Mar 31, 2023
SiGNiFiCANT ACCOUNTiNG POLiCiES AND OTHER DiSCLOSURES ON FiNANCiAL STATEMENTS
These are hereunder given summery of significant accounting policies and other disclosures on the consolidated financial statements.
United Drilling Tools Ltd. ("UDTL" or "the company") is a listed entity incorporated in India. The company is a leading manufacturer of Oil Drilling related Equipment''s in the country. The company has obtained Global quality standards for its major products. The address of it''s registered Office and principal place of businesses are disclosed in the introduction to the annual report.
B. SiGNiFiCANT ACCOUNTiNG POLiCiES
This note provides a list of the significant accounting policies adopted in the preparation of these standalone financial statements.
B.1 Basis of preparation and presentation
(i) These standalone financial statements have been prepared under the historical cost convention and on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies have been consistently applied. The financial statements are presented in Indian rupees rounded off to the nearest rupees.
The standalone financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under section 133 of
the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.
Recent accounting pronouncements New and amended standards adopted by the Company
The Ministry of Corporate Affairs had vide notification dated 23 March 2022 notified Companies (Indian Accounting Standards) Amendment Rules, 2022 which amended certain accounting standards, and are effective 1 April 2022. These amendments did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.
New and amended standards issued but not effective
The Ministry of Corporate Affairs has vide notification dated 31 March 2023 notified Companies (Indian Accounting Standards) Amendment Rules, 2023 (the ''Rules'') which amends certain accounting standards, and are effective 1 April 2023. The Rules predominantly amend Ind AS 12, Income taxes, and Ind AS 1, Presentation of financial statements. The other amendments to Ind AS notified by these rules are primarily in the nature of clarifications. These amendments are not expected to have a material impact on the company in the current or future reporting periods and on foreseeable future transactions. Specifically, no changes would be necessary as a consequence of amendments made to Ind AS 12 as the company''s accounting policy already complies with the now mandatory treatment.
The standalone financial statements have been prepared on accrual basis and under the historical cost convention except following which have been measured at fair value: ⢠certain financial assets and liabilities, ⢠defined benefit plans - plan assets measured at fair value.
The standalone financial statements are presented in Indian Rupees (''), which is the Company''s functional and presentation currency and all amounts are
rounded to the nearest lakhs ('' 00,000) and two decimals thereof, except as stated otherwise
The preparation of the financial statements requires management to make estimates and assumptions. Actual results could vary from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision effects only that period or in the period of the revision and future periods if the revision affects both current and future years. (refer Note 32 C on critical accounting estimates, assumptions and judgements)
B.4 Summary of Significant Accounting Policies:(a) Property, Plant and Equipment
Property, Plant and Equipment are stated at cost or as revalued, less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets, if material, are also included in cost to the extent they relate to the period till such assets are ready to be put to use.
Depreciation on Property, Plant and Equipment is provided on useful life of the assets on Written down Value method as specified in Schedule II to the Companies Act, 2013.
A Property, Plant and Equipment is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit & loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/depletion and impairment loss, if any. The cost comprises purchase/acquisition price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.
Technology Asset acquired on amalgamation is amortized over useful life of the underlying Asset.
Computer Software is amortized over a period of life as specified in schedule II of the companies act and on Written down Value method as specified in Schedule II to the Companies Act, 2013.
Revenue is recognized to the extent it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.
Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer and is stated net of trade discount, returns and Sales Tax / VAT/GST or other taxes collected on behalf of the government. Given the nature of business of the company, the company require to issue Tax Invoice when finished goods are ready for dispatch, but after issue of Tax Invoice to buyer, buyer need to submit Essential Certificate, (EC) to the company from DGH , which takes normally two weeks'' time before dispatch, till such time FG can''t be dispatched, but the same is accounted for in sales as per Tax Invoice issued.
Revenue from rendering services is recognized when the performance of agreed contractual task has been completed.
Interest from foreign exchange fluctuation, which is mostly related to sale and is recognised as other operating income, being related to direct operational income.
Incentives on exports and other Government Grants related to operations are recognised in books after due consideration of certainty of utilization/receipt of such incentives.
(iv) Interest - Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
(v) Export Benefits / Incentives - Export entitlement under Duty Entitlement Pass Book (''DEPB'') Scheme are recognised in the Profit & Loss Account when the right to receive credit as per terms of the scheme is established in respect of export made and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
Rebate, claims & settlement on goods sold are
accounted for as and when these are ascertained
with reasonable accuracy.
(i) Inventories of Finished Goods, Work in progress, Raw materials, Packing materials and Stores & Spares are stated at lower of cost and net realizable value.
(ii) Cost of Raw Materials, Packing Materials, Stores and Spares, Trading and other products are determined on weighted average basis and are net of GST/ Cenvat credit.
(iii) Cost of Work in progress and Finished Goods is determined considering direct material cost and appropriate portion of manufacturing overheads based on normal operating capacity.
(iv) Obsolete, slow moving and defective inventories are identified at the time of physical verification of inventories and where necessary, either written off or provision is made for such inventories.
(v) Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads net of recoverable taxes incurred in bringing them to their respective present location and condition.
(f) Employee Benefit(i) Short Term Employee Benefit :
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services this excludes leave encashment entitlement annually, which is accounted for on the basis of actuarial basis.
(ii) Post Employment Benefits :
Defined Contribution Plan :
Employees benefits in the form of the Company''s contribution to Provident Fund, Pension scheme, Superannuation Fund and Employees State Insurance is a defined contribution scheme and contributions are charged to the Profit & Loss Account of the year when the contribution to the respective fund is due.
Defined Benefit plan :
Retirement benefits in the form of gratuity are considered as defined benefit obligations and are provided for on the basis of actuarial valuation as at the date of Balance Sheet which is not funded.
(g) Foreign currency Transactions(i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to
the foreign currency amount the exchange rate between the reporting currency and the foreign currency on the date of the transaction.
(ii) Foreign currency monetary items are reported using the closing rate.
(iii) Any gain or loss on account of exchange difference arising either on the settlement or on reinstatement of foreign currency monetary items is recognised in the Profit & Loss account.
Equipment''s purchased for research and development is capitalized when commissioned and included in the gross block of Property, Plant and Equipment. Revenue expenditure on research and development related to development of intangible asset is charged to intangible assets under development and taken to intangible assets, till research is complete and the same is recognized as intangible assets ready for use. The other expenditure on R&D is charged to profit & loss account in the period in which it is incurred.
Earlier year items, adjustment/Claims, arisen / settled / noted during the year are, if material in nature, are debited / credited to the prior period Expenses/Income or respective heads of account if not material in the nature, if material charged to other equity and carried to Balance Sheet.
Investments that are readily realizable and intended to be held for not more than a year classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value. Long -term investments are stated at cost. Provision for diminution in the value of investments is made, if it is other than temporary.
Borrowing costs that are attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost of such asset. A qualifying asset is one that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.
The Tax expense for the period comprise Current and Deferred Tax. Tax is recognized in Statement of Profit and Loss except to the extent that it related to the items recognized in the comprehensive income or in equity. In which case, the tax is also recognized in other comprehensive income or equity.
Provision for Current Tax is made after considering benefits, exemptions and deductions available under the Income Tax Act,1961.
Deferred Tax is recognized subject to consideration of prudence, on timing differences, representing the difference between the taxable income/(loss) and accounting income/(loss) that originated in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.
The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
Leases are classified as finance leases whenever the terms of the lease, transfers substantially all
the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Leased assets: Assets held under finance leases are initially recognized as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in Statement of Profit and Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized. Contingent rentals are recognised as expenses in the periods in which they are incurred.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term except where another systematic basis is more representative of time pattern in which economic benefits from the leased assets are consumed.
(n) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. These estimates are reviewed at each reporting date.
If the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent liabilities are not recognized but are disclosed in notes.
Contingent assets are neither recognised nor disclosed in the financial statements.
The accounting policies adopted by the company for segment reporting are in line with the Ind AS 108 .
Business Segment: The Company''s operating business is engineering goods only and accordingly there is only one business segment.
Currency Segment: The analysis of currency segment is based on the basis of currency. The currency segments considered for disclosure are as follows:
(a) Sales in Indian Currency(b) Sales in foreign currency
Segment Assets denotes for assets in Local Currency and in foreign currency.
Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted Earning per Share, the net profit or loss for the period attributable to Equity Shareholders and the weighted average number of Shares outstanding during the period are adjusted for the effects of all dilutive potential Equity Shares.
(q) Financial instruments (i) Financial Assets
A. Initial recognition and measurement
All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.
B. subsequent measurement
(i) financial assets carried at amortised cost (Ac)
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) financial assets at fair value through other comprehensive income
(fvtoci)
A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(iii) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are measured at FVTPL.
C. investment in subsidiaries, Associates and Joint Ventures
The Company has accounted for its investments in subsidiaries, associates and joint venture at cost, if any
D. other Equity investments
All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ''Other Comprehensive Income''
E. impairment of financial assets
I n accordance with Ind AS 109, the Company evaluate impairment of financial assets at fair value through profit and loss (FVTPL).
A. initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
B. subsequent measurement
Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payable maturing within one year from the balance sheet date, the carrying amounts approximate fair
value due to the short maturity of these instruments.
(iii) Derivative and Financial Instrument and Hedge Accounting
The Company uses derivative financial instruments such as currency swaps and forwards contracts to mitigate the risk of changes in exchange rates. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are also subsequently measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to Statement of Profit and Loss, except for the effective portion of cash flow hedges which is recognised in Other Comprehensive Income and later to Statement of Profit and Loss when the hedged item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial assets or non-financial liability.
Hedges that meet the criteria for hedge accounting are accounted for as follows:
a) cash flow hedge
The Company designates derivative contracts or non derivative financial assets / liabilities as hedging instruments to mitigate the risk of movement in foreign exchange rates for foreign exchange exposure on highly probable future cash flows attributable to a recognised asset or liability or forecast cash transactions. When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in the cash flow hedging reserve being part of other comprehensive income. Any ineffective
portion of changes in the fair value of the derivative is recognized immediately in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting, then hedge accounting is discontinued prospectively. If the hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the hedging instrument recognized in cash flow hedging reserve till the period the hedge was effective remains in cash flow hedging reserve until the underlying transaction occurs. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the Statement of Profit and Loss upon the occurrence of the underlying transaction. If the forecasted transaction is no longer expected to occur, then the amount accumulated in cash flow hedging reserve is reclassified in the Statement of Profit and Loss.
b) Fair Value Hedge
The Company designates derivative contracts or non derivative financial assets / liabilities as hedging instruments to mitigate the risk of change in fair value of hedged item due to movement in foreign exchange rates.
Changes in the fair value of hedging instruments and hedged items that are designated and qualify as fair value hedges are recorded in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used and is amortised to Statement of Profit and Loss over the period of maturity.
Government grants with a condition to purchase,
construct or otherwise acquire long-term
assets are initially measured based on grant
receivable under the scheme. Such grants are
recognised in the Statement of Profit and Loss on a systematic basis over the useful life of the asset. Amount of benefits receivable in excess of grant income accrued based on usage of the assets is accounted as Government grant received in advance. Changes in estimates are recognised prospectively over the remaining life of the assets. The company has option to present the government grant related to fixed assets by deducting the grant from the carrying value of the asset and to present the non-monetary grant at a nominal amount. The company has not availed this option in current financial year. Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the company will comply with all attached condition.
(s) current versus non-current classification
The Company presents assets and liabilities in balance sheet based on current/non-current classification.
The Company has presented non-current assets and current assets before equity, non-current liabilities and current liabilities in accordance with Schedule III, Division II of Companies Act, 2013 notified by MCA.
as current when it is:
a) Expected to be realised or intended to be sold or consumed in normal operating cycle,
b) Held primarily for the purpose of trading,
c) Expected to be realised within twelve months after the reporting period, or
d) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
(ii) A liability is classified
as current when it is:
a) Expected to be settled in normal operating cycle.
b) Held primarily for the purpose of trading,
c) Due to be settled within twelve months after the reporting period, or
d) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents
C. CRITICAL ACCOUNTING ESTIMATES , ASSUMPTIONS , JUDGEMENT AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of company''s financial statements in conformity with Ind AS require management to make judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Uncertainty about these assumptions and estimates could result in outcomes that require material adjustments to the carrying value of the assets or liabilities affected in future period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable.
1. Depreciation / Amortisation and useful lives of Property, Plant and Equipment / Intangible Assets
Tangible Assets
Depreciation on Property, Plant and Equipment is provided on useful life of the assets which is taken as specified in Schedule II to the Companies Act, 2013
and depreciation is charged on Written Down Value method after taking into residual value of the assets in order to determine the amount of depreciation / amortization to be recorded during reporting period.
Intangible Assets
The intangible asset is amortized over a period of estimated useful life of asset, taking into account of anticipated technological changes. The depreciation / amortization for the future period is revised if there are significant changes from previous estimates.
2. Recoverability of trade receivable and advances
Judgements are required in assessing the recoverability of overdue trade receivables and advances and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
3. Provisions
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.
4. Income taxes
Management judgment is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The Company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements.
5. Contingencies
Management judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies/ claim/litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.
D. OTHER NOTES ON FINANCIAL STATEMENTS
1. Contingent and disputed Liabilities not provided for :
(i) Bank guarantees against our counter guarantees issued by banks '' 298.32 Lacs (Pr. Yr. '' 322.85 Lacs) .
(ii) Letter of Credit opened by Banks '' 620.80 (Pr. Year '' Nil)
(iii) Bill discounted by bank '' NIL (Pr. Yr. Nil).
(iv) No provision has been made for disputed income tax liabilities of ''1007.01 lacs (Previous Year ''587.54 lacs) which has been paid/adjusted by prepaid taxes. The case is pending before CIT (appeals) of income tax.
2. (i) In the opinion of the Board the Current Assets,
Loans and Advances are approximately of the value as stated in Financial Statements, if realized in the ordinary course of business.
(ii) The provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.
(iii) Balances of Debtors, Creditors and Loan and Advances are subject to confirmation.
(v) The company has pending litigation of Income tax, but as the demand raised by the authorities (even after finalization of appeals) is to be adjusted against MAT already paid, the company don''t foresee the cash flow of the company being negatively affected.
3. Employee Benefit Obligations(i) Defined Contribution Plan
The Company makes contributions towards Employees Provident Fund and Family Pension Fund for qualifying employees. The Fund is operated by the Regional Provident Fund Commissioner. The amount of contribution is recognized as expense for defined contribution plans. The contribution of PF is '' 35.29 lacs ( Pre. Yr. '' 30.82 lacs)
The Company make payment to vested employees at retirement, death while in employment or on termination of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months as per provisions of Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. The Gratuity liability is provided in the books amounting to '' 130.93 lacs (Previous Year '' 109.16 lacs ) on actuarial liability basis as on the date of balance sheet. It is non funded.
Mar 31, 2018
A. Significant Accounting Policies
A.1 Basis of Preparation and Presentation
These financial statements have been prepared under the historical cost convention and on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies have been consistently applied by the Company. The financial statements are presented in Indian rupees rounded off to the nearest rupees.
Up to the year ended 31st March 2017, the company has prepared itâs financial statements in accordance with the requirement of Generally Accepted Accounting Principles (GAAP) in India. GAAP comprises mandatory Accounting Standard as prescribed under section 133 of the companies Act, 2013 (âActâ) read with Rule 7 of the companies (Accounts) rules, 2014, other pronouncement of The Institute of Chartered Accountants of India and Guidelines issued by the Securities and Exchange Board of India (SEBI).
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS), including the rules notified under the relevant provisions of the companies Act.,2013.
These Financial Statements are the companyâs first Ind AS financial Statements.
The companyâs financial statements are presented in Indian Rupees, which is also its functional currency.
A.2 Summery of Significant Accounting Policies :
2.a Property, Plant and Equipment
Property, Plant and Equipment are stated at cost or as revalued, less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets, if material, are also included in cost to the extent they relate to the period till such assets are ready to be put to use.
Depreciation on Property, Plant and Equipment is provided on useful life of the assets on Written Down Value method as specified in Schedule II to the Companies Act, 2013.
A Property, Plant and Equipment is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit & loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.
2.b Intangible Assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/ depletion and impairment loss, if any. The cost comprises purchase/acquisition price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.
Technology Asset acquired on amalgamation is amortized over useful life of the underlying Asset. Computer Software is amortized over a period of life as specified in schedule II of the companies act and on Written Down Value method as specified in Schedule II to the Companies Act, 2013.
2.c Revenue Recognition
(i) Revenue is recognized to the extent it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.
(ii) Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer and is stated net of trade discount, returns and Sales Tax / VAT/GST or other taxes collected on behalf of the government.
(iii) Revenue from rendering services is recognized when the performance of agreed contractual task has been completed.
(iv) Interest - Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
(v) Export Benefits / Incentives - Export entitlement under Duty Entitlement Pass Book (âDEPBâ) Scheme are recognised in the Profit & Loss Account when the right to receive credit as per terms of the scheme is established in respect of export made and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
2.d Expenditures
Rebate, claims & settlement on goods sold are accounted for as and when these are ascertained with reasonable accuracy.
2.e Inventories
(i) Inventories of Finished Goods, Work in prog ress, Raw materials, Packing materials and Stores & Spares are stated at lower of cost and net realisable value.
(ii) Cost of Raw Materials, Packing Materials, Stores and Spares, Trading and other products are determined on weighted average basis and are net of GST/Cenvat credit.
(iii) Cost of Work in progress and Finished Goods is determined considering direct material cost and appropriate portion of manufacturing overheads based on normal operating capacity.
(iv) Obsolete, slow moving and defective inventories are identified at the time of physical verification of inventories and where necessary, either written off or provision is made for such inventories.
(v) Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads net of recoverable taxes incurred in bringing them to their respective present location and condition.
2.f Employee Benefit
(i) Short Term Employee Benefit :
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services this includes leave encashment entitlement annually.
(ii) Post Employment Benefits :
Defined Contribution Plan :
Employees benefits in the form of the Companyâs contribution to Provident Fund, Pension scheme, Superannuation Fund and Employees State Insurance is a defined contribution scheme and contributions are charged to the Profit & Loss Account of the year when the contribution to the respective fund is due. Defined Benefit Plan :
Retirement benefits in the form of gratuity are considered as defined benefit obligations and are provided for on the basis of actuarial valuation as at the date of Balance Sheet which is not funded.
2.g Foreign Currency Transactions
(i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency on the date of the transaction.
(ii) Foreign currency monetary items are reported using the closing rate.
(iii) Any gain or loss on account of exchange difference arising either on the settlement or on reinstatement of foreign currency monetary items is recognised in the Profit & Loss account.
2.h Research and Development
Equipment purchased for research and development is capitalized when commissioned and included in the gross block of Property, Plant and Equipment. Revenue expenditure on research and development related to development of intangible asset is charged to intangible assets under development and taken to intangible assets, till research is complete and the same is recognized as intangible assets ready for use. The other expenditure on R&D is charged to profit & loss account in the period in which it is incurred.
2.i Prior period adjustments
Earlier year items, adjustment/Claims, arisen / settled / noted during the year are, if material in nature, are debited / credited to the prior period Expenses/ Income or respective heads of account if not material in the nature, if material charged to other equity and carried to Balance Sheet.
2.j Investments
Investments that are readily realizable and intended to be held for not more than a year classified as current investments. All other investments are classified as long-tem investments. Current investments are carried at lower of cost and fair value. Long -term investments are stated at cost. Provision for diminution in the value of investments is made, if it is other than temporary.
2.k Finance Cost
Borrowing costs that are attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost of such asset. A qualifying asset is one that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.
2.l Tax Expenses
The Tax expense for the period comprise Current and Deferred Tax. Tax is recognized in Statement of Profit and Loss except to the extent that it related to the items recognized in the comprehensive income or in equity. In which case, the tax is also recognized in other comprehensive income or equity.
Current Tax
Provision for Current Tax is made after considering benefits, exemptions and deductions available under the Income Tax Act,1961.
Deferred tax
Deferred Tax is recognized subject to consideration of prudence, on timing differences, representing the difference between the taxable income/(loss) and accounting income/(loss) that originated in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.
2.m Leases
Leases are classified as finance leases whenever the terms of the lease, transfers substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Leased assets: Assets held under finance leases are initially recognized as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in Statement of Profit and Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized. Contingent rentals are recognised as expenses in the periods in which they are incurred.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term except where another systematic basis is more representative of time pattern in which economic benefits from the leased assets are consumed.
2.n Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. These estimates are reviewed at each reporting date.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent liabilities are not recognized but are disclosed in notes.
Contingent assets are neither recognised nor disclosed in the financial statements.
2.o Segment Reporting
The accounting policies adopted by the company for segment reporting are in line with the Ind AS 108. Business Segment: The Companyâs operating business is in India only and accordingly there is only one business segment.
Currency Segment: The analysis of currency segment is based on the basis of currency. The currency segments considered for disclosure are as follows:
(a) Sales in Indian Currency
(b) Sales in foreign currency (USD)
Segment Assets denotes for assets in Local Currency and in foreign currency.
2.p Earning Per Share
Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted Earning per Share, the net profit or loss for the period attributable to Equity Shareholders and the weighted average number of Shares outstanding during the period are adjusted for the effects of all dilutive potential Equity Shares.
2.q Financial Instruments
(i) Financial Assets
A. Initial recognition and measurement
All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.
B. Subsequent measurement
a) Financial assets carried at amortised cost (AC)
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
b) Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are measured at FVTPL.
C. Investment in subsidiaries, Associates and Joint Ventures
The Company has accounted for its investments in subsidiaries, associates and joint venture at cost, if any.
D. Other Equity Investments
All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in âOther Comprehensive Incomeâ.
Mar 31, 2016
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON FINANCIAL STATEMENTS 24.A. SIGNIFICANT ACCOUNTING POLICIES 1. BASIS OF PREPARATION
The financial statements have been prepared to comply in all material respect with the Notified Accounting Standards pursuant to Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies have been consistently applied by the Company.
2. USE OF ESTIMATES
The presentation of financial statements requires estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known/ materialized.
3. REVENUE RECOGNITION
a) Revenue is recognized to the extent it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.
b) Sale of Goods - Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer and is stated net of trade discount, returns and Sales Tax / VAT but includes Excise Duty.
c) Interest - Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
d) Export Benefits / Incentives - Export entitlement under Duty Entitlement Pass Book (''DEPB'') Scheme are recognised in the Profit & Loss Account when the right to receive credit as per terms of the scheme is established in respect of export made and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
4. EXPENDITURE
Rebate, claims & settlement on goods sold are accounted for as and when these are ascertained with reasonable accuracy.
5. FIXED ASSETS AND DEPRECIATION
a) Fixed Assets are stated at cost or as revalued, less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets, if material, are also included in cost to the extent they relate to the period till such assets are ready to be put to use.
b) Depreciation on Fixed Assets is provided on Written Down Value method at the rates specified in Schedule II to the Companies Act, 2013.
6. INTANGIBLE ASSETS
a) The company has intangible assets acquired on amalgamation and company has continued to carry on research on the on going research of the amalgamating company.
b) The intangible asset on which no further research is carrying on is amortized over a period of ten years and five years based on estimated useful life of the intangible asset.
7. IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit & loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.
8. INVENTORIES
a) Inventories of Finished Goods, Work in progress, Raw materials, Packing materials and Stores & Spares are stated at lower of cost and net realizable value.
b) Cost of Raw Materials, Packing Materials, Stores and Spares, Trading and other products are determined on weighted average basis and are net of Cenvat credit.
c) Cost of Work in progress and Finished Goods is determined considering direct material cost and appropriate portion of manufacturing overheads based on normal operating capacity.
d) Obsolete, slow moving and defective inventories are identified at the time of physical verification of inventories and where necessary, either written off or provision is made for such inventories.
9. EMPLOYEE BENEFITS
a) Defined Contribution Plan:
Employees benefits in the form of the Company''s contribution to Provident Fund, Pension scheme, Superannuation Fund and Employees State Insurance is a defined contribution scheme and contributions are charged to the Profit & Loss Account of the year when the contribution to the respective fund is due.
b) Defined Benefit Plan:
Retirement benefits in the form of gratuity and leave encashment are considered as defined benefit obligations and are provided for on the basis of actuarial valuation as at the date of Balance Sheet.
10. DEFERRED REVENUE EXPENDITURE
Company does not recognize Deferred Revenue Expenditure.
11. FOREIGN CURRENCY TRANSACTIONS
a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
b) Conversion
Foreign currency monetary items are reported using the closing rate.
c) Exchange Difference
Any gain or loss on account of exchange difference arising either on the settlement or on reinstatement of foreign currency monetary items is recognized in the Profit & Loss account.
12. RESEARCH AND DEVELOPMENT
Equipment purchased for research and development is capitalized when commissioned and included in the gross block of fixed assets. Revenue expenditure on research and development related to development of intangible asset is charged to intangible assets under development and taken to intangible assets, till research is complete and the same is recognized as intangible assets ready for use. The other expenditure on R&D is charged to profit & loss account in the period in which it is incurred.
13. PRIOR PERIOD ADJUSTMENTS
Earlier year items, adjustment/Claims, arisen / settled / noted during the year are, if material in nature, are debited / credited to the prior period Expenses/Income or respective heads of account if not material in the nature.
14. INVESTMENTS
Investments that are readily realizable and intended to be held for not more than a year classified as current investments. All other investments are classified as long-tem investments. Current investments are carried at lower of cost and fair value. Long -term investments are stated at cost. Provision for diminution in the value of investments is made, if it is other than temporary.
15. BORROWING COST
Borrowing costs that are attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost of such asset. A qualifying asset is one that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.
16. TAXATION
a) Provision for Current Tax is made after considering benefits, exemptions and deductions available under the Income Tax Act, 1961.
b) Deferred tax is recognized subject to consideration of prudence, on timing differences, representing the difference between the taxable income/(loss) and accounting income/(loss) that originated in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.
17. LEASES
Operating Lease: Lease rentals in respect of assets taken on operating leases are charged to the profit and loss account with reference to lease terms and other consideration.
18. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS''
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in notes. Contingent assets are neither recognized nor disclosed in the financial statements.
19. SEGMENT REPORTING
The accounting policies adopted by the company for segment reporting are in line with the accounting standard on Segmental Reporting.
Primary Segments:
Business Segment: The Company''s operating business is in India only and accordingly there is only one business segment.
Secondary Segments:
Currency Segment: The analysis of currency segment is based on the basis of currency. The currency segments considered for disclosure are as follows:
(a) Sales in Indian Currency
(b) Sales in foreign currency
Segment Assets denotes for assets in Local Currency and in foreign currency.
20. CASH FLOW STATEMENTS
Cash-flow statements are prepared in accordance with "Indirect Method" as explained in the Accounting Standard on Cash Flow Statements (AS-3) issued by the Institute of Chartered Accountants of India. The Cash flows from regular revenue generating, financing and investing activity of the company are segregated.
21. EARNING PER SHARE
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted Earnings per Share, the net profit or loss for the period attributable to Equity Shareholders and the weighted average number of Shares outstanding during the period are adjusted for the effects of all dilutive potential Equity Shares.
22. DERIVATIVE INSTRUMENTS
As per announcement of Institute of Chartered Accountants of India, accounting for derivatives contracts, other than those covered under AS-11, are marked to market on a portfolio basis, and the net loss after considering the offsetting effect on the underlying hedge item is charged to Profit and Loss Account. Net Gain is ignored.
Mar 31, 2015
1. BASIS OF PREPARATION
The financial statements have been prepared to comply in all material
respect with the Notified Accounting Standards pursuant to Companies
(Accounting Standard) Rules, 2006 and the relevant provisions of the
Companies Act, 1956. The financial statements have been prepared under
the historical cost convention on an accrual basis except in case of
assets for which provision for impairment is made and revaluation is
carried out. The accounting policies have been consistently applied by
the Company.
2. USE OF ESTIMATES
The presentation of financial statements requires estimates and
assumptions that affect the reported amount of assets and liabilities
and disclosure of contingent liabilities on the date of the financial
statements and the reported amount of revenues and expenses during the
reporting period. Differences between the actual results and estimates
are recognised in the period in which the results are known/
materialized.
3. REVENUE RECOGNITION
a) Revenue is recognized to the extent it is probable that the economic
benefits will flow to the company and the revenue can be reliably
measured.
b) Sale of Goods - Revenue is recognized when the significant risks and
rewards of ownership of the goods have passed to the buyer and is
stated net of trade discount, returns and Sales Tax / VAT but includes
Excise Duty.
c) Interest - Revenue is recognized on a time proportion basis taking
into account the amount outstanding and the rate applicable.
d) Export Benefits / Incentives - Export entitlement under Duty
Entitlement Pass Book ('DEPB') Scheme are recognised in the Profit &
Loss Account when the right to receive credit as per terms of the
scheme is established in respect of export made and where there is no
significant uncertainty regarding the ultimate collection of the
relevant export proceeds.
4. EXPENDITURE
Rebate, claims & settlement on goods sold are accounted for as and when
these are ascertained with reasonable accuracy.
5. FIXED ASSETS AND DEPRECIATION
a) Fixed Assets are stated at cost or as revalued, less accumulated
depreciation and impairment losses, if any. Cost comprises the purchase
price and any attributable cost of bringing the asset to its working
condition for its intended use. Borrowing costs relating to acquisition
of fixed assets, if material, are also included in cost to the extent
they relate to the period till such assets are ready to be put to use.
b) Depreciation on Fixed Assets is provided on Written Down Value
method at the rates specified in Schedule XIV to the Companies
Act,1956.
6. INTANGIBLE ASSETS
a) The company has intangible assets acquired on amalgamation and
company has continued to carry on research on the on going research of
the amalgamating company.
b) The intangible asset on which no further research is carrying on is
amortized over a period of ten years, based on estimated useful life of
the intangible asset.
7. IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
profit & loss account in the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount. After impairment, depreciation is provided on the revised
carrying amount of the assets over its remaining useful life.
8. INVENTORIES
a) Inventories of Finished Goods, Work in progress, Raw materials,
Packing materials and Stores & Spares are stated at lower of cost and
net realisable value.
b) Cost of Raw Materials, Packing Materials, Stores and Spares, Trading
and other products are determined on weighted average basis and are net
of Cenvat credit.
c) Cost of Work in progress and Finished Goods is determined
considering direct material cost and appropriate portion of
manufacturing overheads based on normal operating capacity.
d) Obsolete, slow moving and defective inventories are identified at
the time of physical verification of inventories and where necessary,
either written off or provision is made for such inventories.
9. EMPLOYEE BENEFITS
a) Defined Contribution Plan:
Employees benefits in the form of the Company's contribution to
Provident Fund, Pension scheme, Superannuation Fund and Employees State
Insurance is a defined contribution scheme and contributions are
charged to the Profit & Loss Account of the year when the contribution
to the respective fund is due.
b) Defined Benefit Plan:
Retirement benefits in the form of gratuity and leave encashment are
considered as defined benefit obligations and are provided for on the
basis of actuarial valuation as at the date of Balance Sheet.
10. DEFERRED REVENUE EXPENDITURE
Company do not recognize Deferred Revenue Expenditure.
11. FOREIGN CURRENCY TRANSACTIONS
a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
b) Conversion
Foreign currency monetary items are reported using the closing rate.
c) Exchange Difference
Any gain or loss on account of exchange difference arising either on
the settlement or on reinstatement of foreign currency monetary items
is recognised in the Profit & Loss account.
12. RESEARCH AND DEVELOPMENT
Equipment purchased for research and development is capitalised when
commissioned and included in the gross block of fixed assets. Revenue
expenditure on research and development related to development of
intangible asset is charged to intangible assets under development and
taken to intangible assets, till research is complete and the same is
recognized as intangible assets ready for use. The other expenditure on
R&D is charged to profit & loss account in the period in which it is
incurred.
13. PRIOR PERIOD ADJUSTMENTS
Earlier year items, adjustment/Claims, arisen / settled / noted during
the year are, if material in nature, are debited / credited to the
prior period Expenses/Income or respective heads of account if not
material in the nature.
14. INVESTMENTS
Investments that are readily realisable and intended to be held for not
more than a year classified as current investments. All other
investments are classified as long-tem investments. Current investments
are carried at lower of cost and fair value. Long -term investments are
stated at cost. Provision for diminution in the value of investments is
made, if it is other than temporary.
15. BORROWING COST
Borrowing costs that are attributable to the acquisition or
construction of a qualifying asset are capitalized as part of the cost
of such asset. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for intended use. All other
borrowing costs are recognized as an expense in the period in which
they are incurred.
16. TAXATION
a) Provision for Current Tax is made after considering benefits,
exemptions and deductions available under the Income Tax Act,1961.
b) Deferred tax is recognized subject to consideration of prudence, on
timing differences, representing the difference between the taxable
income/(loss) and accounting income/(loss) that originated in one
period and are capable of reversal in one or more subsequent periods.
Deferred tax assets and liabilities are measured using the tax rates
and tax laws that have been enacted or substantively enacted by the
Balance Sheet date.
17. LEASES
Operating Lease: Lease rentals in respect of assets taken on operating
leases are charged to the profit and loss account with reference to
lease terms and other consideration.
18. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS'
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in notes.
Contingent assets are neither recognised nor disclosed in the financial
statements.
19. SEGMENT REPORTING
The accounting policies adopted by the company for segment reporting
are in line with the accounting standard on Segmental Reporting.
Primary Segments:
Business Segment: The Company's operating business is in India only and
accordingly there is only one business segment.
Secondary Segments:
Currency Segment: The analysis of currency segment is based on the
basis of currency. The currency segments considered for disclosure are
as follows:
(a) Sales in Indian Currency
(b) Sales in foreign currency
Segment Assets denotes for assets in Local Currency and in foreign
currency .
20. CASH FLOW STATEMENTS
Cash-flow statements are prepared in accordance with "Indirect
Method" as explained in the Accounting Standard on Cash Flow
Statements (AS-3) notified under the Companies (Accounting Standards)
Rules, 2006. The Cash flows from regular revenue generating, financing
and investing activity of the company are segregated.
21. EARNING PER SHARE
Basic earning per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted Earning per Share, the net
profit or loss for the period attributable to Equity Shareholders and
the weighted average number of Shares outstanding during the period are
adjusted for the effects of all dilutive potential Equity Shares.
22. DERIVATIVE INSTRUMENTS
As per announcement of Institute of Chartered Accountants of India,
accounting for derivatives contracts, other than those covered under
AS-11, are marked to market on a portfolio basis, and the net loss
after considering the offsetting effect on the underlying hedge item is
charged to Profit and Loss Account. Net Gain is ignored.
Mar 31, 2013
1. BASIS OF PREPARATION
The financial statements have been prepared to comply in all material
respect with the Notified Accounting Standards pursuant to Companies
(Accounting Standard) Rules, 2006 and the relevant provisions of the
Companies Act, 1956. The financial statements have been prepared under
the historical cost convention on an accrual basis except in case of
assets for which provision for impairment is made and revaluation is
carried out. The accounting policies have been consistently applied by
the Company.
2. USE OF ESTIMATES
The presentation of financial statements requires estimates and
assumptions that affect the reported amount of assets and liabilities
and disclosure of contingent liabilities on the date of the financial
statements and the reported amount of revenues and expenses during the
reporting period. Differences between the actual results and estimates
are recognised in the period in which the results are known/
materialized.
3. REVENUE RECOGNITION
Revenue is recognized to the extent it is probable that the economic
benefits will flow to the company and the revenue can be reliably
measured.
Sale of Goods - Revenue is recognized when the significant risks and
rewards of ownership of the goods have passed to the buyer and is
stated net of trade discount, returns and Sales Tax / VAT but includes
Excise Duty.
Interest - Revenue is recognized on a time proportion basis taking into
account the amount outstanding and the rate applicable.
Export Benefits / Incentives - Export entitlement under Duty
Entitlement Pass Book (''DEPB'') Scheme are recognised in the Profit &
Loss Account when the right to receive credit as per terms of the
scheme is established in respect of export made and where there is no
significant uncertainty regarding the ultimate collection of the
relevant export proceeds.
4. EXPENDITURE
Rebate, claims & settlement on goods sold are accounted for as and when
these are ascertained with reasonable accuracy.
5. FIXED ASSETS AND DEPRECIATION
(a) Fixed Assets are stated at cost or as revalued, less accumulated
depreciation and impairment losses, if any. Cost comprises the purchase
price and any attributable cost of bringing the asset to its working
condition for its intended use. Borrowing costs relating to acquisition
of fixed assets, if material, are also included in cost to the extent
they relate to the period till such assets are ready to be put to use.
(b) Depreciation on Fixed Assets is provided on Written Down Value
method at the rates specified in Schedule XIV to the Companies
Act,1956.
6. INTANGIBLE ASSETS
The company has intangible assets acquired on amalgamation except this
Intangible asset is not recognized by the company.
7. IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
profit & loss account in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount. After impairment, depreciation is provided on the revised
carrying amount of the assets over its remaining useful life.
8. INVENTORIES
(a) Inventories of Finished Goods, Work in progress, Raw materials,
Packing materials and Stores & Spares are stated at lower of cost and
net realisable value.
(b) Cost of Raw Materials, Packing Materials, Stores and Spares,
Trading and other products are determined on weighted average basis and
are net of Cenvat credit.
(c) Cost of Work in progress and Finished Goods is determined
considering direct material cost and appropriate portion of
manufacturing overheads based on normal operating capacity.
(d) Obsolete, slow moving and defective inventories are identified at
the time of physical verification of inventories and where necessary,
either written off or provision is made for such inventories.
9. EMPLOYEE BENEFITS
(a) Defined Contribution Plan :
Employees benefits in the form of the Company''s contribution to
Provident Fund, Pension scheme, Superannuation Fund and Employees State
Insurance is a defined contribution scheme and contributions are
charged to the Profit & Loss Account of the year when the contribution
to the respective fund is due.
(b) Defined Benefit Plan :
Retirement benefits in the form of gratuity and leave encashment are
considered as defined benefit obligations and are provided for on the
basis of actual valuation as at the date of Balance Sheet.
10. DEFERRED REVENUE EXPENDITURE
Company do not recognize Deferred Revenue Expenditure.
11. FOREIGN CURRENCY TRANSACTIONS
(a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
(b) Conversion
Foreign currency monetary items are reported using the closing rate.
(c) Exchange Difference
Any gain or loss on account of exchange difference arising either on
the settlement or on reinstatement of foreign currency monetary items
is recognised in the Profit & Loss account.
12. RESEARCH AND DEVELOPMENT
Equipment purchased for research and development is capitalised when
commissioned and included in the gross block of fixed assets. Revenue
expenditure on research and development is charged to Profit & Loss
account in the period in which it is incurred.
13. PRIOR PERIOD ADJUSTMENTS
Earlier year items, adjustment/Claims, arisen / settled / noted during
the year are, if material in nature, are debited / credited to the
prior period Expenses/Income or respective heads of account if not
material in the nature.
14. INVESTMENTS
Investments that are readily realisable and intended to be held for not
more than a year classified as current investments. All other
investments are classified as long-tem investments. Current investments
are carried at lower of cost and fair value. Long -term investments are
stated at cost. Provision for diminution in the value of investments
is made, if it is other than temporary.
15. BORROWING COST
Borrowing costs that are attributable to the acquisition or
construction of a qualifying asset are capitalised as part of the cost
of such asset. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for intended use. All other
borrowing costs are recognised as an expense in the period in which
they are incurred.
16. TAXATION
(a) Provision for Current Tax is made after considering benefits,
exemptions and deductions available under the Income Tax Act,1961.
(b) Deferred tax is recognised subject to consideration of prudence, on
timing differences, representing the difference between the taxable
income/(loss) and accounting income/(loss) that originated in one
period and are capable of reversal in one or more subsequent periods.
Deferred tax assets and liabilities are measured using the tax rates
and tax laws that have been enacted or substantively enacted by the
Balance Sheet date.
17. LEASES
Operating Lease: Lease rentals in respect of assets taken on operating
leases are charged to the profit and loss account with reference to
lease terms and other consideration.
18. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in notes.
Contingent assets are neither recognised nor disclosed in the financial
statements.
19. SEGMENT REPORTING
The accounting policies adopted by the company for segment reporting
are in line with the accounting standard on Segmental Reporting.
Primary Segment:
Business Segment: The Company''s operating business are organized and
managed separately according to the nature of products, with each
segment representing a strategic business unit that offers different
products. The company operate in only one segment of business.
Secondary Segment:
Geographical Segment: The analysis of geographical segment is based on
the geographical location of the customers. The geographical segments
considered for disclosure are as follows:
(a) Sales within India
(b) Sales outside India
Segment Assets denotes for debtors only.
20. CASH FLOW STATEMENTS
Cash-flow statements are prepared in accordance with "Indirect Method"
as explained in the Accounting Standard on Cash Flow Statements (AS-3)
notified under the Companies (Accounting Standards) Rules, 2006. The
Cash flows from regular revenue generating, financing and investing
activity of the company are segregated.
21. EARNING PER SHARE
Basic earning per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted Earning per Share, the net
profit or loss for the period attributable to Equity Shareholders and
the weighted average number of Shares outstanding during the period are
adjusted for the effects of all dilutive potential Equity Shares.
22. DERIVATIVE INSTRUMENTS
As per announcement of Institute of Chartered Accountants of India,
accounting for derivatives contracts, other than those covered under
AS-11, are marked to market on a portfolio basis, and the net loss
after considering the offsetting effect on the underlying hedge item is
charged to Profit and Loss Account. Net Gain is ignored.
Mar 31, 2010
1. BASIS OF PREPARATION
The financial statements have been prepared to comply in all material
respect with the Notified Accounting Standards pursuant to Companies
(Accounting Standard) Rules, 2006 and the relevant provisions of the
Companies Act, 1956. The financial statements have been prepared under
the historical cost convention on an accrual basis except in case of
assets for which provision for impairment is made and revaluation is
carried out. The accounting policies have been consistently applied by
the Company.
2. USE OF ESTIMATES
The presentation of financial statements requires estimates and
assumptions that affect the reported amount of assets and liabilities
and disclosure of contingent liabilities on the date of the financial
statements and the reported amount of revenues and expenses during the
reporting period. Differences between the actual results and estimates
are recognised in the period in which the results are known/
materialised.
3. REVENUE RECOGNITION
Revenue is recognized to the extent it is probable that the economic
benefits will flow to the company and the revenue can be reliably
measured.
Sale of Goods - Revenue is recognised when the significant risks and
rewards of ownership of the goods have passed to the buyer and is
stated net of trade discount, returns and Sales Tax / VAT but includes
Excise Duty.
Interest - Revenue is recognized on a time proportion basis taking into
account the amount outstanding and the rate applicable.
Export Benefits / Incentives - Export entitlement under Duty
Entitlement Pass Book (DEPB) Scheme are recognised in the Profit &
Loss Account when the right to receive credit as per terms of the
scheme is established in respect of export made and where there is no
significant uncertainty regarding the ultimate collection of the
relevant export proceeds.
4. EXPENDITURE
Rebate, claims & settlement on goods sold are accounted for as and when
these are ascertained with reasonable accuracy.
5. FIXED ASSETS AND DEPRECIATION
a) Fixed Assets are stated at cost or as revalued, less accumulated
depreciation and impairment losses, if any. Cost comprises the purchase
price and any attributable cost of bringing the asset to its working
condition for its intended use. Borrowing costs relating to acquisition
of fixed assets, if material, are also included in cost to the extent
they relate to the period till such assets are ready to be put to use.
b) Depreciation on Fixed Assets is provided on Written Down Value
method at the rates specified in Schedule XIV to the Companies
Act,1956.
6. INTANGIBLE ASSETS
Intangible asset is not recognized by the company.
7. IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment.loss is charged to the
profit & loss account in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount.
After impairment, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life.
8. INVENTORIES
a) Inventories of Finished Goods, Work in progress, Raw materials,
Packing materials and Stores & Spares are stated at lower of cost and
net realisable value.
b) Cost of Raw Materials, Packing Materials, Stores and Spares, Trading
and other products are determined on weighted average basis and are net
of Cenvat credit.
c) Cost of Work in progress and Finished Goods is determined
considering direct material cost and appropriate portion of
manufacturing overheads based on normal operating capacity.
d) Obsolete, slow moving and defective inventories are identified at
the time of physical verification of inventories and where necessary,
either written off or provision is made for such inventories.
9. EMPLOYEE BENEFITS
a) Defined Contribution Plan :
Employees benefits in the form of the Companys contribution to
Provident Fund, Pension scheme, Superannuation Fund and Employees State
Insurance is a defined contribution scheme and contributions are
charged to the Profit & Loss Account of the year when the contribution
to the respective fund is due.
b) Defined Benefit Plan :
Retirement benefits in the form of gratuity and leave encashment are
considered as defined benefit obligations and are provided for on the
basis of actual valuation as at the date of Balance Sheet.
10. DEFERRED REVENUu EXPENDITURE
Company do not recognize Deferred Revenue Expenditure.
11. FOREIGN CURRENCYTRANSACTIONS
a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
b) Conversion
Foreign currency monetary items are reported using the closing rate.
c) Exchange Difference
Any gain or loss on account of exchange difference arising either on
the settlement or on reinstatement of foreign currency monetary items
is recognised in the Profit & Loss account.
12. RESEARCH AND DEVELOPMENT
Equipment purchased for research and development is capitalised when
commissioned and included in the gross block of fixed assets. Revenue
expenditure on research and development is charged to Profit & Loss
account in the period in which it is incurred.
13. PRIOR PERIOD ADJUSTMENTS
Earlier year items, adjustment/Claims, arisen / settled / noted during
the year are, if material in nature, are debited / credited to the
prior period Expenses/Income or respective heads of account if not
material in the nature.
14. INVESTMENTS
Investments that are readily realisable and intended to be held for not
more than a year classified as current investments. All other
investments are classified as lOng-tem investments. Current investments
are carried at lower of cost and fair value. Long -term investments are
stated at cost. Provision for diminution in the value of investments is
made, if it is other than temporary.
15. BORROWING COST
Borrowing costs that are attributable to the acquisition or
construction of a qualifying asset are capitalised as part of the cost
of such asset. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for intended use. All other
borrowing costs are recognised as an expense in the period in which
they are incurred.
16. TAXATION
a) Provision for Current Tax is made after considering benefits,
exemptions and deductions available under the Income Tax Act, 1961.
b) Deferred tax is recognised subject to consideration of prudence, on
timing differences, representing the differencebetween the taxable
income/(loss) and accounting income/{loss) that originated in one
period and are capable of reversal in one or more subsequent periods.
Deferred tax assets and liabilities are measured using the tax rates
and tax laws that have been enacted or substantively enacted by the
Balance Sheet date.
17. LEASES
Operating Lease: Lease rentals in respect of assets taken on operating
leases are charged to the profit and loss account with reference to
lease terms and other consideration.
18. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in notes.
Contingent assets are neither recognised nor disclosed in the financial
statements.
19. SEGMENT REPORTING
The accounting policies adopted by the company for segment reporting
are in line with the accounting standard on Segmental Reporting.
Primary Segment:
Business Segment: The Companys operating business are organized and
managed separately according to the nature of products, with each
segment representing a strategic business unit that offers different
products. The company operate in only one segment of business.
Secondary Segment:
Geographical Segment: The analysis of geographical segment is based on
the geographical location of the customers. The geographical segments
considered for disclosure are as follows:
(a) Sales within India
(b) Sales outside India.
Segment Assets denotes for debtors only.
20. CASH FLOW STATEMENTS
Cash-flow statements are prepared in accordance with "Indirect Method"
as explained in the Accounting Standard on Cash Flow Statements (AS-3)
notified under the Companies (Accounting Standards) Rules, 2006. The
Cash flows from regular revenue generating, financing and investing
activity of the company are segregated.
21. EARNING PER SHARE
Basic earning per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted Earning per Share, the net
profit or loss for the period attributable to Equity Shareholders and
the weighted average number of Shares outstanding during the period are
adjusted for the effects of all dilutive potential Equity Shares.
22. DERIVATIVE INSTRUMENTS
As per announcement of Institute of Chartered Accountants of India,
accounting for derivatives contracts, other than those covered under
AS-11, are marked to market on a portfolio basis, and the net loss
after considering the offsetting effect on the underlying hedge item is
charged to Profit and Loss Account. Net Gain is ignored.
23. The company has sold it land and building. However the company has
taken a better premises on long term lease. The assumption of going
concern is not effected due to such sale.