Accounting Policies of Tijaria Polypipes Ltd. Company
Mar 31, 2018
1. 1 Significant Accounting Policies:
1.1.1.- Property, Plant and Equipment:
Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses. Freehold or Leasehold land is stated at historical cost.
Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalized in accordance with the Company accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use.
Fixtures and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
Where an obligation (legal or constructive) exists to dismantle or remove an asset or restore a site to its former condition at the end of its useful life, the present value of the estimate cost of dismantling, removing or restoring the site is capitalized along with the cost of acquisition or construction upon completion and a corresponding liability is recognized.
Cost of regular comprehensive maintenance work (such as major overhaul) are capitalized as a separate component if they satisfy the recognition criteria. Otherwise they are charged to Profit and Loss during the reporting period in which they are incurred.
1.2.1- Other Intangible Assets: -
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Intangible assets with indefinite useful lives are carried at cost less accumulated impairment losses.
1.3.1 Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from de-recognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.
1.3.2- Depreciation &Amortisation: -
Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method as per the provisions of Part C of Schedule II of the Companies Act, 2013 based on useful life and residual value specified therein. The residual values are note more than 5% of the original cost of the asset''s the asset''s residual value and useful life are reviewed and adjusted if appropriate at the end of each reporting period.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. However, when there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives.
Estimated useful lives of the assets are as follows:
The Use full life are taken as determined based on technical evaluation done by the management expert or those specified by schedule II of the company Act,2013 in order to reflect to the actual usages of the Assets
1.3.3 Capital Work-in-progress/ intangible assets under development and Pre-Operative Expenses during Construction Period
Capital work-in-progress comprises of the cost of PPE that are not yet ready for their intended use at the Balance Sheet date.
Cost of material consumed, erection charges thereon along with other related expenses incurred for the projects are shown as CWIP for capitalization.
Expenditure attributable to construction of fixed assets are identified and allocated on a systematic basis to the cost of the related asset.
Interest during construction and expenditure (net) allocated to construction are apportioned to CWIP/ intangible assets under development on the basis of the closing balance of Specific asset or part of asset being capitalized. The balance, if any, left after such capitalization is kept as a separate item under the CWIP/intangible assets Schedule.
Claims for price variation / exchange rate variation in case of contracts are accounted for on acceptance of claims.
Any other expenditure which is not directly or indirectly attributable to the construction of the Project / construction of the Fixed Asset is charged off to statement of profit and loss in the period in which they are incurred.
1.3.4 - Impairment of tangible and intangible assets other than goodwill:-
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest Company of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
1.3.5 - Borrowing costs: -
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in statement of profit or loss in the period in which they are incurred.
1.3.6 - Cash and cash equivalents: -
Cash and cash equivalent in the balance sheet comprise of cash at banks and on hand and demand deposits with an original maturity of three months or less that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
1.3.7 - Inventories: -
Inventories of Finished Goods, Raw Material and Work in Process are valued at cost or net realizable value whichever is lower. Cost of inventories includes Cost of manufacturing and other cost incurred for the manufacturing and in bringing the inventory to their present location and condition and applicable statutory levies net of under recovered levies charge to Profit and loss but exclude borrowing cost. Costs are assigned on the basis of FIFO method.Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and estimated cost necessary to make the sale.
1.3.8 - Revenue recognition: -
(a)Sale of Tubes and Pipes: -
Revenue is recognised to the extent that it is probable that economic benefit will flow to the Company and that the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. Amount disclosed as revenue are exclusive of excises duty, and net of returns, trade allowances, rebate, value added taxes and amount collected on behalf of third party.
Sales are recognised when the Goods are delivered to customers. No element of financing is deemed present as the sales are made with a credit of 60-75 days which is consistent with market practice.
(b) Interest income:
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
1.3.9 - Taxation: -
Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and loss except to the extent it relates to items directly recognized in equity or in other comprehensive income.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Minimum Alternative Tax (''MAT'') credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income-tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset, the said asset is created by way of a credit to the statement of profit and loss. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income-tax during the specified period.
Deferred tax assets and liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets relate to the same taxable entity and same taxation authority.
Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
1.3.10 - Earnings per share: -
Basic earnings per share is computed by dividing the profit/(loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit/(loss) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date.
1.3.11 - Provisions, Contingencies and commitments: -
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, and it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised 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. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
A disclosure for contingent liabilities is made when there is
(a) A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or
(b) A present obligation that arises from past events but is not recognized because:
(i) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
(ii) The amount of the obligation cannot be measured with sufficient reliability.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets.
Provisions, contingent liabilities, contingent assets and commitments are reviewed at each reporting period.
Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract
1.3.12 - Financial instruments: -
Financial assets and financial liabilities are recognised when a Company entity becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial Assets
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial assets other than trade receivables are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the Statement of Profit and Loss.
Financial assets, other than equity instruments, are subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of both:
(a) The entity''s business model for managing the financial assets and
(b) The contractual cash flow characteristics of the financial asset.
Classification of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):
- The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
- the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):
- the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and
- the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All other financial assets are subsequently measured at fair value.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL. Interest income is recognised in profit or loss and is included in the "Other income" line item.
Impairment of financial assets
The Company recognises a loss allowance for Expected Credit Losses (ECL) on financial assets that are measured at amortised cost and at FVOCI. The credit loss is difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate. This is assessed on an individual or collective basis after considering all reasonable and supportable including that which is forward-looking.
The Company trade receivables or contract revenue receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall, being simplified approach for recognition of impairment loss allowance.
Under simplified approach, the Company does not track changes in credit risk. Rather it recognizes impairment loss allowance based on the lifetime ECL at each reporting date right from its initial recognition. The Company uses a provision matrix to determine impairment loss allowance on the portfolio of trade receivables.
The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.
The impairment losses and reversals are recognised in Statement of Profit and Loss. For equity instruments and financial assets measured at FVTPL, there is no requirement for impairment testing.
Derecognition of financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of Ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On de-recognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.
For financial assets other than trade receivables, the Company recognises 12-month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. If, in a subsequent period, credit quality of the instrument improves such that there is no longer significant increase in credit risks since initial recognition, then the Company reverts to recognizing impairment loss allowance based on 12 months ECL.
On de-recognition of a financial asset other than in its entirety (e.g. when the Company retains an option to repurchase part of a transferred asset), the Company allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset. A cumulative gain or loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair values of those parts.
Non-Current Assets Held for Sale
The Company recognized some Non- Current Assets held for sale, As per the Indian Accounting Standards 105 the company has present a non-current assets classified as held for sale separately from other assets in the balance sheet. Those assets has not be offset. The company has classified non-current assets as held for sale Rs. 1,44,49,797.86 on that cumulative depreciation amount Rs1,20,46,649.07 Company has disclosed these noncurrent assets classified as held for sale is at book value.
1.3.13 - Financial liabilities and equity instruments: -
Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the company are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Company''s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company''s own equity instruments.
Financial liabilities
However, financial liabilities that arise when a transfer of a financial asset does not qualify for de-recognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is either contingent consideration recognised by the Company as an acquirer in a business combination to which Ind AS 103 applies or is held for trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
- It has been incurred principally for the purpose of repurchasing it in the near term; or
- On initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or
- It is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading or contingent consideration recognised by the Company as an acquirer in a business combination to which Ind AS 103 applies, may be designated as at FVTPL upon initial recognition if:
- Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;
- the financial liability forms part of a company of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the company documented risk management or investment strategy, and information about the Companying is provided internally on that basis; or
- it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits the entire combined contract to be designated as at FVTPL in accordance with Ind AS 109.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on measurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ''Other income'' line item.
However, for non-held-for-trading financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognised in other comprehensive income, unless the recognition of the effects of changes in the liability''s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss, in which case these effects of changes in credit risk are recognised in profit or loss. The remaining amount of change in the fair value of liability is always recognised in profit or loss. Changes in fair value attributable to a financial liability''s credit risk that are recognised in other comprehensive income are reflected immediately in retained earnings and are not subsequently reclassified to profit or loss.
Gains or losses on financial guarantee contracts and loan commitments issued by the Company that are designated by the Company as at fair value through profit or loss are recognised in profit or loss.
Financial liabilities subsequently measured at amortised cost financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method. Interest expense that is not capitalized as part of costs of an asset is included in the ''Finance costs'' line item.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company obligations are discharged, cancelled or have expired. An exchange between with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognised in profit or loss.
Reclassification of financial assets and liabilities
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company''s senior management determines change in the business model as a result of external or internal changes which are significant to the Company''s operations. Such change are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in the business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.
For assets and liabilities that are recognised 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.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
1.3.14 Employee related Benefits
Defined Benefit Plans - General Description
Gratuity: Each employee rendering continuous service of 5 years or more is entitled to receive gratuity amount equal to 15/26 of the monthly emoluments for every completed year of service subject to maximum of 10 Lakhs at the time of separation from the company.
Other long-term employee benefits - General Description
Leave Encashment: Each employee is entitled to get 15 earned leaves for each completed year of service. Encashment of earned leaves is made at the end of the financial years.
The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:
1.3.15 Investments:
Long term investments are stated at cost. In case, there is a decline other than temporary in the value of the investment, a provision for same is made. Current investments are valued at lower of cost or fair value.
1.4 Use of Estimates, Assumptions and Judgments
The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures including the disclosure of contingent liabilities. Uncertainty about the assumptions and estimates could result in outcomes that require an adjustment to the carrying amount of assets or liabilities in future periods. Difference between actual results and estimates are recognised in the periods in which the results are known / materialise. The Company has based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
1.4.1Taxes
The Company provides for tax considering the applicable tax regulations and based on reasonable estimates. Management periodically evaluates positions taken in the tax returns giving due considerations to tax laws and establishes provisions in the event if required as a result of differing interpretation or due to retrospective amendments, if any. The recognition of deferred tax assets is based on availability of sufficient taxable profits in the Company against which such assets can be utilized. MAT (Minimum Alternate Tax) is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax and will be able to utilize such credit during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the Statement of Profit and loss and is included in Deferred Tax Assets. The Company reviews the same at each balance sheet date and if required, writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that Company will be able to absorb such credit during the specified period.
1.4.2 Useful life of Property, Plant and Equipment
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
1.4.3 Impairment of Non-financial assets
Non-financial assets are reviewed for impairment, whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
1.4.4 Provision for decommissioning
In measuring the provision for ARO, the Company uses technical estimates to determine the expected cost to dismantle and remove the infrastructure equipment from the site and the expected timing of these costs. Discount rates are determined based on the risk adjusted bank rate of a similar period as the liability.
1.4.5 Provisions and Contingent Liabilities
Provisions and contingent liabilities are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
1.5 First Time Adoption of Ind AS
The Company had prepared its financial statements in accordance with the Accounting Standards (AS) notified under section 133 of the Companies Act, 2013 (Previous GAAP) for and including the year ended March 31, 2017.The Company has prepared its first Ind AS (Indian Accounting Standards) compliant Financial Statements for the year ended March 31, 2018 with restated comparative figures for the year ended March 31, 2017 in compliance with Ind AS. Accordingly, the Opening Balance Sheet, in line with Ind AS transitional provisions, has been prepared as at April1, 2016, the date of Company''s transition to Ind AS. The principal adjustments made by the Company in restating its Previous GAAP financial statements as at and for the Financial year ended March 31, 2017 and the balance sheet as at April 1, 2016 are as mentioned below:
1.5.1 EXEMPTIONS APPLIED
Ind AS 101 on First Time Adoption of Ind AS allows first-time adopters certain voluntary exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:
1.5.1.1 There is no change in the functional currency of the Company and accordingly, it has elected to continue with the carrying values for all of its property, plant and equipment and intangible assets as recognised in its previous GAAP financial statements as the deemed cost at the transition date subject to the adjustments for decommissioning liabilities. As per the exemption under Ind AS 101, decommissioning liability was measured in accordance with Ind AS 37 at the date of transition to Ind AS. To the extent the liability was within the scope of Appendix-A of Ind AS 16, estimated liability that would have been included in the cost of related asset when the liability first arose by discounting the liability to that date using best estimate of the historical risk adjusted discount rate over the intervening period. Accumulated depreciation was calculated on that amount as at the date of transition to Ind AS on the basis of the current estimate of the useful life of the asset, using the depreciation policy adopted by the Company in accordance with Ind AS.
1.5.1.2 Appendix C to Ind AS 17 requires the Company to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all relevant arrangements for classification of leases based on facts and circumstances existing at the date of transition to Ind AS.
1.5.2 Exceptions Applied
Ind AS 101 specifies mandatory exceptions from retrospective application of some aspects of other Ind ASs for firsttime adopters. Following exception is applicable to the Company:
Use of Estimates
The estimates at April 1, 2016 and March 31, 2017 are consistent with those made for the same dates in accordance with Previous GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Previous GAAP did not require estimation:
Impairment of financial assets based on Expected Credit Loss (ECL) model The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at April 1, 2016, the date of transition to Ind AS and as of March 31, 2017.
1.5.3 First Time Ind AS Adoption reconciliations:
Effect of Ind AS Adoption on the Balance Sheet as at March 31, 2017 and April 1, 2016 : -
Mar 31, 2015
(a) Basis of Preparation of Financial Statements:
These financial statements have been prepared to comply with the
Generally Accepted Accounting Principles in India (Indian GAAP),
including the Accounting Standards notified under the relevant
provisions of the Companies Act, 2013.
The financial statements are prepared on accrual basis under the
historical cost convention, except for certain Fixed Assets which are
carried at revalued amounts. The financial statements are presented in
Indian rupees rounded off to the nearest rupee.
(b) Use of Estimates:
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the Financial Statements and the reported
amount of revenues and expenses during the reporting period.
Difference between the actual results and estimates are recognized in
the period in which the results are known or materialized.
(c) Revenue Recognition:
Sales are net of returns, discounts and sales tax. However, turnover
discount and other non-recurring discounts have not been netted from
Sales. Incomes and expenditures are recognised on accrual basis.
However, customers' claims are accounted for as and when arise/settled
on the basis of final settlement.
(d) Fixed Assets and Depreciation:
Fixed Assets are as per books of accounts maintained and are duly
verified by management. They are stated at cost less accumulated
depreciation. The cost includes taxes, duties, freight, installation
and other directly attributable costs of bringing the assets in its
working condition for its intended use. Long term lease hold land is
stated at cost. Intangible asset is stated at the cost of acquisition
less accumulated amortization and impairment loss.
Depreciation on Fixed Assets is provided to the extent of depreciable
amount on the Written Down Value (WDV) Method. Depreciation is provided
based on useful life of the assets as prescribed in Schedule II to the
Companies Act, 2013.
Capital work-in-progress and pre-operative expenses towards expansion
cum diversification project is disclosed separately below the Gross
Block of Assets. Such expenditures are allocated on the respective
assets in the year of installation.
(e) Inventories:
Inventories are as per books of accounts maintained and are duly
verified by the management.
Raw Materials and Stores, Spares, Packing Materials & Stock in Trade
are valued at cost computed on FIFO basis. Scrap is valued at estimated
realisable value.
Work in Progress is valued at material cost plus conversion cost and
finished goods are valued at lower of cost or net realisable value.
Cost for this purpose includes direct cost and appropriate
administrative and other overheads.
(f) Borrowing Cost:
Borrowing costs that are attributable to the acquisition of qualifying
assets are capitalised as a part of cost of such assets. All other
borrowing costs are charged to revenue.
(g) Preliminary Expenses:
Preliminary expenses incurred by the company are subject to
amortization over a period of 5 years equally.
(h) Taxation:
Provision for current tax is made in the accounts on the basis of
estimated tax liability as per the applicable provisions of the Income
Tax Act, 1961
Deferred tax effect of timing differences between tax profit and book
profit is accounted for using the tax rates and laws that have been
enacted or subsequently enacted as on the Balance Sheet date. Deferred
tax assets are recognised to the extent there is virtual certainty that
these assets can be realised in future.
(i) Employees' Benefits:
Employees' benefits in the form of contribution towards Provident Fund,
ESI are considered as defined contribution plan and the contributions
to recognised funds are charged to the Profit and Loss Account of the
year when the contributions are due, as per the provisions of
respective statutes.
Leaves lying in credit of the employees are not paid as the Company
follows practice of granting leaves as and when demanded by the
employees. These leaves are non-accumulating and the un-availed leaves
automatically lapse at the year-end. Hence, no provision for the same
is required to be made.
Gratuity is a post employment benefit and is in the nature of defined
benefit plan. The defined benefit/obligation is calculated by Life
Insurance Corporation of India, an independent actuary using the
projected unit credit method.
(j) Foreign Currency Transactions:
Exchange rate difference arising from foreign currency transactions
relating to import/export of goods are dealt with in the Profit & Loss
Account.
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Any income or expenses on
account of foreign currency exchange rate difference either on
settlement or on transactions, is recognized in the profit & loss
account, except in cases where they relates to acquisition of fixed
assets in which case they are adjusted to the carrying cost of such
assets till the date of put to use.
At the Balance Sheet date all assets and liabilities denominated in
foreign currency are reported at the exchange rate prevailing at the
Balance Sheet date and foreign currency exchange arising due to same is
charged to statement of profit & loss.
(k) Cash Flow Statement:
The cash flow statement is prepared under the indirect method as set
out in the Accounting Standards 3. Cash and cash equivalents in the
cash flow statement comprise cash at bank and in hand and short-term
investments with an original maturity of three months or less.
(l) Accounting for Investments:
Investments which are readily realizable and intended to be held for
not more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognize a
decline other than temporary in the value of investments.
(m) Segment Reporting:
The accounting policies applicable to the reportable segments are same
as those used in the preparation of the financial statements. However,
items of income and expenditures, assets and liabilities which are not
directly attributable / identifiable / allocable on a reasonable basis
to a business segment are shown as unallocated.
(n) Earnings per Share:
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
(o) Accounting for Government Grants:
The Company recognizes the government grants only when there is
reasonable assurance that the Company will comply with the conditions
attached to the scheme and the grant will be received.
(p) Impairment of Assets:
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/ external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The same is charged to the
Profit and Loss Account. After impairment, depreciation is provided on
the revised carrying amount of the asset over its remaining useful
life.
(q) Provisions, Contingent Liability and Contingent Assets:
A provision is recognised when there is a present obligation as a
result of past event that there is possibility of an outflow of
resources to settle the obligation and in respect of which reliable
estimate can be made. Provision is determined based on the best
estimate required to settle the obligation at the end of the year.
These are reviewed at each year end and adjusted to reflect the best
current estimates. Contingent liabilities are not provided for in the
accounts and are separately shown in the Notes on Accounts. Contingent
Assets are neither recognised nor provided or disclosed in the
financial statements.
Mar 31, 2014
(a) Basis of Preparation of Financial Statements:
The Financial Statements have been prepared under the historical cost
convention using accrual method of accounting in accordance with
Generally Accepted Accounting Principles and Provisions of the
Companies Act, 1956 as adopted consistently by the Company following
going concern concept.
Accounting policies not specifically referred to otherwise are
consistent and in accordance with the accounting principles generally
accepted and as recommended by the Institute of Chartered Accountants
of India. All assets and liabilities have been classified as current or
non-current as per revised Schedule VI to the Companies Act, 1956.
(b) Use of Estimates:
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the Financial Statements and the reported
amount of revenues and expenses during the reporting period.
Difference between the actual results and estimates are recognized in
the period in which the results are known or materialized.
(c) Revenue Recognition:
Sales are net of returns, discounts and sales tax. However, Turnover
Discount and other non-recurring discounts have not been netted from
Sales. Incomes and expenditures are recognised on accrual basis.
However, customers'' claims are accounted for as and when arise/settled
on the basis of final settlement.
(d) Fixed Assets and Depreciation:
Fixed Assets are as per books of accounts maintained and are duly
verified by management. They are stated at cost less accumulated
depreciation. The cost includes taxes, duties, freight, installation
and other directly attributable costs of bringing the assets in its
working condition for its intended use. Long term lease hold land is
stated at cost. Intangible asset is stated at the cost of acquisition
less accumulated amortization and impairment loss.
Depreciation on plant & machinery and other assets are provided at the
rates and in the manner prescribed under the Schedule XIV on written
down value method in accordance with the provisions of the Companies
Act, 1956.
Capital work-in-progress and Pre-operative expenses towards expansion
cum diversification project is disclosed separately below the Gross
Block of Assets. Such expenditures are allocated on the respective
assets in the year of installation.
(e) Inventories:
Inventories are as per books of accounts maintained and are duly
verified by management.
Raw Materials and Stores, Spares, Packing Materials & Stock in Trade
are valued at cost computed on FIFO basis. Scrap is valued at estimated
realisable value.
Work in Progress is valued at material cost plus conversion cost and
finished goods are valued at lower of cost or net realisable value.
Cost for this purpose includes direct cost and appropriate
administrative and other overheads.
(f) Borrowing Cost:
Borrowing costs that are attributable to the acquisition of qualifying
assets are capitalised as a part of cost of such assets. All other
borrowing costs are charged to revenue.
(g) Preliminary Expenses:
Preliminary expenses incurred by the company are subject to
amortization over a period of 5 years equally.
(h) Taxation:
Provision for current tax is made in the accounts on the basis of
estimated tax liability as per the applicable provisions of the Income
Tax Act, 1961. Deferred tax effect of timing differences between tax
profit and book profit is accounted for using the tax rates and laws
that have been enacted or subsequently enacted as on the Balance Sheet
date. Deferred tax assets are recognised to the extent there is virtual
certainty that these assets can be realised in future.
(I) Employees'' Benefits:
Employees'' benefits in the form of contribution towards Provident Fund,
ESI are considered as defined contribution plan and the contributions
to recognised funds are charged to the Profit and Loss Account of the
year when the contributions are due, as per the provisions of
respective statutes.
Leaves lying in credit of the employees are not paid as the Company
follows practice of granting leaves as and when demanded by the
employees. These leaves are non-accumulating and the un-availed leaves
automatically lapse at the year-end. Hence, no provision for the same
is required to be made.
Gratuity is a post employment benefit and is in the nature of defined
benefit plan. The defined benefit/obligation is calculated by Life
Insurance Corporation of India, an independent Actuary using the
projected unit credit method.
(j) Foreign Currency Transactions:
Exchange rate difference arising from foreign currency transactions
relating to import/export of goods are dealt with in the Profit & Loss
Account.
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Any income or expenses on
account of foreign currency exchange rate difference either on
settlement or on transactions, is recognized in the profit & loss
account, except in cases where they relates to acquisition of fixed
assets in which case they are adjusted to the carrying cost of such
assets till the date of put to use.
At the Balance Sheet date all assets and liabilities denominated in
foreign currency are reported at the exchange rate prevailing at the
Balance Sheet date and foreign currency exchange arising due to same is
charged to statement of profit & loss.
(k) Cash Flow Statement:
The cash flow statement is prepared under the indirect method as set
out in the Accounting Standards 3. Cash and cash equivalents in the
cash flow statement comprise cash at bank and in hand and short-term
investments with an original maturity of three months or less.
(l) Accounting for Investments:
Investments which are readily realizable and intended to be held for
not more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognize a
decline other than temporary in the value of investments.
(m) Segment Reporting:
The accounting policies applicable to the reportable segments are same
as those used in the preparation of the financial statements. However,
items of income and expenditures, assets and liabilities which are not
directly attributable / identifiable / allocable on a reasonable basis
to a business segment are shown as unallocated.
(n) Earnings per Share:
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
(o) Accounting for Government Grants:
The Company recognizes the government grants only when there is
reasonable assurance that the Company will comply with the conditions
attached to the scheme and the grant will be received.
(p) Impairment of Assets:
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/ external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The same is charged to the
Profit and Loss Account. After impairment, depreciation is provided on
the revised carrying amount of the asset over its remaining useful
life.
(q) Provisions, Contingent Liability and Contingent Assets:
A provision is recognised when there is a present obligation as a
result of past event that there is possibility of an outflow of
resources to settle the obligation and in respect of which reliable
estimate can be made. Provision is determined based on the best
estimate required to settle the obligation at the end of the year.
These are reviewed at each year end and adjusted to reflect the best
current estimates. Contingent liabilities are not provided for in the
accounts and are separately shown in the Notes on Accounts. Contingent
Assets are neither recognised nor provided or disclosed in the
financial statements.
Mar 31, 2013
(a) Basis of Preparation of Financial Statements:
The Financial Statements have been prepared under the historical cost
convention using accrual method of accounting in accordance with
Generally Accepted Accounting Principles and Provisions of the
Companies Act, 1956 as adopted consistently by the Company following
going concern concept.
Accounting policies not specifically referred to otherwise are
consistent and in accordance with the accounting principles generally
accepted and as recommended by the Institute of Chartered Accountants
of India. All assets and liabilities have been classified as current or
non-current as per revised Schedule VI to the Companies Act, 1956.
(b) Use of Estimates:
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the Financial Statements and the reported
amount of revenues and expenses during the reporting period.
Difference between the actual results and estimates are recognized in
the period in which the results are known or materialized.
(c) Revenue Recognition:
Sales are net of returns, discounts and sales tax. However, Turnover
Discount and other non-recurring discounts have not been netted from
Sales. Incomes and expenditures are recognised on accrual basis.
However, customers'' claims are accounted for as and when arise/settled
on the basis of final settlement.
(d) Fixed Assets and Depreciation:
Fixed Assets are as per books of accounts maintained and are duly
verified by management. They are stated at cost less accumulated
depreciation. The cost includes taxes, duties, freight, installation
and other directly attributable costs of bringing the assets in its
working condition for its intended use. Long term lease hold land is
stated at cost. Intangible asset is stated at the cost of acquisition
less accumulated amortization and impairment loss.
Depreciation on plant & machinery and other assets are provided at the
rates and in the manner prescribed under the Schedule XIV on written
down value method in accordance with the provisions of the Companies
Act, 1956. Capital work-in-progress and Pre-operative expenses towards
expansion cum diversification project is disclosed separately below the
Gross Block of Assets. Such expenditures are allocated on the
respective assets in the year of installation.
(e) Inventories:
Inventories are as per books of accounts maintained and are duly
verified by management. Raw Materials and Stores, Spares, Packing
Materials & Stock in Trade are valued at cost computed on FIFO basis.
Scrap is valued at estimated realisable value.
Work in Progress is valued at material cost plus conversion cost and
finished goods are valued at lower of cost or net realisable value.
Cost for this purpose includes direct cost and appropriate
administrative and other overheads.
(f) Borrowing Cost:
Borrowing costs that are attributable to the acquisition of qualifying
assets are capitalised as a part of cost of such assets. All other
borrowing costs are charged to revenue.
(g) Preliminary Expenses:
Preliminary expenses incurred by the company are subject to
amortization over a period of 5 years equally. (h) Taxation:
Provision for current tax is made in the accounts on the basis of
estimated tax liability as per the applicable provisions of the Income
Tax Act, 1961.
Deferred tax effect of timing differences between tax profit and book
profit is accounted for using the tax rates and laws that have been
enacted or subsequently enacted as on the Balance Sheet date. Deferred
tax assets are recognised to the extent there is virtual certainty that
these assets can be realised in future.
(I) Employees'' Benefits:
Employees'' benefits in the form of contribution towards Provident Fund,
ESI are considered as defined contribution plan and the contributions
to recognised funds are charged to the Profit and Loss Account of the
year when the contributions are due, as per the provisions of
respective statutes.
Leaves lying in credit of the employees are not paid as the Company
follows practice of granting leaves as and when demanded by the
employees. These leaves are non-accumulating and the un-availed leaves
automatically lapse at the year-end. Hence, no provision for the same
is required to be made.
Gratuity is a post employment benefit and is in the nature of defined
benefit plan. The defined benefit/obligation is calculated by Life
Insurance Corporation of India, an independent Actuary using the
projected unit credit method.
j) Foreign Currency Transactions:
Exchange rate difference arising from foreign currency transactions
relating to import/export of goods are dealt with in the Profit & Loss
Account.
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Any income or expenses on
account of foreign currency exchange rate difference either on
settlement or on transactions, is recognized in the profit & loss
account, except in cases where they relates to acquisition of fixed
assets in which case they are adjusted to the carrying cost of such
assets till the date of put to use.
At the Balance Sheet date all assets and liabilities denominated in
foreign currency are reported at the exchange rate prevailing at the
Balance Sheet date and foreign currency exchange arising due to same is
charged to statement of profit & loss.
(k) Cash Flow Statement:
The cash flow statement is prepared under the indirect method as set
out in the Accounting Standards 3. Cash and cash equivalents in the
cash flow statement comprise cash at bank and in hand and short-term
investments with an original maturity of three months or less.
(l) Accounting for Investments:
Investments which are readily realizable and intended to be held for
not more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognize a
decline other than temporary in the value of investments.
(m) Segment Reporting:
The accounting policies applicable to the reportable segments are same
as those used in the preparation of the financial statements. However,
items of income and expenditures, assets and liabilities which are not
directly attributable / identifiable / allocable on a reasonable basis
to a business segment are shown as unallocated.
(n) Earnings per Share:
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
(o) Accounting for Government Grants:
The Company recognizes the government grants only when there is
reasonable assurance that the Company will comply with the conditions
attached to the scheme and the grant will be received.
(p) Impairment of Assets:
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/ external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The same is charged to the
Profit and Loss Account. After impairment, depreciation is provided on
the revised carrying amount of the asset over its remaining useful
life.
(q) Provisions, Contingent Liability and Contingent Assets:
A provision is recognised when there is a present obligation as a
result of past event that there is possibility of an outflow of
resources to settle the obligation and in respect of which reliable
estimate can be made. Provision is determined based on the best
estimate required to settle the obligation at the end of the year.
These are reviewed at each year end and adjusted to reflect the best
current estimates. Contingent liabilities are not provided for in the
accounts and are separately shown in the Notes on Accounts. Contingent
Assets are neither recognised nor provided or disclosed in the
financial statements.
Mar 31, 2012
1. Basis of Preparation of Financial Statements:
The Financial Statements have been prepared under the historical cost
convention using accrual method of accounting in accordance with
Generally Accepted Accounting Principles and Provisions of the
Companies Act, 1956 as adopted consistently by the Company following
going concern concept.
Accounting policies not specifically referred to otherwise are
consistent and in accordance with the accounting principles generally
accepted and as recommended by the Institute of Chartered Accountants
of India.
All assets and liabilities have been classified as current or
non-current as per revised Schedule VI to the Companies Act, 1956.
2. Revenue Recognition:
Sales are net of returns, discounts and sales tax. However, Turnover
Discount and other non-recurring discounts have not been netted from
Sales. Incomes and expenditures are recognised on accrual basis.
However, customers' claims are accounted for as and when arise/settled
on the basis of final settlement.
3. Fixed Assets and Depreciation:
Fixed Assets are stated at cost less accumulated depreciation. The cost
includes taxes, duties, freight, installation and other directly
attributable costs of bringing the assets in its working condition for
its intended use. Long term lease hold land is stated at cost.
Intangible asset is stated at the cost of acquisition less accumulated
amortization and impairment loss.
Depreciation on Plant & Machinery and other assets are provided at the
rates prescribed under the Schedule XIV under Written down Value Method
in accordance with the provisions of the Companies Act, 1956 at the
rates and in the manner specified in Schedule XIV of the said Act.
Capital Work-in-progress and Pre-Operative Expenses towards Expansion
cum Diversification Project is disclosed separately below the Gross
Block of Assets. Such expenditures are allocated on the respective
assets in the year of installation.
Software, which is not an integral part of hardware, is treated as an
intangible asset and is amortized over its useful economic life as
estimated by the management between 3 to 5 years.
4. Inventories:
Raw Materials and Stores, Spares, Packing Materials & Stock in Trade
are valued at cost computed on FIFO basis. Scrap is valued at
estimated realisable value.
Work in Progress is valued at material cost plus conversion cost and
finished goods are valued at lower of cost or net realisable value.
Cost for this purpose includes direct cost and appropriate
administrative and other overheads.
5. Borrowing Cost:
Borrowing costs that are attributable to the acquisition of qualifying
assets are capitalised as a part of cost of such assets. All other
borrowing costs are charged to revenue.
6. Preliminary Expenses:
Preliminary expenses incurred by the company are subject to
amortization over a period of 5 years equally.
7. Taxation:
Provision for current tax is made in the accounts on the basis of
estimated tax liability as per the applicable provisions of the Income
Tax Act, 1961.
Deferred tax effect of timing differences between tax profit and book
profit is accounted for using the tax rates and laws that have been
enacted or subsequently enacted as on the Balance Sheet date. Deferred
tax assets are recognised to the extent there is virtual certainty that
these assets can be realised in future.
8. Employees' Benefits:
Employees' benefits in the form of contribution towards Provident Fund,
ESI are considered as defined contribution plan and the contributions
to recognised funds are charged to the Profit and Loss Account of the
year when the contributions are due, as per the provisions of
respective statutes.
Leaves lying in credit of the employees are not paid as the Company
follows practice of granting leaves as and when demanded by the
employees. These leaves are non-accumulating and the un-availed leaves
automatically lapse at the year-end. Hence, no provision for the same
is required to be made.
Gratuity is a post employment benefit and is in the nature of defined
benefit plan. The defined benefit/obligation is calculated by Life
Insurance Corporation of India, an independent Actuary using the
projected unit credit method.
9. Foreign Currency Transactions:
Exchange rate difference arising from foreign currency transactions
relating to import/export of goods are dealt with in the Profit & Loss
Account. Further, as per the notification issued by the Ministry of
Corporate Affairs, the company has opted to capitalize the exchange
difference on the foreign currency loans against purchase of fixed
assets after the same has been put to use and depreciated over the
balance useful life of the assets.
10. Cash Flow Statement:
The cash flow statement is prepared under the indirect method as set
out in the Accounting Standards 3. Cash and cash equivalents in the
cash flow statement comprise cash at bank and in hand and short-term
investments with an original maturity of three months or less.
11. Accounting for Investments:
Investments which are readily realizable and intended to be held for
not more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognize a
decline other than temporary in the value of investments.
12. Segment Reporting:
The accounting policies applicable to the reportable segments are same
as those used in the preparation of the financial statements. However,
items of income and expenditures, assets and liabilities which are not
directly attributable / identifiable / allocable on a reasonable basis
to a business segment are shown as unallocated.
13. Earnings Per Share :
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
14. Impairment of Assets:
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/ external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The same is charged to the
Profit and Loss Account. After impairment, depreciation is provided on
the revised carrying amount of the asset over its remaining useful
life.
15. Accounting for the Government Grant
The company recognizes the Government grant only when there is
reasonable assurance that:
- The enterprise will comply with the conditions attached to them and
- The grant will be received.
16 Provisions, Contingent Liability and Contingent Assets:
A provision is recognised when there is a present obligation as a
result of past event that there is possibility of an outflow of
resources to settle the obligation and in respect of which reliable
estimate can be made. Provision is determined based on the best
estimate required to settle the obligation at the end of the year.
These are reviewed at each year end and adjusted to reflect the best
current estimates.
Contingent liabilities are not provided for in the accounts and are
separately shown in the Notes on Accounts. Contingent Assets are
neither recognised nor provided or disclosed in the financial
statements.
Mar 31, 2011
1. Basis of Preparation of Financial Statements:
The Financial Statements have been prepared under the historical cost
convention using accrual method of accounting in accordance with
Generally Accepted Accounting Principles and Provisions of the
Companies Act, 1956 as adopted consistently by the Company following
going concern concept.
Accounting policies not specifically referred to otherwise are
consistent and in accordance with the accounting principles generally
accepted and as recommended by the Institute of Chartered Accountants
of India.
2. Revenue Recognition:
Sales are net of returns, discounts and sales tax. However, Turnover
Discount and other non-recurring discounts and Excise Duty have been
accounted for separately and have not been netted from Sales.
Government grants are recognised on receipt / upon reasonable certainty
of ultimate collection thereof. Incomes and expenditures are recognised
on accrual basis. However, customers' claims are accounted for as and
when arise/settled on the basis of final settlement.
3. Fixed Assets and Depreciation:
Fixed Assets are stated at cost less accumulated depreciation. The cost
includes taxes, duties, freight, installation and other directly
attributable costs of bringing the assets in its working condition for
its intended use. Long term lease hold land is stated at cost.
Depreciation on Plant & Machinery is provided at the rates prescribed
under the Schedule XIV under Written down Value Method. Depreciation on
other assets is provided on Written down Value Method in accordance
with the provisions of the Companies Act, 1956 at the rates and in the
manner specified in Schedule XIV of the said Act Capital
Work-in-progress and Pre-Operative Expenses towards Expansion cum
Diversification Project is disclosed separately below the Gross Block
of Assets. Such expenditures are allocated on the respective assets in
the year of installation.
4. Borrowing Cost:
Borrowing costs that are attributable to the acquisition of qualifying
assets are capitalised as a part of cost of such assets. All other
borrowing costs are charged to revenue.
5. Preliminary Expenses:
Preliminary expenses incurred by the company are subject to
amortization over a period of 5 years equally.
6. Taxation:
Provision for current tax is made in the accounts on the basis of
estimated tax liability as per the applicable provisions of the Income
Tax Act, 1961, Deferred tax effect of timing differences between tax
profit and book profit is accounted for using the tax rates and laws
that have been enacted or subsequently enacted as on the Balance Sheet
date. Deferred tax assets are recognised to the extent there is
reasonable certainty that these assets can be realised in future.
7. Employees' Benefits:
Employees' benefits in the form of contribution towards Provident Fund,
ESI are considered as defined contribution plan and the contributions
to recognised funds are charged to the Profit and Loss Account of the
year when the contributions are due, as per the provisions of
respective statutes.
Leaves lying in credit of the employees are not paid as the Company
follows practice of granting leaves as and when demanded by the
employees. These leaves are non- accumulating and the un-availed leaves
automatically lapse at the year-end, Hence, no provision for the same
is required to be made.
Gratuity is a post employment benefit and is in the nature of defined
benefit plan. The defined benefit/obligation is calculated by Life
Insurance Corporation of India, an independent Actuary using the
projected unit credit method.
8. Foreign Currency Transactions:
Exchange rate difference arising from foreign currency transactions
relating to import/export of goods are dealt with in the Profit & Loss
Account. Foreign Currency assets and liabilities are restated at the
rates ruling at the end of the year and exchange difference arising out
of such transactions is given effect to relevant assets.
9. Cash Flow Statement:
Cash and cash equivalents in the cash flow statement comprise cash at
bank and in hand and short-term investments with an original maturity
of three months or less
10. Accounting for Investments:
Investments which are readily realizable and intended to be held for
not more than a year are classified as current investments. All other
investments are classified as long- term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognize a
decline other than temporary in the value of investments.
11. Segment Reporting;
The accounting policies applicable to the reportable segments are same
as those used in the preparation of the financial statements. However,
items of income and expenditures, assets and liabilities which are not
directly attributable / identifiable / allocable on a reasonable basis
to a business segment are shown as unallocated.
12. Earning Per Share :
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they are entitled to participate in dividends relative to a
fully paid equity share during the reporting period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
13. Intangible Assets:
Intangible asset is stated at the cost of acquisition less accumulated
amortization and impairment loss.
14. Impairment of As sets :
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on infernal/ external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount, The same is charged to the
Profit and Loss Account. After impairment, depreciation is provided on
the revised carrying amount of the asset over its remaining useful
life,
15. Provisions, Contingent Liability and Contingent Assets:
A provision is recognised when there is a present obligation as a
result of past event that there is possibility of an outflow of
resources to settle the obligation and in respect of which reliable
estimate can be made. Provision is determined based on the best
estimate required to settle the obligation at the year end date. These
are reviewed at each year end and adjusted to reflect the best current
estimates.
Contingent liabilities are not provided for in the accounts and are
separately shown in the Notes on Accounts. Contingent Assets are
neither recognised nor provided or disclosed in the financial
statements.
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