Accounting Policies of Tinplate Company of India Ltd. Company
Mar 31, 2023
SIGNIFICANT ACCOUNTING POLICIES
This note provides a list of the significant accounting policies
adopted in the preparation of these financial statements.
These policies have been consistently applied to all the years
presented, unless otherwise stated.
2.1 Basis of preparation and measurement(i) Compliance with Ind AS
The financial statements comply in all material aspects
with Indian Accounting Standards ("Ind AS") notified
under Section 133 of the Companies Act, 2013 (the ''Act'')
[Companies (Indian Accounting Standards) Rules, 2015]
(as amended from time to time) and other relevant
provisions of the Act.
(ii) Historical Cost Convention
The financial statements have been prepared under
the historical cost convention with the exception of
certain financial assets & liabilities (including derivative
instrument) and defined benefit plan assets that are
required to be carried at fair values by Ind AS''s.
(iii) Current versus Non-Current Classification
The Company presents assets and liabilities in the Balance
Sheet based on current/non-current classification.
An asset is classified as current when it is:
a) expected to be realised or intended to be sold or
consumed in the normal operating cycle,
b) held primarily for the purpose of trading,
c) expected to be realised within twelve months after
the reporting period, or
d) cash or cash equivalents unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current when:
a) it is expected to be settled in the normal operating
cycle,
b) it is held primarily for the purpose of trading,
c) it is due to be settled within twelve months after
the reporting period, or
d) there is no unconditional right to defer settlement
of the liability for at least twelve months after the
reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified
as non-current.
(iv) New and amended standards adopted by the
Company
The Ministry of Corporate Affairs has vide notification
dated March 23, 2022 notified Companies (Indian
Accounting Standards) Amendment Rules, 2022 which
amends certain accounting standards, and are effective
from April 1, 2022. These amendments did not have any
impact on the amounts recognised in prior periods and
are not expected to significantly affect the current or
future periods.
(v) New amendments issued but not effective
The Ministry of Corporate Affairs has vide notification
dated 31 March 2023 notified Companies (Indian
Accounting Standards) Amendment Rules, 2023 (the
''Rules'') which amends certain accounting standards, and
are effective 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 a material
impact on the Company in the current or future reporting
periods and on foreseeable future transactions.
Specifically, no changes would be necessary as a
consequence of amendments made to Ind AS 12 as the
Company''s accounting policy already complies with the
now mandatory treatment.
2.2 Use of estimates and critical accounting judgments
In preparation of the financial statements, the Company
makes judgments, estimates and assumptions about the
carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and the associated
assumptions are based on historical experience and other
factors including expectations of future events that may have
a financial impact on the Company and that are believed to
be reasonable under the circumstances. Actual results may
differ from these estimates. The estimates and the underlying
assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the
estimate is revised and future periods affected.
Significant judgments and estimates relating to the carrying
amounts of assets and liabilities include (i) useful lives of
property, plant and equipment and intangible assets, (ii)
employee benefits (estimation of defined benefit obligation)
and (iii) provisions and contingent liabilities .
Useful lives of property, plant and equipment and
intangible assets
Management reviews its estimate of useful life of property,
plant & equipment and intangible assets at the end of
each reporting period, based on the expected utility of the
assets. Uncertainties in these estimates relate to technical
and economic obsolescence that may change the utility of
property, plant and equipment.
Employee Benefits (Estimation of Defined Benefit
Obligation)
Post-employment benefits represents obligation that will
be settled in the future and require assumptions to project
benefit obligations. Post-employment benefit accounting
is intended to reflect the recognition of future benefit cost
over the employees'' approximate service period, based
on the terms of plans and the investment and funding
decisions made. The accounting requires the company to
make assumptions regarding variables such as discount rate
and rate of compensation increase. Changes in these key
assumptions can have a significant impact on the defined
benefit obligations. The company sets these judgements
based on previous experience and third party actuarial advice.
Provision and Contingent liabilities
A provision is recognised when the Company has a present
obligation as result of a past event and it is probable that the
outflow of resources will be required to settle the obligation,
in respect of which a reliable estimate can be made. These are
reviewed at each balance sheet date and adjusted to reflect
the current best estimates. Contingent liabilities are not
recognised in the financial statements. Due to the uncertainty
inherent in such matters, it is often difficult to predict the final
outcomes. In the normal course of business, the Company
consults with legal counsel and certain other experts on
matters related to litigations. The Company accrues a liability
when it is determined that an adverse outcome is probable
and the amount of the loss can be reasonably estimated. In
the event an adverse outcome is possible or an estimate is not
determinable, the matter is disclosed.
2.3 Revenue Recognitioni) Sale of goods
Sales are recognised when control of the goods has
transferred, being when the products are delivered to the
customers. Delivery occurs when the products have been
shipped or delivered to the specific location as the case may
be, the risks of obsolescence and loss have been transferred
and either the customer has accepted the products in
accordance with the sales contract or the acceptance
provisions have lapsed or the Company has objective
evidence that all criteria for acceptance have been satisfied.
Sale of goods include related ancillary services, if any.
Revenue from these sales are recognised based on the
price specified in the contract, which is generally fixed,
net of the estimated volume discount. No element of
financing is deemed present as the sales are generally
made with a credit term of 30-90 days or against receipt
of advance which is consistent with market practice. The
Company does not 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, the Company is not required
to adjust any of the transaction prices for the time value
of money. Revenue includes consideration received or
receivable but excludes Goods and Service Taxes, and
are net of discounts and rebates.
A receivable is recognised when the goods are delivered
as this is the point in time that the consideration is
unconditional because only the passage of time is
required before the payment is due.
Conversion income (included in other operating
income) and income from hospital services (included
in other income) are recognised on rendering of the
related services.
Interest income is accrued on a time proportion basis
taking into account the amount 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 assets to the
gross carrying amount of a financial assets.
The Income tax expense or credit for the period represent the
sum of the tax payable on current period''s taxable income
based on the applicable income tax rate and changes in
deferred tax assets and liabilities attributable to temporary
differences, unused tax credits and tax losses.
The current income tax payable is based on taxable
profit for the period. Taxable profit differs from ''Profit
before tax'' as reported in the Statement of Profit and
Loss because of items of income or expenses that are
taxable or deductible in other periods and items that are
never taxable or deductible.
The current income tax charge is calculated using
tax rates (and tax laws) that have been enacted or
substantially enacted at the end of the reporting period.
Management periodically evaluates positions taken in
tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the
carrying amounts of assets and liabilities in the financial
statements and the corresponding tax base used in the
computation of taxable profit. Deferred tax liabilities are
generally recognised for all taxable temporary difference.
Deferred tax assets are generally recognised for all
deductible temporary differences and unused tax losses
to the extent that it is probable that taxable profits will
be available against which those deductible temporary
differences and losses can be utilised. Deferred tax
assets and liabilities are not recognised if the temporary
differences arise from the initial recognition of assets and
liabilities in a transaction that at the time of transactions
affects neither the taxable profit nor the accounting profit.
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 or all part of the assets
to be recovered. Deferred tax liabilities and assets are
determined using the tax rates (and tax laws) that have
been enacted or substantively enacted by the end of
the reporting period and are expected to apply when
the related deferred income tax assets is realised or the
deferred income tax liability is settled.
Deferred tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances
relate to the same taxation authority. Current tax assets
and liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on
a net basis, or to realise the asset and settle the liability
simultaneously.
iii) Current and Deferred Tax for the period
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.
2.5 Property, Plant and Equipment
Freehold land is carried at cost. The company recognises
expenditure incurred on construction of assets as an item of
property , plant & equipment only at the time when the assets
is ready for its intended use. All items of property, plant and
equipment are stated at cost less accumulated depreciation /
accumulated impairment loss if any. Pre-operative expenses
including trial run expenses (net of revenue) are capitalised.
The cost of an asset includes the purchase cost of assets,
including import duties and non-refundable taxes, and any
directly attributable costs of bringing an asset to the location
and condition of its intended use. Interest on borrowings used
to finance the construction of qualifying assets are capitalised
as part of the cost of the asset until such time that the asset
is ready for its intended use. Subsequent expenditure on
items of property, plant and equipment after its purchase
/ completion is included in the asset''s carrying amount or
recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the
item will flow to the Company and the cost of the item can be
measured reliably.
The carrying amount of any component accounted for as a
separate asset is derecognised when replaced.
On the date of transition to Ind AS i.e. April 1, 2015, the
Company has opted to measure all of its property, plant and
equipment at their previous Generally Accepted Accounting
Principles net carrying value and use that net carrying value
as its deemed cost.
Expenditure incurred on construction of assets which are not
ready for their intended use are carried at cost less impairment
(if any), under Capital work-in-progress. The cost includes the
purchase cost of materials, including import duties and non¬
refundable taxes, interest on borrowings used to finance the
construction of the asset and any directly attributable costs of
bringing an assets ready for their intended use.
Intangible assets acquired separately are stated at cost less
accumulated amortisation / accumulated impairment loss, if
any. Computer Software for internal use, which is primarily
acquired from third-party vendors is capitalised. Subsequent
costs associated with maintaining such softwares are
recognised as expense as and when incurred. Cost of software
includes license fees and cost of implementation/system
integration services, where applicable.
On the date of transition to Ind AS i.e. April 1, 2015, the Company
has opted to measure all of its intangible assets at their previous
Generally Accepted Accounting Principles net carrying value and
use that net carrying value as its deemed cost.
2.8 Depreciation and Amortisation Method, Estimated
Useful Lives and Residual Values
(i) Freehold land is not depreciated.
(ii) Depreciation is provided on a straight line basis over the
useful lives of assets, which is as stated in Schedule II
to the Act or based on technical estimates made by the
Company. The details of estimated life for each category
of asset are as under:
(a) Buildings - 30 to 60 years
(b) Roads - 5 to 10 years
(c) Plant and equipment - 3 to 20 years
(d) Vehicles - 8 to 10 years
(e) Furniture, Fixtures and Office Equipments
- 5 to 10 years
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 assets and is recognised in the
Statement of profit and loss.
The useful lives, residual values and the method of
depreciation of property, plant and equipment are
reviewed, and adjusted if appropriate, at the end of each
reporting year.
*For these class of assets, based on internal assessment
and independent technical evaluation carried out by
external valuers, the Company believes that the useful
lives as given above best represent the year over which
Company expects to use these assets. Hence, the useful
lives for these assets are different from the useful lives as
prescribed under Part C of Schedule II to the Act.
(iii) The cost of Intangible asset are amortised on straight
line basis over the estimated useful life of 5 years.
Amortisation method and useful lives are reviewed
periodically including at each year end.
2.9 Impairment of Non-Financial Assets
At the end of each reporting year, the company reviews the
carrying amounts of Property, plant and equipment and
Intangible assets to determine whether there is any indication
that the carrying value of those assets may not be recoverable
through its continuous use. 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).
Where the asset does not generate cash flows that are
independent from other assets, the Company estimates the
recoverable amount of the cash generating unit to which
the asset belongs.
Recoverable amount is the higher of fair value less costs to
sell 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. An impairment loss is recognised in the statement
of profit and loss as and when the carrying amount of an asset
exceeds its recoverable amount.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash generating unit) is increased to
the revised estimate of its recoverable amount, 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 in
the statement of profit and loss immediately.
General and specific borrowing costs that are attributable to
the acquisition, construction or production of a qualifying asset
are capitalised as part of cost of such assets till such time as the
asset is ready for its intended use or sale. A qualifying asset is an
asset that necessarily takes a substantial period of time to get
ready for its intended use or sale. Investment income earned
on the temporary investment of specific borrowing pending
their expenditure on qualifying assets is deducted from the
borrowing cost eligible for capitalisation. All other borrowing
costs are recognised as an expense in the Statement of Profit
and Loss in the period in which they are incurred.
Inventories are stated at the lower of cost and net
realisable value.
Cost of inventories is ascertained on weighted average basis.
Cost comprises direct materials and, where applicable, direct
labour costs and those overheads that have been incurred
in bringing the inventories to their present location and
condition. Net realisable value is the price at which the
inventories can be realised in the normal course of business
after allowing for the cost of conversion from their existing
state to a finished condition and for the cost of marketing,
selling and distribution.
Provision are made to cover slow moving and obsolete items
based on historical experience of utilisation on a product
category basis.
Scrap is carried at estimated realisable value or cost
whichever is lower.
Mar 31, 2022
1. GENERAL CORPORATE INFORMATION
The Tinplate Company of India Limited (TCIL) is the producer of tin coated and tin free steel sheets in India having its headquarter at Kolkata, West Bengal and works located at Jamshedpur, Jharkhand. The Company is a Subsidiary of Tata Steel Limited. The strategic goal of the company is to create and enhance value for the stakeholders through growth and competitiveness and also to reach status of supplier of choice for tin mill products in Asia. The Company''s equity shares are listed on the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE).
The financial statements for the year ended March 31, 2022 were approved by the Board of Directors and authorised for issue on April 12, 2022.
2. SIGNIFICANT ACCOUNTING POLICIES
This note provides a list of the significant accounting policies adopted in the preparation of these financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
2.1 Basis of preparation and measurement
(i) Compliance with Ind AS
The financial statements comply in all material aspects with Indian Accounting Standards ("Ind AS") notified under Section 133 of the Companies Act, 2013 (the ''Act'') [Companies (Indian Accounting Standards) Rules, 2015] (as amended from time to time) and other relevant provisions of the Act.
(ii) Historical Cost Convention
The financial statements have been prepared under the historical cost convention with the exception of certain financial assets & liabilities (including derivative instrument) and defined benefit plan assets that are required to be carried at fair values by Ind AS''s.
(iii) Current versus Non-Current Classification
The Company presents assets and liabilities in the Balance Sheet based on current/non-current classification.
An asset is classified as current when it is:
a) expected to be realised or intended to be sold or consumed in the normal operating cycle,
b) held primarily for the purpose of trading,
c) expected to be realised within twelve months after the reporting period, or
d) cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current when:
a) it is expected to be settled in the normal operating cycle,
b) it is held primarily for the purpose of trading,
c) it is due to be settled within twelve months after the reporting period, or
d) there is no unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current.
(iv) New and amended standards adopted by the Company
The Company has applied the following amendments to Ind AS for the first time for their annual reporting period commencing from April 1, 2021:
- Extension of COVID-19 related concessions -amendments to Ind AS 116
- Interest rate benchmark reform - amendments to Ind AS 109, Financial Instruments, Ind AS 107, Financial Instruments: Disclosures, Ind AS 104, Insurance Contracts and Ind AS 116, Leases
The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.
(v) New amendments issued but not effective
The Ministry of Corporate Affairs has vide notification dated March 23, 2022 notified Companies (Indian Accounting Standards) Amendment Rules, 2022 which amends certain accounting standards, and are effective April 1, 2022. These amendments are not expected to have a material impact on the Company in the current or future reporting periods and on foreseeable future transactions.
(vi) Reclassifications consequent to amendments to Schedule III
The Ministry of Corporate Affairs amended the Schedule III to the Companies Act, 2013 on March 24, 2021 to increase the transparency and provide additional disclosures to users of financial statements. These amendments are effective from April 1, 2021.
Consequent to above, the Company has changed the classification/ presentation of security deposits, in the current year.
Security deposits (which meet the definition of a financial asset as per Ind AS 32) have been included in ''other financial assets'' line item. Previously, these deposits were included in ''loans'' line item.
The Company has reclassified comparative amounts to conform with current year presentation as per the requirements of Ind AS 1. The impact of such classifications is summarised below:
|
('' in lakh) |
|||
|
31.03.2021 |
Increase/ (Decrease) |
31.03.2021 (restated) |
|
|
Balance sheet (extract) |
(as previously reported) |
||
|
Loans (non-current) |
34.47 |
(32.07) |
2.40 |
|
Other financial assets (non-current) |
3,727.85 |
32.07 |
3,759.92 |
|
Loans (current) |
13.97 |
(8.07) |
5.90 |
|
Other financial assets (current) |
311.20 |
8.07 |
319.27 |
2.2 Use of estimates and critical accounting judgments
I n preparation of the financial statements, the Company makes judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and the associated assumptions are based on historical experience and other factors including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.
Significant judgments and estimates relating to the carrying amounts of assets and liabilities include (i) useful lives of property, plant and equipment and intangible assets, (ii) employee benefits (estimation of defined benefit obligation) and (iii) provisions and contingent liabilities.
Useful lives of property, plant and equipment and intangible assets
Management reviews its estimate of useful life of property, plant & equipment and intangible assets at the end of each reporting period, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of property, plant and equipment.
Employee Benefits (Estimation of Defined Benefit Obligation)
Post-employment benefits represents obligation that will be settled in the future and require assumptions to project benefit obligations. Post-employment benefit accounting is intended to reflect the recognition of future benefit cost over the employees'' approximate service period, based on the terms of plans and the investment and funding decisions made. The accounting requires the company to
make assumptions regarding variables such as discount rate and rate of compensation increase. Changes in these key assumptions can have a significant impact on the defined benefit obligations. The company sets these judgements based on previous experience and third party actuarial advice.
Provision and Contingent liabilities
A provision is recognised when the Company has a present obligation as result of a past event and it is probable that the outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements. Due to the uncertainty inherent in such matters, it is often difficult to predict the final outcomes. In the normal course of business, the Company consults with legal counsel and certain other experts on matters related to litigations. The Company accrues a liability when it is determined that an adverse outcome is probable and the amount of the loss can be reasonably estimated. In the event an adverse outcome is possible or an estimate is not determinable, the matter is disclosed.
i) Sale of goods
Sales are recognised when control of the goods has transferred, being when the products are delivered to the customers. Delivery occurs when the products have been shipped or delivered to the specific location as the case may be, the risks of obsolescence and loss have been transferred and either the customer has accepted the products in accordance with the sales contract or the acceptance provisions have lapsed or the Company has objective evidence that all criteria for acceptance have been satisfied. Sale of goods include related ancillary services, if any.
Revenue from these sales are recognised based on the price specified in the contract, which is generally fixed, net of the estimated volume discount. No element of financing is deemed present as the sales are generally made with a credit term of 30-90 days or against receipt of advance which is consistent with market practice. The Company does not 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, the Company is not required to adjust any of the transaction prices for the time value of money. Revenue includes consideration received or receivable but excludes Goods and Service Taxes, and are net of discounts and rebates.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
Conversion income (included in other operating income) and income from hospital services (included in other income) are recognised on rendering of the related services.
Interest income is accrued on a time proportion basis taking into account the amount 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 assets to the gross carrying amount of a financial assets.
The Income tax expense or credit for the period represent the sum of the tax payable on current period''s taxable income based on the applicable income tax rate and changes in deferred tax assets and liabilities attributable to temporary differences, unused tax credits and tax losses.
The current income tax payable is based on taxable profit for the period. Taxable profit differs from ''Profit before tax'' as reported in the Statement of Profit and Loss because of items of income or expenses that are taxable or deductible in other periods and items that are never taxable or deductible.
The current income tax charge is calculated using tax rates (and tax laws) that have been enacted or substantially enacted at the end of the reporting period.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax base used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary difference. Deferred tax assets are generally recognised for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences and losses can be utilised. Deferred tax assets and liabilities are not recognised ifthe temporary differences arise from the initial recognition of assets and liabilities in a transaction that at the time of transactions affects neither the taxable profit nor the accounting profit.
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 or all part of the assets to be recovered. Deferred tax liabilities and assets are determined using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred income tax assets is realised or the deferred income tax liability is settled.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
iii) Current and Deferred Tax for the period
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.
2.5 Property, Plant and Equipment
Freehold land is carried at cost. The company recognises expenditure incurred on construction of assets as an item of property , plant & equipment only at the time when the assets is ready for its intended use. All items of property, plant and equipment are stated at cost less accumulated depreciation / accumulated impairment loss if any. Pre-operative expenses including trial run expenses (net of revenue) are capitalised. The cost of an asset includes the purchase cost of assets, including import duties and non-refundable taxes, and any directly attributable costs of bringing an asset to the location and condition of its intended use. Interest on borrowings used to finance the construction of qualifying assets are capitalised as part of the cost of the asset until such time that the asset is ready for its intended use. Subsequent expenditure on items of property, plant and equipment after its purchase / completion is included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.
The carrying amount of any component accounted for as a separate asset is derecognised when replaced.
On the date of transition to Ind AS i.e. April 1, 2015, the Company has opted to measure all of its property, plant and equipment at their previous Generally Accepted Accounting Principles net carrying value and use that net carrying value as its deemed cost.
Expenditure incurred on construction of assets which are not ready for their intended use are carried at cost less impairment (if any), under Capital work-in-progress. The cost includes the purchase cost of materials, including import duties and nonrefundable taxes, interest on borrowings used to finance the construction of the asset and any directly attributable costs of bringing an assets ready for their intended use.
Intangible assets acquired separately are stated at cost less accumulated amortisation / accumulated impairment loss, if any. Computer Software for internal use, which is primarily acquired from third-party vendors is capitalised. Subsequent costs associated with maintaining such softwares are recognised as expense as and when incurred. Cost of software includes license fees and cost of implementation/system integration services, where applicable.
2.8 Depreciation and Amortisation Method, Estimated Useful Lives and Residual Values
(i) Freehold land is not depreciated.
(ii) Depreciation is provided on a straight line basis over the useful lives of assets, which is as stated in Schedule II to the Act or based on technical estimates made by the Company. The details of estimated life for each category of asset are as under:
(a) Buildings - 30 to 60 years
(b) Roads - 5 to 10 years
(c) *Plant and Machinery - 3 to 20 years
(e) Vehicles - 8 to 10 years
(f) Furniture, Fixtures and Office Equipments - 5 to 10 years
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 assets and is recognised in the Statement of profit and loss.
The useful lives, residual values and the method of depreciation of property, plant and equipment are reviewed, and adjusted if appropriate, at the end of each reporting year.
*For these class of assets, based on internal assessment and independent technical evaluation carried out by external valuers, the Company believes that the useful lives as given above best represent the year over which Company expects to use these assets. Hence, the useful lives for these assets are different from the useful lives as prescribed under Part C of Schedule II to the Act.
(iii) The cost of Intangible asset are amortised on straight line basis over the estimated useful life of 5 years. Amortisation method and useful lives are reviewed periodically including at each year end.
2.9 Impairment of Non-Financial Assets
At the end of each reporting year, the company reviews the carrying amounts of Property, plant and equipment and Intangible assets to determine whether there is any indication that the carrying value of those assets may not be recoverable through its continuous use. 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).
Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell 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. An impairment loss is recognised in the statement of profit and loss as and when the carrying amount of an asset exceeds its recoverable amount.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, 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 in the statement of profit and loss immediately.
General and specific borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost of such assets till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. Investment income earned on the temporary investment of specific borrowing pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalisation. All other borrowing costs are recognised as an expense in the Statement of Profit and Loss in the period in which they are incurred.
Inventories are stated at the lower of cost and net realisable value.
Cost of inventories is ascertained on weighted average basis. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Net realisable value is the price at which the inventories can be realised in the normal course of business after allowing for the cost of conversion from their existing state to a finished condition and for the cost of marketing, selling and distribution.
Provision are made to cover slow moving and obsolete items based on historical experience of utilisation on a product category basis.
2.12 Provisions, Contingent Liabilities and Contingent Assets:
i) Provision
Provisions are recognised in the balance sheet when the Company has a present obligation (legal or constructive) as a result of a past event, which is expected to result in an outflow of resources embodying economic benefits which can be reliably estimated. Each provision is based on the best estimate of the expenditure required to settle the present obligation at the balance sheet date. When appropriate, provisions are measured on a discounted basis. Provisions are not recognised for future operating losses.
Constructive obligation is an obligation that derives from an entity''s actions where:
(a) by an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities and
(b) as a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities.
ii) Contingent Liabilities and Assets
Contingent liability is a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company, or is a present obligation that arises from past events but is not recognised because either it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or a reliable estimate of the amount of the obligation cannot be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits to the entity. Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.
Company as a Lessee
The Company assesses whether a contract is or contains a lease, at inception of a contract. 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.
The Company recognises a right-of-use asset ("ROU") and a corresponding lease liability with respect to all lease arrangements in which it is the lessee at the date at which the leases asset is available for use by the Company, except for leases with a term of twelve months or less (short-term leases) and leases of low-value assets. Contracts may contain both lease and non-lease components. The Company allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. Payments associated with short term leases and all leases of low-value assets are recognised on a straight-line basis as an expense in the Statement of Profit and Loss over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
(i) fixed payments (including in-substance fixed payments), less any lease incentives receivable,
(ii) variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date,
(iii) amounts expected to be payable by the Company under residual value guarantees,
(iv) the exercise price of a purchase option if the Company is reasonably certain to exercise that option, and
(v) payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate can not be readily determined, which is generally the case for leases in the Company, the lessee''s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The Company is exposed to potential future increase in variable lease payments based on an index or rate, which
are not included in the lease liability until they take effect. The lease liability will be reassessed and adjusted against the right-of-use of asset as and when such changes takes effect. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Lease liabilities are remeasured with a corresponding adjustment to the related right-of-use asset if the company changes its assessment of whether it will exercise an extension or a termination option.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, any initial direct costs and restoration costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.
Lease liability and right-of-use asset (ROU) have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Leases for which the company is a lessor is classified either as a finance or an operating lease. Whenever the terms of the lease transfers substantially all the risks and rewards incidental to ownership of an underlying asset to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
A. Short-term Employee Benefits
Liability in respect of short term employee benefit that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised at the amount of the benefits expected to be paid when the liabilities are settled. The liabilities are presented as "Provisions for employee benefits" within "Current Provisions" in the balance sheet.
B. Post Employment Benefit Plans Defined Contribution Plans
Contributions under Defined Contribution Plans payable in keeping with the related schemes are recognised as expenses for the year in which the employee has rendered the service.
Defined Benefit Plans
The present value of defined benefit obligations are ascertained by an independent actuarial valuation using Projected Unit Credit Method as per the requirement of Ind AS 19 - Employee Benefits. The liability / (asset) recognised in the Balance Sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognized past service costs. Measurements, comprising of actuarial gains and losses, the effect of the asset ceiling (excluding amounts included in net interest on the net defined benefit liability) and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the year in which they occur. Measurements are not reclassified to profit or loss in subsequent years.
C. Other Long-term Employment Benefits (unfunded)
Long Service Award
The present value of obligation against long-term employee benefits is ascertained by an independent actuarial valuation using Projected Unit Credit Method as per the requirement of Ind AS 19 - Employee Benefits. All actuarial gains and losses and past service cost are recognised in the Statement of Profit and Loss as applicable in the year in which they occur.
Compensated Absences
Compensated absences which are not expected to be settled within twelve months after the end of the year in which the employee renders the related service are recognised based on actuarial valuation at the present value of the obligation as on the reporting date.
The benefits are discounted using the appropriate market yields at the end of the reporting year that have terms approximating to the terms of the related obligation. Remeasurement as a result of experience adjustment and changes in actuarial assumptions are recognised in the statement of profit and loss.
Financial assets and financial liabilities are recognised when the company become a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction cost 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 cost directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the Statement of Profit and Loss.
A. Investments and Other Financial Assets
(i) Classification
The Company classifies its financial assets in the following measurement categories:-
⢠Those to be measured subsequently at fair value (either through comprehensive income or through profit or loss), and
⢠Those to be measured at amortised cost
The classification depends on the company''s business model for managing financial assets and the contractual terms of cash flows.
(ii) Measurement
Financial Assets measured at Amortized Cost
Financial assets are measured at amortized cost if these financial assets are held with a business model to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Assets measured at Fair Value
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business model to hold these assets in order to collect contractual cash flows and to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company in respect of equity investments which are not held for trading has made an irrevocable election to present in other comprehensive income. Such an election is made by the Company on an instrument by instrument basis at the time of initial recognition of fair value changes of such equity investments. Subsequent changes in the fair value of such equity instruments are taken through other comprehensive income.
Financial asset not measured at amortized cost or at fair value through other comprehensive income is carried at fair value through profit or loss. A gain or loss on such assets that is subsequently measured at fair value through profit or loss is recognised in the statement of profit and loss.
(iii) Impairment of Financial Assets
Loss allowance for expected credit losses, assessed on a forward looking basis, is recognized for financial assets measured at amortized cost and fair value through other comprehensive income.
The Company recognises life time expected credit losses for all trade receivables that do not constitute a financing transaction. For financial assets whose credit risk has not significantly increased since initial recognition, loss allowance equal to twelve months expected credit losses is recognised. Loss allowance equal to the lifetime expected credit losses is recognised if the credit risk on the financial instruments has significantly increased since initial recognition.
(iv) De-Recognition of Financial Assets
A financial asset is derecognised only when
⢠The Company has transferred the rights to receive cash flows from the financial asset or
⢠retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the Company has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.
Where the Company has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset.
Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
B. Financial Liabilities and Equity Instruments
(i) Classification as Debt or Equity
Financial liabilities and equity instruments issued by the company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instruments.
(ii) Measurement Equity Instruments
An equity instruments is any contract that evidences a residual interest in the assets of an entity after deducting all its liabilities. Equity instruments are recognised at the proceed received, net of direct issue cost.
Financial Liabilities
Trade and other payables represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting year. Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method where the time value of money is significant.
Interest-bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowing is recognised over the term of the borrowings in the statement of profit and loss.
(iii) De-Recognition of Financial Liabilities
The company derecognised financial liabilities when and only when the Company''s obligation are discharged, cancelled or they expire.
2.16 Foreign Currency Transactions
The financial statements of the Company are presented in Indian Rupee, which is the functional currency of the company and the presentation currency for the financial statements.
Transactions in foreign currencies are initially recognised in reporting currency i.e. Indian Rupees, by using the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange prevailing at the reporting date.
The exchange differences arising on the settlement of transactions and from the translation of monetary assets & liabilities denominated in foreign currencies at year end exchange rates are recognised in the Statement of Profit and Loss. Foreign exchange gains and losses presented in the Statement of Profit and Loss on a net basis within "Other Income/ Other Expenses".
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.
2.17 Derivative Financial Instruments
The Company uses derivative financial instruments such as forward foreign exchange contracts, to safeguard its risks associated with foreign exchange fluctuations. Such derivative financial instruments are used as risk management tools and not for speculative purposes. The Company enters into certain derivative contracts to hedge risk which are not designated as hedges. Derivatives are initially recognised at fair value at the date of derivative contracts being entered into and are subsequently measured at fair value at the end of each reporting period, with changes included in "Other Income/ Other Expenses".
2.18 Trade Receivables
Trade receivables are amount receivable from customers for goods sold or services rendered in the ordinary course of business. Trade receivables are recognised initially at the amount of considerations that is unconditional. The Company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.
2.19 Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand/ deposits held at call with banks and other short term deposits with original maturities of three month or less which are readily convertible into known amount of cash and are subject to insignificant risk of change in value.
2.20 Earnings Per Share
(i) Basic Earning per share
The basic earnings per share is computed by dividing the net profit or loss attributable to the owners for the year by the weighted average number of equity shares outstanding during the year, adjusted for bonus elements in equity shares, if any issued during the year.
(ii) Diluted earning per share
Diluted earnings per share adjusts the figures used in the determination of basic earning per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential equity shares and the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker is responsible for allocating resources and assessing performance of the operating segments and has been identified as the Managing Director of the Company. The accounting policies adopted for the segment reporting are in line with the accounting policies of the Company. Refer Note 39.
Government grants are recognized at its fair value, when there is a reasonable assurance that the company will comply with the conditions attaching to them and that the grants will be received.
Government grants relating to income are deferred and recognised in the Statement of Profit and Loss over the year necessary to match them with the costs that they are intended to compensate and presented within Other Operating Income.
Government grants relating to the purchase of property, plant and equipment are included in liabilities as deferred income and are credited to the Statement of Profit and Loss on a straight line basis over the expected lives of the related assets or other systematic basis representative of the fulfillment of obligation associated with the grant received and presented within Other Operating Income.
2.23 Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty.
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs (with two places of decimal) as per the requirement of Schedule III, unless otherwise stated.
Mar 31, 2018
1. SIGNIFICANT ACCOUNTING POLICIES
This note provides a list of the significant accounting policies adopted in the preparation of these financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
1.1 Basis of preparation and measurement
i) Compliance with Ind AS
The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the âActâ) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.
ii) Historical cost convention
The financial statements have been prepared under the historical cost convention with the exception of certain assets & liabilities, and defined benefit plans that are required to be carried at fair values by Ind ASâs.
iii) Current versus Non-current Classification
The Company presents assets and liabilities in the Balance Sheet based on current/non-current classification.
An asset is classified as current when it is:
a) expected to be realised or intended to be sold or consumed in the normal operating cycle,
b) held primarily for the purpose of trading,
c) expected to be realised within twelve months after the reporting year, or
d) cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting year.
All other assets are classified as non-current.
A liability is classified as current when:
a) it is expected to be settled in the normal operating cycle,
b) it is held primarily for the purpose of trading,
c) it is due to be settled within twelve months after the reporting year, or
d) there is no unconditional right to defer settlement of the liability for at least twelve months after the reporting year.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as noncurrent.
1.2 Use of estimates and critical accounting judgements
In preparation of the financial statements, the Company makes judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and the associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised and future periods affected Significant judgments and estimates relating to the carrying amounts of assets and liabilities include useful lives of property, plant and equipment, intangible assets, impairment of property, plant and equipment, intangible assets, provision for employee benefits and other provisions, recoverability of deferred tax assets, commitments and contingencies.
1.3 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the effects of transactions of noncash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
1.4 Revenue Recognition
i) Sale of Goods
Revenue is measured at the fair value of the consideration received or receivable. Sales are recognised when the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract and the amount of revenue can be measured reliably. Revenue includes consideration received or receivable, excise duty but excludes Goods and Service Taxes, and are net of discounts and rebates.
ii) Income from Services
Conversion income and income from hospital services are recognised on rendering of the related services. Revenue from conversion income is recognised by reference to the stage of completion of transactions at the end of the reporting year.
iii) Dividend and Interest income
Dividend income is recognised when the companyâs right to receive dividend is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
Interest income from financial assets 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 proportion basis taking into account the amount 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 assets to that assets net carrying amount on initial recognition.
(iv) Income from Export Incentive Scheme
Export incentive under various schemes notified by the Government has been recognised on the basis of amount received/ License received.
1.5 Taxes on Income
Income tax expenses represent the sum of the tax payable on current yearâs taxable income and deferred tax.
(i) Current income tax
The Current income tax payable is based on taxable profit for the year. Taxable profit differs from â Profit before taxâ as reported in the Statement of Profit and Loss because of items of income or expenses that are taxable or deductible in other years and items that are never taxable or deductible.
The current tax is calculated using tax rates that have been enacted or substantially enacted by the end of the reporting year. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
(ii) 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 base used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary difference. Deferred tax assets are generally recognised for all the 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 differences arise from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit no the accounting profit.
The Carrying amount of deferred tax assets is reviewed at the end of each reporting year and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all part of the assets 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 assets is realised, based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting year.
The measurement of deferred tax liability and assets reflects the tax consequences that would follow from the manner in which the company expects at the end of the reporting year, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
(iii) 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.
1.6 Property, plant and equipment
All Property, plant and equipment are stated at cost less accumulated depreciation / accumulated impairment loss if any. Pre-operative expenses including trial run expenses (net of revenue) are capitalised. The cost of an asset includes the purchase cost of assets, including import duties and non-refundable taxes, and any directly attributable costs of bringing an asset to the location and condition of its intended use. Interest on borrowings used to finance the construction of qualifying assets are capitalised as part of the cost of the asset until such time that the asset is ready for its intended use. Subsequent expenditure on property, plant and equipment after its purchase / completion is capitalised only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.
Assets held under finance lease are depreciated over their expected useful lives on the same basis as owned assets.
1.7 Capital Work in Progress
Expenditure incurred on construction of assets which are not ready for their intended use are carried at cost less impairment (if any), under Capital work-in-progress. The cost includes the purchase cost of materials, including import duties and non-refundable taxes, any directly attributable costs and Interest on borrowings used to finance the construction of the asset.
1.8 Intangible assets
Intangible assets acquired separately are stated at cost less accumulated amortisation / accumulated impairment loss, if any. Computer Software for internal use, which is primarily acquired from third-party vendors is capitalised. Subsequent costs associated with maintaining such softwares are recognised as expense as and when incurred. Cost of software includes license fees and cost of implementation/system integration services, where applicable.
1.9 Depreciation and Amortisation Method, Estimated Useful Lives and Residual Values
(i) Freehold land is not depreciated. Premium paid on leasehold land and land development expenses are amortised over the primary lease period.
(ii) Depreciation is provided on a straight line basis over the useful lives of assets, which is as stated in Schedule II to the Act or based on technical estimates made by the Company. The details of estimated life for each category of asset are as under:
(a) Buildings - 30 to 60 years
(b) Roads - 5 to 10 years
(c) Plant and Machinery (Rolling Mill in Steel Plant) -20 years
(d) Other Plant and Machinery - 3 to 20 years*
(e) Motor Vehicles - 8 to 10 years
(f) Furniture, Fixtures and Office Equipments - 3 to 10 years
(g) Computer Software - 5 years
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 assets and is recognised in the Statement of profit and loss.
The useful lives, residual values and the method of depreciation of property, plant and equipment are reviewed, and adjusted if appropriate, at the end of each reporting year.
*For these class of assets, based on internal assessment and independent technical evaluation carried out by external valuers, the Company believes that the useful lives as given above best represent the period over which Company expects to use these assets. Hence, the useful lives for these assets are different from the useful lives as prescribed under Part C of Schedule II to the Act.
(iii) The cost of Intangible asset are amortised on straight line basis over the estimated useful life of 5 years. Amortisation method and useful lives are reviewed periodically including at each financial year end.
1.10 Impairment of non-financial assets
At the end of each reporting year, the company reviews the carrying amounts of Property, plant and equipment and Intangible assets to determine whether there is any indication that the carrying value of those assets may not be recoverable through its continuous use. 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).
Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell 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. An impairment loss is recognised in the statement of profit and loss as and when the carrying amount of an asset exceeds its recoverable amount
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, 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 in the statement of profit and loss immediately.
1.11 Borrowing Costs
Borrowing Costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost of such assets till such time as the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an expense in the Statement of Profit and Loss in the year in which they are incurred.
1.12 Inventories
Finished and semi-finished products produced and purchased by the Company are carried at lower of cost and net realisable value.
Work-in-progress is carried at lower of cost and net realisable value.
Stores and spare parts are carried at lower of cost and net realisable value. Necessary provision is made and expensed in case of identified obsolete and nonmoving items.
Scrap is carried at estimated realisable value.
Raw Material is carried at lower of cost and net realisable value.
Cost of Inventories includes purchase price, non refundable taxes and duties and other directly attributable costs incurred in bringing the inventories to their present location and condition.
Cost of inventories is ascertained on weighted average basis. Cost of work-in-progress and finished goods comprises of direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to complete the sale.
1.13 Provisions, Contingent Liabilities and Contingent Assets :
(i) Provision
Provisions are recognised in the balance sheet when the Company has a present obligation (legal or constructive) as a result of a past event, which is expected to result in an outflow of resources embodying economic benefits which can be reliably estimated. Each provision is based on the best estimate of the expenditure required to settle the present obligation at the balance sheet date. When appropriate, provisions are measured on a discounted basis. Provisions are not recognised for future operating losses.
Constructive obligation is an obligation that derives from an entityâs actions where:
(a) by an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities and
(b) as a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities.
(ii) Contingent Liabilities and Assets
Contingent liability is a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company, or is a present obligation that arises from past events but is not recognised because either it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or a reliable estimate of the amount of the obligation cannot be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits to the entity. Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.
1.14 Leases
Company as a Lessee
The Company determines whether an arrangement contains a lease by assessing whether the fulfillment of a transaction is dependent on the use of a specific asset and whether the transaction conveys the right to use that asset to the Company in return for payment. Where this occurs, the arrangement is deemed to include a lease and is accounted for either as finance or operating lease.
Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Operating lease
Rentals payable under operating leases are charged to the statement of profit and loss on a straight line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Finance lease
Finance leases are capitalised at the commencement of lease, at the lower of the fair value of the property or the present value of the minimum lease payments.
The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in the Statement of Profit and Loss over the period of the lease.
1.15 Employee Benefits
A. Short-term Employee Benefits
Liability in respect of short term employee benefit is recognised at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in an accounting year.
B. Post Employment Benefit Plans Defined Contribution Plans
Contributions under Defined Contribution Plans payable in keeping with the related schemes are recognised as expenses for the year in which the employee has rendered the service.
Defined Benefit Plans
The present value of defined benefit obligations are ascertained by an independent actuarial valuation using Projected Unit Credit Method as per the requirement of Ind AS 19 - Employee Benefits. The liability / (asset) recognised in the Balance Sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognized past service costs. Measurements, comprising of actuarial gains and losses, the effect of the asset ceiling (excluding amounts included in net interest on the net defined benefit liability) and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Measurements are not reclassified to profit or loss in subsequent periods.
C. Other Long-term Employment Benefits (unfunded) Long Service Award
The present value of obligation against long-term employee benefits is ascertained by an independent actuarial valuation using Projected Unit Credit Method as per the requirement of Ind AS 19 â Employee Benefits. All actuarial gains and losses and past service cost are recognised in the Statement of Profit and Loss as applicable in the year in which they occur.
Compensated absences
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised based on actuarial valuation at the present value of the obligation as on the reporting date.
The benefits are discounted using the market yields at the end of the reporting year that have terms approximating to the terms of the related obligation remeasurement as a result of experience adjustment and changes in actuarial assumptions are recognised in the statement of profit and loss.
1.16 Financial instruments
Financial assets and financial liabilities are recognised when the company become a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction cost 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 cost directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the Statement of Profit and Loss.
1.17 Financial assets
Financial assets measured at amortized cost
Financial assets are subsequently measured at amortized cost if these financial assets are held within a business model to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets measured at fair value
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business model to hold these assets in order to collect contractual cash flows and to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company in respect of equity investments which are not held for trading has made an irrevocable election to present in other comprehensive income. Such an election is made by the Company on an instrument by instrument basis at the time of initial recognition of such equity investments. Subsequent changes in the fair value of such equity instruments are taken through other comprehensive income.
Financial asset not measured at amortized cost or at fair value through other comprehensive income is carried at fair value through profit or loss. A gain or loss on such assets that is subsequently measured at fair value through profit or loss is recognised in statement of profit and loss.
Impairment of financial assets
Loss allowance for expected credit losses, assessed on a forward looking basis, is recognized for financial assets measured at amortized cost and fair value through other comprehensive income.
The Company recognises life time expected credit losses for all trade receivables that do not constitute a financing transaction. For financial assets whose credit risk has not significantly increased since initial recognition, loss allowance equal to twelve months expected credit losses is recognised. Loss allowance equal to the lifetime expected credit losses is recognised if the credit risk on the financial instruments has significantly increased since initial recognition.
De-recognition of financial assets
A financial asset is derecognised only when
- The Company has transferred the rights to receive cash flows from the financial asset or
- retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the Company has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.
Where the Company has neither transferred a financial asset nor retained substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
1.18 Financial liabilities and equity instruments
Classification of 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 instruments.
Equity Instruments
An equity instruments in any contract that evidences a residual interest in the assets of an entity after deducting all its liabilities. Equity instruments issued by the company are recognised at the proceed received, net of direct issue cost.
Financial liabilities
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method where the time value ofmoney is significant. Interest-bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method.
De recognition of financial liabilities
The company derecognise financial liabilities when and only when the Companyâs obligation are discharged, cancelled or have expired.
1.19 Foreign Currency Transactions
The financial statements of the Company are presented in Indian Rupee, which is the functional currency of the company and the presentation currency for the financial statements.
Transactions in foreign currencies are initially recognised in reporting currency i.e.Indian Rupees, using the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are premeasured at the rates of exchange prevailing at the reporting date.
The exchange differences arising on the settlement of transactions and from the translation of monetary assets & liabilities denominated in foreign currencies at year end exchange rates are recognised in the Statement of Profit and Loss.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.
1.20 Derivative Financial Instruments
The Company uses derivative financial instruments such as forwards, to safeguard its risks associated with foreign exchange fluctuations. Such derivative financial instruments are used as risk management tools and not for speculative purposes. Derivatives are initially recognised at fair value at the date of derivative contracts being entered into and are subsequently re measured at fair value at the end of each reporting year.
1.21 Trade receivables
Trade receivables are amount receivable from customers for goods sold in the ordinary course of business. Trade receivable are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less provision for expected credit loss.
1.22 Trade payables
Trade payables represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
1.23 Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposit held at call with banks and other short term deposits which are readily convertible into known amount of cash, are subject to insignificant risk of change in value and have maturities of less than one year from the date of such deposits. These balances with banks are unrestricted for withdrawal and usage.
Other bank balance includes balances and deposits with banks that are restricted for withdrawal and usage.
1.24 Earnings Per Share
The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares together with any dilutive equity equivalent shares outstanding during the year adjusted to take into account the after income tax effect of interest and other financing costs associated with dilutive potential equity shares.
1.25 Segment Reporting
The Company identifies primary segments based on the dominant source, nature of risks and returns, internal organisation, management structure and the internal performance reporting systems to the chief operating decision maker. The chief operating decision maker is responsible for allocating resources and assessing performance of the operating segments and has been identified as the Managing Director of the Company. The accounting policies adopted for the segment reporting are in line with the accounting policies of the Company.
1.26 Government Grants
Government Grants are not recognized until there is a reasonable assurance that the company will comply with the conditions attached to them and that the grants will be received.
Government grants relating to income are deferred and recognised in the Statement of Profit and Loss over the year necessary to match them with the costs that they are intended to compensate and presented within Other Operating Income.
Government Grants relating to the Purchase of Property, plant and equipment are included in Non current liabilities as deferred income and are credited to the Statement of Profit and Loss on a straight line basis over the expected lives of the related assets and presented within Other Operating Income.
1.27 Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the group or the counterparty.
1.28 Recent Accounting Pronouncements
Standards issued but not yet effective
The Company is in the process of assessing the detailed impact of âInd AS 115 - Revenue from Contracts with Customersâ. Presently, the Company is not able to reasonably estimate the impact that application of Ind AS 115 is expected to have on its financial statements, except that adoption of Ind AS 115 is not expected to significantly change the timing of the Companyâs revenue recognition for product sales. Consistent with the current practice, recognition of revenue will continue to occur at a point in time when products are dispatched to customers, which is also when the control of the asset is transferred to the customer under Ind AS 115.
Further, the Company has assessed the effects of applying the âInd AS 21 - The Effects of Changes in Foreign Exchange Ratesâ to its foreign currency transactions for which consideration is received in advance. The Company expects this change to impact its accounting for revenue contracts involving multiple advance payments in foreign currency.
1.29 Rounding of Amounts
All amounts disclosed in the Financial Statements and notes have been rounded off to the nearest Lakhs (with two places of decimal) as per the requirement of Schedule III, unless otherwise stated.
Mar 31, 2017
1. General Corporate Information
The Tinplate Company of India Ltd.(TCIL) is the largest producer of tin coated and tin free steel sheets in India. Having its headquarter in Kolkata, and the company''s works is located at Jamshedpur, Jharkhand. The strategic goal of the company is to create and enhance value for the stakeholders through growth and competitiveness and also to reach status of supplier of choice for tin mill products in Asia.
2. Basis for preparation and measurement
In accordance with the notification issued by the Ministry of Corporate Affairs, the Company has adopted Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 01, 2016.The transition from previous GAAP (i.e., I GAAP) to Ind AS has been accounted for in accordance with Ind AS 101 "First Time Adoption of Indian Accounting Standards", with April 01, 2015 as the transition date. In accordance with Ind As 101 "First time adoption of Indian Accounting Standard", the Company has presented a reconciliation from the presentation of financial statements under accounting standards notified under the Companies (Accounting Standards) Rules, 2006 ("Previous GAAP") to Ind AS of total equity as at April 1, 2015 & March 31 2016 and of total comprehensive income for the year ended March 31 2016.The financial statements have been prepared under the historical cost convention with the exception of certain assets and liabilities that are required to be carried at fair values by Ind ASs.
2.01 Use of estimates and critical accounting judgments
In preparation of the financial statements, the Company makes judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and the associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods affected. Significant judgments and estimates relating to the carrying amounts of assets and liabilities include useful lives of property, plant and equipment, intangible assets, impairment of property, plant and equipment, intangible assets, provision for employee benefits and other provisions, recoverability of deferred tax assets, commitments and contingencies.
2.02 Significant Accounting Policies
The significant accounting policies applied by the Company in preparation of its financial statements are listed below. Such accounting policies have been applied consistently to all the periods presented in these financial statements and in preparing the opening Ind As statement of financial position as at April 01, 2015 for the purpose of transition to Ind AS, unless otherwise indicated.
2.03 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
2.04 Revenue Recognition
i) Sale of Goods
Revenue shall be measured at the fair value of the consideration received or receivable. Sales are recognized when the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract and the amount of revenue can be measured reliably. Revenue includes consideration received or receivable, excise duty but excludes sales related taxes and are net of discounts.
ii) Income from Services
Conversion income and income from hospital services are recognized on rendering of the related services. Revenue from conversion income is recognized by reference to the stage of completion of transactions at the end of the reporting period. Revenue is recognized only to the extent of expenses that are recoverable.
iii) Dividend and Interest income
Dividend income is recognized when the company''s right to receive dividend is established. interest income from financial assets is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time proportion basis taking into account the amount 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 assets to that assets net carrying amount on initial recognition.
(iv) Income from Export Incentive Scheme
Export incentive under various schemes notified by the Government has been recognized on the basis of amount received/ License received.
2.05 Taxes on Income
Income tax expenses represent the sum of the tax currently payable and deferred tax.
(i) Current income tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from '' Profit before tax'' as reported in the financial statement of profit and losses because of items of income or expenses that are taxable or deductible in other years and items that are never taxable or deductible. The current tax is calculated using tax rates that have been enacted by the end of the reporting period.
(ii) Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax based used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary difference. Deferred Tax assets are generally recognized for all the deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary differences arise from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit not the accounting profit. 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 part of the assets 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 assets is realized, based on the tax rates ( and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liability 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.
(iii) Current and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.
(iv) Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.
2.06 Property, plant and equipment
All Property, plant and equipment are stated at cost less depreciation/amortization/impairment loss if any. Pre-operative expenses including trial run expenses (net of revenue) are capitalized. The cost of an asset includes the purchase cost of materials, including import duties and non-refundable taxes, and any directly attributable costs of bringing an asset to the location and condition of its intended use. Interest on borrowings used to finance the construction of qualifying assets are capitalized as part of the cost of the asset until such time that the asset is ready for its intended use. Subsequent expenditure on property ,plant and equipment after its purchase / completion is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance. Assets held under finance lease are depreciated over their expected useful lives on the same basis as owned assets.
2.07 Capital Work in Progress
Expenditure incurred on construction of assets which are not ready for their intended use are carried at cost less impairment (if any), under Capital work-in-progress. The cost includes the purchase cost of materials, including import duties and non-refundable taxes, any directly attributable costs and Interest on borrowings used to finance the construction of the asset.
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost.
2.08 Depreciation and Amortization
(i) Freehold land is not depreciated. Premium paid on leasehold land and land development expenses are amortized over the primary lease period.
(ii) Depreciation is provided on a straight line basis over the useful lives of assets, which is as stated in Schedule II of Companies Act, 2013 or based on technical estimate made by the Company. The details of estimated life for each category of asset are as under:
(i) Buildings - 30 & 60 years
(ii) Roads - 5 & 10 years
(iii) Plant and Machinery (Rolling Mill in Steel Plant) - 20 years
(iv) Other Plant and Machinery - 3 to 20 years*
(v) Motor Vehicles - 8 & 10 years
(vi) Furniture, Fixtures and Office Equipments - 3 to 10 years
(vii) Computer Software - 5 years
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the assets and is recognized in profit or loss.
*For these class of assets, based on internal assessment and independent technical evaluation carried out by external valuers the Company believes that the useful lives as given above best represent the period over which Company expects to use these assets. Hence the useful lives for these assets are different from the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013.
(iii) The cost of Intangible asset are amortized on straight line basis over the estimated useful life of 5 years.
2.09 Impairment
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 indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs. Intangible assets with an indefinite useful life are tested for impairment annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell 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. An impairment loss is recognized in the statement of profit and loss as and when the carrying amount of an asset exceeds its recoverable amount.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or 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 recognized for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognized in the statement of profit and loss immediately.
2.10 Borrowing Costs
Borrowing Costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such assets till such time as the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the profit or loss statement which they are incurred.
2.11 Inventories
Finished and semi-finished products produced and purchased by the Company are carried at lower of cost and net realizable value.
Work-in-progress is carried at lower of cost and net realizable value.
Stores and spare parts are carried at cost. Necessary provision is made and expensed in case of identified obsolete and nonmoving items.
Scrap is carried at estimated realizable value.
Raw Material is carried at lower of cost and net realizable value.
Cost includes purchase price, non refundable taxes and duties and other directly attributable costs incurred in bringing the goods to the point of sale.
Cost of inventories is ascertained on weighted average basis. Work-in-progress and finished and semi finished products are valued on absorption cost basis.
2.12 Provisions, Contingent Liabilities and Contingent Assets :
(i) Provision
Provisions are recognized in the balance sheet when the Company has a present obligation (legal or constructive) as a result of a past event, which is expected to result in an outflow of resources embodying economic benefits which can be reliably estimated. Each provision is based on the best estimate of the expenditure required to settle the present obligation at the balance sheet date.
When appropriate, provisions are measured on a discounted basis.
Constructive obligation is an obligation that derives from an entity''s actions where :
(a) by an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities and
(b) As a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities.
(ii) Contingent Liabilities and Assets
Contingent liability is a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise, or is a present obligation that arises from past events but is not recognized because either it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or a reliable estimate of the amount of the obligation cannot be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits to the entity. Contingent assets are not recognized in financial statements since this may result in the recognition of income that may never be realized. However, when the realization of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.
2.13 Leases
The Company determines whether an arrangement contains a lease by assessing whether the fulfillment of a transaction is dependent on the use of a specific asset and whether the transaction conveys the right to use that asset to the Company in return for payment. Where this occurs, the arrangement is deemed to include a lease and is accounted for either as finance or operating lease. Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Operating lease - Rentals payable under operating leases are charged to the statement of profit and loss on a straight line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred. ln the event that lease incentives are received to enter into operating leases, such incentives are recognized as a liability. The aggregate benefit of incentives is recognized as a reduction of rental expense on a straight line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Finance lease - Finance leases are capitalized at the commencement of lease, at the lower of the fair value of the property or the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income over the period of the lease.
2.14 Employee Benefits
Short-term Employee Benefits
Liability in respect of short term employee benefit is recognized at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in an accounting period.
Post Employment Benefit Plans Defined Contribution Plans
Defined contribution plans are those plans where the Company pays fixed contributions to a fund managed by independent trust. Contributions are paid in return for services rendered by the employees during the year. The company has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay employee benefits. The Company provides Provident Fund facility to all employees and Superannuation benefits to selected employees.
Defined Benefit Plans
The present value of these defined benefit obligations are ascertained by an independent actuarial valuation using Projected Unit Credit Method as per the requirement of Ind AS 19 - Employee Benefits. The liability recognized in the balance sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognized past service costs. Measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Measurements are not reclassified to profit or loss in subsequent periods.
Other Long-term Employment Benefits (unfunded)
The present value of obligation against long-term employee benefits is ascertained by an independent actuarial valuation using Projected Unit Credit Method as per the requirement of Ind AS 19 - Employee Benefits. All actuarial gains and losses and past service cost are recognized in the Statement of Profit and Loss or Other Comprehensive Income as applicable in the year in which they occur.
Compensated absences
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognized based on actuarial valuation at the present value of the obligation as on the reporting date.
2.15 Financial instruments
Financial assets and financial liabilities are recognized when the company become a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction cost 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 cost directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
2.16 Financial assets
Financial assets at amortized cost
Financial assets are subsequently measured at amortized cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets measured at fair value
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company in respect of equity investments which are not held for trading has made an irrevocable election to present in other comprehensive income subsequent changes in the fair value of such equity instruments. Such an election is made by the Company on an instrument by instrument basis at the time of initial recognition of such equity investments. Financial asset not measured at amortized cost or at fair value through other comprehensive income is carried at fair value through profit or loss.
Impairment of financial assets
Loss allowance for expected credit losses is recognized for financial assets measured at amortized cost and fair value through other comprehensive income.
The Company recognizes life time expected credit losses for all trade receivables that do not constitute a financing transaction. For financial assets whose credit risk has not significantly increased since initial recognition, loss allowance equal to twelve months expected credit losses is recognized. Loss allowance equal to the lifetime expected credit losses is recognized if the credit risk on the financial instruments has significantly increased since initial recognition.
De-recognition of financial assets
The company derecognize a financial assets when the contractual right to the cash flows from the assets expire, or when it transfers the financial assets and substantially all the risk and reward of ownership of the assets to another party. If the company retains substantially all the risks and rewards of ownership of a transferred financial assets, the company continue to recognize the financial assets and also recognize a collateralized borrowings for the proceeds received.
2.17 Financial liabilities and equity instruments Classification of 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 instruments.
Equity Instruments
An equity instruments in any contract that evidences a residual interest in the assets of an entity after deducting all its liabilities. Equity instruments issued by the company are recognized at the proceed received, net of direct issue cost.
Financial liabilities
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost, using the effective interest rate method where the time value of money is significant.
Interest-bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at amortized cost using the effective interest rate method.
De-recognition of financial liabilities
The company derecognize financial liabilities when and only when the company obligation are discharged, cancelled or have expired.
2.18 Foreign Currency Transactions
The financial statements of the Company are presented in INR, which is the functional currency of the company and the presentation currency for the financial statements. Transactions in foreign currencies are initially recognized in reporting currency i.e. Indian Rupees, using the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are premeasured at the rates of exchange prevailing at the reporting date.
The exchange differences arising on the settlement of transactions and measurement are recognized in the Statement of Profit and Loss. In respect of transactions covered by forward exchange contracts, the difference between the contract rate and the rate applicable on the date of transaction is charged to the Statement of Profit and Loss over the period of the contract. Profit/(loss) on cancellation of forward exchange contracts are recognized as income or as expense in the statement of Profit and Loss.
2.19 Derivative Financial Instruments
The Company uses derivative financial instruments such as forwards, to hedge its risks associated with foreign exchange fluctuations. Such derivative financial instruments are used as risk management tools and not for speculative purposes. Derivatives are initially recognized at fair value at the date of derivative contracts being entered into and are subsequently re measured at fair value at the end of each reporting period.
2.20 Cash and bank balances
Cash and cash equivalents include cash on hand and in bank, net of outstanding bank overdrafts. Other bank balances - which include balances and deposits with banks that are restricted for withdrawal and usage.
2.21 Earnings Per Share
The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity together with any dilutive equity equivalent shares outstanding during the year, except where the results would be anti-dilutive.
2.22 Segment Reporting
The Company identifies primary segments based on the dominant source, nature of risks and returns, internal organization, management structure and the internal performance reporting systems. The accounting policies adopted for the segment reporting are in line with the accounting policies of the Company.
2.23 Government Grants
Government Grants are not recognized until there is a reasonable assurance that the company will comply with the conditions attaching to them and that the grants will be received. Total grants received less the amounts credited to the statement of profit and loss at the balance sheet date are included in the balance sheet as deferred income.
2.24 First-time adoption of Ind AS-mandatory exceptions, optional exemptions
i) Overall Principle
The entity has prepared the opening balance sheet as per Ind AS as of April 1,2015 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from IGAAP to Ind AS required under Ind AS, and applying Ind AS in measurement of recognized assets and liabilities. However, this principle is subject to the certain exception and optional exemption availed by the company as detailed below;
ii) Derecognition of financial assets and financial liabilities
The company has applied the derecognition requirement of financial assets and financial liabilities prospectively for transaction occurring on or after April 1,2015 (the transition date).
iii) Deemed cost for property, plant and equipment
The company has elected to continue with the carrying value of all its plant and equipment, and intangible assets recognized as of April 1,2015 (transition date) measured as per the IGAAP and use that carrying value as its deemed cost as of the transition date.
iv) Equity Investments at FVTOCI
The company has designated investment in equity shares at fair value through other comprehensive income (FVTOCI) on the basis offacts and circumstances that existed at the transition date.
v) Determining whether an arrangement contains a lease
The company has applied Appendix C of Ind AS 17 in Determining whether an Arrangement contains a Lease arrangement existing at the transition date on the basis of facts and circumstances existing at that date.
vi) Classification of debt instruments
The company has determined the classification of debt instruments in terms of whether they meet the amortized cost criteria or the FVTOCI criteria based on facts and circumstances that existed as of the transition date.
Mar 31, 2015
1.1 Basis of preparation of Financial Statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant provisions of the
Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956
Act"), as applicable. The financial statements have been prepared on
accrual basis under the historical cost convention. The accounting
policies adopted in the preparation of the financial statements are
consistent with those followed in the previous year.
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 realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current and non-current classification of
assets and liabilities.
1.2 Use of Estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialise.
1.3 Cash Flow Statement
Cash flows are reported using the indirect method, whereby
profit/(loss) before extraordinary items and tax is adjusted for the
effects of transactions of non-cash nature and any deferrals or
accruals of past or future cash receipts or payments. The cash flows
from operating, investing and financing activities of the Company are
segregated based on the available information.
1.4 Revenue Recognition
(i) Sale of goods
Sales are recognised when the significant risks and rewards of
ownership in the goods are transferred to the buyer as per the terms of
the contract. Revenue includes consideration received or receivable,
excise duty but excludes sales related taxes and are net of discounts.
(ii) Income from Services
Conversion income and income from hospital services are recognised on
rendering of the related services.
(iii) Dividend and Interest income
Dividend income is recognised when the company's right to receive
dividend is established. Interest income is recognised on a time
proportion basis taking into account the amount outstanding and the
rate applicable.
(iv) Income from Export Incentive Scheme
Export incentive under various schemes notified by the Government has
been recognised on the basis of credits afforded in the pass
book/amount received.
1.5 Fixed Assets
All fixed assets (comprising both tangible and intangible items) are
stated at cost less depreciation/amortization. Pre-operative expenses
including trial run expenses (net of revenue) are capitalised. The cost
of an asset includes the purchase cost of materials, including import
duties and non- refundable taxes, and any directly attributable costs
of bringing an asset to the location and condition of its intended use.
Interest on borrowings used to finance the construction of qualifying
assets are capitalised as part of the cost of the asset until such time
that the asset is ready for its intended use. Subsequent expenditure
on fixed assets after its purchase / completion is capitalised only if
such expenditure results in an increase in the future benefits from
such asset beyond its previously assessed standard of performance.
1.6 Depreciation and Amortisation
(i) Freehold land is not depreciated. Premium paid on leasehold land
and land development expenses are amortised over the primary lease
period.
(ii) Depreciation on tangible fixed assets has been provided on the
straight-line method as per the useful life prescribed in Schedule II
to the Companies Act, 2013.Intangible asset are amortised over the
estimated useful life of 5 years.
1.7 Employee Benefits
(i) Short-term Employee Benefits
Short term employee benefits are recognised as an expense at the
undiscounted amount in the statement of profit and loss of the year in
which the related service is rendered.
(ii) Post Employment Benefit Plans Defined Contribution Plans
Defined contribution plans are those plans where the Company pays fixed
contributions to a fund managed by independent trust. Contributions are
paid in return for services rendered by the employees during the year.
The company has no legal or constructive obligation to pay further
contributions if the fund does not hold sufficient assets to pay
employee benefits. The Company provides Provident Fund facility to all
employees and Superannuation benefits to selected employees.
Defined Benefit Plans
The present value of these defined benefit obligations are ascertained
by an independent actuarial valuation using Projected Unit Credit
Method as per the requirement of Accounting Standard 15 - Employee
Benefits. The liability recognised in the balance sheet is the present
value of the defined benefit obligations on the balance sheet date less
the fair value of the plan assets (for funded plans), together with
adjustments for unrecognised past service costs. Any asset resulting
from this calculation is limited to past service cost, plus the present
value of available refunds and reductions in future contributions to
the scheme. All actuarial gains and losses are recognised in the
Statement of Profit and Loss in full in the year in which they occur.
Past service cost is recognised immediately to the extent that the
benefits are already vested, and otherwise is amortised on a
straight-line basis over the average period until the benefits become
vested.
(iii) Other Long-term Employment Benefits (unfunded)
The present value of obligation against long-term employee benefits is
ascertained by an independent actuarial valuation using Projected Unit
Credit Method as per the requirement of Accounting Standards 15 -
Employee Benefits. All actuarial gains and losses and past service cost
are recognised in the Statement of Profit and Loss in full in the year
in which they occur.
1.8 Foreign Currency Transactions
Transactions in foreign currencies are initially recognised in
reporting currency i.e. lndian Rupees, using the exchange rates
prevailing on the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are remeasured at the
rates of exchange prevailing at the balance sheet date.
The exchange differences arising on the settlement of transactions and
remeasurement are recognised in the Statement of Profit and Loss. In
respect of transactions covered by forward exchange contracts, the
difference between the contract rate and the spot rate on the date of
transaction is charged to the Statement of Profit and Loss over the
period of the contract. Profit/(loss) on cancellation of forward
exchange contracts are recognised as income or as expense in the
statement of Profit and Loss.
1.9 Borrowing Costs
Borrowing Costs that are attributable to the acquisition, construction
or production of a qualifying asset are capitalised as part of cost of
such assets till such time as the asset is ready for its intended use.
A qualifying asset is an asset that necessarily takes a substantial
period of time to get ready for its intended use. All other borrowing
costs are recognised as an expense in the period in which they are
incurred.
1.10 Impairment
Whenever events or changes in circumstances indicate that the carrying
value of fixed assets may be impaired, the Company subjects such assets
to a test of recoverability, based on discounted cash flows expected
from use or disposal of such assets. If the assets are impaired, the
Company recognises an impairment loss as the difference between the
carrying value and recoverable amount i.e. net selling price or value
in use, whichever is higher.
1.11 Investments
Long term (i.e Non-current) investments are carried at cost less
provision for diminution other than temporary (if any), in the value of
such investments. Current investments are carried at lower of cost and
fair value.
1.12 Inventories
Inventories are carried at lower of cost and net realisable value other
than scrap which is carried at net realisable value.
Cost of inventories is ascertained on weighted average basis.
Work-in-progress and finished and semi finished products are valued on
absorption cost basis.
1.13 Taxes on Income
(i) Current Tax
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the applicable tax rates and the
provisions of the Income Tax Act, 1961 and other applicable tax laws.
(ii) Deferred tax
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantively enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets are recognised for timing differences of items other than
unabsorbed depreciation and carry forward losses only to the extent that
reasonable certainty exists that sufficient future taxable income will
be available against which these can be realised. However, if there are
unabsorbed depreciation and carry forward of losses and items relating
to capital losses, deferred tax assets are recognised only if there is
virtual certainty supported by convincing evidence that there will be
sufficient future taxable income available to realise the assets.
Deferred tax assets and liabilities are offset if such items relate to
taxes on income levied by the same governing tax laws and the Company
has a legally enforceable right for such set off. Deferred tax assets
are reviewed at each balance sheet date for their realisability.
(iii) Current and Deferred tax is measured based on the provisions of
tax laws and tax rates enacted or substantively enacted as at the
Balance Sheet date. 'Current and deferred tax relating to items
directly recognised in reserves are recognised in reserves and not in
the Statement of Profit and Loss.
(iv) Minimum Alternate Tax (MAT) paid in accordance with the tax laws,
which gives future economic benefits in the form of adjustment to
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax.
Accordingly, MAT is recognised as an asset in the Balance Sheet when it
is highly probable that future economic benefit associated with it will
flow to the Company.
1.14 rovisions, Contingent Liabilities and Contingent Assets:
(i) Provision
A provision is recognised in the financial statements where there
exists a present obligation as a result of a past event, in respect of
which a reliable estimate can be made, and it is probable that an
outflow of resources would be necessitated in order to settle the
obligation.
(ii) Contingent Liabilities and Assets
Contingent liability is a possible obligation that arises from past
events and the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the enterprise, or is a present obligation
that arises from past events but is not recognised because either it is
not probable that an outflow of resources embodying economic benefits
will be required to settle the obligation, or a reliable estimate of
the amount of the obligation cannot be made. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
Contingent liabilities are disclosed in the Notes. Contingent Assets
are neither recognised nor disclosed.
1.15 leases:
For assets acquired under Operating Lease i.e. the lease under which
significant portion of risk and rewards of ownership are retained by
the lessor, rentals payable are charged to the Statement of Profit and
Loss. Assets acquired under Finance Lease i.e. the lease which are not
operating lease, are capitalised at lower of the Fair Value and Present
Value of Minimum Lease Payments and a liability is created for an
equivalent amount. Each lease rental paid is allocated between the
liability and the interest cost so as to obtain a constant periodic
rate of interest on the outstanding liability for each year.
1.16 Cash and Cash Equivalents :
Cash and cash equivalents comprises of cash on hand and balances in
current accounts and deposit accounts with banks having original
maturity of less than three months.
1.17 Earnings Per Share
The basic earnings per share is computed by dividing the net profit
attributable to the equity shareholders for the year by the weighted
average number of equity shares outstanding during the year. Diluted
earnings per share is computed by dividing the net profit attributable
to the equity shareholders for the year by the weighted average number
of equity together with any dilutive equity equivalent shares
outstanding during the year, except where the results would be
anti-dilutive.
1.18 Segment Reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns, internal organisation, management
structure and the internal performance reporting systems. The
accounting policies adopted for the segment reporting are in line with
the accounting policies of the Company.
Mar 31, 2014
01 Basis of preparation of Financial Statements
The financial statements are prepared under the historical cost
convention on going concern, on accrual basis and are in compliance
with the accounting standards notified under Section 211(3C) of the
Companies Act, 1956 (which continues to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated September 2013 of the Ministry of Corporate Affairs).
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 VI to the Companies Act, 1956. Based
on the nature of products and the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current and non-current classification of
assets and liabilities.
The accounts presentation in accordance with Generally Accepted
Accounting Principles in India requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosures of contingent liabilities as at the
date of the financial statements and the reported amounts of expenses
during the year. Actual results could differ from those estimates. Any
revision to accounting estimates is recognised prospectively in the
current and future periods.
02 Cash Flow Statement
Cash flows are reported using the indirect method, whereby
profit/(loss) before extraordinary items and tax is adjusted for the
effects of transactions of non-cash nature and any deferrals or
accruals of past or future cash receipts or payments. The cash flows
from operating, investing and financing activities of the Company are
segregated based on the available information.
03 Revenue Recognition
(i) Sale of goods
Sales are recognised when the substantial risks and rewards of
ownership in the goods are transferred to the buyer as per the terms of
the contract. Revenue includes consideration received or receivable,
excise duty but excludes sales related taxes and are net of discounts.
(ii) Rendering of services
Conversion income and income from hospital services are recognised on
rendering of the related services.
(iii) Dividend and Interest income
Dividend income is recognised when the company''s right to receive
dividend is established. Interest income is recognised on a time
proportion basis taking into account the amount outstanding and the
rate applicable.
04 Fixed Assets
All fixed assets (comprising both tangible and intangible items) are
stated at cost less depreciation/amortization. Pre-operative expenses
including trial run expenses (net of revenue) are capitalised. The cost
of an asset includes the purchase cost of materials, including import
duties and non refundable taxes, and any directly attributable costs of
bringing an asset to the location and condition of its intended use.
Interest on borrowings used to finance the construction of qualifying
assets are capitalised as part of the cost of the asset until such time
that the asset is ready for its intended use.
05 Depreciation and Amortisation
(i) Freehold land is not depreciated. Premium paid on leasehold land
and land development expenses are amortised over the primary lease
period.
(ii) In respect of other assets, depreciation is provided on a straight
line basis applying the rates specified in Schedule XIV to the
Companies Act, 1956 ,other than computer software (Intangible asset)
which is amortised under straight line method over a period of five
years.
06 Employee Benefits
(i) Short-term Employee Benefits
Short term employee benefits are recognised as an expense at the
undiscounted amount in the statement of profit and loss of the year in
which the related service is rendered.
(ii) Post Employment Benefit Plans Defined Contribution Plans
Defined contribution plans are those plans where the Company pays fixed
contributions to a fund managed by independent trust. Contributions are
paid in return for services rendered by the employees during the year.
The company has no legal or constructive obligation to pay further
contributions if the fund does not hold sufficient assets to pay
employee benefits. The Company provides Provident Fund facility to all
employees and Superannuation benefits to selected employees.
Defined Benefit Plans
The present value of these defined benefit obligations are ascertained
by an independent actuarial valuation using Projected Unit Credit
Method as per the requirement of Accounting Standard 15 Employee
Benefits. The liability recognised in the balance sheet is the present
value of the defined benefit obligations on the balance sheet date less
the fair value of the plan assets (for funded plans), together with
adjustments for unrecognised past service costs. Any asset resulting
from this calculation is limited to past service cost, plus the present
value of available refunds and reductions in future contributions to
the scheme. All actuarial gains and losses are recognised in the
Statement of Profit and Loss in full in the year in which they occur.
Past service cost is recognised immediately to the extent that the
benefits are already vested, and otherwise is amortised on a
straight-line basis over the average period until the benefits become
vested.
(iii) Other Long-term Employment Benefits (unfunded)
The present value of obligation against long-term employee benefits is
ascertained by an independent actuarial valuation using Projected Unit
Credit Method as per the requirement of Accounting Standards 15 -
Employee Benefits. All actuarial gains and losses and past service cost
are recognised in the Statement of Profit and Loss in full in the year
in which they occur.
07 Foreign Currency Transactions
Transactions in foreign currencies are initially recognised in
reporting currency i.e.Indian Rupees, using the exchange rates
prevailing on the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are remeasured at the
rates of exchange prevailing at the balance sheet date.
The exchange differences arising on the settlement of transactions and
remeasurement are recognised in the Statement of Profit and Loss. In
respect of transactions covered by forward exchange contracts, the
difference between the contract rate and the spot rate on the date of
transaction is charged to the Statement of Profit and Loss over the
period of the contract. Profit/(loss) on cancellation of forward
exchange contracts are recognised as income or as expense in the
statement of Profit and Loss .
08 Borrowing Costs
Borrowing Costs that are attributable to the acquisition, construction
or production of a qualifying asset are capitalised as part of cost of
such assets till such time as the asset is ready for its intended use.
A qualifying asset is an asset that necessarily takes a substantial
period of time to get ready for its intended use. All other borrowing
costs are recognised as an expense in the period in which they are
incurred.
09 Impairment
Whenever events or changes in circumstances indicate that the carrying
value of fixed assets may be impaired, the Company subjects such assets
to a test of recoverability, based on discounted cash flows expected
from use or disposal of such assets. If the assets are impaired, the
Company recognises an impairment loss as the difference between the
carrying value and recoverable amount i.e. net selling price or value
in use, whichever is higher.
10 Investments
Long term (i.e Non-current) investments are carried at cost less
provision for diminution other than temporary (if any), in the value of
such investments. Current investments are carried at lower of cost and
fair value.
11 Inventories
Inventories are carried at lower of cost and net realisable value other
than scrap which is carried at net realisable value.
Cost of inventories is generally ascertained on weighted average basis.
Work-in-progress and finished and semi finished products are valued on
absorption cost basis.
12 Taxes on Income
(i) Current Tax
Current tax is measured at the amount expected to be paid to the tax
authorities in accordance with the provisions of the Income-tax Act,
1961.
(ii) Deferred tax
Deferred tax assets and liabilities are recognised by computing the tax
effect on timing differences which arise during the year and reverse in
the subsequent periods. Deferred tax assets against unabsorbed
depreciation and carried forward loss under tax laws, are recognised
only to the extent that there is virtual certainty supported by
convincing evidence that sufficient future taxable income will be
available against which such deferred tax assets can be realised.
Deferred tax assets on other timing differences are recognised only to
the extent that there is a reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realised.
(iii) Current and Deferred tax is measured based on the provisions of
tax laws and tax rates enacted or substantively enacted as at the
Balance Sheet date.
13 Provisions, Contingent Liabilities and Contingent Assets
(i) Provision
A provision is recognised in the financial statements where there
exists a present obligation as a result of a past event, in respect of
which a reliable estimate can be made, and it is probable that an
outflow of resources would be necessitated in order to settle the
obligation.
(ii) Contingent Liabilities and Assets
Contingent liability is a possible obligation that arises from past
events and the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the enterprise, or is a present obligation
that arises from past events but is not recognised because either it is
not probable that an outflow of resources embodying economic benefits
will be required to settle the obligation, or a reliable estimate of
the amount of the obligation cannot be made. Contingent Assets are
neither recognised nor disclosed.
14 Leases
For assets acquired under Operating Lease i.e. the lease under which
significant portion of risk and rewards of ownership are retained by
the lessor, rentals payable are charged to the Statement of Profit and
Loss. Assets acquired under Finance Lease i.e. the lease which are not
operating lease, are capitalised at lower of the Fair Value and Present
Value of Minimum Lease Payments.
15 Cash and Cash Equivalents
Cash and cash equivalents comprises of cash on hand and balances in
current accounts and deposit accounts with banks having original
maturity of less than three months.
16 Earnings Per Share
The basic earnings per share is computed by dividing the net profit
attributable to the equity shareholders for the year by the weighted
average number of equity shares outstanding during the year. Diluted
earnings per share is computed by dividing the net profit attributable
to the equity shareholders for the year by the weighted average number
of equity together with any dilutive equity equivalent shares
outstanding during the year, except where the results would be
anti-dilutive.
17 Segment Reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns, internal organisation, management
structure and the internal performance reporting systems. The
accounting policies adopted for the segment reporting are in line with
the accounting policies of the Company.
Mar 31, 2013
1.01 Basis of preparation of Financial Statements
The financial statements are prepared under the historical cost
convention on going concern and on accrual basis. The financial
statements are presented in accordance with Generally Accepted
Accounting Principles in India, Accounting Standards notified under
Section 211 (3C) of the Companies Act, 1956 and the relevant provisions
thereof.
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 VI to the Companies Act, 1956. Based
on the nature of products and the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current and non-current classification of
assets and liabilities.
The accounts presentation in accordance with Generally Accepted
Accounting Principles in India requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosures of contingent liabilities as at the
date of the financial statements and the reported amounts of expenses
during the year. Actual results could differ from those estimates. Any
revision to accounting estimates is recognised prospectively in the
current and future periods.
1.02 Cash Flow Statement
Cash flows are reported using the indirect method, whereby
profit/(loss) before extraordinary items and tax is adjusted for the
effects of transactions of non-cash nature and any deferrals or
accruals of past or future cash receipts or payments. The cash flows
from operating, investing and financing activities of the Company are
segregated based on the available information.
1.03 Revenue Recognition
(i) Sale of goods
Sales are recognised when the substantial risks and rewards of
ownership in the goods are transferred to the buyer as per the terms of
the contract. Revenue includes consideration received or receivable,
excise duty but net of discounts and other sales related taxes.
(ii) Rendering of services
Conversion income and income from hospital services are recognised on
rendering of the related services.
(iii) Dividend and Interest income
Dividend income is recognised when the company''s right to receive
dividend is established. Interest income is recognised on a time
proportion basis taking into account the amount outstanding and the
rate applicable.
1.04 Fixed Assets
All fixed assets (comprising both tangible and intangible items) are
stated at cost less depreciation. Pre- operative expenses including
trial run expenses (net of revenue) are capitalised. The cost of an
asset includes the purchase cost of materials, including import duties
and non-refundable taxes, and any directly attributable costs of
bringing an asset to the location and condition of its intended use.
Interest on borrowings used to finance the construction of qualifying
assets are capitalised as part of the cost of the asset until such time
that the asset is ready for its intended use.
1.05 Depreciation and Amortisation
(i). Freehold land is not depreciated. Premium paid on leasehold land
and land development expenses are amortised over the primary lease
period.
(ii) In respect of other assets, depreciation is provided on a straight
line basis applying the rates specified in Schedule XIV to the
Companies Act, 1956, other than computer software (Intangible asset)
which is amortised under straight line method over a period of five
years.
1.06 Employee Benefits
(i) Short-term Employee Benefits
Short term employee benefits are recognised as an expense at the
undiscounted amount in the statement of profit and loss of the year in
which the related service is rendered.
(ii) Post Employment Benefit Plans Defined Contribution Plans
Defined contribution plans are those plans where the Company pays fixed
contributions to a fund managed by independent trust. Contributions are
paid in return for services rendered by the employees during the year.
The company has no legal or constructive obligation to pay further
contributions if the fund does not hold sufficient assets to pay
employee benefits. The Company provides Provident Fund facility to all
employees and Superannuation benefits to selected employees.
Defined Benefit Plans
The present value of these defined benefit obligations are ascertained
by an independent actuarial valuation using Projected Unit Credit
Method as per the requirement of Accounting Standards 15 - Employee
Benefits. The liability recognised in the balance sheet is the present
value of the defined benefit obligations on the balance sheet date less
the fair value of the plan assets (for funded plans), together with
adjustments for unrecognised past service costs. Any asset resulting
from this calculation is limited to past service cost, plus the present
value of available refunds and reductions in future contributions to
the scheme. All actuarial gains and losses are recognised in the
Statement Profit and Loss in full in the year in which they occur. Past
service cost is recognised immediately to the extent that the benefits
are already vested, and otherwise is amortised on a straight-line basis
over the average period until the benefits become vested.
(iii) Other Long-term Employment Benefits (unfunded)
The present value of obligation against long-term employee benefits is
ascertained by an independent actuarial valuation using Projected Unit
Credit Method as per the requirement of Accounting Standards 15 -
Employee Benefits. All actuarial gains and losses and past service cost
are recognised in the Statement of Profit and Loss in full in the year
in which they occur.
1.07 Foreign Currency Transactions
Transactions in foreign currencies are initially recognised in
reporting currency i.e.Indian Rupees, using the exchange rates
prevailing on the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies and foreign currency
forward contracts remaining unsettled are remeasured at the rates of
exchange prevailing at the balance sheet date.
The exchange differences arising on the settlement of transactions and
remeasurement are recognised in the Statement of Profit and Loss. In
respect of transactions covered by forward exchange contracts, the
difference between the contract rate and the spot rate on the date of
transaction is charged to the Statement of Profit and Loss over the
period of the contract. Profit/(loss) on cancellation of forward
exchange contracts are recognised as income or as expense in the
statement of Profit and Loss.
1.08 Borrowing Costs
Borrowing Costs that are attributable to the acquisition, construction
or production of a qualifying asset are capitalised as part of cost of
such assets till such time as the asset is ready for its intended use.
A qualifying asset is an asset that necessarily takes a substantial
period of time to get ready for its intended use. All other borrowing
costs are recognised as an expense in the period in which they are
incurred.
1.09 Impairment
Wherever events or changes in circumstances indicate that the carrying
value of fixed assets may be impaired, the Company subjects such assets
to a test of recoverability, based on discounted cash flows expected
from use or disposal of such assets. If the assets are impaired, the
Company recognises an impairment loss as the difference between the
carrying value and recoverable amount i.e. net selling price or value
in use, whichever is higher.
1.10 Investments
Long term (i.e Non-current) investments are carried at cost less
provision for diminution other than temporary (if any), in the value of
such investments. Current investments are carried at lower of cost and
fair value.
1.11 Inventories
Inventories are carried at lower of cost and net realisable value other
than scrap which is carried at net realisable value.
Cost of inventories is generally ascertained on weighted average basis.
Work-in-progress and finished and semi finished products are valued on
absorption cost basis.
1.12 Taxes on Income
(i) Current Tax
Current tax is measured at the amount expected to be paid to the tax
authorities in accordance with the provisions ofthe Income-tax Act,
1961.
(ii) Deferred tax
Deferred tax assets and liabilities are recognised by computing the tax
effect on timing differences which arise during the year and reverse in
the subsequent periods. Deferred tax assets against unabsorbed
depreciation and carried forward loss under tax laws, are recognised
only to the extent that there is virtual certainty supported by
convincing evidence that sufficient future taxable income will be
available against which such deferred tax assets can be realised.
Deferred tax assets on other timing differences are recognised only to
the extent that there is a reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realised.
(iii) Current and Deferred tax is measured based on the provisions of
tax laws and tax rates enacted or substantively enacted as at the
Balance Sheet date.
1.13 Provisions, Contingent Liabilities and Contingent Assets
(i) Provision
A provision is recognised in the financial statements where there
exists a present obligation as a result of a past event, the amount of
which is reliably estimable, and it is probable that an outflow of
resources would be necessitated in order to settle the obligation.
(ii) Contingent Liabilities and Assets
Contingent liability is a possible obligation that arises from past
events and the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the enterprise, or is a present obligation
that arises from past events but is not recognised because either it is
not probable that an outflow of resources embodying economic benefits
will be required to settle the obligation, or a reliable estimate of
the amount of the obligation cannot be made. Contingent Assets are
neither recognised nor disclosed.
1.14 Leases
For assets acquired under Operating Lease i.e. the lease under which
significant portion of risk and rewards of ownership are retained by
the lessor, rentals payable are charged to the Statement of Profit and
Loss. Assets acquired under Finance Lease i.e. the lease which are not
operating lease, are capitalised at lower of the Fair Value and Present
Value of Minimum Lease Payments.
1.15 Cash and Cash Equivalents
Cash and cash equivalents comprises of cash on hand and balances in
current accounts and deposit accounts with banks having original
maturity of less than three months.
1.16 Earnings Per Share
The basic earnings per share is computed by dividing the net profit
attributable to the equity shareholders for the year by the weighted
average number of equity shares outstanding during the year. Diluted
earnings per share is computed by dividing the net profit attributable
to the equity shareholders for the year by the weighted average number
of equity together with any dilutive equity equivalent shares
outstanding during the year, except where the results would be
anti-dilutive.
1.17 Segment Reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns, internal organisation, management
structure and the internal performance reporting systems. The
accounting policies adopted for the segment reporting are in line with
the accounting policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of the their relationship to the operating
activities of the segment. Assets and liabilities which relate to the
Company as a whole and are not allocable to segments on reasonable
basis have been included under "unallocable asset/liabilities"
Mar 31, 2012
A. Basis of preparation of Financial Statements :
These Financial Statements have been prepared in accordance with the
generally accepted accounting principles in India under historical cost
convention on accrual basis. Further, these Financial Statements have
been prepared to comply in all material aspects with the applicable
accounting standards notified under Section 211 (3C)[The Companies
(Accounting Standards) Rules, 2006, as amended] and the relevant
provisions of the Companies Act, 1956 (the Act).
All assets and liabilities have been classified as current or non
current as per the Company's normal operation cycle and other criteria
set out in Schedule VI to the Act.
b. Revenue Recognition:
(i) Sale of goods : Sales are recognised when the substantial risks and
rewards of ownership in the goods are transferred to the buyer as per
the terms of the contract and are recognised net of trade discounts,
rebates etc.
(ii) Sale of services : Conversion charges are recognized on rendering
the related services.
(iii) Other items of Income are recognised on accrual and prudent
basis.
c. Employee Benefits:
(i) Short-term Employee Benefits :
The undiscounted amount of Short-term Employee Benefits expected to be
paid in exchange for the services rendered by employees is recognised
during the period when the employee renders the service.
(ii) Post Employment Benefit Plans:
Contributions under Defined Contribution Plans payable in keeping with
the related schemes are recognized as expenses for the year.
For Defined Benefit Plans, the cost of providing benefits is determined
using the Projected Unit Credit Method, with actuarial valuations being
carried out at each Balance Sheet date. Actuarial gains and losses are
recognized in full in the Profit and Loss Statement for the period in
which they occur. Past service cost is recognized immediately to the
extent that the benefits are already vested, and otherwise is amortised
on a straight-line basis over the average period until the benefits
become vested. The retirement benefit obligation recognized in the
Balance Sheet represents the present value of the defined benefit
obligation as adjusted for unrecognized past service cost, and as
reduced by the fair value of scheme assets. Any asset resulting from
this calculation is limited to past service cost, plus the present
value of available refunds and reductions in future contributions to
the scheme.
(iii) Other Long-term Employment Benefits (unfunded):
The cost of providing long-term employee benefits is generally
determined using Projected Unit Credit Method with actuarial valuation
being carried out at each Balance Sheet date. Actuarial gains and
losses and past service cost are recognised immediately in the Profit
and Loss Statement for the period in which they occur. Other long term
employee benefit obligation recognized in the Balance Sheet represents
the present value of related obligation.
d. Depreciation and Amortisation:
(i) Freehold land and leasehold land are not depreciated.
(ii) In respect of other assets, depreciation is provided on a straight
line basis applying the rates specified in Schedule XIV to the
Companies Act, 1956, other than computer software (Intangible Asset)
which is amortised under straight line method over a period of five
years.
e. Foreign Exchange Transactions:
Transactions in foreign currencies are recorded at exchange rates
prevailing on the date of the transaction. Monetary assets and
liabilities related to foreign currency transactions remaining
unsettled at the end of the year are translated at year end rates.
The exchange differences arising on settlement of transactions and/or
restatements are recognized in the Profit and Loss Statement. In
respect of transactions covered by forward exchange contracts, the
difference between the contract rate and the spot rate on the date of
transaction is charged to the Profit and Loss Statement over the period
of the contract. Profit/(loss) on cancellation of forward exchange
contracts are recognized as income or as expense for the year.
f. Borrowing Cost:
Borrowing Costs that are attributable to the acquisition or
construction of a qualifying asset are included in the cost of such
assets till such time as the asset is ready for its intended use. All
other borrowing costs are recognised as an expense in the period in
which they are incurred.
g. Fixed Assets:
All fixed assets (comprising both tangible and intangible items) are
stated at cost less accumulated depreciation and accumulated impairment
loss, if any. Pre-operative expenses including trial run expenses (net
of revenue) are capitalised.
An impairment loss is recognized wherever the carrying amount of fixed
assets of a cash generating unit exceeds its recoverable amount i.e.,
net selling price or value in use, whichever is higher.
h. Investments:
Long term (i.e. Non-current) investments are carried at cost less
provision for diminution other than temporary, in carrying amount of
such investments. Current investments are carried at lower of cost and
fair value.
i. Inventories:
Inventories are carried at lower of cost and net realizable value other
than scrap which is carried at net realizable value.
Cost of inventories is generally ascertained on weighted average basis.
Work-in-Progress and finished goods are valued on absorption cost
basis.
j. Taxation:
Current tax in respect of taxable income is provided for the year based
on applicable tax rates and laws. Deferred tax is recognized subject
to the consideration of prudence in respect of deferred tax assets, on
timing differences, being the differences between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods and is measured using tax
rates and laws that have been enacted or substantively enacted by the
Balance Sheet date. Deferred tax assets are reviewed at each Balance
Sheet date to reassess realisation.
k. Provisions and Contingent Liabilities :
A provision is recognized in the financial statements where there
exists a present obligation as a result of a past event, the amount of
which is reliably estimable, and it is probable that an outflow of
resources would be necessitated in order to settle the obligation.
Contingent liability is a possible obligation that arises from past
events and the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the enterprise, or is a present obligation
that arises from past events but is not recognised because either it is
not probable that an outflow of resources embodying economic benefits
will be required to settle the obligation, or a reliable estimate of
the amount of the obligation cannot be made.
I. Leases:
For assets acquired under Operating Lease, rentals payable are charged
to the Profit and Loss Statement. Assets acquired under Finance Lease
are capitalised at lower of the Fair Value and Present Value of Minimum
Lease Payments.
Mar 31, 2011
A. Basis of preparation of Financial Statements :
The Financial Statements are prepared to comply in all material aspects
with all the applicable accounting principles in India, the applicable
accounting standards notified under Section 211 (3C) of the Companies
Act, 1956 and the relevant provisions of the Companies Act, 1956.
b. Sale of Products and Services:
(i) Sales comprise sale of goods, and are recognized on completion of
sales.
(ii) Export incentive under the Duty Entitlement Pass Book Scheme is
recognized on the basis of credits afforded in the pass book against
export of the Company's own products and export under conversion
arrangement and such benefit under Duty Free Replenishment Certificate
Scheme being recognized on sale of licenses. Export incentive under
Target plus scheme is recognized on completion of required formalities
on accural basis.
(iii) Conversion charges are recognized on rendering the related
services.
c. Employee Benefits:
(i) Short-term Employee Benefits :
The undiscounted amount of Short-term Employee Benefits expected to be
paid in exchange for the services rendered by employees is recognised
during the period when the employee renders the service.
(ii) Post Employment Benefit Plans:
Contributions under Defined Contribution Plans payable in keeping with
the related schemes are recognized as expenses for the year.
For Defined Benefit Plans, the cost of providing benefits is determined
using the Projected Unit Credit Method, with actuarial valuations being
carried out at each Balance Sheet date. Actuarial gains and losses are
recognized in full in the Profit and Loss Account for the period in
which they occur. Past service cost is recognized immediately to the
extent that the benefits are already vested, and otherwise is amortised
on a straight-line basis over the average period until the benefits
become vested. The retirement benefit obligation recognized in the
Balance Sheet represents the present value of the defined benefit
obligation as adjusted for unrecognized past service cost, and as
reduced by the fair value of scheme assets. Any asset resulting from
this calculation is limited to past service cost, plus the present
value of available refunds and reductions in future contributions to
the scheme.
(iii) Other Long-term Employment Benefits (unfunded):
The cost of providing long-term employee benefits is generally
determined using Projected Unit Credit Method with actuarial valuation
being carried out at each Balance Sheet date. Actuarial gains and
losses and past service cost are recognized immediately in the Profit
and Loss Account for the period in which they occur. Other long term
employee benefit obligation recognized in the Balance Sheet represents
the present value of related obligation.
d. Depreciation:
(i) Freehold land and leasehold land are not depreciated.
(ii) In respect of other assets, depreciation is provided on a straight
line basis applying the rates specified in Schedule XIV to the
Companies Act, 1956, other than computer software (Intangible Asset)
which is amortised under Straight Line Method over a period of five
years.
e. Foreign Exchange Transactions:
Transactions in foreign currencies are recorded at exchange rates
prevailing on the date of the transaction. Monetary assets and
liabilities related to foreign currency transactions remaining
unsettled at the end of the year are translated at year end rates.
The exchange differences arising on settlement of transactions and/or
restatements are recognized in the Profit and Loss Account. In respect
of transactions covered by forward exchange contracts, the difference
between the contract rate and the spot rate on the date of transaction
is charged to the Profit and Loss Account over the period of the
contract. Profit/(loss) on cancellation of forward exchange contracts
are recognized as income or as expense for the year.
f. Borrowing Cost:
Borrowing Costs that are attributable to the acquisition or
construction of a qualifying asset are included in the cost of such
assets till such time as the asset is ready for its intended use. All
other borrowing costs are recognised as an expense in the period in
which they are incurred.
g. Fixed Assets:
All fixed assets (comprising both tangible and intangible items) are
stated at cost less depreciation.
Pre-operation expenses including trial run expenses (net of revenue)
are capitalized. An impairment loss is recognized wherever the carrying
amount of fixed assets of a cash generating unit exceeds its
recoverable amount i.e., net selling price or value in use, whichever
is higher.
h. Investments:
Long term investments are carried at cost less provision for permanent
diminution in value of such investments. Current investments are
carried at lower of cost and fair value.
i. Inventories:
Inventories are carried at lower of cost and net realizable value other
than scrap which are carried at net realizable value.
Cost of inventories is generally ascertained on 'weighted average'
basis. Work-in-Process and finished and semi-finished products are
valued on absorption cost basis.
j. Taxation:
Current tax in respect of taxable income is provided for the year based
on applicable tax rates and laws. Deferred tax is recognized subject to
the consideration of prudence in respect of deferred tax assets, on
timing differences, being the differences between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods and is measured using tax
rates and laws that have been enacted or substantively enacted by the
Balance Sheet date. Deferred tax assets are reviewed at each Balance
Sheet date to reassess realisation.
k. Provisions and Contingent Liabilities :
A provision is recognized in the financial statements where there
exists a present obligation as a result of a past event, the amount of
which is reliably estimable, and it is probable that an outflow of
resources would be necessitated in order to settle the obligation.
Contingent liability is a possible obligation that arises from past
events and the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the enterprise, or is a present obligation
that arises from past events but is not recognised because either it is
not probable that an outflow of resources embodying economic benefits
will be required to settle the obligation, or a reliable estimate of
the amount of the obligation cannot be made.
l. Leases:
For assets acquired under Operating Lease, rentals payable are charged
to the Profit and Loss Account. Assets acquired under Finance Lease are
capitalised at lower of the Fair Value and Present Value of Minimum
Lease Payments.
Mar 31, 2010
A. Basis of preparation of Financial Statements :
The Financial Statements are prepared to comply in all material aspects
with all the applicable accounting principles in India, the applicable
accounting standards notified under Section 211 (3C) of the Companies
Act, 1956 and the relevant provisions of the Companies Act, 1956.
b. Sale of Products and Services:
(i) Sales comprise sale of goods, and are recognized on completion of
sales.
(ii) Export incentive under the Duty Entitlement Pass Book Scheme is
recognized on the basis of credits afforded in the pass book against
export of the Companys own products and export under conversion
arrangement and such benefit under Duty Free Replenishment Certificate
Scheme being recognized on sale of licenses.
(iii) Conversion charges are recognized on rendering the related
services.
c. Employee Benefits:
(i) Short-term Employee Benefits :
The undiscounted amount of Short-term Employee Benefits expected to be
paid in exchange for the services rendered by employees is recognised
during the period when the employee renders the service.
(ii) Post Employment Benefit Plans :
Contributions under Defined Contribution Plans payable in keeping with
the related schemes are recognized as expenses for the year.
For Defined Benefit Plans, the cost of providing benefits is determined
using the Projected Unit Credit Method, with actuarial valuations being
carried out at each Balance Sheet date. Actuarial gains and losses are
recognized in full in the Profit and Loss Account for the period in
which they occur. Past service cost is recognized immediately to the
extent that the benefits are already vested, and otherwise is amortised
on a straight-line basis over the average period until the benefits
become vested. The retirement benefit obligation recognized in the
Balance Sheet represents the present value of the defined benefit
obligation as adjusted for unrecognized past service cost, and as
reduced by the fair value of scheme assets. Any asset resulting from
this calculation is limited to past service cost, plus the present
value of available refunds and reductions in future contributions to
the scheme.
(iii) Other Long-term Employment Benefits (unfunded):
The cost of providing long-term employee benefits is generally
determined using Projected Unit Credit Method with actuarial valuation
being carried out at each Balance Sheet date. Actuarial gains and
losses and past service cost are recognized immediately in the Profit
and Loss Account for the period in which they occur. Other long term
employee benefit obligation recognized in the Balance Sheet represents
present value of related obligation.
d. Research and Development:
Research and Development costs (other than cost of fixed assets
acquired) are charged as an expense in the year in which they are
incurred.
e. Depreciation:
(i) Freehold land and leasehold land are not depreciated.
(ii) In respect of other assets, depreciation is provided on a straight
line basis applying the rates specified in Schedule XIV to the
Companies Act, 1956.
f. Foreign Exchange Transactions:
Transactions in foreign currencies are recorded at exchange rates
prevailing on the date of the transaction. Monetary assets and
liabilities related to foreign currency transactions remaining
unsettled at the end of the year are translated at year end rates.
The exchange differences arising on settlement of transactions and/or
restatements are recognized in the Profit and Loss Account. In respect
of transactions covered by forward exchange contracts, the difference
between the contract rate and the spot rate on the date of transaction
is charged to the Profit and Loss Account over the period of the
contract. Profit/ (loss) on cancellation of forward exchange contracts
are recognized as income or as expense for the year.
g. Borrowing Cost:
Borrowing Costs that are attributable to the acquisition or
construction of a qualifying asset are included in the cost of such
assets till such time as the asset is ready for its intended use. All
other borrowing costs are recognised as an expense in the period in
which they are incurred.
h. Fixed Assets:
All fixed assets are valued at cost less depreciation. Pre-operation
expenses including trial run expenses (net of revenue) are capitalized.
An impairment loss is recognized wherever the carrying amount of fixed
assets of a cash generating unit exceeds its recoverable amount i.e.,
net selling price or value in use, whichever is higher.
i. Investments:
Long term investments are carried at cost less provision for permanent
diminution in value of such investments. Current investments are
carried at lower of cost and fair value.
j. Inventories:
Finished and semi-finished products produced/purchased by the Company
are carried at lower of cost and net realizable value.
Work-in-progress is carried at lower of cost and net realizable value.
Raw materials purchased by the Company are carried at lower of cost and
net realizable value.
Stores and spare parts are carried at or below cost.
Cost of inventories is generally ascertained on weighted average
basis. Work-in- progress and finished and semi-finished products are
valued on absorption cost basis.
k. Taxation:
Current tax in respect of taxable income is provided for the year based
on applicable tax rates and laws. Deferred tax is recognized subject to
the consideration of prudence in respect of deferred tax assets, on
timing differences, being the differences between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods and is measured using tax
rates and laws that have been enacted or substantively enacted by the
Balance Sheet date, deferred tax assets are reviewed at each Balance
Sheet date to reassess realisation. Fringe Benefit Tax (applicable till
the year ended 31* March 2009) is accounted for based on the estimated
fringe benefits for the year as per the related provisions of the
Income Tax Act, 1961.
l. Provisions and Contingent Liabilities :
A provision is recognized in the financial statements where there
exists a present obligation as a result of a past event, the amount of
which is reliably estimable, and it is probable that an outflow of
resources would be necessitated in order to settle the obligation.
Contingent liability is a possible obligation that arises from past
events and the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the enterprise, or is a present obligation
that arises from past events but is not recognised because either it is
not probable that an outflow of resources embodying economic benefits
will be required to settle the obligation, or a reliable estimate of
the amount of the obligation cannot be made.
m. Leases:
For assets acquired under Operating lease, rentals payable are charged
to the Profit and Loss Account. Assets acquired under Finance Lease are
capitalised at lower of the Fair Value and Present Value of Minimum
Lease Payments.
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