way of Hypothecation over Plant & Machinery & Equipment acquired out of the said Loan & also by way of Equitable Mortgage over Specific Immovable Properties of Textile Division.( Yarn & Fabric Division)
2) Term Loan From ICICI Bank Is Secured by way of Hypothecation over Plant & Machinery & Equipment acquired out of the said Loan & also by way of pari passu charge over Specific Immovable Properties of Textile Division. (Yarn & Fabric Division ) by way of Equitable Mortgage shared with Bank of India.
Terms of Repayment
1) Term Loan from Bank of India is Repayable in 10 Half yearly equal Instalmentâs starting from 31.3.2016 & ending on 30.9.2020. Rate of Interest is 10.30% p.a as at the yearend .(31st March 2017 : 11.50% p.a) . The said rate of Interest is without Considering Interest Subsidy under TUF Scheme.
2) Term Loan from ICICI Bank is Repayable in 20 Quarterly equal Instalmentâs starting from 31.12.2019 & ending on 30.9.2024. Rate of Interest is 8.50 % p.a as at the year end.
Nature of Security
1 . Cash Credit From Bank of India Is Secured Against the Hypothecation of Stock And Book Debts Both Present & Future.
2. Overdraft From H.D.F.C Bank are Secured Against Fixed Deposits of the Company.
3. Overdraft from IDBI Bank Are Secured Against the Fixed Deposits of the Company.
4. Export Packing Credit Against L/Cs. Confirmed Orders From HDFC Bank Are Secured Against the Hypothecation of Stock & Book Debts Both Present & Future And Fixed Assets & Equitable Mortgage of the Companies Specific Immovable Properties.
5. Export Packing Credit Against L/Cs. Confirmed Orders From CITI Bank Are Secured Against the Hypothecation of Stock & Book Debts Both Present & Future And Fixed Assets & Equitable Mortgage of the Companies Specific Immovable Properties.
6. Working Capital Loan from Kotak Mahindra Bank is secured against Lien of Investments
Mar 31, 2017
Notes to the Standalone Financial Statements for the Year Ended March 31, 2017
1. Company Overview
Technocraft Industries (India) Limited ("the Company"), was incorporated on 28th October 1992, CIN L28120MH1992PLC069252. The company is a Public Limited company incorporated and domiciled in India and is having its registered office at A-25 Technocraft House MIDC Marol Industrial Area Road No. 3 Opp ESIS Hospital Andheri (E) Mumbai - 400093 Maharashtra India. The Company is listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India.
The Company is well diversified having its business Interest in Drum Closures (2nd Largest in the World), Scaffolding, Formworks, Cotton Yarn, Fabrics & Readymade Garments. It has its own 15 MW Captive Thermal Power Plant. Authorization of Financial Statements: The Financial Statements were authorized for issue in accordance with a resolution of the directors on 30th May 2017.
2 Significant accounting policies:
i) Basis of Preparation and Presentation:
The Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 ("Act") read with Companies (Indian Accounting Standards) Rules, 2015; and the other relevant provisions of the Act and Rules there under.
These financial statements for the year ended 31st March, 2017 are the first financials with comparatives, prepared under Ind AS. For all previous periods including the year ended 31st March, 2016, the Company had prepared its financial statements in accordance with the accounting standards notified under companies (Accounting Standard) Rule, 2006 (as amended) and other relevant provisions of the Act (hereinafter referred to as ''Previous GAAP'') used for its statutory reporting requirement in India.
The Financial Statements have been prepared under historical cost convention basis except for certain financial assets and financial liabilities measured at fair value (refer accounting policies for financial instruments).
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
ii) Use of Estimates and Judgments:
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
iii) Fair Value Measurement:
Fair value is the price that would be received to sell an asset or settle a liability in an ordinary transaction between market participants at the measurement date. The fair value of an asset or a liability is measured using the assumption that market participants would use when pricing an asset or liability acting in their best economic interest. The Company used valuation techniques, which were appropriate in circumstances and for which sufficient data were available considering the expected loss/ profit in case of financial assets or liabilities
iv) Revenue Recognition
Revenue is recognized 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.
Incomes and Expenditures are recognized on accrual basis except in case of significant uncertainties like, Benefits on Special Import License Premium, all cash incentives and Claims Payable & receivable, which have been accounted on Acceptance basis.
Export Incentives are accounted for in the year of export.
Dividend Income on Investments is accounted for when the right to receive the payment is established.
Purchases are reported net of Trade discounts, Returns, Value Added Tax (to the extent refundable/ adjustable) & Sales (if any) made during the course of the business.
Amounts disclosed as revenue are inclusive of excise duty and net of trade discounts, Quantity Discounts, Returns & Rebates and Value added taxes.
v) Inventories
Inventories of Raw Materials, Finished Goods, Semi-Finished Goods, Trading Goods, and Stores, Spares and other components, Packing Materials, Fuel and Oil are valued at cost or net realizable value, whichever is lower. Goods in transit are valued at cost or net realizable value, whichever is lower. Cost comprises of all cost of purchases, cost of conversion and other costs incurred in bringing the inventory to their present location and conditions. The excise duty in respect of Closing Inventory of finished goods is included as part of finished goods. Cost is arrived at on FIFO basis. Due allowance is estimated and made for defective and obsolete items, wherever necessary.
If payment terms for inventory are on deferred basis i.e. beyond normal credit terms, then cost is determined by discounting the future cash flows at an interest rate determined with reference to the market rates. The difference between total cost and deemed cost is recognized as interest expense over the period of financing under the effective interest method.
vi) Property, plant and equipment
Property, plant and equipment are stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any.
vii) Capital Work in Progress
Cost of assets not ready for use at the balance sheet date is disclosed under capital work-in-progress. Expenditure during construction period is included under Capital Work in Progress & the same is allocated to the respective Property, Plant and Equipment on the completion of its construction.
viii) Intangible Assets
Intangible assets acquired are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any.
ix) Depreciation
Depreciation on Property, Plant and Equipment has been provided on the Written down Value method based on the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Leasehold Land is amortized over the period of lease.
Intangible assets are amortized on a straight line basis over the estimated useful economic life.
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or disposition of the asset and the resultant gains or losses are recognized in the statement of profit and loss.
x) Investment Property
Investment property applies to owner-occupied property and is held to earn rentals or for capital appreciation or both. Hence such properties are reclassified from Property, Plant and Equipment to Investment property. Investment properties are depreciated using the written down value method over their estimated useful life.
xi) Government Subsidy
The Company recognizes government grants only when there is reasonable assurance that the conditions attached to them shall be complied with, and the grants will be received.
Government grants relating to the purchase of property, plant and equipment are treated as deferred income and are recognized in net profit in the statement of profit and loss on a systematic and rational basis over the useful life of the asset.
Government grants related to revenue are recognized on a systematic basis in net profit in the statement of profit and loss over the periods necessary to match them with the related costs which they are intended to compensate.
xii) Borrowings
Borrowings are initially recognized at net of transaction Cost incurred and measured at amortized Cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in the statement of Profit & Loss over the period of borrowings using the effective Interest method.
xiii) Income Tax
Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current and deferred tax are recognized in the statement of profit and 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) Current Income Tax
Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for that period. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.
Current tax assets and liabilities are offset only if, the Company:
- has a legally enforceable right to set off the recognized amounts; and
- Intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
b) Deferred Income Tax
Deferred tax is recognized for the future tax consequences of deductible temporary differences between the carrying values of assets and liabilities and their respective tax bases at the reporting date, using the tax rates and laws that are enacted or substantively enacted as on reporting date.
Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available against which the deductible temporary differences, unused tax losses and credits can be utilized.
Deferred tax assets and liabilities are offset only if:
- Entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
- Deferred tax assets and the deferred tax liabilities relate to the income taxes levied by the same taxation authority.
xiv) Leases
Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower. Subsequent to initial recognition, minimum lease payments shall be apportioned between the finance charge and the reduction of the outstanding liability. The finance charge shall be allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rents shall be charged as expenses in the periods in which they are incurred.
Leases in which significant portion of the risks and rewards of ownership are not transferred to the Company, as lessee are classified as operating leases. Lease Income from operating leases where the Company is a Lessor is recognized in income on straight -line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increase.
xv) Financial Assets
a) Initial recognition and measurement
All financial assets (not measured subsequently at fair value through profit or loss) are recognized initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset.
b) Subsequent measurement
Subsequent measurement is determined with reference to the classification of the respective financial assets. The Company classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.
(i) Debt instruments at amortized cost
A ''debt instrument'' is measured at the amortized cost if both the following conditions are met:
- The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
- Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the Statement of Profit & Loss. The losses arising from impairment are recognized in the Statement of Profit & Loss.
(ii) Debt instruments at Fair value through Other Comprehensive Income (FVOCI)
A ''debt instrument'' is measured at the fair value through other comprehensive income if both the following conditions are met:
- The asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets
- Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, these assets are subsequently measured at fair value. Interest income under effective interest method, foreign exchange gains and losses and impairment are recognized in the Statement of Profit & Loss. Other net gains and losses are recognized in other comprehensive Income.
(iii) Debt instruments at Fair value through profit or loss (FVTPL)
Fair value through profit or loss is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVOCI, is classified as at FVTPL.
(iv) Equity investments
All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
For equity instruments classified as FVOCI, all fair value changes on the instrument, excluding dividends, are recognized in other comprehensive income (OCI).
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit & Loss.
c) De-recognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e. removed from the Company''s Balance Sheet) 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 or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement; and either:
- The Company has transferred substantially all the risks and rewards of the asset, or
- The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
d) 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 impairment methodology applied depends on whether there has been a significant increase in credit risk.
e) Income Recognition
Interest Income from debt instruments is recognized using the effective interest rate method.
xvi) Financial Liabilities
a) Initial recognition and measurement
All financial liabilities are recognized initially at fair value net of transaction costs that are attributable to the respective liabilities.
b) Subsequent measurement
Subsequent measurement is determined with reference to the classification of the respective financial liabilities. The measurement of Financial liabilities depends on their classification, as described below:
- Financial Liabilities at fair value through profit or loss (FVTPL)
A financial liability is classified as at fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and changes therein, including any interest expense, are recognized in Statement of Profit & Loss.
- Financial Liabilities measured at amortized cost
After initial recognition, financial liabilities other than those which are classified as fair value through profit or loss are subsequently measured at amortized cost using the effective interest rate method ("EIR").
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit & Loss.
c) De recognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the Statement of Profit & Loss.
xvii) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.
xviii) Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses following hierarchy and assumptions that are based on market conditions and risks existing at each reporting date.
Fair value hierarchy:
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized 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 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable
- Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
xix) Cash & Cash Equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.
Cash and cash equivalents comprise cash at banks and on hand and demand deposits with banks with an original maturity of three months or less.
xx) Investment in Subsidiaries & Joint ventures - Unquoted
Investments in equity shares of Subsidiaries & Joint Ventures are recorded at cost and reviewed for impairment at each reporting date.
xxi) Employee Benefits Short-term employee benefit
Short term employee benefits are recognized as an expense at an undiscounted amount in the Statement of Profit & Loss of the year in which the related services are rendered.
Post-employment benefits
The Company''s net obligation in respect of defined benefit plans such as gratuity is calculated separately for each plan by estimating the amount of future benefit that the employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligation is performed at each reporting period and by a qualified actuary using the projected unit credit method.
The current service cost of the defined benefit plan, recognized in the Statement of Profit & Loss as part of employee benefit expense, reflects the increase in the defined benefit obligation resulting from employee service in the current year, benefit changes, curtailments and settlements. Past service costs are recognized immediately in the Statement of Profit & Loss. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit & Loss.
Re-measurements which comprise of actuarial gains and losses, the return on plan assets (excluding net interest) and the effect of the asset ceiling (if any, excluding net interest), are recognized immediately in other comprehensive income.
Other long-term employee benefits
Liability towards other long term employee benefits - leave encashment is determined on actuarial valuation by qualified actuary by using Projected Unit Credit method.
The current service cost of other long term employee benefits, recognized in the Statement of Profit & Loss as part of employee benefit expense, reflects the increase in the obligation resulting from employee service in the current year, benefit changes, curtailments and settlements. Past service costs are recognized immediately in the Statement of Profit & Loss. The interest cost is calculated by applying the discount rate to the balance of the obligation. This cost is included in employee benefit expense in the Statement of Profit & Loss. Re-measurements are recognized in the Statement of Profit & Loss.
xxii) Foreign Currency Transactions:
a) Functional and Presentation Currency:
The Financial Statements are presented in Indian Rupee (?) which is Company''s Functional and Presentation Currency. All amounts have been rounded off to the nearest lakhs, unless otherwise indicated.
b) Monetary Items
- Transactions denominated in foreign currency are normally accounted for at the exchange rate prevailing at the time of transaction.
- Monetary assets (including loans to subsidiaries) and Liabilities in foreign currency transactions remaining unsettled at the end of the year (other than forward contract transactions) are translated at the year-end rates and the corresponding effect is given to the respective account.
- Exchange differences arising on account of fluctuations in the rate of exchange are recognized in the statement of Profit & Loss.
- Exchange rate difference arising on account of conversion/translation of liabilities incurred for acquisition of Fixed Assets is recognized in the Statement of Profit & Loss.
c) Non - Monetary Items
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 transactions.
xxiii) Impairment of Non-Financial Assets:
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An assets recoverable amount is the higher of an asset''s CGU''S fair value less cost of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Companies of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
I n assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, or other fair value indicators
xxiv) Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Provisions are not discounted to present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
xxv) Contingent Liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
xxvi) Earnings per Share
The basic earnings per share is computed by dividing the net profit attributable to equity shareholders for the period by the weighted average number of equity shares outstanding during the period.
The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares which could be issued on the conversion of all dilutive potential equity shares
xxvii) Classification of Assets and Liabilities as Current and Non-Current:
All assets and liabilities are classified as current or non-current as per the Company''s normal operating cycle (determined at 12 months) and other criteria set out in Schedule III of the Act.
xxviii) Cash Flows
Cash flows are reported using the indirect method, where by net profit 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 item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated.
xxix) Operating Segments
Operating segments are reported in a manner consistent with the internal reporting provided to Chief Operating Decision Maker (CODM).
Mar 31, 2015
A. BASIS OF ACCOUNTING
- These Financial Statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. Pursuant to Section 133 of the
Companies Act, 2013 read with Rule 7 of Companies (Accounts) Rules,
2014, till the Standards of accounting or any addendum thereto are
prescribed by Central Government in consultation and recommendation of
the National Financial Reporting Authority, the existing Accounting
Standards notified under the Companies Act, 1956 shall continue to
apply. Consequently these Financial Statements have been prepared to
Comply in all material aspects with the accounting standards notified
under Section 211(3C) of the Companies Act ,1956[Companies (Accounting
Standards) Rules ,2006,as amended] and other relevant provisions of the
Companies Act,2013.
- 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 the Schedule III to the Companies Act, 2013.Based
on the nature of Products and the time between the acquisition of
assets for processing and their realization 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 & Liabilities.
B. RECOGNITION OF INCOME AND EXPENDITURE
- Incomes and Expenditures are recognized on accrual basis except in
case of significant uncertainties like, Benefits on Special Import
License Premium, all cash incentives and claims payable & receivable,
which have been accounted on Acceptance basis.
- Export Incentives are accounted for in the year of export.
- Dividend Income on Investments is accounted for when the right to
receive the payment is established.
- Purchases are reported net of Trade discounts, Returns, Value Added
Tax (to the extent refundable/ adjustable) & Sales, if any, made during
the course of the business.
- Sales are reported net of Trade discounts, Quantity Discounts,
Returns & Rebates and Excise Duty & Sales Tax.
- Sales of Scrap / Unusable Waste are reported net of Excise duty and
Sales Tax.
C. INVENTORIES
- Inventories of Raw Materials, Finished Goods, Semi-Finished Goods,
Trading Goods, Raw Material Scrap and Stores, Spares and other
components, Packing Materials, Fuel and Oil are valued at cost or net
realizable value, whichever is lower.
- Goods in transit are valued at cost or net realizable value,
whichever is lower.
- Cost comprises of all cost of purchases, cost of conversion and other
costs incurred in bringing the inventory to their present location and
conditions.
- Cost is arrived at on FIFO basis.
D. FIXED ASSETS
Tangible Fixed Assets are stated at cost of acquisition or construction
inclusive of incidental expenses related there to and includes amount
added on revaluation less accumulated depreciation & Cenvat credit.
E. DEPRECIATION
- Depreciation on Tangible Fixed Assets has been provided on the
Written Down Value method based on the Useful life of the assets as
prescribed in Schedule II to the Companies Act, 2013.
- Depreciation on additions to Tangible Fixed Assets or on Sale /
Disposal of Tangible Fixed Assets is calculated on prorata basis from
the Quarter in which additions or up to the Quarter of such Sale/
Disposal is made as the case may be.
- Depreciation on Revalued amount of Fixed Assets has been charged to
Statement of Profit & Loss Account.
- Leasehold Land is amortized over the period of lease.
F. EXPENDITURE DURING CONSTRUCTION PERIOD
Expenditure during construction period is included under Capital Work
in Progress and the same is allocated to the respective Fixed Assets on
the completion of its construction.
G. FOREIGN EXCHANGE TRANSACTIONS
- Transactions denominated in foreign currency are normally accounted
for at the exchange rate prevailing at the time of transaction.
- Monetary assets (including loans to subsidiaries) and Liabilities in
foreign currency transactions remaining unsettled at the end of the
year (other than forward contract transactions) are translated at the
year end rates and the corresponding effect is given to the respective
account.
- Exchange differences' arising on account of fluctuations in the rate
of exchange is recognized in the statement of Profit & Loss.
- Exchange rate difference arising on account of conversion/translation
of liabilities incurred for acquisition of Fixed Assets is recognized
in the Statement of Profit & Loss.
H. GOVERNMENT GRANTS
- Capital subsidy/government grants are accounted for where it is
reasonably certain that the same will be received.
- Capital subsidy/government grants in the form of Capital/Investment
Incentives received from government/Semi- government authorities are
credited to capital reserve account.
- Capital subsidy/government grants related to specific non depreciable
assets are credited to capital reserve account.
- Capital subsidy/government grants related to specific Depreciable
assets are credited to the Cost of the assets
- Other Revenue Grants are credited to statement of Profit & Loss under
'Other Income' or deducted from the related Expenses in accordance with
the related scheme and in the period in which these are accrued.
I. INVESTMENTS
- Long Term Investments are stated at Cost. Provision for diminution is
made to recognize a decline, other than temporary, in the value of Long
Term Investments.
- Current Investments are valued at Cost or Market Value whichever is
lower.
J. EMPLOYEE BENEFITS
- The Company makes regular contribution to the Employees' Provident
Fund and Employees' Pension Fund Schemes and these contributions are
charged to Statement of Profit and Loss.
- The Leave Encashment & Gratuity liability is determined by actuarial
valuation, using the Project Unit Credit Method as specified in AS 15
(Revised) "EMPLOYEE BENEFITS" and the liability is fully charged to
Statement of Profit & Loss. Actuarial gains and losses arising on such
valuation are also recognized immediately in Statement of Profit &
Loss.
K. BORROWING COST
Borrowing costs directly attributable to the acquisition or
construction of qualifying assets are capitalized. Other borrowing
costs are charged to the Statement of Profit & Loss in the year in
which they are incurred.
L. LEASES
Lease rentals in respect of the assets acquired on Lease are charged to
Statement of Profit and Loss.
M. TAXATION
Provision for current tax is made on the assessable income at the tax
rate applicable to the relevant assessment year. Deferred tax
resulting from" timing difference "between book and taxable profit is
accounted for using the tax rate and tax laws that have been enacted or
substantively enacted by the Balance Sheet Date. Deferred tax assets
are recognized, only to the extent there is a reasonable certainty of
its realization. At each Balance sheet date, the carrying amount of
deferred tax assets is reviewed to reassure realization.
N. INTANGIBLE ASSETS
- Intangible Assets are recognized by the Company only if it is
probable that the future economic benefits that are attributable to the
assets will flow to the enterprise and the cost of the same can be
measured reliably.
- Intangible Assets are amortized on a systematic basis over its useful
life on straight line basis and the amortization for each period will
be recognized as an expense.
O. IMPAIRMENT
- Impairment loss is recognized wherever the carrying amount of an
asset is in excess of its recoverable amount and the same is recognized
as an expense in the statement of profit and loss and carrying amount
of the asset is reduced to its recoverable amount.
- Reversal of impairment losses recognized in prior years is recorded
when there is an indication that the impairment losses recognized for
the asset no longer exist or have decreased.
P. PROVISIONS
A Provision is recognized when an enterprise has a present obligation
as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted
to present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
Q. CONTINGENT LIABILITY
Contingent Liabilities are not accounted for in the Accounts. These are
disclosed by way of Notes to the financial Statements to the extent of
information available with the Company.
# Already Paid / Adjusted by the Income Tax Department from the Refund
due but the Matters are still under Litigation. ## Includes Penal
Amount also.
Mar 31, 2014
A. GENERAL
The Financial Statement are prepared on the historical cost basis, in
accordance with the Generally Accepted Accounting Principles in India,
the Accounting Standards issued by The Institute of Chartered
Accountants of India and the provisions of the Companies Act, 1956,
adjusted by valuation of certain Fixed Assets and on the accounting
principles of a going concern.
Accounting Principles not specifically referred to otherwise be
consistent and in consonance with the generally accepted accounting
principles.
B. RECOGNITION OF INCOME AND EXPENDITURE
Incomes and Expenditures are recognized on accrual basis except in
case of significant uncertainties like, Benefits on Special Import
License Premium, all cash incentives and Claims Payable & receivable,
which have been accounted on Acceptance basis.
Export Incentives are accounted for in the year of export.
Dividend Income on Investments is accounted for when the right to
receive the payment is established.
Purchases are reported net of Trade discounts, Returns, Value Added
Tax (to the extent refundable/ adjustable) & Sales, if any, made during
the course of the business.
Sales are reported net of Trade discounts, Quantity Discounts,
Returns & Rebates, Excise Duty & Sales Tax.
Sales of Scrap / Unusable Waste are reported net of Excise duty and
Sales Tax.
C. INVENTORIES
Inventories of Raw Materials, Finished Goods, Semi-Finished Goods,
Trading Goods, Raw Material Scrap and Stores, Spares and other
components, Packing materials, Fuel and Oil are valued at cost or net
realizable value, whichever is lower.
Goods in transit are valued at cost or net realizable value,
whichever is lower.
Cost comprises of all cost of purchases, cost of conversion and other
costs incurred in bringing the inventory to their present location and
conditions.
Cost is arrived at on FIFO basis.
D. FIXED ASSETS
Fixed Assets are stated at cost of acquisition or construction
inclusive of incidental expenses related there to and includes amount
added on revaluation less accumulated depreciation & Cenvat credit.
E. DEPRECIATION
Depreciation on Fixed Assets has been provided on pro-rata basis on
the written down value method at the rates specified in schedule XIV,
of the Companies Act, 1956.
Leasehold Land is amortized over the period of lease.
The amount of Depreciation on Revalued Assets charged for each period
has been set off against Revaluation Reserve Account.
F. EXPENDITURE DURING CONSTRUCTION PERIOD
Expenditure during construction period is included under Capital Work
in Progress and the same is allocated to the respective Fixed Assets on
the completion of its construction.
G. FOREIGN EXCHANGE TRANSACTIONS
Transactions denominated in foreign currency are normally accounted
for at the exchange rate prevailing at the time of transaction.
Monetary assets (including loans to subsidiaries) and Liabilities in
foreign currency transactions remaining unsettled at the end of the
year (other than forward contract transactions) are translated at the
year end rates and the corresponding effect is given to the respective
account.
Exchange differences'' arising on account of fluctuations in the rate
of exchange is recognized in the statement of Profit & Loss.
Exchange rate difference arising on account of conversion/translation
of liabilities incurred for acquisition of Fixed Assets is recognized
in the Statement of Profit & Loss.
H. GOVERNMENT GRANTS
Capital subsidy/government grants are accounted for where it is
reasonably certain that the same will be received.
Capital subsidy/government grants in the form of Capital/Investment
Incentives received from government/Semi-government authorities are
credited to capital reserve account.
Capital subsidy/government grants related to specific non depreciable
assets are credited to capital reserve account.
Capital subsidy/government grants related to specific depreciable
assets are credited to capital reserve account and are recognized as
income in profit and loss statement on a systematic and rational basis
over the useful life of assets.
Other Revenue Grants are credited to statement of Profit & Loss under
''Other Income'' or deducted from the related Expenses in accordance with
the related scheme and in the period in which these are accrued.
I. INVESTMENTS
Long Term Investments are stated at Cost. Provision for diminution is
made to recognize a decline, other than temporary, in the value of Long
Term Investments.
Current Investments are valued at Cost or Market Value whichever is
lower.
J. EMPLOYEE BENEFITS
The Company makes regular contribution to the Employees'' Provident
Fund and Employees Pension Fund Schemes and these contributions are
charged to Statement of Profit and Loss.
The Leave Encashment & Gratuity liability is determined by actuarial
valuation, using the Project Unit Credit Method as specified in AS 15
(Revised) ÂEMPLOYEE BENEFITSÂ and the liability is fully charged to
Statement of Profit & Loss. Actuarial gains and losses arising on such
valuation are also recognized immediately in Statement of Profit & Loss.
K. BORROWING COST
Borrowing costs directly attributable to the acquisition or
construction of qualifying assets are capitalized. Other borrowing
costs are charged to the Statement of Profit & Loss in the year in
which they are incurred.
L. LEASES
Lease rentals in respect of the assets acquired on Lease are charged to
Statement of Profit and Loss.
M. TAXATION
Provision for current tax is made on the assessable income at the tax
rate applicable to the relevant assessment year. Deferred tax resulting
from timing difference Âbetween book and taxable profit is accounted
for using the tax rate and tax laws that have been enacted or
substantively enacted by the Balance Sheet Date. Deferred tax assets
are recognized, only to the extent there is a reasonable certainty of
its realization. At each Balance sheet date, the carrying amount of
deferred tax assets is reviewed to reassure realization.
N. INTANGIBLE ASSETS
Intangible Assets are recognized by the Company only if it is probable
that the future economic benefits that are attributable to the assets
will flow to the enterprise and the cost of the same can be measured
reliably.
Intangible Assets are amortized on a systematic basis over its useful
life on straight line basis and the amortization for each period will
be recognized as an expense.
O. IMPAIRMENT
Impairment loss is recognized wherever the carrying amount of an asset
is in excess of its recoverable amount and the same is recognized as an
expense in the statement of profit and loss and carrying amount of the
asset is reduced to its recoverable amount.
Reversal of impairment losses recognized in prior years is recorded
when there is an indication that the impairment losses recognized for
the asset no longer exist or have decreased.
P. PROVISIONS
A Provision is recognized when an enterprise has a present obligation
as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted to
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
Q. CONTINGENT LIABILITY
Contingent Liabilities are not accounted for in the Accounts. These are
disclosed by way of Notes to the financial Statements to the extent of
information available with the Company.
Mar 31, 2013
A. GENERAL
These Financial Statement are prepared on the historical cost basis, in
accordance with the Generally Accepted Accounting Principles in India,
the Accounting Standards issued by The Institute of Chartered
Accountants of India and the provisions of the Companies Act, 1956,
adjusted by valuation of certain Fixed Assets and on the accounting
principles of a going concern.
à Accounting Principles not specifically referred to otherwise are
consistent and in consonance with the generally accepted accounting
principles.
B. RECOGNITION OF INCOME AND EXPENDITURE
à Incomes and expenditures are recognized on accrual basis except
benefits on Special
Import License Premium, Sales Tax set off, Duty Drawback and all cash
incentives, Claims receivable and Government taxes, which have been
accounted on cash basis.
à Purchases are reported net of Trade discounts, Returns, Value Added
Tax (to the extent refundable/ adjustable) & Sales, if any, made during
the course of the business.
à Sales are reported net of Trade discounts, Quantity Discounts,
Returns & Rebates, Excise Duty & Sales Tax.
à Sales of Scrap / Unusable Waste are reported net of Excise duty and
Sales Tax.
C. INVENTORIES
à Inventories of Raw Materials, Finished Goods, Semi-Finished Goods,
Trading Goods, Raw
Material Scrap and Stores, Spares and other components, Packing
Materials, Fuel and Oil are valued at cost or net realizable value,
whichever is lower.
à Goods in transit are valued at cost or net realizable value,
whichever is lower.
à Cost comprises of all cost of purchases, cost of conversion and other
costs incurred in bringing the inventory to their present location and
conditions.
à Cost is arrived at on FIFO basis.
D. FIXED ASSETS
Fixed Assets are stated at cost of acquisition or construction
inclusive of incidental expenses related there to and includes amount
added on revaluation less accumulated depreciation & cenvat credit.
E. DEPRECIATION
à Depreciation on Fixed Assets has been provided on pro-rata basis on
the written down value method at the rates specified in schedule XIV,
of the Companies Act, 1956.
à Leasehold Land is amortized over the period of lease.
à The amount of Depreciation on Revalued Assets charged for each period
has been set off against Revaluation Reserve Account.
F. EXPENDITURE DURING CONSTRUCTION PERIOD
Expenditure during construction period is included under Capital Work
in Progress and the same is allocated to the respective Fixed Assets on
the completion of its construction.
G. FOREIGN EXCHANGE TRANSACTIONS
à Transactions denominated in foreign currency are normally accounted
for at the exchange rate prevailing at the time of transaction.
à Monetary assets and Liabilities in foreign currency transactions
remaining unsettled at the
end of the year (other than forward contract transactions) are
translated at the year end rates and the corresponding effect is given
to the respective account.
à Exchange differences'' arising on account of fluctuations in the rate
of exchange is recognized in the statement of Profit & Loss.
à Exchange rate difference arising on account of conversion/translation
of liabilities incurred for acquisition of Fixed Assets is recognized
in the Statement of Profit & Loss.
à Investment & finance (including loans & equity contribution) in
foreign subsidiaries are recorded in rupees by applying the exchange
rate prevailing at the time of making Investments and Finance.
H. GOVERNMENT GRANTS
à Capital subsidy/government grants are accounted for where it is
reasonably certain that the ultimate collection will be made.
à Capital subsidy/government grants in the form of Capital/Investment
Incentives received from government/Semi-government authorities are
credited to capital reserve account.
à Capital subsidy/government grants related to specific non depreciable
assets are credited to capital reserve account.
à Capital subsidy/government grants related to specific depreciable
assets are credited to capital reserve account and are recognized as
income in profit and loss statement on a systematic and rational basis
over the useful life of assets.
à Other Revenue Grants are credited to statement of Profit & Loss under
''Other Income'' or deducted from the related Expenses.
I. INVESTMENTS
Long Term Investments are stated at Cost and provision for diminution
in value in the perception of the management will only be considered.
J. EMPLOYEE BENEFITS
à The Company makes regular contribution to the Employees'' Provident
Fund and Employees'' Pension Fund Schemes and these contributions are
charged to Statement of Profit and Loss.
à The Leave Encashment & Gratuity liability is determined by actuarial
valuation, using the Project Unit Credit Method as specified in AS 15
(Revised) "EMPLOYEE BENEFITS" and the liability is fully charged to
Statement of Profit & Loss. Actuarial gains and losses arising on such
valuation are also recognized immediately in Statement of Profit &
Loss.
K. BORROWING COST
Borrowing costs directly attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of the assets up to the date the assets are put to use. Other borrowing
costs are charged to the Statement of Profit & Loss in the year in
which they are incurred.
L. LEASES
Lease rentals in respect of the assets acquired on Lease are charged to
Statement of Profit and Loss.
M. TAXATION
Provision for current tax is made on the assessable income at the tax
rate applicable to the relevant assessment year. Deferred tax resulting
from" timing difference "between book and taxable profit is accounted
for using the tax rate and tax laws that have been enacted or
substantively enacted by the Balance Sheet Date. Deferred tax assets
are recognized, only to the extent there is a reasonable certainty of
its realization. At each Balance sheet date, the carrying amount of
deferred tax assets is reviewed to reassure realization.
N. INTANGIBLE ASSETS
Intangible Assets are recognized by the Company only if it is probable
that the future economic benefits that are attributable to the assets
will flow to the enterprise and the cost of the same can be measured
reliably.
Intangible Assets are amortized on a systematic basis over its useful
life and the amortization for each period will be recognized as an
expense.
O. IMPAIRMENT
Impairment loss is recognized wherever the carrying amount of an asset
is in excess of its recoverable amount and the same is recognized as an
expense in the statement of profit and loss and carrying amount of the
asset is reduced to its recoverable amount.
Reversal of impairment losses recognized in prior years is recorded
when there is an indication that the impairment losses recognized for
the asset no longer exist or have decreased.
P. PROVISIONS
A Provision is recognized when an enterprise has a present obligation
as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted to
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
Q. CONTINGENT LIABILITY
Contingent Liabilities are not accounted for in the Accounts. These are
disclosed by way of Notes to the financial Statements to the extent of
information available with the Company.
Mar 31, 2012
A. GENERAL
- These Financial Statement are prepared on the historical cost
basis, in accordance with the Generally Accepted Accounting Principles
in India, the Accounting Standards issued by the Institute of Chartered
Accountants of India (except to the extent otherwise stated herein
2(B), 2(E)(1) below) and the provisions of the Companies Act, 1956,
adjusted by valuation of certain Fixed Assets and on the accounting
principles of a going concern.
- Accounting Principles not specifically referred to otherwise are
consistent and in consonance with the generally accepted accounting
principles.
B. RECOGNITION OF INCOME AND EXPENDITURE
Incomes and expenditures are recognized on accrual basis except
benefits on Special Import License Premium, Sales Tax set off, Duty
Drawback and all cash incentives, Claims receivable and Government
taxes, which have been accounted on cash basis.
C. SALES
- Sales are reported net of trade discounts, returns & rebates,
Excise Duty and Sales Tax.
- Sales of Scrap/Unusable Waste are reported net of Excise duty and
Sales Tax.
D. INVENTORIES
- Inventories of Raw Materials, Finished Goods, Semi-Finished Goods,
Trading Goods, Raw Material Scrap and Stores Spares and other
components, Packing Materials, Fuel and Oil are valued at cost or net
realizable value, whichever is lower.
- Goods in transit are valued at cost or net realizable value,
whichever is lower.
- Cost comprises of all cost of purchases, cost of conversion and
other costs incurred in bringing the inventory to their present
location and conditions.
- Cost is arrived at on FIFO basis.
E. FIXED ASSETS
Fixed Assets are stated at cost of acquisition or construction
inclusive of incidental expenses related there to and includes amount
added on revaluation less accumulated depreciation & cenvat credit.
F. DEPRECIATION
- Depreciation on Fixed Assets has been provided on pro-rata basis on
the written down value method at the rates specified in schedule XIV,
of the Companies Act, 1956.
- Leasehold Land is amortized over the period of lease.
- Depreciation on Revalued Assets is charged for each period after
deducting the amount of depreciation on the revalued cost, transferred
from revaluation reserve.
G. EXPENDITURE DURING CONSTRUCTION PERIOD
Expenditure during construction period is included under Capital Work
in Progress and the same is allocated to the respective Fixed Assets on
the completion of its construction.
H. DEFERRED REVENUE EXPENDITURE
The expenses disclosed under Miscellaneous Expenditure consists of
Preliminary expenses and the same have been amortized over a period of
10 years
I. FOREIGN EXCHANGE TRANSACTIONS
- Transactions denominated in foreign currency are normally accounted
for at the exchange rate prevailing at the time of transaction.
- Monetary assets and Liabilities in foreign currency transactions
remaining unsettled at the end of the year (other than forward contract
transactions) are translated at the year end rates and the
corresponding effect is given to the respective account.
- Exchange differences' arising on account of fluctuations in the
rate of exchange is recognized in the statement of Profit & Loss.
- Exchange rate difference arising on account of
conversion/translation of liabilities incurred for acquisition of Fixed
Assets is recognized in the Statement of Profit & Loss.
- Investment & finance (including loans & equity contribution) in
foreign subsidiaries are recorded in rupees by applying the exchange
rate prevailing at the time of making Investments and Finance.
J. GOVERNMENT GRANTS
- Capital subsidy/government grants are accounted for where it is
reasonably certain that the ultimate collection will be made.
- Capital subsidy/government grants in the form of Capital/Investment
Incentives received from government/Semi-government authorities are
credited to capital reserve account.
- Capital subsidy/government grants related to specific non
depreciable assets are credited to capital reserve account.
- Capital subsidy/government grants related to specific depreciable
assets are credited to capital reserve account and are recognized as
income in profit and loss statement on a systematic and rational basis
over the useful life of assets.
- Other Revenue Grants are credited to statement of Profit & Loss
under 'Other Income' or deducted from the related Expenses.
K. INVESTMENTS
Long Term Investments are stated at Cost and provision for diminution
in value in the perception of the management will only be considered.
L. EMPLOYEE BENEFITS
- The Company makes regular contribution to the Employees' Provident
Fund and Employees' Pension Fund Schemes and these contributions are
charged to Statement of Profit and Loss.
- Year end liabilities on account of Leave encashment Benefits to
employees are accounted for on accrual basis and provision for actual
earned leave accrued and provided as per the balance of unclaimed leave
at the year end since there is no scheme in the company for leave
encashment benefits in line with AS 15 (Revised) "EMPLOYEE
BENEFITS".
- The gratuity liability is determined by actuarial valuation, using
the Project Unit Credit Method as specified in AS 15 (Revised)
"EMPLOYEE BENEFITS" and the liability is fully charged to Statement
of Profit & Loss. Actuarial gains and losses arising on such valuation
are also recognized immediately in Statement of Profit & Loss.
M. BORROWING COST
Borrowing costs directly attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of the assets up to the date the assets are put to use. Other borrowing
costs are charged to the Statement of Profit & Loss in the year in
which they are incurred.
N. LEASES
Lease rentals in respect of the assets acquired on Lease are charged to
Statement of Profit and Loss.
O. TAXATION
Provision for current tax is made on the assessable income at the tax
rate applicable to the
relevant assessment year. Deferred tax resulting from "timing
difference "between book and taxable profit is accounted for using
the tax rate and tax laws that have been enacted or substantively
enacted by the Balance Sheet Date. Deferred tax assets are recognized,
only to the extent there is a reasonable certainty of its realization.
At each Balance sheet date, the carrying amount of deferred tax assets
is reviewed to reassure realization.
P. INTANGIBLE ASSETS
Intangible Assets are recognized by the Company only if it is probable
that the future economic benefits that are attributable to the assets
will flow to the enterprise and the cost of the same can be measured
reliably.
Intangible Assets are amortized on a systematic basis over its useful
life and the amortization for each period will be recognized as an
expense.
Q. IMPAIRMENT
Impairment loss is recognized wherever the carrying amount of an asset
is in excess of its recoverable amount and the same is recognized as an
expense in the statement of profit and loss and carrying amount of the
asset is reduced to its recoverable amount.
Reversal of impairment losses recognized in prior years is recorded
when there is an indication that the impairment losses recognized for
the asset no longer exist or have decreased.
R. PROVISIONS
A Provision is recognized when an enterprise has a present obligation
as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted to
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
S. CONTINGENT LIABILITY
Contingent Liabilities are not accounted for in the Accounts. These are
disclosed by way of Notes to the financial Statements to the extent of
information available with the Company.
Mar 31, 2011
A. GENERAL
- These Financial Statement are prepared on the historical cost basis,
in accordance with the
Generally Accepted Accounting Principles in India, the Accounting
Standards issued by the Institute of Chartered Accountants of India
(except to the extent otherwise stated herein 2(B), 2(E) (i) below) and
the provisions of the Companies Act, 1956, adjusted by valuation of
certain Fixed Assets and on the accounting principles of a going
concern.
- Accounting Principles not specifically referred to otherwise are
consistent and in consonance with the generally accepted accounting
principles.
B. RECOGNITION OF INCOME AND EXPENDITURE
Incomes and expenditures are recognized on accrual basis except
benefits on Special Import License Premium, Sales Tax set off, Duty
Drawback and all cash incentives, Claims receivable and Government
taxes, which have been accounted on cash basis.
C. SALES
- Sales are reported net of trade discounts, returns & rebates, Excise
Duty and Sales Tax.
- Sales of Scrap/Unusable Waste are reported net of Excise duty and
Sales Tax.
D. INVENTORIES
- Inventories of Raw Materials, Finished Goods, Semi-Finished Goods,
Trading Goods, Raw Material Scrap and Stores Spares and other
components, Packing Materials, Fuel and Oil are valued at cost or net
realizable value, whichever is lower.
- Goods in transit are valued at cost or net realizable value,
whichever is lower.
- Cost comprises of all cost of purchases, cost of conversion and other
costs incurred in bringing
the inventory to their present location and conditions.
- Cost is arrived at on FIFO basis.
E. FIXED ASSETS
Fixed Assets are stated at cost of acquisition or construction
inclusive of incidental expenses related there to and includes amount
added on revaluation less accumulated depreciation & cenvat credit.
F. DEPRECIATION
- Depreciation on Fixed Assets has been provided on pro-rata basis on
the written down value method at the rates specified in schedule XIV,
of the Companies Act, 1956.
- Leasehold Land is amortized over the period of lease.
- Depreciation on Revalued Assets is charged for each period after
deducting the amount of depreciation on the revalued cost, transferred
from revaluation reserve.
G. EXPENDITURE DURING CONSTRUCTION PERIOD
Expenditure during construction period is included under Capital Work
in Progress and the same is allocated to the respective Fixed Assets on
the completion of its construction.
H. DEFERRED REVENUE EXPENDITURE
The expenses disclosed under Miscellaneous Expenditure consist
Preliminary expenses and the same have been amortized over a period of
10 years
I. FOREIGN EXCHANGE TRANSACTIONS
- Transactions denominated in foreign currency are normally accounted
for at the exchange rate prevailing at the time of transaction.
- Monetary assets and Liabilities in foreign currency transactions
remaining unsettled at the end of the year (other than forward contract
transactions) are translated at the year end rates and the
corresponding effect is given to the respective account.
- Exchange differences' arising on account of fluctuations in the rate
of exchange is recognized in the Profit & Loss Account.
- Exchange rate difference arising on account of conversion/translation
of liabilities incurred for acquisition of Fixed Assets is recognized
in the Profit & Loss A/c .
- Investment & finance (including loans & equity contribution) in
foreign subsidiaries are recorded in rupees by applying the exchange
rate prevailing at the time of making Investments and Finance.
J. GOVERNMENT GRANTS
- Capital subsidy/government grants are accounted for where it is
reasonably certain that the ultimate collection will be made.
- Capital subsidy/government grants in the form of Capital/Investment
Incentives received from government/Semi-government authorities are
credited to capital reserve account.
- Capital subsidy/government grants related to specific non depreciable
assets are credited to capital reserve account.
- Capital subsidy/government grants related to specific depreciable
assets are credited to capital reserve account and are recognized as
income in profit and loss statement on a systematic and rational basis
over the useful life of assets.
- Other Revenue Grants are credited to Profit & Loss Account under
'Other Income' or deducted from the related Expenses.
K. INVESTMENTS
Long Term Investments are stated at Cost and provision for diminution
in value in the perception of the management will only be considered.
L. EMPLOYEE BENEFITS
- The Company makes regular contribution to the Employees' Provident
Fund and Employees' Pension Fund Schemes and these contributions are
charged to Profit and Loss Account.
- Year end liabilities on account of Leave encashment Benefits to
employees are accounted for on accrual basis and provision for actual
earned leave accrued and provided as per the balance of unclaimed leave
at the year end since there is no scheme in the company for leave
encashment benefits.
- The gratuity liability is determined by actuarial valuation, using
the Project Unit Credit Method as specified in AS 15 (Revised) "
EMPLOYEE BENEFITS " and the liability is fully charged to Profit & Loss
A/c. Actuarial gains and losses arising on such valuation are also
recognized immediately in Profit & Loss A/c
M. BORROWING COST
Borrowing costs directly attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of the assets up to the date the assets are put to use. Other borrowing
costs are charged to the Profit & Loss Account in the year in which
they are incurred.
N. LEASES
Lease rentals in respect of the assets acquired on Lease are charged to
Profit and Loss Account.
O. TAXATION
Provision for current tax is made on the assessable income at the tax
rate applicable to the relevant assessment year. Deferred tax resulting
from" timing difference "between book and taxable profit is accounted
for using the tax rate and tax laws that have been enacted or
substantively enacted by the Balance Sheet Date. Deferred tax assets
are recognized, only to the extent there is a reasonable certainty of
its realization. At each Balance sheet date, the carrying amount of
deferred tax assets is reviewed to reassure realization.
P. INTANGIBLE ASSETS
Intangible Assets are recognized by the Company only if it is probable
that the future economic benefits that are attributable to the assets
will flow to the enterprise and the cost of the same can be measured
reliably.
Intangible Assets are amortized on a systematic basis over its useful
life and the amortization for each period will be recognized as an
expense.
Q. IMPAIRMENT
Impairment loss is recognized wherever the carrying amount of an asset
is in excess of its recoverable amount and the same is recognized as an
expense in the statement of profit and loss and carrying amount of the
asset is reduced to its recoverable amount.
Reversal of impairment losses recognized in prior years is recorded
when there is an indication that the impairment losses recognized for
the asset no longer exist or have decreased.
R. PROVISIONS
A Provision is recognized when an enterprise has a present obligation
as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted to
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
S. CONTINGENT LIABILITY
Contingent Liabilities are not accounted for in the Accounts. These are
disclosed by way of Notes to the Accounts to the extent of information
available with the Company.
Mar 31, 2010
A. GENERAL
- These Financial Statement are prepared on the historical cost basis,
in accordance with the Generally Accepted Accounting Principles in
India, the Accounting Standards issued by the Institute of Chartered
Accountants of India (except to the extent otherwise stated herein
2(C), 2(F), 2(Q) & 2(R) below) and the provisions of the Companies Act,
1956, adjusted by valuation of certain Fixed Assets and on the
accounting principles of a going concern.
- Accounting Principles not specifically referred to otherwise are
consistent and in consonance with the generally accepted accounting
principles.
B. RECOGNITION OF INCOME AND EXPENDITURE
Incomes and expenditures are recognized on accrual basis except
benefits on Special Import License Premium, Sales Tax set off, Duty
Drawback and all cash incentives, Claims receivable and Government
taxes, which have been accounted on cash basis.
C. SALES
- Sales are reported net of trade discounts, returns & rebates, Excise
Duty and Sales Tax.
- Sales of Scrap/Unusable Waste are reported net of Excise duty and
Sales Tax.
D. INVENTORIES
- Inventories of Raw Materials, Finished Goods, Semi-Finished Goods,
Trading Goods, Raw Material Scrap and Stores Spares and other
components, Packing Materials, Fuel and Oil are valued at cost or net
realizable value, whichever is lower.
- Goods in transit is valued at cost or net realizable value, whichever
is lower.
- Cost comprise of all cost of purchases, cost of conversion and other
costs incurred in bringing the inventory to their present location and
conditions.
- Cost is arrived at on FIFO basis.
E. FIXED ASSETS
Fixed Assets are stated at cost of acquisition or construction
inclusive of incidental expenses related there to and includes amount
added on revaluation less accumulated depreciation & cenvat credit.
F. DEPRECIATION
- Depreciation on Fixed Assets has been provided on pro-rata basis on
the written down value method at the rates specified in schedule XIV,
of the Companies Act, 1956.
- Leasehold Land is amortized over the period of lease.
- Depreciation on Revalued Assets is charged for each period after
deducting the amount of depreciation on the revalued cost, transferred
from revaluation reserve.
G. EXPENDITURE DURING CONSTRUCTION PERIOD
Expenditure during construction period is included under Capital Work
in Progress and the same is allocated to the respective Fixed Assets on
the completion of its construction.
H. DEFERRED REVENUE EXPENDITURE
The expenses disclosed under Miscellaneous Expenditure consist
Preliminary expenses and the same have been amortized over a period of
10 years.
I. FOREIGN EXCHANGE TRANSACTIONS
- Transactions denominated in foreign currency are normally accounted
for at the exchange rate prevailing at the time of transaction.
- Monetary assets and Liabilities in foreign currency transactions
remaining unsettled at the end of the year (other than forward contract
transactions) are translated at the year end rates and the
corresponding effect is given to the respective account.
- Exchange differences arising on account of fluctuations in the rate
of exchange is recognized in the Profit & Loss Account.
- Exchange rate difference arising on account of conversion/translation
of liabilities incurred for acquisition of Fixed Assets is recognized
in the Profit & Loss A/c .
- Investment & finance (including loans & equity contribution) in
foreign subsidiaries are recorded in rupees by applying the exchange
rate prevailing at the time of making Investments and Finance.
J. GOVERNMENT GRANTS
- Capital subsidy/government grants are accounted for where it is
reasonably certain that the ultimate collection will be made.
- Capital subsidy/government grants in the form of Capital/Investment
Incentives received from government/Semi-government authorities are
credited to capital reserve account.
ff- Capital subsidy/government grants related to specific non
depreciable assets are credited to capital reserve account.
- Capital subsidy/government grants related to specific depreciable
assets are credited to capital reserve account and are recognized as
income in profit and loss statement on a systematic and rational basis
over the useful life of assets.
- Other Revenue Grants are credited to Profit & Loss Account under
Other Income or deducted from the related Expenses.
K. INVESTMENTS
Long Term Investments are stated at Cost and provision for diminution
in value in the perception of the management will only be considered.
L. EMPLOYEE BENEFITS
- The Company makes regular contribution to the Employees Provident
Fund and Employees Pension Fund Schemes and these contributions are
charged to Profit and Loss Account.
- Year end liabilities on account of Leave encashment Benefits to
employees are accounted for on accrual basis and provision for actual
earned leave accrued and provided as per the balance of unclaimed leave
at the year end since there is no scheme in the company for leave
encashment benefits.
- The gratuity liability is determined by actuarial valuation, using
the Project Unit Credit Method as specified in AS 15 (Revised) "
EMPLOYEE BENEFITS " and the liability is fully charged to Profit & Loss
A/c. Actuarial gains and losses arising on such valuation are also
recognized immediately in Profit & Loss A/c
M. BORROWING COST
Borrowing costs directly attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of the assets up to the date the assets are put to use. Other borrowing
costs are charged to the Profit & Loss Account in the year in which
they are incurred.
N. LEASES
Lease rentals in respect of the assets acquired on Lease are charged to
Profit and Loss Account.
O. TAXATION
Provision for current tax is made on the assessable income at the tax
rate applicable to the relevant assessment year. Deferred tax resulting
from" timing difference "between book and taxable profit is accounted
for using the tax rate and tax laws that have been enacted or
substantively enacted by the Balance Sheet Date. Deferred tax assets
are recognized, 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 realization.
P. INTANGIBLE ASSETS
Intangible Assets are recognized by the Company only if it is probable
that the future economic benefits that are attributable to the assets
will flow to the enterprise and the cost of the same can be measured
reliably.
Intangible Assets are amortized on a systematic basis over its useful
life and the amortization for each period will be recognized as an
expense.
Q. IMPAIRMENT
Impairment loss is recognized wherever the carrying amount of an asset
is in excess of its recoverable amount and the same is recognized as an
expense in the statement of profit and loss and carrying amount of the
asset is reduced to its recoverable amount.
Reversal of impairment losses recognized in prior years is recorded
when there is an indication that the impairment losses recognized for
the asset no longer exist or have decreased.
R. PROVISIONS
A Provision is recognized when an enterprise has a present obligation
as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted to
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
S. CONTINGENT LIABILITY
Contingent Liabilities are not accounted for in the Accounts. These are
disclosed by way of Notes to the Accounts to the extent of information
available with the Company.
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