Accounting Policies of Uflex Ltd. Company
Mar 31, 2018
I. SIGNIFICANT ACCOUNTING POLICIES
A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements of the company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules 2015, the provisions of Companies Act, 2013, and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. Financial statements of the company are prepared under the historical cost convention except for the certain financial assets and liabilities measured at fair value as mentioned in applicable accounting policies.
B. USE OF ESTIMATES AND JUDGEMENTS
The preparation of the financial statements is in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates.
The estimates and underlying assumptions are reviewed on going concern basis.
Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, in the period of the revision and future periods if the revision affects both current and future.
C. CLASSIFICATION OF EXPENDITURE / INCOME
Except otherwise indicated:
i) All expenditure and income are accounted for under the natural heads of account.
ii) All expenditure and income are accounted for on accrual basis.
D. REVENUES
Revenues from sale of goods and processing
Revenue from the sale of goods and processing of material in the course of ordinary activities is measured at the value of the consideration received or receivable, net of returns, trade discounts, rate differences volume rebates and Commission paid. Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing effective control over, or managerial involvement with, the goods, and the amount of revenue can be measured reliably. The timing of transfers of risks and rewards normally happen upon shipment (except in case of consignment sales in which case the revenues are recognized when the materials are sold to ultimate customers).
Further, revenues are recognized at gross value of consideration of goods & processing of goods (Job work) including the amount of excise duty/cess recoveries and excluding sales tax/ value added tax/ Goods and Service Tax (GST).
Revenue from Services
Revenue from the service contract is recognized when the related services are performed and revenue from the services at the end of the reporting period is recognized based on stage of completion method. When there is uncertainty as to the ultimate collection of the revenue, recognition is postponed until such uncertainty is resolved. Revenues from service contracts are measured based on the services performed to date as a percentage of total services to be performed. In case where the services are performed by an indeterminate number of acts over a specified period of time, revenue is recognized on a straight line basis over the specified period. After the initial recognition, in respect of uncollectible amount, provisions are made in the period in which amount is identified as uncollectible.
Interest Income & Expense
Interest income is recognized on time apportionment basis. Effective interest method is used to compute the interest income on long terms loans and advances.
Dividend Income
Dividend income is recognized when the right to receive is established, which is generally when shareholders approve the dividend.
Rental Income
Rental income from investment property is recognized as part of other Income in Statement of profit and loss on a straight-line basis over the term of the lease.
E. PROPERTY, PLANT AND EQUIPMENT (PPE)
Recognition and measurement:
Property, plant and equipment are initially recognized at cost after deducting refundable purchase taxes and including the cost directly attributable to bring the asset to the location and conditions necessary for it to be capable of operating in the manner intended by the management, borrowing cost in accordance with the established accounting policy, cost of restoring and dismantling, if any, initially estimated by the management. After the initial recognition the property, plant and equipment are carried at cost less accumulated depreciation and impairment losses, if any.
Cost of Self-constructed assets is determined using the same principles as for acquired assets after eliminating the component of internal profits.
Any gain or loss on disposal of an item of property, plant and equipment is recognized in the statement of profit or loss.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at 1st April 2015, measured as per the previous GAAP, and use that carrying value as the deemed cost of such property, plant and equipment.
Depreciation on all property, plant & equipment are provided for, from the date of put to use for commercial production on straight line method at the useful lives prescribed in Schedule-II to the Companies Act, 2013, except for the followings, where the management believes that technical useful lives is different from those prescribed in Schedule II of the Companies Act, 2013 based on technical evaluation:
Cost of leasehold land are written off over the primary lease period of the land expect of the leasehold land, held by the company on the date of transition, which is amortized over the remaining useful lives of the assets. Freehold land is not depreciated.
The estimated useful lives, residual values and depreciation method are reviewed at each financial year end and the effect of any change is accounted for on prospective basis.
The carrying amount of the all property, plant and equipment are derecognized on its disposal or when no future economic benefits are expected from its use or disposal and the gain or loss on de-recognition is recognized in the statement of profit & loss.
Reclassification to investment property:
When the use of a property changes from owner-occupied to investment property, the property is reclassified as investment property at its carrying amount on the date of reclassification.
F. INTANGIBLE ASSETS
Acquired Intangible assets are initially recognized at cost after deducting refundable purchase taxes and including the transaction cost, if any. After initial recognition, intangibles are carried at cost less accumulated amortization and impairment losses, if any.
Intangible assets in respect of Product development is created when the technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the company has an intention and ability to complete and use or sell the product / technology and the cost is reliably measurable. Revenue expenditures pertaining to Research is charged to the statement of profit & loss. Development costs of products are charged to the statement of profit & loss unless a products technological and commercial feasibility has been established in which case such expenditure is capitalized. Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortization and accumulated impairment loss, if any.
Intangibles assets are amortized over their respective individual estimated useful lives on a straight line basis, from the date they are available for use, as per period prescribed in respective license/ agreement or five years.
Intangible asset is derecognized on disposal or when no future economic benefits are expected from continuing use or disposal.
The estimated useful lives, residual values and amortization method are reviewed at each financial year end and the effect of any change is accounted for on prospective basis.
G. INVESTMENT PROPERTIES
Investment properties are initially recognized at cost after deducting refundable purchase taxes and including the transaction cost, if any. After initial recognition the investment properties are carried at cost less accumulated depreciation and impairment losses, if any.
Transfer to and from the investment properties are made when and only when, there is change in the use of the investment property as evidenced by the conditions laid down under the Indian accounting standard. The carrying amount of the property as on the date of classification is considered as carrying value of the investment property and vice-versa.
The company has opted for an exemption provided by the Indian Accounting Standard (Ind AS)-101. Accordingly the carrying value for Investment Properties as recognized in the financial statements, as at the date of transition to Ind AS, measured as per previous GAAP are used as deemed cost as at the date of transition.
Depreciation on investment properties are provided for from the date of put to use for on straight line method at the useful lives prescribed in Schedule-II to the Companies Act, 2013
The carrying amount of the investment properties are derecognized on its disposal or when no future economic benefits are expected from its use or disposal and the gain or loss on de-recognition is recognized in the statement of profit & loss.
The estimated useful lives, residual values and depreciation method are reviewed at each financial year end and the effect of any change is accounted for on prospective basis.
The fair value of the investment properties are disclosed in the notes.
H. INVENTORIES
Inventories of finished goods and work in progress are valued at lower of cost, based on weighted average method, (except in case of machine manufacturing where specific identification method is used) arrived after including depreciation on plant & machinery, electrical installation and factory building, repair & maintenance on factory building, specific manufacturing expenses including specific payments & benefits to employees or net realizable value.
Raw Materials and other materials including packaging, stores and fuels are valued at lower of cost, based on first-in-first-out method arrived at after including freight inward and other expenditure directly attributable to acquisition or net realizable value.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
I. FINANCIAL INSTRUMENTS Initial Recognition:
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables/payables and where cost of generation of fair value exceeds benefits, which are initially measured at transaction price. Transaction costs directly related to the acquisition or issue of the financial assets and financial liabilities (other than financial assets and financial liabilities through profit & loss account) are added to or deducted from the cost of financial assets or financial liabilities. Transaction cost directly attributed to the acquisition of financial assets or financial liabilities at fair value through profit & loss account are recognized immediately in the statement of profit & loss.
Subsequent Recognition:
Non-derivative financial instruments
(i) Financial assets carried at amortized cost: A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) Financial assets at fair value through other comprehensive income: A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company has made an irrevocable election for its investments which are classified as equity instruments (all being not held for trading), to present the subsequent changes in fair value in other comprehensive income based on its business model.
Fair value of the listed equity instruments are measured using the rate quoted in the stock exchange wherein the securities are actively traded as on the last working day of the period of reporting. In respect of unlisted equity instruments, fair value is determined based on the latest audited financial statements and considering the open market information available, failing which it shall be measured at cost.
(iii) Financial assets at fair value through profit or loss: A financial asset which is not classified in any of the above categories (including investment in units of mutual funds) is subsequently fair valued through profit or loss.
(iv) Financial liabilities: Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through profit and loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(v) Investment in Subsidiaries/Joint ventures / Associates: Investment in subsidiaries / Joint Ventures / Associates are carried at cost in the separate financial statements. Any gain or losses on disposal of these investments are recognized in the statement of profit & loss.
J. TRADE RECEIVABLES
Trade receivables represents amount billed to customers as credit sales and are net off; a) any amount billed but for which revenues are reversed under the relevant Indian accounting standard and b) impairment for trade receivables, which is estimated for amounts not expected to be collected in full.
K. LOANS AND ADVANCES
Loans and advances are non-derivative financial assets with fixed and determinable payments. This category includes the loans, other financial assets and other current assets.
Subsequent to initial measurement, loans and receivables are carried at amortized cost based on effective interest rate method less appropriate allowance for doubtful receivables, if any.
Loans and advances are further classified as current and non-current depending whether they will realize within 12 months from the balance sheet date or beyond.
L. FINANCIAL LIABILITIES
Financial liabilities are initially recognized at the fair value of the consideration received less directly attributable transaction cost.
Subsequent to initial measurement, financial liabilities viz borrowings are measured at amortized cost. The difference in the initial carrying amount of the financial liabilities and their redemption value is recognized in the statement of profit & loss over the contractual term using the effective interest rate method.
Financial liabilities are further classified as current and non-current depending whether they are payable within 12 months from the balance date or beyond.
Financial liabilities are derecognized when the company is discharged from its obligation; they expire, are cancelled or replaced by a new liability with substantial modified terms.
M. EARNING PER SHARE
Basic Earnings Per Share is computed by dividing the net profit attributable to the equity shareholders of the company to the weighted average number of Shares outstanding during the period & Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders of the company after adjusting the effect of all dilutive potential equity shares that were outstanding during the period. The weighted average number of shares outstanding during the period includes the weighted average number of equity shares that could have issued upon conversion of all dilutive potential.
N. TAXATION Current Tax
Current tax is expected tax payable on the taxable income for the year, using the tax rate enacted at the reporting date, and any adjustment to the tax payable in respect of the earlier periods.
Current tax assets and liabilities are offset where the company has legal enforceable right to offset and intends either to settle on net basis, or to realize the assets and settle the liability simultaneously.
Deferred Tax Assets and Liabilities
Deferred tax is recognized for all taxable temporary differences and is calculated based on the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is measured at the tax rates that are expected to be applied when the asset is realized or the liability is settled, based on the laws that have been enacted or substantively enacted at the reporting date.
Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the assets can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset and when the deferred tax balances relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but the Group intends to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
Current and Deferred Tax for the Year
Current and deferred tax are recognized in the statement of profit & loss, except when they relates to items that are recognized in other comprehensive income or directly in equity, in which case, the current tax and deferred tax is recognized directly in other comprehensive income or equity respectively.
O. EMPLOYEE BENEFITS
The company provides for the various benefits plans to the employees. These are categorized into Defined Benefits Plans and Defined Contributions Plans. Defined contribution plans includes the amount paid by the company towards the liability for Provident fund to the employees provident fund organization and Employee State Insurance fund in respect of ESI and defined benefits plans includes the retirement benefits, such as gratuity and paid absences (leave benefits) both accumulated and non-accumulated.
a. In respect Defined Contribution Plans, contribution made to the specified fund based on the services rendered by the employees are charged to Statement of Profit & Loss in the year in which services are rendered by the employee.
b. Liability in respect of Defined Long Term benefit plan is determined at the present value of the amounts payable determined using actuarial valuation techniques performed by an independent actuarial at each balance sheet date using the projected unit credit methods. Re-measurement, comprising actuarial gain and losses, the effects of assets ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of Financial Position with a charge or credit recognized in other comprehensive income in the period in which they occur. Past Service cost is recognized in the statement of profit & loss in the period of plan amendment.
c. Liabilities for accumulating paid absences is determined at the present value of the amounts payable determined using the actuarial valuation techniques performed by an independent actuarial at each balance sheet date using the projected unit credit method. Actuarial gain or losses in respect of accumulating paid absences are charged to statement of profit & loss account.
d. Liabilities for short term employee benefits are measured at undiscounted amount of the benefits expected to be paid and charged to Statement of Profit & Loss in the year in which the related service is rendered.
P. IMPAIRMENT FINANCIAL ASSETS
The company recognizes the impairment on financial assets based on the expected credit loss model for the financial assets which are not fair value through profit and loss account. Loss allowance on trade receivables, with no significant financing component is measured at an amount equal to lifetime expected credit loss. The amount of expected credit losses or reversal that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in the statement of profit and loss for the period.
Intangible assets, investment property and property, plant and equipment
Intangible assets, investment property and property plant & equipment are evaluated for recoverability wherever events or changes in circumstances indicate that their carrying amount may not be recoverable.
For impairment testing, assets that do not generate independent cash flows are grouped together into cash generating units (CGUs).
For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value in use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.
If such asset is considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit & loss if there have been changes in the estimates used to determine the recoverable amount. The carrying amount is increased to its revised recoverable amount, provided that this amount does not exceeds the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss has been recognized for the asset in prior years.
Q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
A provision is recognized, if as a result of past event the company has present legal or constructive obligations that is reasonably estimable and it is probable that an outflow of economic benefits will be required to settle the obligation.
Contingent liabilities are disclosed for possible obligations arising out of uncertain events not wholly in control of the company.
Contingent assets are not recognized in the financial statements. However due disclosures are made in the financial statements for the contingent assets, where economic benefits is probable and amount can be estimated reliably.
R. FOREIGN CURRENCY TRANSACTIONS
Functional Currency
The Companies functional currency is Indian Rupees. The financial statement of the company is presented in Indian rupees rounded off to nearest lacs.
Transaction and Translations
Transactions in currency other than Indian Rupees are recorded at the rate, as declared by the custom authority / inter-bank rates, ruling on the date of transaction.
Unsettled Foreign currency denominated monetary assets and liabilities, as at the balance sheet date, are translated using the exchange rates as at the balance sheet date. The gain or loss resulting from the translation is recognized in the statement of profit & loss. Non-monetary assets and non-monetary liabilities denominated in foreign currency and measured at cost are translated at the exchange rate at the date of the transaction. Non-monetary assets and non-monetary liabilities denominated in foreign currency and measured carried at fair value are translated at the date when the fair value is determined.
Transaction gain or losses realized upon settlement of foreign currency transaction are included in determining the net profit for the period in which transaction is settled.
Exchanges difference arises on settlement / translation of foreign currency monetary items relating to acquisition of property, plant & equipment till the period they are put to use for commercial production, are capitalized to the cost of assets acquired and provided for over the useful life of the property, plant & equipment.
S. LEASES
Payments made under operating leases are generally recognized in the statement of profit and loss on a straight line basis over the term of leases unless such payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases, lease incentive are recognized as integral part of the total lease expense over the term of the lease.
Minimum lease payments under the finance leases are apportioned between the finance charge and the reduction of outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of liability.
T. BORROWING COST
Borrowings cost are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing cost directly attributable to the acquisition or construction of qualifying /eligible assets, intended for commercial production are capitalized as part of the cost of such assets. All other borrowing costs are recognized as an expense in the year in which they are incurred.
U. STANDARDS ISSUED BUT NOT YET EFFECTIVE
During the year, the company has adopted all the Indian Accounting Standards (Ind AS) that are notified by the Ministry of Corporate Affairs and are relevant to its operations and effective for the financial year beginning on or after 1st April 2017.
In March 2018, the Ministry of Corporate Affairs (MCA) issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2018, notifying new Indian Accounting Standard âInd AS 115â on âRevenue from Contract with Customersâ effective 1st April 2018. New Revenue recognition standard differs in some aspects as compared to existing accounting principles for revenue recognition. The differences could result in changes in the identification of performance obligations, timing of revenue recognition, measurement and disclosures.
Apart from this the MCA has also made amendments in the various Indian Accounting Standards which are effective for the financial periods beginning on or after 1st April 2018. The standards which might have impact on the financials of the Company are listed as under:
- Ind AS 103 - Business Combinations
- Ind AS 107 - Financial Instruments Disclosures
- Ind AS 109 - Financial Instruments
- Ind AS 112 - Disclosures of Interest in Other Entities
- Ind AS 1 - Presentation of Financial Statements
- Ind AS 2 - Inventories
- Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
- Ind AS 12 - Income Taxes
- Ind AS 16 - Property, Plant and Equipment
- Ind AS 17 - Leases
- Ind AS 18 - Revenues (Omitted)
- Ind AS 21 - The Effects of Changes on Foreign Exchange Rates
- Ind AS 23 - Borrowing Costs
- Ind AS 28 - Investments in Associates and Joint Ventures
- Ind AS 32 - Financial Instruments Presentations
- Ind AS 34 - Interim Financial Reporting
- Ind AS 36 - Impairment of Assets
- Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets
- Ind AS 38 - Intangible Assets
- Ind AS 40 - Investment Property
The Company is in the process of assessing the changes required/ possible impact of these Ind ASâs on the financial statements in the period of initial application and accordingly will adopt these changes by suitably amending its accounting policies as well the presentations and disclosures in the financial Statements.
Mar 31, 2017
1 COMPANY OVERVIEW AND SIGNIFICANT ACCOUNTING POLICIES
I. COMPANY OVERVIEW
The Company is a public limited company, domiciled in India and registered with the ROC, Delhi & Haryana under the Registration number 55-32166 dated 21st June 1988. Old Registration number has been converted into new Corporate Identification number (CIN) L74899DL1988PLC032166 Registered office of the Company is situated at 305, 3rd Floor, Bhanot Corner, Pamposh Enclave, Greater Kailash-I, New Delhi- 110 048 and Corporate Office at A-108-109, Sector-4, Noida, Uttar Pradesh-201301
The Company is a leading Indian Multinational, engaged in the manufacture and sale of flexible packaging products & offers a complete flexible packaging solution to its customers across the globe.
II. SIGNIFICANT ACCOUNTING POLICIES
A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The Company has adopted Indian Accounting Standards (Ind AS) notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules 2015 with effect from 1st April 2016. The Adoption of the IND AS was carried out in accordance with the IND AS 101 First Time adoption of the Indian Accounting Standards. Accordingly Companyâs opening Ind AS Balance Sheet date of transition is 1st April 2015. please refer to Note No 2 for more information on reconciliations of differences and descriptions of the effect of transition.
Accordingly the financial statements of the company with effect from 1st April 2016 have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules 2015, the provisions of Companies Act, 2013, and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. Financial statements of the company are prepared under the historical cost convention except for the followings assets and liabilities which have been measured at their fair value:
-Certain financial assets and liabilities measured at fair value (Refer to accounting policies for more details).
For the periods up to and including the financial year ended 31st March 2016, the financial Statements were prepared in accordance with the Indian Generally Accepted Accounting principal (GAAp) under the historical cost convention on the accrual basis. GAAp comprises mandatory accounting standards as prescribed by the Companies Act 2013 u/s 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of Companies Act, 2013, and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied.
B. USE OF ESTIMATES AND JUDGEMENTS
The preparation of the financial statements is in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates.
The estimates and underlying assumptions are reviewed on going concern basis.
Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, in the period of the revision and future periods if the revision affects both current and future.
C. CLASSIFICATION OF EXPENDITURE / INCOME
Except otherwise indicated:
i) All expenditure and income are accounted for under the natural heads of account.
ii) All expenditure and income are accounted for on accrual basis.
D. REVENUES
Revenues from sale of goods and processing
Revenue from the sale of goods and processing of material in the course of ordinary activities is measured at the value of the consideration received or receivable, net of returns, trade discounts, rate differences volume rebates and Commission paid. Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing effective control over, or managerial involvement with, the goods, and the amount of revenue can be measured reliably. The timing of transfers of risks and rewards normally happen upon shipment (except in case of consignment sales in which case the revenues are recognized when the materials are sold to ultimate customers).
Further, revenues are recognized at gross value of consideration of goods & processing of goods (Job work) including the amount of excise duty/cess recoveries and excluding sales tax/ value added tax.
Revenue from Services
Revenue from the service contract is recognized when the related services are performed and revenue from the services at the end of the reporting period is recognized based on stage of completion method. When there is uncertainty as to the ultimate collection of the revenue, recognition is postponed until such uncertainty is resolved. Revenues from service contracts are measured based on the services performed to date as a percentage of total services to be performed. In case where the services are performed by an indeterminate number of acts over a specified period of time, revenue is recognized on a straight line basis over the specified period. After the initial recognition, in respect of uncollectible amount, provisions are made in the period in which amount is identified as uncollectible.
Interest Income & Expense
Interest income is recognized on time apportionment basis. Effective interest method is used to compute the interest income on long terms loans and advances.
Dividend Income
Dividend income is recognized when the right to receive is established, which is generally when shareholders approve the dividend.
Rental Income
Rental income from investment property is recognized as part of other Income in Statement of profit and loss on a straight-line basis over the term of the lease.
E. PROPERTY, PLANT AND EQUIPMENT (PPE)
Recognition and measurement:
Property, plant and equipment are initially recognized at cost after deducting refundable purchase taxes and including the cost directly attributable to bring the asset to the location and conditions necessary for it to be capable of operating in the manner intended by the management, borrowing cost in accordance with the established accounting policy, cost of restoring and dismantling, if any, initially estimated by the management. After the initial recognition the property, plant and equipment are carried at cost less accumulated depreciation and impairment losses.
Cost of Self-constructed assets is determined using the same principles as for acquired assets after eliminating the component of internal profits.
Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at 1st April 2015, measured as per the previous GAAp, and use that carrying value as the deemed cost of such property, plant and equipment.
Depreciation on all property, plant & equipment are provided for, from the date of put to use for commercial production on straight line method at the useful lives prescribed in Schedule-II to the Companies Act, 2013, except for the followings, where the management believes that technical useful lives is different from those prescribed in Schedule II of the Companies Act, 2013 based on technical evaluation:
Cost of leasehold land are written off over the primary lease period of the land except of the leasehold land, held by the company on the date of transition, which is amortized over the remaining useful lives of the assets. Freehold land is not depreciated.
The estimated useful lives, residual values and depreciation method are reviewed at each financial year end and the effect of any change is accounted for on prospective basis.
The carrying amount of the all property, plant and equipment are derecognized on its disposal or when no future economic benefits are expected from its use or disposal and the gain or loss on de-recognition is recognized in the statement of profit & loss.
Reclassification to investment property:
When the use of a property changes from owner-occupied to investment property, the property is reclassified as investment property at its carrying amount on the date of reclassification.
F. INTANGIBLE ASSETS
Acquired Intangible assets are initially recognized at cost after deducting refundable purchase taxes and including the transaction cost, if any. After initial recognition, intangibles are carried at cost less accumulated amortization and impairment losses.
Intangible assets in respect of product development is created when the technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the company has an intention and ability to complete and use or sell the product / technology and the cost is reliably measurable. The amount initially recognized of the internally generated intangible assets is the sum of the expenditures incurred from the date when the intangibles first met the recognition criteria. Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortization and accumulated impairment loss, if any. All revenue expenditure on research & development activities are accounted for under their natural heads of revenue expenses accounts.
Intangibles assets are amortized over their respective individual estimated useful lives on a straight line basis, from the date they are available for use.
Intangible asset is derecognized on disposal or when no future economic benefits are expected from continuing use or disposal.
The estimated useful lives, residual values and amortization method are reviewed at each financial year end and the effect of any change is accounted for on prospective basis.
G. INVESTMENT PROPERTIES
Investment properties are initially recognized at cost after deducting refundable purchase taxes and including the transaction cost, if any. After initial recognition the investment properties are carried at cost less accumulated depreciation and impairment losses.
Transfer to and from the investment properties are made when and only when, there is change in the use of the investment property as evidenced by the conditions laid down under the Indian accounting standard. The carrying amount of the property as on the date of classification is considered as carrying value of the investment property and vice-versa.
The company has opted for an exemption provided by the Indian Accounting Standard (Ind As)-101. Accordingly the carrying value for Investment Properties as recognized in the financial statements, as at the date of transition to Ind AS, measured as per previous GAAp are used as deemed cost as at the date of transition.
Depreciation on investment properties are provided for from the date of put to use for on straight line method at the useful lives prescribed in Schedule-ll to the Companies Act, 2013
The carrying amount of the investment properties are derecognized on its disposal or when no future economic benefits are expected from its use or disposal and the gain or loss on de-recognition is recognized in the statement of profit & loss.
The estimated useful lives, residual values and depreciation method are reviewed at each financial year end and the effect of any change is accounted for on prospective basis.
The fair value of the investment properties are disclosed in the notes.
H. INVENTORIES
Inventories of finished goods and work in progress are valued at lower of cost, based on weighted average method, (except in case of machine manufacturing where specific identification method is used) arrived after including depreciation on plant & machinery, electrical installation and factory building, repair & maintenance on factory building, specific manufacturing expenses including excise duty and specific payments & benefits to employees or net realizable value
Raw Materials and other materials including packaging, stores and fuels are valued at lower of cost, based on first-in-first-out method arrived at after including freight inward and other expenditure directly attributable to acquisition or net realizable value.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
I. FINANCIAL INSTRUMENTS Initial Recognition:
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables/payables and where cost of generation of fair value exceeds benefits, which are initially measured at transaction price. Transaction costs directly related to the acquisition or issue of the financial assets and financial liabilities (other than financial assets and financial liabilities through profit & loss account) are added to or deducted from the cost of financial assets or financial liabilities. Transaction cost directly attributed to the acquisition of financial assets or financial liabilities at fair value through profit & loss account are recognized immediately in the statement of profit & loss.
Subsequent Recognition:
Non-derivative financial instruments
(i) Financial assets carried at amortized cost: A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) Financial assets at fair value through other comprehensive income: A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company has made an irrevocable election for its investments which are classified as equity instruments (all being not held for trading), to present the subsequent changes in fair value in other comprehensive income based on its business model.
Fair value of the listed equity instruments are measured using the rate quoted in the stock exchange wherein the securities are actively traded as on the last working day of the period of reporting. In respect of unlisted equity instruments, fair value is determined based on the latest audited financial statements and considering the open market information available, failing which it shall be measured at cost.
(iii) Financial assets at fair value through profit or loss: A financial asset which is not classified in any of the above categories (including investment in units of mutual funds) is subsequently fair valued through profit or loss.
(iv) Financial liabilities: Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through profit and loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(v) Investment in Subsidiaries/Joint ventures / Associates: Investment in subsidiaries / Joint Ventures /
Associates are carried at cost in the separate financial statements. Any gain or losses on disposal of these investments are recognized in the statement of profit & loss.
J. TRADE RECEIVABLES
Trade receivables represents amount billed to customers as credit sales and are net off; a) any amount billed but for which revenues are reversed under the relevant Indian accounting standard and b) impairment for trade receivables, which is estimated for amounts not expected to be collected in full.
K. LOANS AND ADVANCES
Loans and advances are non-derivative financial assets with fixed and determinable payments. This category includes the loans, cash and bank balances, other financial assets and other current assets.
Subsequent to initial measurement, loans and receivables are carried at amortized cost based on effective interest rate method less appropriate allowance for doubtful receivables.
Loans and advances are further classified as current and non-current depending whether they will realize within 12 months from the balance sheet date or beyond.
L. FINANCIAL LIABILITIES
Financial liabilities are initially recognized at the fair value of the consideration received less directly attributable transaction cost.
Subsequent to initial measurement, financial liabilities are measured at amortized cost. The difference in the initial carrying amount of the financial liabilities and their redemption value is recognized in the statement of profit & loss over the contractual term using the effective interest rate method. This category includes the following class of liabilities; trade and other payables, borrowing; and other financial liabilities.
Financial liabilities are further classified as current and non-current depending whether they are payable within 12 months from the balance date or beyond.
Financial liabilities are derecognized when the company is discharged from its obligation; they expire, are cancelled or replaced by a new liability with substantial modified terms.
M. EARNING PER SHARE
Basic Earnings Per Share is computed by dividing the net profit attributable to the equity shareholders of the company to the weighted average number of Shares outstanding during the period & Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders of the company after adjusting the effect of all dilutive potential equity shares that were outstanding during the period the weighted average number of shares outstanding during the period including the weighted average number of equity shares that could have issued upon conversion of all dilutive potential.
N. TAXATION Current Tax
Current tax is tax expected tax payable on the taxable income for the year, using the tax rate enacted at the reporting date, and any adjustment to the tax payable in respect of the earlier periods.
Current tax assets and liabilities are offset where the company has legal enforceable right to offset and intends either to settle on net basis, or to realize the assets and settle the liability simultaneously.
Deferred Tax Assets and Liabilities
Deferred tax is recognized for all taxable temporary differences and is calculated based on the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is measured at the tax rates that are expected to be applied when the asset is realized or the liability is settled, based on the laws that have been enacted or substantively enacted at the reporting date.
Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the assets can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset and when the deferred tax balances relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but the Group intends to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
Current and Deferred Tax for the Year
Current and deferred tax are recognized in the statement of profit & loss, except when they relates to items that are recognized in other comprehensive income or directly in equity, in which case, the current tax and deferred tax is recognized directly in other comprehensive income or equity respectively.
O. EMPLOYEE BENEFITS
The company provides for the various benefits plans to the employees. These are categorized into Defined Benefits Plans and Defined Contributions Plans. Defined contribution plans includes the amount paid by the company towards the liability for provident fund to the employees provident fund organization and Employee State Insurance fund in respect of ESI and defined benefits plans includes the retirement benefits, such as gratuity and paid absences (leave benefits) both accumulated and non-accumulated.
a. In respect Defined Contribution Plans, contribution made to the specified fund based on the services rendered by the employees are charged to Statement of Profit & Loss in the year in which services are rendered by the employee.
b. Liability in respect of Defined Long Term benefit plan is determined at the present value of the amounts payable determined using actuarial valuation techniques performed by an independent actuarial at each balance sheet date using the projected unit credit methods. Re-measurement, comprising actuarial gain and losses, the effects of assets ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of Financial Position with a charge or credit recognized in other comprehensive income in the period in which they occur. past Service cost is recognized in the statement of profit & loss in the period of plan amendment.
c. Liabilities for accumulating paid absences is determined at the present value of the amounts payable determined using the actuarial valuation techniques performed by an independent actuarial at each balance sheet date using the projected unit credit method. Actuarial gain or losses in respect of accumulating paid absences are charged to statement of profit & loss account.
d. Liabilities for short term employee benefits are measured at undiscounted amount of the benefits expected to be paid and charged to Statement of Profit & Loss in the year in which the related service is rendered.
P. IMPAIRMENT Financial assets
The company recognizes the impairment on financial assets based on the expected credit loss model for the financial assets which are not fair value through profit and loss account. Loss allowance on trade receivables, with no significant financing component is measured at an amount equal to lifetime expected credit loss. For all financial assets expected credit losses are measured at an amount equal to 12-month ECL unless there has been significant increase in credit risk from initial recognition in which case these are measured at lifetime expected credit loss. The amount of expected credit losses or reversal that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in the profit and loss for the period.
Intangible assets, investment property and property, plant and equipment
Intangible assets, investment property and property plant & equipment are evaluated for recoverability wherever events or changes in circumstances indicate that their carrying amount may not be recoverable.
For impairment testing, assets that do not generate independent cash flows are grouped together into cash generating units (CGUs).
For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value in use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.
If such asset is considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit & loss if there have been changes in the estimates used to determine the recoverable amount. The carrying amount is increased to its revised recoverable amount, provided that this amount does not exceeds the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss has been recognized for the asset in prior years.
Q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
A provision is recognized, if as a result of past event the company has present legal or constructive obligations that is reasonably estimable and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pretax rate that reflects current market assessments of the time value of money and the risk specific to liability.
Contingent liabilities are disclosed for possible obligations arising out of uncertain events not wholly in control of the company.
Contingent assets are not recognized in the financial statements. However due disclosures are made in the financial statements for the contingent assets, where economic benefits is probable and amount can be estimated reliably.
R. FOREIGN CURRENCY TRANSACTIONS
Functional Currency
The Companies functional currency is Indian Rupees. The financial statement of the company is presented in Indian rupees rounded off to nearest lacs.
Transaction and translations
Transactions in currency other than Indian Rupees are recorded at the rate, as declared by the custom and excise department / inter-bank rates, ruling on the date of transaction.
Unsettled Foreign currency denominated monetary assets and liabilities, as at the balance sheet date, are translated using the exchange rates as at the balance sheet date. The gain or loss resulting from the translation is recognized in the profit & loss. Non-monetary assets and non-monetary liabilities denominated in foreign currency and measured at cost are translated at the exchange rate at the date of the transaction. Non-monetary assets and non-monetary liabilities denominated in foreign currency and measured carried at fair value are translated at the date when the fair value is determined.
Transaction gain or losses realized upon settlement of foreign currency transaction are included in determining the net profit for the period in which transaction is settled.
Exchanges difference arises on settlement / translation of foreign currency monetary items relating to acquisition of property, plant & equipment till the period they are put to use for commercial production, are capitalized to the cost of assets acquired and provided for over the useful life of the property, plant & equipment.
S. LEASES
Payments made under operating leases are generally recognized in the profit and loss on a straight line basis over the term of leases unless such payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases, lease incentive are recognized as integral part of the total lease expense over the term of the lease.
Minimum lease payments under the finance leases are apportioned between the finance charge and the reduction of outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of liability.
T. BORROWING COST
Borrowings cost are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing cost directly attributable to the acquisition or construction of qualifying / eligible assets, intended for commercial production are capitalized as part of the cost of such assets. All other borrowing costs are recognized as an expense in the year in which they are incurred.
U. STANDARDS ISSUED BUT NOT YET EFFECTIVE
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017 notifying amendments to Ind AS 7 on âStatement of Cash Flowsâ and Ind AS 102 on âShare based paymentsâ, applicable w.e.f. 1st April 2017. These amendments are in accordance with the recent amendments made by the International Accounting Standards Board (ISB) to IAS, Statement of Cash flows and IFRS 2 Share based payments respectively. The amendments to Ind AS 7 are applicable to the Company w.e.f. 1st April 2017.
Amendment to Ind AS 7;
The amendment to Ind AS 7 requires the entities to provide disclosures that enables the users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation statements between opening and closing balances in the balance sheet liabilities arising from financing activities to meet the disclosure requirement.
Since, the impact of proposed changes in Ind AS 7 relates to the disclosure of the items included in the financial statements, it does not have any impact on the financial position of the company.
Amendment to Ind AS 102;
The amendment to Ind AS 102 provides specific guidance to measurement of cash settled awards, modification of cash settled awards and awards that include a net settlement feature in respect of withholding taxes.
It clarifies that the fair value of cash settled awards is determined on a basis consistent with that used for equity settled awards. Market based performance conditions and non-vesting conditions are reflected in the fair values, but non market performance conditions and service vesting conditions are reflected in the estimate the number of awards expected to vest. Also the amendment clarifies that the terms and conditions of a cash settled share based payment transaction are modified with the result that it becomes equity settled share based payment transaction, the transaction is accounted for as such from the date of modification. Further, the amendment requires the awards that include a net settlement feature in respect of withholding taxes to be treated as equity settled in entirety. The cash payment to the tax authority is treated as part as if it was part of an equity settlement. However the provisions of Ind AS 102 are currently not applicable to the company.
Mar 31, 2016
A. COMPANY AND ITS BACKGROUND
The Company was registered with the ROC, Delhi & Haryana under the
Registration number 55-32166 dated 21st June 1988. Old Registration
number has been converted into new Corporate Identification number
(CIN) L74899DL1988pLC032166
Registered office of the Company is situated at 305, 3rd Floor, Bhanot
Corner, Pamposh Enclave, Greater Kailash-I, New Delhi- 110 048
The Company has been engaged in the manufacture and sale of flexible
packaging products & offer a complete flexible packaging solution to
its customers across the globe.
B. SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Preparation of Financial Statements
The financial Statements are prepared in accordance with the Indian
Generally Accepted Accounting principal (GAAp) under the historical
cost convention on the accrual basis. GAAp comprises mandatory
accounting standards as prescribed by the Companies Act 2013 u/s 133 of
the Act, read with rule 7 of the Companies (Accounts) rules, 2014, the
provisions of Companies Act, 2013, and guidelines issued by the
Securities and Exchange Board of India (SEBI). Accounting policies have
been consistently applied.
b. Use of Estimates and Judgements
The preparation of the financial statements is in conformity with GAAP,
requires management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other
factors that are believed to be reasonable under the circumstances, the
results of which form the basis of making the judgements about the
carrying values of assets and liabilities that are readily apparent
from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on going concern
basis.
Revisions to accounting estimates are recognized in the period in which
the estimate is revised if the revision affects only that period, in
the period of the revision and future periods if the revision affects
both current and future.
c. Classification of Expenditure/Income
Except otherwise indicated:
i) All expenditure and income are accounted for under the natural heads
of account.
ii) All expenditure and income are accounted for on accrual basis.
d. Valuation
i) Fixed Assets
a) Fixed Assets are normally accounted for on cost basis (net of CENVAT
credits) including the cost of installation, pre-operative expenses,
identifiable trial run expenses where incurred, eligible adjustment on
account of foreign exchange fluctuations and impairment losses.
Pre-operative expenses and identifiable trial run expenses incurred by
the company up to the date eligible assets are put to use for
commercial production are allocated to them in proportion to their
cost. The cost of fixed assets is adjusted for revaluation, if any,
done in any year as decided by the management so as to show the fixed
assets at their current value.
b) Self-constructed Fixed Assets are valued at cost including overheads
of the unit constructing the asset.
ii) Finished Goods
Finished goods are valued at lower of cost, based on weighted average
method, (except in case of machine manufacturing where specific
identification method is used) arrived after including depreciation on
plant & machinery, electrical installation and factory building, repair
& maintenance on factory building, specific manufacturing expenses
including excise duty and specific payments & benefits to employees or
net realisable value.
iii) Work-in-Progress
Work-in-progress are valued at lower of cost, based on weighted average
method, (except in case of machine manufacturing where specific
identification method is used) arrived after including depreciation on
plant & machinery, electrical installation and factory building, repair
& maintenance on factory building, specific manufacturing expenses and
specific payments & benefits to employees or net realisable value.
iv) Raw Material
Raw Materials are valued at lower of cost, based on first-in-first-out
method arrived at after including freight inward and other expenditure
directly attributable to acquisition or net realisable value.
v) Stores, fuel and packing materials are valued at lower of cost,
based on first-in-first-out method or net realisable value.
vi) Inter-unit transfers of goods and services / job work are valued at
cost price / the price agreed to between the units.
e. Cost of spares, tools, jigs & dies are charged to revenue.
f. Leases
i) Lease rentals paid on operating leases are charged to revenue.
ii) Lease rentals received under operating lease are recognized in the
statement of Profit & Loss.
g. Expenses incurred for issue of financial securities are charged to
Securities Premium Reserve.
h. Foreign Currency Transactions
i) Foreign currency monetary items remaining unsettled at the year end
are translated at year end rates. Non-monetary items which are carried
at historical cost denominated in a foreign currency are reported using
the exchange rate at the date of the transaction; and non-monetary
items which are carried at fair value or other similar valuation
denominated in foreign currency are reported using the exchange rates
that existed when the values were determined.
ii) Exchange differences on settlement / translation of monetary items,
are adjusted as income / expense through the Exchange Fluctuation
Account in the year they arise.
iii) Difference between the forward and exchange rate on the date of
transactions are adjusted over the period of the contract as an income
/ expense through the Exchange Fluctuation Account.
iv) Profit or loss on cancellation of forward contracts for
transactions, are adjusted as income / expense through Exchange
Fluctuation Account in the year they arise.
v) Exchanges difference arises on settlement / translation of foreign
currency monetary items relating to acquisition of fixed assets till
the period they are put to use for commercial production, are
capitalized to the cost of assets acquired and provided for over the
useful life of the fixed asset.
i. Depreciation
i) Normal depreciation on all fixed assets, except land and extra shift
depreciation on specific plant & machineries for the period of extra
shift worked, are provided from the date of put to use for commercial
production on straight line method at the useful life prescribed in
Schedule-II to the Companies Act, 2013 except for the followings, where
useful life is different than those prescribed in the Schedule II of
the Companies Act 2013:
ii) No depreciation is provided on leasehold land.
iii) Depreciation on additions / deletions to fixed assets is provided
on pro-rata basis from / to the date of additions / deletions.
iv) In case the financial year consists of the period less / more than
the normal period of 12 months, depreciation on fixed assets existing
at the beginning of the financial year as well as those acquired during
the said period are provided for the period covered on pro-rata basis.
j. Turnover
i) Gross sales are inclusive of inter-unit sale value and excise
duty/cess recoveries and exclusive of sales tax/value added tax.
ii) Sales returns / rate differences are adjusted from the sales of the
year in which the returns take place / rate differences accepted.
iii) Gross job work is inclusive of inter-unit job work value and
excise duty/service tax/cess recoveries.
iv) Consignment Sales are considered as Sales when goods are sold to
ultimate customer.
k. Purchases
i) purchases are inclusive of inter-unit purchase value and net of
CENVAT credits and materials consumed during trial run.
ii) purchases returns / rebates are adjusted from the purchases of the
year in which the returns take place / rebates allowed.
l. Investments
i) Long term investments are valued at their cost including brokerage,
fees and duty. However, if there is decline in value of investment,
other than temporary, the carrying amount of investment is reduced
recognizing the decline in value of each investment.
ii) Current investments are valued at cost or market price, whichever
is lower.
m. Employee Benefits
i) Defined Long Term benefit is recognized at the present value of the
amounts payable determined using actuarial valuation techniques.
Actuarial gain and losses in respect of post employment and other long
term benefits are charged to Statement of Profit & Loss.
ii) Defined Contribution Plans are charged to Statement of Profit &
Loss based on the contribution made to the specified fund.
iii) Short term employee benefits are charged to Statement of Profit &
Loss at the undiscounted amount in the year in which the related
service is rendered.
n. Claims by / Against The Company
Claims by / against the Company arising on any account are provided in
the accounts on receipts / acceptances.
o. Borrowing Cost
Borrowing cost attributable to the acquisition or construction of
qualifying /eligible assets, intended for commercial production are
capitalised as part of the cost of such assets. All other borrowing
costs are recognized as an expense and are charged to revenue in the
year in which they are incurred.
p. Earning Per Share
In accordance with the Accounting Standard-20 (AS-20) "Earning per
Share" issued by The Institute of Chartered Accountants of India, Basic
Earning per Share is computed using the weighted average number of
Shares outstanding during the period & Diluted Earning per share is
computed using the weighted average number of shares outstanding after
adjusting the effect of all dilutive potential equity shares that were
outstanding during the period.
q. Provision For Taxation
i) Current Tax
provision for current tax is measured using the current tax rates after
making the necessary adjustments in accordance with the Income Tax
Computation & Disclosures Standards issued by the CBDT, to the items of
income / expenditure accounted for in the books of accounts as per
generally accepted accounting principles.
ii) Deferred Tax Assets / Liabilities
Deferred tax assets & liabilities are measured using the current tax
rates. When there is unabsorbed depreciation or carry forward of
losses, deferred tax assets are recognised only to the extent that
there is virtual certainty of realisation of deferred tax assets. Other
deferred tax assets are recognised to the extent, there is reasonable
certainty of realisation of deferred tax assets. Such deferred tax
assets & other unrecognised deferred tax assets are re-assessed at each
Balance Sheet date and the carrying value of the same are adjusted
recognising the change in the value of each such deferred tax assets.
r. Research & Development
i) All revenue expenditure on research & development activities are
accounted for under their natural heads of revenue expenses accounts.
ii) All capital expenditure related to research & development
activities are accounted for under their natural heads of fixed assets
accounts.
s. Impairment
Management periodically assesses using external and internal sources
whether there is an indication that assets of concerned cash generating
unit may be impaired. Impairment loss, if any, is provided as per
Accounting Standard (AS-28) on Impairment of Assets.
t. Provisions, Contingent Liabilities and Contingent Assets
In accordance with the Accounting Standard AS - 29 issued by Institute
of Chartered Accountants of India a) provisions are made for the
present obligations where amount can be estimated reliably, and b)
contingent liabilities are disclosed for possible obligations arising
out of uncertain events not wholly in control of the company.
Contingent assets are neither recognised nor disclosed in the financial
statements.
u. Intangible Assets
i) Customised or separately purchased software is classified as
intangible assets at their cost and amortised over a period of five
years from date of put to use.
ii) All capital expenditures relating to patent / technology are
capitalized under the natural head of fixed assets account and
amortized over the period of contract.
iii) All revenue expenditure relating to use of patent / technology are
accounted for under the natural head of revenue expense account
Mar 31, 2015
A. Basis of Preparation of Financial Statements
The financial Statements are prepared in accordance with the Indian
Generally Accepted Accounting Principal (GAAP) under the historical
cost convention on the accrual basis. GAAP comprises mandatory
accounting standards as prescribed by the Companies Act 2013 u/s 133 of
the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, the
provisions of Companies Act, 2013, and guidelines issued by the
Securities and Exchange Board of India (SEBI). Accounting policies have
been consistently applied.
b. Use of Estimates and Judgements
The preparation of the financial statements is in conformity with GAAP,
requires management to make judgments, estimates and assumptions that
affect the application of policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other
factors that are believed to be reasonable under the circumstances, the
results of which form the basis of making the judgments about the
carrying values of assets and liabilities that are readily apparent
from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed ongoing concern
basis.
Revisions to accounting estimates are recognized in the period in which
the estimate is revised if the revision affects only that period, in
the period of the revision and future periods if the revision affects
both current and future.
c. Classification of Expenditure / Income
Except otherwise indicated:
i) All expenditure and income are accounted for under the natural heads
of account.
ii) All expenditure and income are accounted for on accrual basis.
d. Valuation
i) Fixed Assets
a) Fixed Assets are normally accounted for on cost basis (net of CENVAT
credits) including the cost of installation, pre-operative expenses,
identifiable trial run expenses where incurred, eligible adjustment on
account of foreign exchange fluctuations and impairment losses.
Pre-operative expenses and identifiable trial run expenses incurred by
the company up to the date eligible assets are put to use for
commercial production are allocated to them in proportion to their
cost. The cost of fixed assets is adjusted for revaluation, if any,
done in any year as decided by the management so as to show the fixed
assets at their current value.
b) Self-constructed Fixed Assets are valued at cost including overheads
of the unit constructing the asset.
ii) Finished Goods
Finished goods are valued at lower of cost, based on weighted average
method, (except in case of machine manufacturing where specific
identification method is used) arrived after including depreciation on
plant & machinery, electrical installation and factory building, repair
& maintenance on factory building, specific manufacturing expenses
including excise duty and specific payments & benefits to employees or
net realisable value.
iii) Work-in-Progress
Work-in-Progress are valued at lower of cost, based on weighted average
method, (except in case of machine manufacturing where specific
identification method is used) arrived after including depreciation on
plant & machinery, electrical installation and factory building, repair
& maintenance on factory building, specific manufacturing expenses and
specific payments & benefits to employees or net realisable value.
iv) Raw Materials
Raw Materials are valued at lower of cost, based on first-in-first-out
method arrived at after including freight inward and other expenditure
directly attributable to acquisition or net realisable value.
Stores, fuel and packing materials are valued at lower of cost, based
on first-in-first-out method or net realisable value.
Inter-unit transfers of goods and services / job work are valued at
cost price / the price agreed to between the units.
e. Cost of spares, tools, jigs & dies are charged to revenue.
f. Leases
i) Lease rentals paid on operating leases are charged to revenue.
ii) Lease rentals received under operating lease are recognized in the
statement of Profit & Loss.
g. Expenses incurred for issue of financial securities are charged to
Securities Premium
Reserve.
h. Foreign Currency Transactions
i) Foreign currency monetary items remaining unsettled at the year end
are translated at year end rates. Non-monetary items which are carried
at historical cost denominated in a foreign currency are reported using
the exchange rate at the date of the transaction; and non-monetary
items which are carried at fair value or other similar valuation
denominated in foreign currency are reported using the exchange rates
that existed when the values were determined.
ii) Exchange differences on settlement / translation of monetary items,
are adjusted as income / expense through the Exchange Fluctuation
Account in the year they arise.
iii) Difference between the forward and exchange rate on the date of
transactions are adjusted over the period of the contract as an income
/ expense through the Exchange Fluctuation Account.
iv) Profit or loss on cancellation of forward contracts for
transactions, are adjusted as income / expense through Exchange
Fluctuation Account in the year they arise.
v) Exchanges difference arises on settlement / translation of foreign
currency monetary items relating to acquisition of fixed assets till
the period they are put to use for commercial production, are
capitalized to the cost of assets acquired and provided for over the
useful life of the fixed asset.
i. Depreciation
i) Normal depreciation on all fixed assets, except land and extra shift
depreciation on specific plant & machineries for the period of extra
shift worked, are provided from the date of put to use for commercial
production on straight line method at the useful life prescribed in
Schedule-II to the Companies Act, 2013 except for the followings, where
useful live is different than those prescribed in the Schedule II of
the Companies Act 2013:
Particulars Description
Rotogravure Cylinders & Shims Over the useful life as technically
(useful life 3 Years) specified by the management based on
the past experience
Continuous process Plant Over the useful life as technically
(useful life of 20 Years) specified by the management based on
the past experience
ii) No depreciation is provided on leasehold land.
iii) Depreciation on additions / deletions to fixed assets is provided
on pro-rata basis from / to the date of additions / deletions.
v) In case the financial year consists of the period less / more than
the normal period of 12 months, depreciation on fixed assets existing
at the beginning of the financial year as well as those acquired during
the said period are provided for the period covered on pro-rata basis.
j. Turnover
i) Gross sales are inclusive of inter-unit sale value and excise
duty/cess recoveries and exclusive of sales tax.
ii) Sales returns / rate differences are adjusted from the sales of the
year in which the returns take place / rate differences accepted.
iii) Gross job work is inclusive of inter-unit job work value and
excise duty/cess recoveries.
iv) Consignment Sales are considered as Sales when goods are sold to
ultimate customer.
k. Purchases
i) Purchases are inclusive of inter-unit purchase value and net of
CENVAT credits and materials consumed during trial run.
ii) Purchases returns / rebates are adjusted from the purchases of the
year in which the returns take place / rebates allowed.
l. Investments
i) Long term investments are valued at their cost including brokerage,
fees and duty. However, if there is decline in value of investment,
other than temporary, the carrying amount of investment is reduced
recognizing the decline in value of each investment.
ii) Current investments are valued at cost or market price, whichever
is lower.
m. Employee Benefits
i) Defined Long Term benefitis recognized at the present value of the
amounts payable determined using actuarial valuation techniques.
Actuarial gain and losses in respect of post employment and other long
term benefits are charged to Statement of Profit & Loss.
ii) Defined Contribution Plans are charged to Statement of Profit &
Loss based on the contribution made to the specified fund.
iii) Short term employee benefits are charged to Statement of Profit &
Loss at the undiscounted amount in the year in which the related
service is rendered.
n. Claims by / Against the Company
Claims by / against the Company arising on any account are provided in
the accounts on receipts / acceptances.
o. Borrowing Cost
Borrowing cost attributable to the acquisition or construction of
qualifying /eligible assets, intended for commercial production are
capitalised as part of the cost of such assets. All other borrowing
costs are recognized as an expense and are charged to revenue in the
year in which they are incurred.
p. Earning Per Share
In accordance with the Accounting Standard-20 (AS-20) "Earning Per
Share" issued by The Institute of Chartered Accountants of India,
Basic Earning Per Share is computed using the weighted average number
of Shares outstanding during the period & Diluted Earning per share is
computed using the weighted average number of shares outstanding after
adjusting the effect of all dilutive potential equity shares that were
outstanding during the period.
q. Deferred Tax Assets / Liabilities
Deferred tax assets & liabilities are measured using the current tax
rates. When there is unabsorbed depreciation or carry forward of
losses, deferred tax assets are recognised only to the extent that
there is virtual certainty of realisation of deferred tax assets. Other
deferred tax assets are recognised to the extent, there is reasonable
certainty of realisation of deferred tax assets. Such deferred tax
assets & other unrecognised deferred tax assets are re-assessed at each
Balance Sheet date and the carrying value of the same are adjusted
recognising the change in the value of each such deferred tax assets.
r. Research & Development
i) All revenue expenditure on research & development activities are
accounted for under their natural heads of revenue expenses accounts.
ii) All capital expenditure related to research & development
activities are accounted for under their natural heads of fixed assets
accounts.
s. Impairment
Management periodically assesses using external and internal sources
whether there is an indication that assets of concerned cash generating
unit may be impaired. Impairment loss, if any, is provided as per
Accounting Standard (AS-28) on Impairment of Assets.
t. Provisions, Contingent Liabilities and Contingent Assets
In accordance with the Accounting Standard AS - 29 issued by Institute
of Chartered Accountants of India a) provisions are made for the
present obligations where amount can be estimated reliably, and b)
contingent liabilities are disclosed for possible obligations arising
out of uncertain events not wholly in control of the company.
Contingent assets are neither recognised nor disclosed in the financial
statements.
u. Intangible Assets
i) Customised or separately purchased software is classified as
intangible assets at their cost and amortised over a period of five
years from date of put to use.
ii) All capital expenditures relating to patent / technology are
capitalized under the natural head of fixed assets account and
amortized over the period of contract.
iii) All revenue expenditure relating to use of patent / technology are
accounted for under the natural head of revenue expense account.
Mar 31, 2014
1 GENERAL
A. COMPANY AND ITS BACKGROUND
The Company was registered with the ROC, Delhi & Haryana under the
Registration number 55-32166 dated 21st June 1988. Old Registration
number has been converted into new Corporate Identification number (CIn)
l74899Dl1988plC032166
The Registered Office of the Company is situated at 305, 3rd Floor,
Bhanot Corner, Pamposh Enclave, Greater Kailash-I, new Delhi- 110 048
The Company has been engaged in the manufacture and sale of flexible
packaging products & offer a complete flexible packaging solution to its
customers across the globe.
B. SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Preparation of Financial Statements
The financial Statements are prepared in accordance with the Indian
Generally Accepted Accounting principles (GAAp) under the historical
cost convention on the accrual basis. GApp comprises mandatory
accounting standards as prescribed by the Companies (Accounting
Standards) Rules,2006 (read with General Circular 15/2013 dated 13th
September,2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013), the provisions of Companies
Act,1956, and guidelines issued by the Securities and Exchange Board of
India (SEBI). Accounting policies have been consistently applied.
b. Use of estimates and Judgments
The preparation of the financial statements is in conformity with GAAP,
requires management to make judgments, estimates and assumptions that
affect the application of policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other
factors that are believed to be reasonable under the circumstances, the
results of which form the basis of making the judgments about the
carrying values of assets and liabilities that are readily apparent
from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on going concern
basis.
Revisions to accounting estimates are recognized in the period in which
the estimate is revised if the revision affects only that period, in
the period of the revision and future periods if the revision affects
both current and future.
c. Classification of Expenditure / Income
Except otherwise indicated:
i) All expenditure and income are accounted for under the natural heads
of account.
ii) All expenditure and income are accounted for on accrual basis.
d. Valuation
i) Fixed Assets
a) Fixed Assets are normally accounted for on cost basis (net of CENVAT
credits) including the cost of installation, pre-operative expenses,
identifiable trial run expenses where incurred, eligible adjustment on
account of foreign exchange fluctuations and impairment losses.
Pre-operative expenses and identifiable trial run expenses incurred by
the company up to the date eligible assets are put to use for
commercial production are allocated to them in proportion to their
cost. The cost of fixed assets is adjusted for revaluation, if any, done
in any year as decided by the Management so as to show the fxed assets
at their current value.
b) Self-constructed Fixed Assets are valued at cost including overheads
of the unit constructing the asset.
ii) Finished goods
Finished goods are valued at lower of cost, based on weighted average
method, (except in case of machine manufacturing where specific
identification method is used) arrived after including depreciation on
plant & machinery, electrical installation and factory building, repair
& maintenance on factory building, specific manufacturing expenses
including excise duty and specific payments & benefits to employees or
net realisable value.
iii) work-in-Progress
Work-in-progress are valued at lower of cost, based on weighted average
method, (except in case of machine manufacturing where specific
identification method is used) arrived after including depreciation on
plant & machinery, electrical installation and factory building, repair
& maintenance on factory building, specific manufacturing expenses and
specific payments & benefits to employees or net realisable value.
iv) Raw materials
Raw Materials are valued at lower of cost, based on first-in-first-out
method arrived at after including freight inward and other expenditure
directly attributable to acquisition or net realisable value.
v) Stores, fuel and packing materials are valued at lower of cost,
based on first-in-first-out method or net realisable value.
vi) Inter-unit transfers of goods and services / job work are valued at
cost price / the price agreed to between the units.
e. Cost of spares, tools, jigs & dies are charged to revenue.
f. Leases
i) lease rentals paid on operating leases are charged to revenue.
ii) Lease rentals received under operating lease are recognized in the
statement of Profit & Loss.
g. Expenses incurred for issue of financial securities are charged to
Securities Premium Reserve.
h. Foreign currency transactions
i) Foreign currency monetary items remaining unsettled at the year end
are translated at year-end rates. non-monetary items which are carried
at historical cost denominated in a foreign currency are reported using
the exchange rate at the date of the transaction; and non- monetary
items which are carried at fair value or other similar valuation
denominated in foreign currency are reported using the exchange rates
that existed when the values were determined.
ii) Exchange differences on settlement / translation of monetary items,
are adjusted as income / expense through the Exchange Fluctuation
Account in the year they arise.
iii) Difference between the forward and exchange rate on the date of
transactions are adjusted over the period of the contract as an income
/ expense through the Exchange Fluctuation Account.
iv) Profit or loss on cancellation of forward contracts for
transactions, are adjusted as income / expense through Exchange
Fluctuation Account in the year they arise.
v) Exchanges difference arises on long term foreign currency monetary
items relating to acquisition of fixed assets are capitalized to the
cost of assets acquired and provided for over the remaining useful life
of the fixed asset.
i. Depreciation
i) Normal depreciation on all fixed assets, except land and extra shift
depreciation on specific plant & machineries for the period of extra
shift worked, are provided from the date of put to use for commercial
production on straight line method at the rates prescribed in Schedule-
XIV to the Companies Act, 1956 except in respect of rotogravure
cylinders & shims, where it is provided @ 33-1/3% p.a., based on the
estimated useful life of assets assessed by the Management.
ii) no depreciation is provided on leasehold land.
iii) Depreciation on additions / deletions to fixed assets is provided
on pro-rata basis from / to the date of additions / deletions.
iv) In case the financial year consists of the period less / more than
the normal period of 12 months, depreciation on fixed assets existing at
the beginning of the financial year as well as those acquired during the
said period are provided for the period covered on pro-rata basis.
j. turnover
i) Gross sales are inclusive of inter-unit sale value and excise
duty/cess recoveries and exclusive of sales tax.
ii) Sales returns / rate differences are adjusted from the sales of the
year in which the returns take place / rate differences accepted.
iii) Gross job work is inclusive of inter-unit job work value and
excise duty/cess recoveries.
iv) Consignment Sales are considered as Sales when goods are sold to
ultimate customer.
k. Purchases
i) purchases are inclusive of inter-unit purchase value and net of
CENVAT credits and materials consumed during trial run.
ii) purchases returns / rebates are adjusted from the purchases of the
year in which the returns take place / rebates allowed.
l. Investments
i) long term investments are valued at their cost including brokerage,
fees and duty. However, if there is decline in value of investment,
other than temporary, the carrying amount of investment is reduced
recognizing the decline in value of each investment.
ii) Current investments are valued at cost or market price, whichever
is lower.
m. Employee Benefits
i) Defined Long Term benefit is recognized at the present value of the
amounts payable determined using actuarial valuation techniques.
Actuarial gain and losses in respect of post employment and other long
term benefits are charged to Statement of Profit & Loss.
ii) Defined Contribution Plans are charged to Statement of Profit & Loss
based on the contribution made to the specified fund.
iii) Short term employee benefits are charged to Statement of Profit &
Loss at the undiscounted amount in the year in which the related
service is rendered.
n. Claims by / against the Company
Claims by / against the Company arising on any account are provided in
the accounts on receipts / acceptances.
o. Borrowing Cost
Borrowing cost attributable to the acquisition or construction of
qualifying /eligible assets, intended for commercial production are
capitalised as part of the cost of such assets. All other borrowing
costs are recognized as an expense and are charged to revenue in the
year in which they are incurred.
p. earning Per Share
In accordance with the Accounting Standard-20 (AS-20) "Earning per
Share" issued by The Institute of Chartered Accountants of India, Basic
Earning per Share is computed using the weighted average number of
Shares outstanding during the period & Diluted Earning per share is
computed using the weighted average number of shares outstanding after
adjusting the effect of all dilutive potential equity shares that were
outstanding during the period.
q. Deferred tax Assets / Liabilities
Deferred tax assets & liabilities are measured using the current tax
rates. When there is unabsorbed depreciation or carry forward of
losses, deferred tax assets are recognised only to the extent that
there is virtual certainty of realisation of deferred tax assets.
Other deferred tax assets are recognised to the extent, there is
reasonable certainty of realisation of deferred tax assets. Such
deferred tax assets & other unrecognised deferred tax assets are
re-assessed at each Balance Sheet date and the carrying value of the
same are adjusted recognising the change in the value of each such
deferred tax assets.
r. Research & Development
i) All revenue expenditure on research & development activities are
accounted for under their natural heads of revenue expenses accounts.
ii) All capital expenditure related to research & development
activities are accounted for under their natural heads of fixed assets
accounts.
s. Impairment
Management periodically assesses using external and internal sources
whether there is an indication that assets of concerned cash generating
unit may be impaired. Impairment loss, if any, is provided as per
Accounting Standard (AS-28) on Impairment of Assets.
t. Provisions, Contingent Liabilities and Contingent Assets
In accordance with the Accounting Standard AS-29 issued by Institute of
Chartered Accountants of India a) provisions are made for the present
obligations where amount can be estimated reliably, and b) contingent
liabilities are disclosed for possible obligations arising out of
uncertain events not wholly in control of the company. Contingent
assets are neither recognised nor disclosed in the financial statements.
u. Intangible Assets
i) Customised or separately purchased software is classified as
intangible assets at their cost and amortised over a period of five
years from date of put to use.
ii) All capital expenditures relating to patent / technology are
capitalized under the natural head of fixed assets account and amortized
over the period of contract.
iii) All revenue expenditure relating to use of patent / technology are
accounted for under the natural head of revenue expense account.
Mar 31, 2013
A. Basis of Preparation of Financial Statements
Financial Statements are prepared under the historical cost convention,
except for certain fi xed assets which are revalued, in accordance with
the generally accepted accounting principles in India and provisions of
the Companies Act, 1956.
b. Use of Estimates and Judgements
The preparation of the fi nancial statements is in conformity with
Indian Accounting Standards and requires management to make judgments,
estimates and assumptions that affect the application of policies and
reported amounts of assets and liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about the carrying values of assets and liabilities that are
readily apparent from other sources. Actual results may differ from
these estimates. The estimates and underlying assumptions are reviewed
on a going basis.
Revisions to accounting estimates are recognized in the period in which
the estimate is revised if the revision affects only that period, in
the period of the revision and future periods if the revision affects
both current and future.
c. Classifi cation Of Expenditure / Income
Except otherwise indicated:
i) All expenditure and income are accounted for under the natural heads
of account.
ii) All expenditure and income are accounted for on accrual basis.
d. Valuation
i) Fixed Assets
a) Fixed Assets are normally accounted for on cost basis (net of CENVAT
credits) including the cost of installation, pre-operative expenses,
identifi able trial run expenses where incurred, eligible adjustment on
account of foreign exchange fl uctuations and impairment losses.
Pre-operative expenses and identifi able trial run expenses incurred by
the company up to the date eligible assets are put to use for
commercial production are allocated to them in proportion to their
cost. The cost of fi xed assets is adjusted for revaluation, if any,
done in any year as decided by the management so as to show the fi xed
assets at their current value.
b) Self-constructed Fixed Assets are valued at cost including overheads
of the unit constructing the asset.
ii) Finished Goods
Finished goods are valued at lower of cost, based on weighted average
method, (except in case of machine manufacturing where specifi c
identifi cation method is used) arrived after including depreciation on
plant & machinery, electrical installation and factory building, repair
& maintenance on factory building, specifi c manufacturing expenses
including excise duty and specifi c payments & benefi ts to employees
or net realisable value. iii) Work-in-Progress
Work-in-Progress are valued at lower of cost, based on weighted average
method, (except in case of machine manufacturing where specifi c
identifi cation method is used) arrived after including depreciation on
plant & machinery, electrical installation and factory building, repair
& maintenance on factory building, specifi c manufacturing expenses and
specifi c payments & benefi ts to employees or net realisable value.
iv) Raw Materials
Raw Materials are valued at lower of cost, based on fi rst-in-fi
rst-out method arrived at after including freight inward and other
expenditure directly attributable to acquisition or net realisable
value.
v) Stores, fuel and packing materials are valued at lower of cost,
based on fi rst-in-fi rst-out method or net realisable value.
vi) Inter-unit transfers of goods and services / job work are valued at
cost price / the price agreed to between the units.
e. Cost of spares, tools, jigs & dies are charged to revenue.
f. Leases
i) Lease rentals paid on operating leases are charged to revenue.
ii) Lease rentals received under operating lease are recognized in the
Statement of Profi t & Loss.
g. Expenses incurred for issue of fi nancial securities are charged to
Securities Premium Reserve.
h. Foreign Currency Transactions
i) Foreign currency monetary items remaining unsettled at the year end
are translated at year end rates. Non-monetary items which are carried
at historical cost denominated in a foreign currency are reported using
the exchange rate at the date of the transaction; and non-monetary
items which are carried at fair value or other similar valuation
denominated in foreign currency are reported using the exchange rates
that existed when the values were determined.
ii) Exchange differences on settlement / translation of monetary items,
are adjusted as income / expense through the Exchange Fluctuation
Account in the year they arise.
iii) Difference between the forward and exchange rate on the date of
transactions are adjusted over the period of the contract as an income
/ expense through the Exchange Fluctuation Account.
iv) Profi t or loss on cancellation of forward contracts for
transactions, are adjusted as income / expense through Exchange
Fluctuation Account in the year they arise.
i. Depreciation
i) Normal depreciation on all fi xed assets, except land and extra
shift depreciation on specifi c plant & machineries for the period of
extra shift worked, are provided from the date of put to use for
commercial production on straight line method at the rates prescribed
in Schedule-XIV to the Companies Act, 1956 except in respect of
rotogravure cylinders & shims, where it is provided @ 33-1/3% p.a.,
based on the estimated useful life of assets assessed by the
management.
ii) No depreciation is provided on leasehold land.
iii) Depreciation on additions / deletions to fi xed assets is provided
on pro-rata basis from / to the date of additions / deletions.
iv) In case the fi nancial year consists of the period less / more than
the normal period of 12 months, depreciation on fi xed assets existing
at the beginning of the fi nancial year as well as those acquired
during the said period are provided for the period covered on pro-rata
basis.
j. Turnover
i) Gross sales are inclusive of inter-unit sale value and excise
duty/cess recoveries and exclusive of sales tax.
ii) Sales returns / rate difference are adjusted from the sales of the
year in which the returns take place / rate difference accepted. iii)
Gross job work is inclusive of inter-unit job work value and excise
duty/cess recoveries. iv) Consignment Sales are considered as Sales
when goods are sold to Ultimate customer.
k. Purchases
i) Purchases are inclusive of inter-unit purchase value and net of
CENVAT credits and materials consumed during trial run.
ii) Purchases returns / rebates are adjusted from the purchases of the
year in which the returns take place / rebates allowed.
l. Investments
i) Long term investments are valued at their cost including brokerage,
fees and duty. However, if there is decline in value of investment,
other than temporary, the carrying amount of investment is reduced
recognizing the decline in value of each investment.
ii) Current investments are valued at cost or market price, whichever
is lower.
m. Employee Benefi ts
i) Defi ned Long Term benefi t is recognized at the present value of
the amounts payable determined using actuarial valuation techniques.
Actuarial gain and losses in respect of post employment and other long
term benefi ts are charged to Statement of Profi t & Loss.
ii) Defi ned Contribution Plans are charged to Statement of Profi t &
Loss based on the contribution made to the specifi ed fund.
iii) Short term employee benefi ts are charged to Statement of Profi t
& Loss at the undiscounted amount in the year in which the related
service is rendered.
n. Claims by / Against the Company
Claims by / against the Company arising on any account are provided in
the accounts on receipts / acceptances.
o. Borrowing Cost
Borrowing cost attributable to the acquisition or construction of
qualifying /eligible assets, intended for commercial production are
capitalised as part of the cost of such assets. All other borrowing
costs are recognized as an expense and are charged to revenue in the
year in which they are incurred.
p. Earning Per Share
In accordance with the Accounting Standard-20 (AS-20) "Earning Per
Share" issued by The Institute of Chartered Accountants of India, Basic
Earning Per Share is computed using the weighted average number of
Shares outstanding during the period & Diluted Earning per share is
computed using the weighted average number of shares outstanding after
adjusting the effect of all dilutive potential equity shares that were
outstanding during the period.
q. Deferred Tax Assets / Liabilities
Deferred tax assets & liabilities are measured using the current tax
rates. When there is unabsorbed depreciation or carry forward of
losses, deferred tax assets are recognised only to the extent that
there is virtual certainty of realisation of deferred tax assets. Other
deferred tax assets are recognised to the extent, there is reasonable
certainty of realisation of deferred tax assets. Such deferred tax
assets & other unrecognised deferred tax assets are re-assessed at each
Balance Sheet date and the carrying value of the same are adjusted
recognising the change in the value of each such deferred tax assets.
r. Research & Development
i) All revenue expenditure on research & development activities are
accounted for under their natural heads of revenue expenses accounts.
ii) All capital expenditure related to research & development
activities are accounted for under their natural heads of fi xed assets
accounts.
s. Impairment
Management periodically assesses using external and internal sources
whether there is an indication that assets of concerned cash generating
unit may be impaired. Impairment loss, if any, is provided as per
Accounting Standard (AS-28) on Impairment of Assets.
t. Provisions, Contingent Liabilities and Contingent Assets
In accordance with the Accounting Standard AS Â 29 issued by Institute
of Chartered Accountants of India a) provisions are made for the
present obligations where amount can be estimated reliably, and b)
contingent liabilities are disclosed for possible obligations arising
out of uncertain events not wholly in control of the company.
Contingent assets are neither recognised nor disclosed in the fi
nancial statements.
u. Intangible Assets
i) Customised or separately purchased software is classifi ed as
intangible assets at their cost and amortised over a period of fi ve
years from date of put to use.
ii) All capital expenditures relating to patent / technology are
capitalized under the natural head of fi xed assets account and
amortized over the period of contract.
Mar 31, 2012
A. Basis Of Preparation Of Financial Statements
Financial Statements are prepared under the historical cost convention,
except for certain fixed assets which are revalued, in accordance with
the generally accepted accounting principles in India and provisions of
the Companies Act, 1956.
b. Use of Estimates and Judgements
The preparation of the financial statements is in conformity with
Indian Accounting Standards and requires management to make judgments,
estimates and assumptions that affect the application of policies and
reported amounts of assets and liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgments about the carrying values of assets and liabilities that are
readily apparent from other sources. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on a going basis.
Revisions to accounting estimates are recognized in the period in which
the estimate is revised if the revision affects only that period, in
the period of the revision and future periods if the revision affects
both current and future.
c. Classification of Expenditure / Income
Except otherwise indicated:
i) All expenditure and income are accounted for under the natural heads
of account.
ii) All expenditure and income are accounted for on accrual basis.
d. Valuation
i) Fixed Assets
a) Fixed Assets are normally accounted for on cost basis (net of CENVAT
credits) including the cost of installation, pre-operative expenses,
identifiable trial run expenses where incurred, eligible adjustment on
account of foreign exchange fluctuations and impairment losses.
Pre-operative expenses and identifiable trial run expenses incurred by
the company up to the date eligible assets are put to use for
commercial production are allocated to them in proportion to their
cost. The cost of fixed assets is adjusted for revaluation, if any,
done in any year as decided by the management so as to show the fixed
assets at their current value.
b) Self-constructed Fixed Assets are valued at cost including overheads
of the unit constructing the asset.
ii) Finished Goods
Finished goods are valued at lower of cost, based on weighted average
method, (except in case of machine manufacturing where specific
identification method is used) arrived after including depreciation on
plant & machinery, electrical installation and factory building, repair
& maintenance on factory building, specific manufacturing expenses
including excise duty and specific payments & benefits to employees
or net realisable value.
iii) Work-in-Progress
Work-in-Progress are valued at lower of cost, based on weighted average
method, (except in case of machine manufacturing where specific
identification method is used) arrived after including depreciation on
plant & machinery, electrical installation and factory building, repair
& maintenance on factory building, specific manufacturing expenses and
specific payments & benefits to employees or net realisable value.
iv) Raw Materials
Raw Materials are valued at lower of cost, based on first-in-first
-out method arrived at after including freight inward and other
expenditure directly attributable to acquisition or net realisable
value.
v) Stores, fuel and packing materials are valued at lower of cost,
based on first-in-first-out method or net realisable value.
vi) Inter-unit transfers of goods and services / job work are valued at
cost price / the price agreed to between the units.
e. Cost of spares, tools, jigs & dies are charged to revenue.
f. Leases
i) Lease rentals paid on operating leases are charged to revenue.
ii) Lease rentals received under operating lease are recognized in the
statement of Profit & Loss Account.
g. Expenses incurred for issue of financial securities are charged to
Securities Premium Reserve.
h. Foreign Currency Transactions
i) Foreign currency monetary items remaining unsettled at the year end
are translated at year end rates. Non-monetary items which are carried
at historical cost denominated in a foreign currency are reported using
the exchange rate at the date of the transaction; and non-monetary
items which are carried at fair value or other similar valuation
denominated in foreign currency are reported using the exchange rates
that existed when the values were determined.
ii) Exchange differences on settlement / translation of monetary items,
are adjusted as income / expense through the Exchange Fluctuation
Account in the year they arise.
iii) Difference between the forward and exchange rate on the date of
transactions are adjusted over the period of the contract as an income
/ expense through the Exchange Fluctuation Account.
iv) Profit or loss on cancellation of forward contracts for
transactions, are adjusted as income / expense through Exchange
Fluctuation Account in the year they arise.
i. Depreciation
i) Normal depreciation on all fixed assets, except land and extra
shift depreciation on specific plant & machineries for the period of
extra shift worked, are provided from the date of put to use for
commercial production on straight line method at the rates prescribed
in Schedule-XIV to the Companies Act, 1956 except in respect of
rotogravure cylinders & shims, where it is provided @ 33-1/3% p.a.,
based on the estimated useful life of assets assessed by the
management.
ii) No depreciation is provided on leasehold land.
iii) Depreciation on additions / deletions to fixed assets is provided
on pro-rata basis from / to the date of additions / deletions.
iv) In case the financial year consists of the period less / more than
the normal period of 12 months, depreciation on fixed assets existing
at the beginning of the financial year as well as those acquired
during the said period are provided for the period covered on pro-rata
basis.
j. Turnover
i) Gross sales are inclusive of inter-unit sale value and excise
duty/cess recoveries and exclusive of sales tax.
ii) Sales returns / rate difference are adjusted from the sales of the
year in which the returns take place/ rate difference accepted.
iii) Gross job work is inclusive of inter-unit job work value and
excise duty/cess recoveries. iv) Consignment Sales are considered as
Sales when goods are sold to Ultimate customer.
k. Purchases
i) Purchases are inclusive of inter-unit purchase value and net of
CENVAT credits and materials consumed during trial run.
ii) Purchases returns / rebates are adjusted from the purchases of the
year in which the returns take place / rebates allowed.
l. Investments
i) Long term investments are valued at their cost including brokerage,
fees and duty. However, if there is decline in value of investment,
other than temporary, the carrying amount of investment is reduced
recognizing the decline in value of each investment.
ii) Current investments are valued at cost or market price, whichever
is lower.
m. Employee Benefits
i) Defined Long Term benefit (other than leave encashment) is
recognized at the present value of the amounts payable determined using
actuarial valuation techniques. Actuarial gain and losses in respect of
post employment and other long term benefits are charged to Profit &
Loss Account.
ii) Defined long term benefits in respect of leave encashment is
charged to profit & loss account based on the leave entitlement of
employees remaining unutilised at the end of the year , at the
undiscounted amount.
iii) Defined Contribution Plans are charged to profit & loss account
based on the contribution made to the specified fund.
iv) Short term employee benefits are charged to Profit & Loss Account
at the undiscounted amount in the year in which the related service is
rendered.
n. Claims by / Against the Company
Claims by / against the Company arising on any account are provided in
the accounts on receipts / acceptances.
o. Borrowing Cost
Borrowing cost attributable to the acquisition or construction of
qualifying /eligible assets, intended for commercial production are
capitalised as part of the cost of such assets. All other borrowing
costs are recognized as an expense and are charged to revenue in the
year in which they are incurred.
p. Earning Per Share
In accordance with the Accounting Standard-20 (AS-20) "Earning Per
Share" issued by The Institute of Chartered Accountants of India, Basic
Earning Per Share is computed using the weighted average number of
Shares outstanding during the period & Diluted Earning per share is
computed using the weighted average number of shares outstanding after
adjusting the effect of all dilutive potential equity shares that were
outstanding during the period.
q. Deferred Tax Assets / Liabilities
Deferred tax assets & liabilities are measured using the current tax
rates. When there is unabsorbed depreciation or carry forward of
losses, deferred tax assets are recognised only to the extent that
there is virtual certainty of realisation of deferred tax assets. Other
deferred tax assets are recognised to the extent, there is reasonable
certainty of realisation of deferred tax assets. Such deferred tax
assets & other unrecognised deferred tax assets are re-assessed at each
Balance Sheet date and the carrying value of the same are adjusted
recognising the change in the value of each such deferred tax assets.
r. Research & Development
i) All revenue expenditure on research & development activities are
accounted for under their natural heads of revenue expenses accounts.
ii) All capital expenditure related to research & development
activities are accounted for under their natural heads of fixed assets
accounts.
s. Impairment
Management periodically assesses using external and internal sources
whether there is an indication that assets of concerned cash generating
unit may be impaired. Impairment loss, if any, is provided as per
Accounting Standard (AS-28) on Impairment of Assets.
t. Provisions, Contingent Liabilities and Contingent Assets
In accordance with the Accounting Standard AS Ã 29 issued by Institute
of Chartered Accountants of India a) provisions are made for the
present obligations where amount can be estimated reliably, and b)
contingent liabilities are disclosed for possible obligations arising
out of uncertain events not wholly in control of the company.
Contingent assets are neither recognised nor disclosed in the fi
nancial statements.
u. Intangible Assets
i) Customised or separately purchased software is classified as
intangible assets at their cost and amortised over a period of five
years from date of put to use.
ii) All capital expenditures relating to patent / technology are
capitalized under the natural head of fixed assets account and
amortized over the period of contract.
iii) All revenue expenditure relating to use of patent / technology are
accounted for under the natural head of revenue expense account.
Mar 31, 2011
1. CLASSIFICATION OF EXPENDITURE / INCOME
Except otherwise indicated:
i) All expenditure and income are accounted for under the natural heads
of account. ii) All expenditure and income are accounted for on
accrual basis.
2. VALUATION
i) Fixed Assets
a) Fixed Assets are normally accounted for on cost basis (net of CENVAT
credits) including the cost of installation, pre-operative expenses,
identifiable trial run expenses where incurred, eligible adjustment on
account of foreign exchange fluctuations and impairment losses.
Pre-operative expenses and identifiable trial run expenses incurred by
the company up to the date eligible assets are put to use for
commercial production are allocated to them in proportion to their
cost. The cost of fixed assets is adjusted for revaluation, if any,
done in any year as decided by the management so as to show the fixed
assets at their current value.
b) Self-constructed Fixed Assets are valued at cost including overheads
of the unit constructing the asset.
ii) Finished Goods
Finished goods are valued at lower of cost, based on weighted average
method, (except in case of machine manufacturing where specific
identification method is used) arrived after including depreciation on
plant & machinery, electrical installation and factory building, repair
& maintenance on factory building, specific manufacturing expenses
including excise duty and specific payments & benefits to employees
or net realisable value.
iii) Work-in-Progress
Work-in-Progress are valued at lower of cost, based on weighted average
method, (except in case of machine manufacturing where specific
identification method is used) arrived after including depreciation on
plant & machinery, electrical installation and factory building, repair
& maintenance on factory building, specific manufacturing expenses and
specific payments & benefits to employees or net realisable value.
iv) Raw Materials
Raw Materials are valued at lower of cost, based on first-in-fi
rst-out method arrived at after including freight inward and other
expenditure directly attributable to acquisition or net realisable
value.
v) Stores, fuel and packing materials are valued at lower of cost,
based on first-in-first-out method or net realisable value.
vi) Inter-unit transfers of goods and services / job work are valued at
cost price / the price agreed to between the units.
3. Cost of spares, tools, jigs & dies are charged to revenue.
4. LEASES
i) Lease rentals paid on operating leases are charged to revenue.
ii) Lease rentals received under operating lease are recognized in the
statement of Profit & Loss Account.
5. Expenses incurred for issue of financial securities are charged to
Securities Premium Account.
6. FOREIGN CURRENCY TRANSACTIONS
i) Foreign currency monetary items remaining unsettled at the year end
are translated at year end rates. Non- monetary items which are carried
at historical cost denominated in a foreign currency are reported using
the exchange rate at the date of the transaction; and non-monetary
items which are carried at fair value or other similar valuation
denominated in foreign currency are reported using the exchange rates
that existed when the values were determined.
ii) Exchange differences on settlement / translation of monetary items,
are adjusted as income / expense through the Exchange Fluctuation
Account in the year they arise.
iii) Difference between the forward and exchange rate on the date of
transactions are adjusted over the period of the contract as an income
/ expense through the Exchange Fluctuation Account.
iv) Profit or loss on cancellation of forward contracts for
transactions, are adjusted as income / expense through Exchange
Fluctuation Account in the year they arise.
7. DEPRECIATION
i) Normal depreciation on all fixed assets, except land and extra
shift depreciation on specific plant & machineries for the period of
extra shift worked, are provided from the date of put to use for
commercial production on straight line method at the rates prescribed
in Schedule-XIV to the Companies Act, 1956.
ii) No depreciation is provided on leasehold land.
iii) Depreciation on additions / deletions to fixed assets is provided
on pro-rata basis from / to the date of additions / deletions.
iv) In case the financial year consists of the period less / more than
the normal period of 12 months, depreciation on fixed assets existing
at the beginning of the financial year as well as those acquired
during the said period are provided for the period covered on pro rata
basis.
v) Depreciation on additions / deletions to the fixed assets due to
eligible foreign exchange fluctuations is provided on pro rata basis
from the date of additions / deletions.
8. TURNOVER
i) Gross sales are inclusive of inter-unit sale value and excise
duty/cess recoveries and sales tax.
ii) Sales returns / rate difference are adjusted from the sales of the
year in which the returns take place / rate difference accepted.
iii) Gross job work is inclusive of inter-unit job work value and
excise duty/cess recoveries.
iv) Consignment Sales are considered as Sales when goods are sold to
Ultimate customer.
9. PURCHASES
i) Purchases are inclusive of inter-unit purchase value and net of
CENVAT credits and materials consumed during trial run.
ii) Purchases returns / rebates are adjusted from the purchases of the
year in which the returns take place / rebates allowed.
10. INVESTMENTS
i. Long term investments are valued at their cost including brokerage,
fees and duty. However, if there is decline in value of investment,
other than temporary, the carrying amount of investment is reduced
recognizing the decline in value of each investment.
ii. Short term investments are valued at cost or market price,
whichever is lower.
11. EMPLOYEE BENEFITS
i. Defined Long Term benefit (other than leave encashment) is
recognized at the present value of the amounts payable determined using
actuarial valuation techniques. Actuarial gain and losses in respect of
post employment and other long term benefits are charged to Profit &
Loss Account.
ii. Defined long term benefits in respect of leave encashment is
charged to profit & loss account based on the leave entitlement of
employees remaining unutilised at the end of the year, at the
undiscounted amount.
iii. Defined Contribution Plans are charged to profit & loss account
based on the contribution made to the specified fund.
iv. Short term employee benefits are charged to Profit & Loss Account
at the undiscounted amount in the year in which the related service is
rendered.
12. CLAIMS BY / AGAINST THE COMPANY
Claims by / against the Company arising on any account are provided in
the accounts on receipts / acceptances.
13. BORROWING COST
Borrowing cost attributable to the acquisition or construction of
qualifying /eligible assets, intended for commercial production are
capitalised as part of the cost of such assets. All other borrowing
costs are recognized as an expense and are charged to revenue in the
year in which they are incurred.
14. EARNING PER SHARE
In accordance with the Accounting Standard-20 (AS-20) "Earning Per
Share" issued by The Institute of Chartered Accountants of India, Basic
Earning Per Share is computed using the weighted average number of
Shares outstanding during the period & Diluted Earning per share is
computed using the weighted average number of shares outstanding after
adjusting the effect of all dilutive potential equity shares that were
outstanding during the period.
15. DEFERRED TAX ASSETS / LIABILITIES
Deferred tax assets & liabilities are measured using the current tax
rates. When there is unabsorbed depreciation or carry forward of
losses, Deferred tax assets are recognised only to the extent that
there is virtual certainty of realisation of deferred tax assets. Other
deferred tax assets are recognised to the extent, there is reasonable
certainty of realisation of deferred tax assets. Such deferred tax
assets & other unrecognised deferred tax assets are re- assessed at
each Balance Sheet date and the carrying value of the same are adjusted
recognising the change in the value of each such deferred tax assets.
16. RESEARCH & DEVELOPMENT
i) All revenue expenditure on research & development activities are
accounted for under their natural heads of revenue expenses accounts.
ii) All capital expenditure related to research & development
activities are accounted for under their natural heads of fixed assets
accounts.
17. IMPAIRMENT
Management periodically assesses using external and internal sources
whether there is an indication that assets of concerned cash generating
unit may be impaired. Impairment loss, if any, is provided as per
Accounting Standard (AS-28) on Impairment of Assets.
18. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
In accordance with the Accounting Standard AS - 29 issued by Institute
of Chartered Accountants of India a) provisions are made for the
present obligations where amount can be estimated reliably, and b)
contingent liabilities are disclosed for possible obligations arising
out of uncertain events not wholly in control of the company.
Contingent assets are neither recognised nor disclosed in the fi
nancial statements.
19. INTANGIBLE ASSETS
Customised or separately purchased software is classified as
intangible assets at their cost and amortised over a period of five
years from date of put to use.
Mar 31, 2010
1. CLASSIFICATION OF EXPENDITURE / INCOME
Except otherwise indicated:
i) All expenditure and income are accounted for under the natural heads
of account.
ii) All expenditure and income are accounted for on accrual basis.
2. VALUATION
i) Fixed Assets
a) Fixed Assets are normally accounted for on cost basis (net of CENVAT
credits) including the cost of installation, pre-operative expenses,
identifiable trial run expenses where incurred, eligible adjustment on
account of foreign exchange fluctuations and impairment losses.
Pre-operative expenses and identifiable trial run expenses incurred by
the company up to the date eligible assets are put to use for
commercial production are allocated to them in proportion to their
cost. The cost of fixed assets is adjusted for revaluation, if any,
done in any year as decided by the management so as to show the fixed
assets at their current value.
b) Self-constructed Fixed Assets are valued at cost including overheads
of the unit constructing the asset.
ii) Finished Goods
Finished goods are valued at lower of cost, based on weighted average
method, (except in case of machine manufacturing where specific
identification method is used) arrived after including depreciation on
plant & machinery, electrical installation and factory building, repair
& maintenance on factory building, specific manufacturing expenses
including excise duty and specific payments & benefits to employees or
net realisable value.
iii) Work-in-Progress
Work-in-Progress are valued at lower of cost, based on weighted average
method, (except in case of machine manufacturing where specific
identification method is used) arrived after including depreciation on
plant & machinery, electrical installation and factory building, repair
& maintenance on factory building, specific manufacturing expenses and
specific payments & benefits to employees or net realisable value.
iv)Raw Materials
Raw Materials are valued at lower of cost, based on first-in-first-out
method arrived at after including freight inward and other expenditure
directly attributable to acquisition or net realisable value.
v) Stores, fuel and packing materials are valued at lower of cost,
based on first-in-first-out method or net realisable value.
vi)Inter-unit transfers of goods and services / job work are valued at
cost price / the price agreed to between the units.
3. Cost of spares, tools, jigs & dies are charged to revenue.
4. LEASES
i) Lease rentals paid on operating leases are charged to revenue.
ii) Lease rentals received under operating lease are recognized in the
statement of Profit & Loss Account.
5. Expenses incurred for issue of financial securities are charged to
Securities Premium Account.
6. FOREIGN CURRENCY TRANSACTIONS
i) Foreign currency monetary items remaining unsettled at the year end
are translated at year end rates. Non- monetary items which are carried
at historical cost denominated in a foreign currency are reported using
the exchange rate at the date of the transaction; and non-monetary
items which are carried at fair value or other similar valuation
denominated in foreign currency are reported using the exchange rates
that existed when the values were determined.
ii) Exchange differences on settlement / translation of monetary items,
are adjusted as income / expense through the Exchange Fluctuation
Account in the year they arise.
iii) Difference between the forward and exchange rate on the date of
transactions are adjusted over the period of the contract as an income
/ expense through the Exchange Fluctuation Account.
iv)Profit or loss on cancellation of forward contracts for
transactions, are adjusted as income / expense through Exchange
Fluctuation Account in the year they arise.
7. DEPRECIATION
i) Normal depreciation on all fixed assets, except land and extra shift
depreciation on specific plant & machineries for the period of extra
shift worked, are provided from the date of put to use for commercial
production on straight line method at the rates prescribed in
Schedule-XIV to the Companies Act, 1956.
ii) No depreciation is provided on leasehold land.
iii) Depreciation on additions / deletions to fixed assets is provided
on pro-rata basis from / to the date of additions / deletions.
iv)In case the financial year consists of the period less / more than
the normal period of 12 months, depreciation on fixed assets existing
at the beginning of the financial year as well as those acquired during
the said period are provided for the period covered on pro-rata basis.
v) Depreciation on additions / deletions to the fixed assets due to
eligible foreign exchange fluctuations is provided on pro-rata basis
from the date of additions / deletions.
8. TURNOVER
i) Gross sales are inclusive of inter-unit sale value and excise
duty/cess recoveries and sales tax.
ii) Sales returns / rate difference are adjusted from the sales of the
year in which the returns take place / rate difference accepted.
iii) Gross job work is inclusive of inter-unit job work value and
excise duty/cess recoveries.
iv)Consignment Sales are considered as Sales when goods are sold to
Ultimate customer.
9. PURCHASES
i) Purchases are inclusive of inter-unit purchase value and net of
CENVAT credits and materials consumed during trial run.
ii) Purchases returns / rebates are adjusted from the purchases of the
year in which the returns take place / rebates allowed.
10. INVESTMENTS
i. Long term investments are valued at their cost including brokerage,
fees and duty. However, if there is decline in value of investment,
other than temporary, the carrying amount of investment is reduced
recognizing the decline in value of each investment.
ii. Short term investments are valued at cost or market price,
whichever is lower.
11. EMPLOYEE BENEFITS
i. Defined Long Term benefit (other than leave encashment) is
recognized at the present value of the amounts payable determined using
actuarial valuation techniques. Actuarial gains and losses in respect
of post employment and other long term benefits are charged to Profit &
Loss Account.
ii. Defined long term benefits in respect of leave encashment is
charged to profit & loss account based on the leave entitlement of
employees remaining unutilised at the end of the year , at the
undiscounted amount.
iii. Defined Contribution Plans are charged to profit & loss account
based on the contribution made to the specified fund.
iv. Short term employee benefits are charged to Profit & Loss Account
at the undiscounted amount in the year in which the related service is
rendered.
12. CLAIMS BY / AGAINST THE COMPANY
Claims by / against the Company arising on any account are provided in
the accounts on receipts / acceptances.
13. BORROWING COST
Borrowing cost attributable to the acquisition or construction of
qualifying /eligible assets till put to use for commercial production
are capitalised as part of the cost of such assets. A qualifying
/eligible asset is an asset that necessarily takes a substantial period
of time to get ready for intended use. All other borrowing costs are
recognized as an expense and are charged to revenue in the year in
which they are incurred.
14. EARNING PER SHARE
In accordance with the Accounting Standard-20 (AS-20) ÃEarning Per
Shareà issued by The Institute of Chartered Accountants of India, Basic
Earning Per Share is computed using the weighted average number of
Shares outstanding during the period & Diluted Earning per share is
computed using the weighted average number of shares outstanding after
adjusting the effect of all dilutive potential equity shares that were
outstanding during the period.
15. DEFERRED TAX ASSETS / LIABILITIES
Deferred tax assets & liabilities are measured using the current tax
rates. When there is unabsorbed depreciation or carry forward of
losses, Deferred tax assets are recognised only to the extent that
there is virtual certainty of realisation of deferred tax assets. Other
deferred tax assets are recognised to the extent, there is reasonable
certainty of realisation of deferred tax assets. Such deferred tax
assets & other unrecognised deferred tax assets are re-assessed at each
Balance Sheet date and the carrying value of the same are adjusted
recognising the change in the value of each such deferred tax assets.
16. RESEARCH & DEVELOPMENT
i) All revenue expenditure on research & development activities are
accounted for under their natural heads of revenue expenses accounts.
ii) All capital expenditure related to research & development
activities are accounted for under their natural heads of fixed assets
accounts.
17. IMPAIRMENT
Management periodically assesses using external and internal sources
whether there is an indication that assets of concerned cash generating
unit may be impaired. Impairment loss, if any, is provided as per
Accounting Standard (AS-28) on Impairment of Assets.
18. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
In accordance with the Accounting Standard AS Ã 29 issued by Institute
of Chartered Accountants of India a) provisions are made for the
present obligations where amount can be estimated reliably, and b)
contingent liabilities are disclosed for possible obligations arising
out of uncertain events not wholly in control of the company.
Contingent assets are neither recognised nor disclosed in the financial
statements.
19. INTANGIBLE ASSETS
Customised or separately purchased software is classified as intangible
assets at their cost and amortised over a period of five years from
date of put to use.
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