Accounting Policies of VST Industries Ltd. Company
Mar 31, 2022
1. SIGNIFICANT ACCOUNTING POLICIES Company Information
VST Industries Limited (the ''Company'') is a public limited Company domiciled in India with its registered office located at 1-7-1063/1065, Azamabad, Hyderabad - 500020. The Company is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
The Company is engaged inter-alia in manufacture and trading of Cigarettes, Tobacco and Tobacco products.
Basis of Preparation of Financial Statements
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 as amendment from time to time.
The financial statements have been prepared on accrual and going concern basis. The Accounting Policies are applied consistently to all the periods presented in the financial statements. All assets and liabilities have been classified as current or noncurrent as per the Company''s normal operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act, 2013 as amended from time to time. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.
The statement of cash flows has been prepared under indirect method.
The financial statements have also been prepared in accordance with the relevant presentation requirements of the Companies Act, 2013. The financial statements were authorised for issue by the Company''s Board of Directors on 26th April, 2022.
Basis of Measurement
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis, except for certain items that are measured at fair value, as explained in the accounting policies. Fair Value is the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability, if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and / or disclosure purposes in these financial statements is determined on such a basis, except leasing transactions that are within the scope of Ind AS 116 - Leases, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 - Inventories or value in use in Ind AS 36 - Impairment of Assets.
Key Accounting Estimates and Judgements
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as at the date of the financial statements, and the reported amounts of revenues and expenses for the year. The estimates and underlying assumptions are reviewed on an ongoing basis. Actual results could differ from those estimates.
Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period; they are recognised in the period of the revision and future periods if the revision affects both current and future periods.
Following is the information about critical judgements in applying accounting policies, as well as estimates and assumptions that have the most significant effect to the carrying amounts of assets and liabilities within the next financial year.
(a) Useful lives of property, plant and equipment and intangible assets
As described in the significant accounting policies, the Company reviews the estimated useful lives of property, plant and equipment, and intangible assets at the end of each reporting period.
(b) Recognition of deferred tax assets
Deferred tax is recorded on temporary differences between the tax bases of assets and liabilities and their carrying amounts, at the rates that have been enacted or substantively enacted at the reporting date. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable profits during the periods in which those temporary differences and tax loss carry-forwards become deductible. The Company considers expected reversal of deferred tax liabilities and projected future taxable income in making this assessment. The amount of deferred tax assets considered realisable, however, could reduce in the carry-forward period are reduced.
(c) Measurement and likelihood of occurrence of provisions and contingencies - Notes 25
As described in the significant accounting policies, the Company has ongoing litigations with various regulatory authorities and third parties. Where an outflow of funds is believed to be probable and a reliable estimate of the outcome of the dispute can be made based on management''s assessment of specific circumstances of each dispute and relevant external advice, management accrues a liability for its best estimate of it. Such accruals are by nature complex and can take number of years to resolve and can involve estimation uncertainty. Information about such litigations is provided in notes to the financial statements.
(d) Fair value measurements and valuation processes
Some of the Company''s assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where market observable inputs are not available, the Company engages third party valuers, where required, to perform the valuation. Information about the valuation techniques and inputs used in determining the fair value of various assets, liabilities and share
based payments are disclosed in the concerned notes to the financial statements.
(e) Measurement of defined benefit obligations
The determination of Company''s liability towards defined benefit obligation to employees is made through independent actuarial valuation including determination of amounts to be recognised in the Statement of Profit and Loss and in other comprehensive income.
Such valuation depends upon assumptions determined after taking into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. Information about such valuation is provided in notes to the financial statements.
Property, plant and equipment are stated at acquisition or construction cost, net of accumulated depreciation and accumulated impairment losses, if any. Upon adoption of Ind AS, the Company had elected to measure all its property, plant and equipment at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1st April, 2016.
Cost is inclusive of freight, installation costs, duties and taxes, interest on specific borrowings utilised for financing the assets and other incidental expenses.
All upgradations / enhancements are charged off as revenue expenditure unless they bring similar significant future economic benefits.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of asset. Any gain or loss arising on retirement or disposal of property, plant and equipment is determined as difference between the sale proceed and the carrying amount of the asset and is recognised in the Statement of Profit and Loss.
Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as "Capital work-in-progressâ.
Depreciation is provided on the straight line method at the rates based on estimated useful life of assets as prescribed under Part C of Schedule II to the Companies Act, 2013 with the exception of the following:
Building - 20 Years
Plant & Equipment - 5 - 20 Years Motor Vehicles - 4 Years.
Assets costing '' 5,000 or less - fully depreciated in the year of purchase.
Freehold land is not depreciated.
Based on technical evaluation, the management believes that the useful lives as given above best represent the period over which management expects to use these assets. Hence, the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013.
The residual values, useful lives and method of depreciation of property, plant and equipment are reviewed at each financial year-end and adjusted prospectively, if appropriate.
Intangible assets are stated at cost less any accumulated amortisation and accumulated impairment losses, if any.
Computer Software (including licence fee and cost of implementation / system integration services) is capitalised where ever it is expected to provide future enduring economic benefits. Cost of upgradation/ enhancements is charged off as revenue expenditure unless they bring similar significant benefits.
The useful lives of intangible assets are assessed as either finite or infinite. Finite-life intangible assets are amortised on a straight-line basis over the period of their expected useful lives. Estimated useful lives by major class of finite-life intangible assets are as follows:
Computer software - 4 years
The amortisation period and the amortisation method for finite-life intangible assets is reviewed at each financial year end and adjusted prospectively, where appropriate.
The assessment of infinite life is reviewed annually to determine whether the infinite life continues, if not, it is impaired or changed prospectively basis such revised estimates.
Impairment of Non Financial Assets
Assessment for impairment is done at each Balance Sheet date as to whether there is any indication that a non-financial asset may be impaired. Impairment loss, if any, is provided to the extent, the carrying amount of non-financial assets or cash generating units exceed their recoverable amount.
Recoverable amount is higher of an asset''s or cash generating unit''s fair value less cost of disposal and its value in use. Value in use is the net present value of estimated future cash flows expected to arise from the continuing use of an asset or cash generating unit and from its disposal at the end of its useful life.
Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognised for an asset in prior accounting periods may no longer exist or may have decreased. Basis the assessment a reversal of an impairment loss of an asset is recognised in the Statement of Profit and Loss.
Derivatives and Hedge Accounting
Derivatives are initially recognised at fair value and are subsequently re-measured to their fair value at the end of each reporting period.
The resulting gain / loss is recognised in the Statement of Profit and Loss immediately unless the derivative is designated as an effective hedging instrument, in which event the timing of recognition in profit or loss / inclusion in the initial cost of non-financial asset depends on the nature of the hedging relationship and the nature of the hedged item.
The Company complies with the principles of hedge accounting where derivative contracts are designated as hedge instruments. At the inception of the hedge relationship, the Company documents
the relationship between the hedge instrument and the hedged item along with the risk management objectives and its strategy for undertaking hedge transaction, which can be a fair value hedge or a cash flow hedge.
Changes in fair value of the designated portion of derivatives / hedging instruments that qualify as fair value hedges together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk are recognised in the Statement of Profit and Loss in the line item relating to the hedged item.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in the other comprehensive income and accumulated as ''Cash Flow Hedge'' in Equity. The gains / losses relating to the ineffective portion is recognised in the statement of profit and loss. Amounts previously recognised and accumulated in other comprehensive income are reclassified to profit or loss when the hedged item affects the Statement of Profit and Loss. However, when the hedged item results in the recognition of a non-financial asset, such gains / losses are transferred from equity (but not as reclassification adjustment) and included in the initial measurement cost of the nonfinancial asset.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer
qualifies for hedge accounting. Any gains/losses recognised in other comprehensive income and accumulated in equity at that time remains in equity and is reclassified to statement of profit and loss when the underlying transaction is ultimately recognised. When an underlying transaction is no longer expected to occur, the gains / losses accumulated in equity is recognised immediately in the Statement of Profit and Loss.
The financial statements are presented in INR, the functional currency of the Company. Items included in the financial statements of the Company are recorded using the currency of the primary economic environment in which the Company operates (the ''functional currency'').
Foreign currency transactions are translated into the functional currency using exchange rates on the date of the transaction. Foreign exchange gains and losses from settlement of these transactions and from translation of monetary assets and liabilities at the exchange rate prevailing on reporting date are recognised in the Statement of Profit and Loss.
FINANCIAL INSTRUMENTS I. Financial Assets
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument. On initial recognition, a financial asset is recognised at fair value. In case of financial assets which are recognised at fair value through profit and loss, its transaction cost are recognised in the Statement of Profit and Loss. In other cases, the transaction cost are attributed to the acquisition value of the financial asset. Financial assets are subsequently classified as measured at
⢠amortised cost
⢠fair value through profit and loss (''FVTPL'')
⢠fair value through other comprehensive income (''FVOCI'').
Financial assets are not reclassified subsequent to their recognition, except if and in the period the Company changes its business model for managing financial assets.
Trade receivables are initially recognised at fair value. Subsequently, these assets are held at amortised cost, using the effective interest rate (''EIR'') method net of any expected credit losses. The EIR is the rate that discounts estimated future cash flow through the expected life of financial instrument.
Debt instruments are initially measured at amortised cost, or FVTPL or FVOCI till derecognition, on the basis of (i) the entity''s business model for managing the financial assets and (ii) the contractual cash flow characteristics of the financial asset.
(a) Measured at amortised cost: Financial assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows that are solely payment of principal and interest, are subsequently measured at amortised cost using the EIR method less impairment, if any. The amortisation of EIR and loss arising from impairment, if any is recognised in the Statement of Profit and Loss.
(b) Measured at fair value through other comprehensive income: Financial assets that are held within a business model whose objective is achieved by both, selling financial assets and collecting contractual cash flows that are solely payments of principal and interest, are subsequently measured at fair value through other comprehensive income. Fair value movements are recognized in the other comprehensive income (OCI). Interest income measured using the EIR method and impairment losses, if any are recognised in the Statement of Profit and Loss. On derecognition, cumulative gain or loss previously recognised in OCI is reclassified from the equity to ''other income'' in the Statement of Profit and Loss.
(c) Measured at fair value through profit or loss: A financial asset not classified as either at amortised cost or FVOCI, is classified as FVTPL.
Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognised as ''other income'' in the Statement of Profit and Loss.
All investments in equity instruments classified under financial assets are initially measured at fair value, the Company may, on initial recognition, irrevocably elect to measure the same either at FVOCI or FVTPL The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity instrument is recognised as ''Other Income'' in the Statement of Profit and Loss unless the Company has elected to measure such instrument at FVOCI. Fair value changes excluding dividends, on an equity instrument measured at FVOCI is recognised in OCI. Amounts recognised in OCI are not subsequently reclassified to the Statement of Profit and Loss. Dividend income on the investment in equity instruments are recognised as ''other income'' in the Statement of Profit and Loss.
Derecognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the contractual rights to receive the cash flows from the asset.
Expected credit losses are recognized for all financial assets subsequent to initial recognition other than financial assets in FVTPL category.
For financial assets other than trade receivables, as per Ind AS 109, the Company recognises 12 month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. The
Company''s trade receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall.
The impairment losses and reversals are recognised in the Statement of Profit and Loss.
Initial recognition and measurement
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortised cost unless at initial recognition, they are classified as fair value through profit and loss.
In case of trade payables, they are initially recognised at fair value and subsequently, these liabilities are held at amortised cost, using the EIR method.
Financial liabilities are subsequently measured at amortised cost using the EIR method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.
A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled or expires.
Offsetting Financial Instrument
Financial assets and liabilities are offset and the net amount is included in the Balance Sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realize the assets and settle the liability simultaneously.
Inventories are valued at the lower of cost and net realisable value. Cost is computed on a weighted average basis. Cost includes all costs of purchases net of input tax credit availed, conversion costs and other attributable expenses incurred in bringing the inventories to their present location and condition and includes,
where applicable, appropriate overhead cost based on normal level of activity. The net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale.
Obsolete, slow moving and defective inventories are identified from time to time and, where necessary, a provision is made for such inventories.
Assets Held for Sale
Non-current assets or disposal groups comprising of assets and liabilities are classified as ''held for sale'' when all of the following criteria''s are met: (i) decision has been made to sell (ii) the assets are available for immediate sale in its present condition (iii) the assets are being actively marketed and (iv) sale has been agreed or is expected to be concluded within 12 months of the Balance Sheet date.
Subsequently, such non-current assets and disposal groups classified as held for sale are measured at the lower of its carrying value and fair value less costs to sell. Non-current assets held for sale are not depreciated or amortised.
Cash and Cash Equivalents
Cash and cash equivalents are cash, balances with bank and short-term (three months or less from the date of acquisition), highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value.
Provisions and Contingent Liabilities
Provisions are recognised 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. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date.
If the effect of the time value of money is material, provisions are discounted to reflect their present value using a current pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
Revenue from sale of goods is recognized when effective control over goods is transferred to a customer as per the terms of the contract.
This is usually evidenced by a transfer of all the significant risks and rewards of ownership upon delivery of goods to the customer, which in terms of timing is not materially different to the date of shipping. Revenue is measured at the contracted price received or receivable (includes Excise Duties and National Calamity Contingent Duty which are payable on manufacture of goods) after deduction of any trade discount, incentive and other similar discounts and any taxes or duties collected on behalf of the Government which are levied on sales such as Goods and Service tax, etc.
Income from export incentives such as duty drawback is recognised on accrual basis.
Interest income is recognized using the effective interest rate (EIR) method.
Dividend income on investments is recognised when the right to receive dividend is established.
Expenses are accounted on accrual basis.
Employee Benefits Defined Contribution Plans
Contributions to defined contribution schemes such as employees'' state insurance, labour welfare fund, superannuation scheme, employee pension scheme etc. are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. Provident fund contribution in respect of certain employees, who
are members of constituted and approved trusts, the Company recognizes contribution payable to such trusts as an expense including any shortfall in interest between the amount of interest realized from the investment and the interest payable to members at the rate declared by the Government of India. In respect of other employees, provident funds are deposited with the government administered fund and charged as an expense to the Statement of Profit and Loss.
The Company makes contribution to defined contribution pension plan. The contribution payable is recognized as an expense, when an employee renders the related service.
The Company also makes contribution to defined benefit pension and gratuity plan. The cost of providing benefits under the defined benefit obligation is calculated by independent actuary using the projected unit credit method. Service costs and net interest expense or income is reflected in the Statement of Profit and Loss. Gain or loss on account of remeasurements are recognised immediately through other comprehensive income in the period in which they occur.
Other Long Term Employee Benefits
The employees of the Company are entitled to compensated leave for which the Company records the liability based on actuarial valuation computed using projected unit credit method. These benefits are funded.
Termination benefits, in the nature of voluntary retirement benefits or termination benefits arising from restructuring, are recognised in the Statement of Profit and Loss. The Company recognises termination benefits at the earlier of the following dates:
(a) when the Company can no longer withdraw the offer of those benefits; or
(b) when the Company recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of termination benefits.
Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.
Code on Social Security 2020 - update
The Indian parliament has passed and approved the Code on Social Security 2020, however, the effective date of the code and complete clarity on the rules/interpretations are still awaited. The Company will evaluate the subject rules once they are notified and recognise the consequent impact, if any, in its financial statements in the period in which, the Code becomes effective.
Employees of the Company receive remuneration in the form of share based payments in consideration for the services rendered. Under the equity-settled share based payment, fair value of the option / equity instruments at the grant date determined by an independent valuer using Black Scholes Model and this recognised in the Statement of Profit and Loss as ''Employee benefit expense'' on a systematic basis over the vesting period of the option, based on the company''s estimate of option/ equity instruments that will eventually vest with corresponding increase in Other Equity.
In case of forfeiture/lapse of stock options, which are not vested, amortised portion is reversed by credit to employee benefit expense.
Treasury Shares
The Company has created an Employee Benefit Trust (EBT) for providing share based payment to its employees. The Company uses EBT as a vehicle for distributing shares to employees under the Employee Stock Option Scheme. The EBT purchases shares from the market, for giving shares to employees. The Company treats EBT as its extension and the shares held by EBT are treated as treasury shares.
Own equity instruments that are re-acquired (treasury shares) are recognised at cost and deducted from Other Equity. No gain or loss is recognised in Statement of Profit and Loss on purchase, sale, issue or cancellation of the company''s own equity instruments. Any difference between carrying amount and the consideration, if reissued or sold, is recognised in capital reserve. Share options exercised during the reporting period are settled with treasury shares.
Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the Statement of Profit and Loss except to the extent it relates to a business combination or to an item which is recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable/recoverable on the taxable income/ loss for the year using applicable tax rates at the Balance Sheet date, and any adjustment to taxes in respect of previous years. Interest income/ expenses and penalties, if any, related to income tax are included in current tax expense.
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.
A deferred tax assets / liability is recognised based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end of the reporting period. Deferred tax assets are recognised only
Dividend Distribution
Dividend paid (including income tax thereon, if any) is recognized in the period in which the interim dividends are approved by the Board of Directors and in respect of final dividend when approved by shareholders.
Leases
Leases which are short term that have a lease term of 12 months and low value leases in which a substantial portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments and receipts under such leases are recognised to the Statement of Profit and Loss on a straight-line basis over the term of the lease unless the lease payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases, in which case the same are recognised as an expense in line with the contractual term.
Recent Amendments
Ministry of Corporate Affairs (''MCA'') notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 23rd March, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from 1st April, 2022.
The Company does not expect the amendment to have any significant impact in its financial statements.
to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable the related tax benefit will be realised.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxing authority.
Basic earnings per share is computed by dividing the net profit for the period attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity Shares.
Mar 31, 2018
COMPANY INFORMATION
VST Industries Limited (the âCompanyâ) is a public limited Company domiciled in India with its registered office located at 1-7-1063/1065, Azamabad, Hyderabad - 500020. The Company is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The Company is engaged inter-alia in manufacture and trading of Cigarettes, Tobacco and Tobacco products.
STATEMENT OF COMPLIANCE
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendments Rules, 2016.
The financial statements have also been prepared in accordance with the relevant presentation requirements of the Companies Act, 2013. The Company adopted Ind AS from 1st April, 2017. Up to the year ended 31st March, 2017, the Company prepared its financial statements in accordance with the requirements of previous Generally Accepted Accounting Principles (GAAP), which includes Standards notified under the Companies (Accounting Standards) Rules, 2006. These are the Companyâs first Ind AS financial statements. The date of transition to Ind AS is 1st April, 2016. Details of the exceptions and optional exemptions availed by the Company and principal adjustments along with related reconciliations are detailed in Note 35 (Firsttime Adoption).
The financial statements were authorised for issue by the Companyâs Board of Directors on 12th April, 2018.
BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared on accrual and going concern basis. The Accounting Policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1st April, 2016 being the date of transition to Ind AS. All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non - current classification of assets and liabilities.
The Ministry of Corporate Affairs has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018. Accordingly, Ind AS 115 - âRevenue from contracts with customersâ shall apply for accounting period commencing on or after 1st April, 2018. Based on preliminary evaluation considering known and estimable information, the management believes that the standard will not have a significant impact on the Companyâs financial statement in the period of its initial application.
BASIS OF MEASUREMENT
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis, except for certain items that are measured at fair value, as explained in the accounting policies.
Fair Value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except leasing transactions that are within the scope of Ind AS 17 - Leases, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 - Inventories or value in use in Ind AS 36 - Impairment of Assets.
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Actual results could differ from those 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 affects only that period; they are recognised in the period of the revision and future periods if the revision affects both current and future periods.
INVENTORIES
Inventories are valued at the lower of cost and net realisable value. Cost is computed on a weighted average basis. Cost includes all costs of purchases net of cenvat credit availed, conversion costs and other attributable expenses incurred in bringing the inventories to their present location and condition and includes, where applicable, appropriate overheads based on normal level of activity. The net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale.
Obsolete, slow moving and defective inventories are identified from time to time and, where necessary, a provision is made for such inventories.
ASSETS HELD FOR SALE
Non-current assets or disposal groups comprising of assets and liabilities are classified as âheld for saleâ when all of the following criteriaâs are met: (i) decision has been made to sell (ii) the assets are available for immediate sale in its present condition (iii) the assets are being actively marketed and (iv) sale has been agreed or is expected to be concluded within 12 months of the Balance Sheet date. Subsequently, such non-current assets and disposal groups classified as held for sale are measured at the lower of its carrying value and fair value less costs to sell. Non-current assets held for sale are not depreciated or amortised.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents are short-term (three months or less from the date of acquisition), highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at acquisition or construction cost, net of accumulated depreciation and accumulated impairment losses, if any.
Cost is inclusive of freight, installation costs, duties and taxes, interest on specific borrowings utilised for financing the assets and other incidental expenses.
All upgradations/enhancements are charged off as revenue expenditure unless they bring similar significant additional benefits.
An item of property, plant and equipment is de-recognised upon disposal or when no future economic benefits are expected to arise from the continued use of asset. Any gains or losses arising on retirement or disposal of property, plant and equipment is determined as difference between the sale proceeds and the carrying amount of the asset and is recognised in the Statement of Profit and Loss.
Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as âCapital work-in-progressâ.
DEPRECIATION
Depreciation is provided on the straight line method at the rates based on estimated useful life of assets as prescribed under Part C of Schedule II to the Companies Act, 2013 with the exception of the following:
Building on freehold Land - 20 years
Building on Leasehold Land - 20 years
Motor Vehicles - 4 years
Assets costing Rs.5,000 or less - fully depreciated in the year of purchase.
Freehold land is not depreciated.
The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end and adjusted prospectively, if appropriate.
Upon adoption of Ind AS, the Company has elected to measure all its property, plant and equipment at the previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1st April, 2016.
INTANGIBLE ASSETS
Intangible assets are stated at cost less any accumulated amortisation and accumulated impairment losses, if any.
Computer Software (including licence fee and cost of implementation/system integration services) is capitalised where ever it is expected to provide future enduring economic benefits. Cost of upgradation/enhancements is charged off as revenue expenditure unless they bring similar significant benefits.
The useful lives of intangible assets are assessed as either finite or indefinite. Finite-life intangible assets are amortised on a straight-line basis over the period of their expected useful lives. Estimated useful lives by major class of finite-life intangible assets are as follows:
Rights on Time Shares - 20 years Computer software - 4 years
The amortisation period and the amortisation method for finite-life intangible assets is reviewed at each financial year end and adjusted prospectively, if appropriate.
The assessment of indefinite life is reviewed annually to determine whether the infinite life continues, if not, it is impaired or changed prospectively basis revised estimates.
IMPAIRMENT OF NON FINANCIAL ASSETS
Assessment for impairment is done at each Balance Sheet date as to whether there is any indication that a non-financial asset may be impaired. Impairment loss, if any, is provided to the extent, the carrying amount of non-financial assets or cash generating units exceed their recoverable amount.
Recoverable amount is higher of an assetâs or cash generating unitâs fair value less cost of disposal and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset or cash generating unit and from its disposal at the end of its useful life.
Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognised for an asset in prior accounting periods may no longer exist or may have decreased, basis the assessment a reversal of an impairment loss for an asset is recognised in the Statement of Profit and Loss.
DERIVATIVES AND HEDGE ACCOUNTING
Derivatives are initially recognised at fair value and are subsequently re-measured to their fair value at the end of each reporting period. The resulting gains/losses is recognised in the Statement of Profit and Loss immediately unless the derivative is designated as an effective hedging instrument, in which event the timing of recognition in profit or loss/inclusion in the initial cost of non-financial asset depends on the nature of the hedging relationship and the nature of the hedged item.
The Company complies with the principles of hedge accounting where derivative contracts are designated as hedge instruments. At the inception of the hedge relationship, the Company documents the relationship between the hedge instrument and the hedged item along with the risk management objectives and its strategy for undertaking hedge transaction, which can be a fair value hedge or a cash flow hedge.
(i) Fair value hedges
Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The change in the fair value of the designated portion of hedging instrument and the change in fair value of the hedged item attributable to the hedged risk are recognised in the Statement of Profit and Loss in the line item relating to the hedged item.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date.
(ii) Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in the other comprehensive income and accumulated as âCash Flow Hedging Reserveâ. The gains/losses relating to the ineffective portion is recognised in the Statement of Profit and Loss. Amounts previously recognised and accumulated in other comprehensive income are reclassified to profit or loss when the hedged item affects the Statement of Profit and Loss. However, when the hedged item results in the recognition of a non-financial asset, such gains/losses are transferred from equity (but not as reclassification adjustment) and included in the initial measurement cost of the non-financial asset.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gains/losses recognised in other comprehensive income and accumulated in equity at that time remains in equity and is reclassified when the underlying transaction is ultimately recognised. When an underlying transaction is no longer expected to occur, the gains/losses accumulated in equity is recognised immediately in the Statement of Profit and Loss.
FOREIGN CURRENCIES
The financial statements are presented in INR, the functional currency of the Company. Items included in the financial statements of the Company are recorded using the currency of the primary economic environment in which the Company operates (the âfunctional currencyâ).
Foreign currency transactions are translated into the functional currency using exchange rates on the date of the transaction. Foreign exchange gains and losses from settlement of these transactions and from translation of monetary assets and liabilities at the exchange rate prevailing on reporting date are recognised in the Statement of Profit and Loss.
FINANCIAL INSTRUMENTS
I. Financial Assets
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument. On initial recognition, a financial asset is recognised at fair value, in case of financial assets which are recognised at fair value through profit and loss (FVTPL), its transaction cost are recognised in the Statement of Profit and Loss. In other cases, the transaction cost are attributed to the acquisition value of the financial asset. Financial assets are subsequently classified as measured at
- amortised cost
- fair value through profit and loss (FVTPL)
- fair value through other comprehensive income (FVOCI).
Financial assets are not reclassified subsequent to their recognition, except if and in the period the Company changes its business model for managing financial assets.
Trade Receivables and Loans
Trade receivables are initially recognised at fair value. Subsequently, these assets are held at amortised cost, using the effective interest rate (EIR) method net of any expected credit losses. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.
Debt Instruments
Debt instruments are initially measured at amortised cost, or fair value through other comprehensive income (FVOCI) or fair value through profit or loss (FVTPL) till derecognition, on the basis of (i) the entityâs business model for managing the financial assets and (ii) the contractual cash flow characteristics of the financial asset.
(a) Measured at amortised cost: Financial assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows that are solely payment of principal and interest, are subsequently measured at amortised cost using the effective interest rate (EIR) method less impairment, if any. The amortisation of EIR and loss arising from impairment, if any is recognised in the Statement of Profit and Loss.
(b) Measured at fair value through other comprehensive income: Financial assets that are held within a business model whose objective is achieved by both, selling financial assets and collecting contractual cash flows that are solely payments of principal and interest, are subsequently measured at fair value through other comprehensive income. Fair value movements are recognized in the other comprehensive income (OCI). Interest income measured using the EIR method and impairment losses, if any are recognised in the Statement of Profit and Loss. On derecognition, cumulative gain or loss previously recognised in OCI is reclassified from the equity to âother incomeâ in the Statement of Profit and Loss.
(c) Measured at fair value through profit or loss: A financial asset not classified as either amortised cost or FVOCI, is classified as FVTPL. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognised as âother incomeâ in the Statement of Profit and Loss.
Equity Instruments
All investments in equity instruments classified under financial assets are initially measured at fair value, the Company may, on initial recognition, irrevocably elect to measure the same either at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity instrument is recognised as other income in the Statement of Profit and Loss unless the Company has elected to measure such instrument at FVOCI. Fair value changes excluding dividends, on an equity instrument measured at FVOCI are recognised in OCI. Amounts recognised in OCI are not subsequently reclassified to the Statement of Profit and Loss. Dividend income on the investment in equity instruments are recognised as âother incomeâ in the Statement of Profit and Loss.
Derecognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the contractual rights to receive the cash flows from the asset.
Impairment of Financial Asset
Expected credit losses are recognized for all financial assets subsequent to initial recognition other than financial assets in FVTPL category.
For financial assets other than trade receivables, as per Ind AS 109, the Company recognises 12 month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. The Companyâs trade receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall.
The impairment losses and reversals are recognised in Statement of Profit and Loss.
II. Financial Liabilities
Initial recognition and measurement
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortised cost unless at initial recognition, they are classified as fair value through profit and loss. In case of trade payables, they are initially recognised at fair value and subsequently, these liabilities are held at amortised cost, using the effective interest rate (EIR) method.
Subsequent measurement
Financial liabilities are subsequently measured at amortised cost using the EIR method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.
Derecognition
A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled or expires.
Offsetting Financial Instrument
Financial assets and liabilities are offset and the net amount is included in the Balance Sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the assets and settle the liability simultaneously.
PROVISIONS AND CONTINGENT LIABILITIES
Provisions are recognised 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. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date.
If the effect of the time value of money is material, provisions are discounted to reflect its present value using a current pretax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
REVENUE RECOGNITION
Revenue from sale of goods is recognised when all the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract and there is no continuing managerial involvement with the goods and the amount of revenue can be measured reliably. The Company retains no effective control of the goods transferred to a degree usually associated with ownership and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. Revenue is measured at fair value of the consideration received or receivable after deduction of any trade discounts, rebates and any taxes or duties collected on behalf of the government which are levied on sales such as goods and service tax, etc.
Income from export incentives such as duty drawback is recognised on accrual basis.
Interest income is recognized using the effective interest rate (EIR) method.
Dividend income on investments is recognised when the right to receive dividend is established.
EXPENDITURE
Expenses are accounted on accrual basis.
EMPLOYEE BENEFITS Defined Contribution Plans
Contributions to defined contribution schemes such as employeesâ state insurance, labour welfare fund, superannuation scheme, employee pension scheme etc. are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. Provident fund contribution in respect of certain employees, who are members of constituted and approved trusts, the Company recognizes contribution payable to such trusts as an expense including any shortfall in interest between the amount of interest realized by the investment and the interest payable to members at the rate declared by the Government of India. In respect of other employees, provident funds are deposited with the government administered fund and charged as an expense to the Statement of Profit and Loss.
The Company makes contribution to defined contribution pension plan. The contribution payable is recognized as an expense, when an employee renders the related service.
Defined Benefit Plans
The Company also makes contribution to defined benefit pension and gratuity plan. The cost of providing benefits under the defined benefit obligation is calculated by independent actuary using the projected unit cost method. Service costs and net interest expense or income is reflected in the Statement of Profit and Loss. Gain or loss on account of remeasurements are recognised immediately through other comprehensive income in the period in which they occur.
The employees of the Company are entitled to compensated leave for which the Company records the liability based on actuarial valuation computed using projected unit cost method. These benefits are funded.
Termination benefits
Termination benefits, in the nature of voluntary retirement benefits or termination benefits arising from restructuring, are recognised in the Statement of Profit and Loss. The Company recognises termination benefits at the earlier of the following dates:
(a) when the Company can no longer withdraw the offer of those benefits; or
(b) when the Company recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of termination benefits.
Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.
INCOME TAXES
Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the Statement of Profit and Loss except to the extent it relates to a business combination or to an item which is recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable/receivable on the taxable income/ loss for the year using applicable tax rates at the Balance Sheet date, and any adjustment to taxes in respect of previous years. Interest income/expenses and penalties, if any, related to income tax are included in current tax expense.
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.
A deferred tax liability is recognised based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end of the reporting period. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable the related tax benefit will be realised.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.
EARNINGS PER SHARE
Basic earnings per share is computed by dividing the net profit for the period attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
DIVIDEND DISTRIBUTION
Dividend paid (including income tax thereon) is recognized in the period in which the interim dividends are approved by the Board of Directors or in respect of final dividend when approved by shareholders.
LEASES
Leases in which a substantial portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments and receipts under such leases are recognised to the Statement of Profit and Loss on a straight-line basis over the term of the lease unless the lease payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases, in which case the same are recognised as an expense in line with the contractual term.
Mar 31, 2017
1. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION OF ACCOUNTS
The financial statements have been prepared on the basis of going concern, under the historic cost convention, except for certain, tangible assets which are being carried at revalued amounts. These financial statements have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards specified under Section 133 of the Companies Act, 2013 ("the Act") read with Rule 7 of the Companies (Accounts) Rules, 2014 and the other relevant provisions of the Act.
USE OF ESTIMATES
The preparation of financial statements, require estimates and assumptions to be made that affect the reported amounts of assets and liabilities as on the date of the financial statements and reported amount of revenues and expenses during the reported period. The estimates made are based on the principles of prudence and reasonableness, however, actual results could differ from these estimates. Any revision to such accounting estimates is recognized prospectively in the current and future periods.
FIXED ASSETS
Tangible assets
Tangible assets are stated at historical cost, net of accumulated depreciation and accumulated impairment loss, if any, except so far as they relate to the revaluation of land and buildings. Historical cost is inclusive of freight, installation cost, duties and taxes, interest on specific borrowings utilized for financing the assets and other incidental expenses.
Depreciation is provided on straight line basis at the rates determined based on estimated useful life of assets. The useful life of the assets are periodically reviewed and re-determined based on a technical evaluation and expected use and the unamortized depreciable amount is charged over the remaining useful life of such assets. In certain cases, the useful life of assets so determined being different from the useful life as prescribed under Part C of Schedule II of the Companies Act, 2013, are given below:
Buildings on Freehold Land - 20 years
Buildings on Leasehold Land - 20 years
Motor Vehicles - 4 years
All assets costing less than Rs.5,000 are fully depreciated in the year of purchase.
Depreciation on the revalued assets is calculated on the revalued costs and the Revaluation Reserve is adjusted with the difference between the depreciation calculated on such revalued costs and historic costs.
Intangible assets
Intangible assets are stated at cost net of accumulated amortization and accumulated impairment loss, if any. Computer software (including license fees and cost of implementation/system integration services) is capitalized where it is expected to provide future enduring economic benefits. Cost of up gradation/enhancements is charged off as revenue expenditure unless they bring similar significant additional benefits. Intangible assets are amortized on a straight line basis over their estimated useful life. Useful life is determined based on the period of the underlying contract and the period of time the intangible asset is expected to be used i.e.
Rights on time share- 20 years Computer software - 4 years
Impairment of Assets
All the fixed assets are assessed for any indication of impairment, at the end of each financial year. On such indication, the impairment loss, being the excess of carrying value over the recoverable value of the assets, is charged to the statement of profit and loss in the respective financial years. The impairment loss recognized in the prior years is reversed in cases where the recoverable value exceeds the carrying value, upon re-assessment in the subsequent years.
INVENTORIES
Inventories are valued at lower of cost and net realizable value. Cost is computed on weighted average method. Cost includes purchase cost net of CENVAT credit availed and attributable expenses.
Consumption and/or other stock diminution is accounted for at the aforesaid weighted average cost. In the case of finished goods, cost comprises of material, direct labour, applicable overhead expenses, applicable excise duty and taxes paid/ payable thereon.
Obsolete, slow moving and defective inventories are identified at the time of physical verification of inventories and where necessary, provision is made for such inventories.
Goods-in-transit/with third parties are valued at cost which represents the costs incurred up to the stage at which the goods are in transit/with third parties.
INVESTMENTS
Long-term investments are valued at cost net of provision, for permanent diminution in value, if any. Current investments are stated at lower of cost and net realizable value.
REVENUE RECOGNITION
Sales are recognized when the property in the goods is transferred and are recorded net of trade discounts, rebates and value added tax. Gross Sales are inclusive of excise duty. Net Sales are stated after deducting such excise duty.
Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate of interest applicable. Dividend income from investments is recognized in the year in which the right to receive dividend is established.
Profit on sale of investment is recorded on disposal and is determined as difference between the sale price and carrying value of the investment.
EMPLOYEE BENEFITS
Contribution to various recognized provident funds, approved pension and gratuity funds and contributions to other retiral benefits are charged to revenue. Liabilities for retiral benefits which are in the nature of defined benefit schemes are determined on the basis of actuarial valuation as per the requirements of Accounting Standard 15 on "Employee Benefits" as at the end of the accounting period. Actuarial gains or losses arising during the year are recognized in the statement of profit and loss. Payments under Voluntary Retirement Scheme are charged to revenue on accrual basis in the year in which they become due for payment.
TAXES ON INCOME
Current tax is determined as the amount of tax payable in respect of taxable income for the period.
Deferred tax is recognized on timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods, subject to consideration of prudence. 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.
RESEARCH AND DEVELOPMENT
Revenue expenditure on research and development is recognized in the statement of profit and loss in the year it is incurred. Capital expenditure on research and development is included under fixed assets.
FOREIGN EXCHANGE TRANSACTIONS
The transactions in foreign currency are accounted for at the exchange rate prevailing on the date of the transaction. Gains and losses resulting from the settlement of such transactions and from translation of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of profit and loss.
The Company uses foreign exchange forward contracts and currency options to hedge risks associated with movements in foreign exchange rates. The use of these foreign exchange forward contracts and currency options is to reduce the risk or cost to the Company and are not meant for trading or speculation purposes.
The Company adopted Accounting Standard 30 on "Financial Instruments: Recognition and Measurement" issued by the Institute of Chartered Accountants of India to the extent the adoption does not contradict with existing accounting standards and other authoritative pronouncements of the Company Law and other regulatory requirements.
Foreign exchange forward contracts and currency options that are designated as cash flow hedges and qualify for hedge accounting are fair valued at each reporting date and the resultant gain or loss is recognized directly in Shareholders'' Funds under ''Cash Flow Hedge Reserve Account'' to the extent considered highly effective and are reclassified into the statement of profit & loss upon occurrence of the hedged transactions.
Gain or loss on derivative instruments that are either not designated as cash flow hedges or designated as cash flow hedges to the extent considered ineffective is recognized in the statement of profit and loss.
If the hedged transaction is no longer expected to occur, the net cumulative gain or loss on the hedging instrument recognized in Shareholders'' Funds under Cash Flow Hedge Reserve is transferred to the statement of profit and loss.
LEASES
Assets acquired by way of finance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are charged in the statement of profit and loss.
Lease rentals paid in respect of operating leases are charged to the statement of profit and loss.
Mar 31, 2016
BASIS OF PREPARATION OF ACCOUNTS
The financial statements have been prepared on the basis of going
concern, under the historic cost convention, except for certain
tangible assets which are being carried at revalued amounts. These
financial statements have been prepared to comply in all material
aspects with applicable accounting principles in India, the applicable
Accounting Standards specified under Section 133 of the Companies Act,
2013 ("the Act") read with Rule 7 of the Companies (Accounts) Rules,
2014 and the other relevant provisions of the Act.
The Ministry of Corporate Affairs has amended the Companies (Accounting
Standard) Rules, 2006 (principal rules) vide notification no. G.S.R 364
(E) dated 30th March, 2016. However, the accounting standards notified
under the said notification read with Rule 3(2) of the principal rules,
shall be applicable to accounting periods commencing on or after 1st
April, 2016 in respect of the Company. Accordingly, the Accounting
Standards notified on 30th March, 2016 shall be applied with effect
from 1st April, 2016.
USE OF ESTIMATES
The preparation of financial statements, require estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities as on the date of the financial statements and reported
amount of revenues and expenses during the reported period. The
estimates made are based on the principles of prudence and
reasonableness, however, actual results could differ from these
estimates. Any revision to such accounting estimates is recognised
prospectively in the current and future periods.
FIXED ASSETS
Tangible assets
Tangible assets are stated at historical cost, net of accumulated
depreciation and accumulated impairment loss, if any, except so far as
they relate to the revaluation of land and buildings. Historical cost
is inclusive of freight, installation cost, duties and taxes, interest
on specific borrowings utilised for financing the assets and other
incidental expenses.
Depreciation is provided on straight line basis at the rates determined
based on estimated useful life of assets. The useful life of the assets
are periodically reviewed and re-determined based on a technical
evaluation and expected use and the unamortised depreciable amount is
charged over the remaining useful life of such assets. In certain
cases, the useful life of assets so determined being different from the
useful life as prescribed under Part C of Schedule II of the Companies
Act, 2013, are given below:
Buildings on Freehold Land - 20 years
Buildings on Leasehold Land - 20 years
Motor Vehicles - 4 years
All assets costing less than Rs.5,000 are fully depreciated in the year
of purchase.
Depreciation on the revalued assets is calculated on the revalued costs
and the Revaluation Reserve is adjusted with the difference between the
depreciation calculated on such revalued costs and historic costs.
Intangible assets
Intangible assets are stated at cost net of accumulated amortisation
and accumulated impairment loss, if any. Computer software (including
license fees and cost of implementation/system integration services) is
capitalised where it is expected to provide future enduring economic
benefits. Cost of upgradation/enhancements is charged off as revenue
expenditure unless they bring similar significant additional benefits.
Intangible assets are amortised on a straight line basis over their
estimated useful life. Useful life is determined based on the period of
the underlying contract and the period of time the intangible asset is
expected to be used i.e.
Rights on time share- 20 years
Computer software - 4 years
Impairment of Assets
All the fixed assets are assessed for any indication of impairment, at
the end of each financial year. On such indication, the impairment
loss, being the excess of carrying value over the recoverable value of
the assets, is charged to the statement of profit and loss in the
respective financial years. The impairment loss recognised in the prior
years is reversed in cases where the recoverable value exceeds the
carrying value, upon re-assessment in the subsequent years.
INVENTORIES
Inventories are valued at lower of cost and net realisable value. Cost
is computed on weighted average method. Cost includes purchase cost net
of CENVAT credit availed and attributable expenses.
Consumption and/or other stock diminution is accounted for at the
aforesaid weighted average cost. In the case of finished goods, cost
comprises of material, direct labour, applicable overhead expenses,
applicable excise duty and taxes paid/ payable thereon.
Obsolete, slow moving and defective inventories are identified at the
time of physical verification of inventories and where necessary,
provision is made for such inventories.
Goods in transit/with third parties are valued at cost which represents
the costs incurred upto the stage at which the goods are in
transit/with third parties.
INVESTMENTS
Long-term investments are valued at cost net of provision, for
permanent diminution in value, if any. Current investments are stated
at lower of cost and net realisable value.
REVENUE RECOGNITION
Sales are recognised when the property in the goods is transferred and
are recorded net of trade discounts, rebates and value added tax. Gross
Sales are inclusive of excise duty. Net Sales are stated after
deducting such excise duty.
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and rate of interest applicable.
Dividend income from investments is recognised in the year in which the
right to receive dividend is established.
EMPLOYEE BENEFITS
Contribution to various recognised provident funds, approved pension
and gratuity funds and contributions to other retiral benefits are
charged to revenue. Liabilities for retiral benefits which are in the
nature of defined benefit schemes are determined on the basis of
actuarial valuation as per the requirements of Accounting Standard 15
on "Employee Benefits" as at the end of the accounting period.
Actuarial gains or losses arising during the year are recognised in the
statement of profit and loss. Payments under Voluntary Retirement
Scheme are charged to revenue on accrual basis in the year in which
they become due for payment.
LEASES
Assets acquired by way of finance lease are capitalised at the lower of
the fair value and the present value of the minimum lease payments at
the inception of the lease term and disclosed as leased assets. Lease
payments are apportioned between finance charge and reduction of the
lease liability based on the implicit rate of return. Finance charges
are charged in the statement of profit and loss.
Lease rentals paid in respect of operating leases are charged to the
statement of profit and loss.
TAXES ON INCOME
Current tax is determined as the amount of tax payable in respect of
taxable income for the period.
Deferred tax is recognised on timing differences between taxable income
and accounting income that originate in one period and are capable of
reversal in one or more subsequent periods, subject to consideration of
prudence. 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.
FOREIGN EXCHANGE TRANSACTIONS
The transactions in foreign currency are accounted for at the exchange
rate prevailing on the date of the transaction. Gains and losses
resulting from the settlement of such transactions and from translation
of monetary assets and liabilities denominated in foreign currencies
are recognised in the statement of profit and loss.
The Company uses foreign exchange forward contracts and currency
options to hedge risks associated with movements in foreign exchange
rates. The use of these foreign exchange forward contracts and currency
options is to reduce the risk or cost to the Company and are not meant
for trading or speculation purposes.
The Company adopted Accounting Standard 30 on "Financial Instruments:
Recognition and Measurement" issued by the Institute of Chartered
Accountants of India to the extent the adoption does not contradict
with existing accounting standards and other authoritative
pronouncements of the Company Law and other regulatory requirements.
Foreign exchange forward contracts and currency options that are
designated as cash flow hedges and qualify for hedge accounting are
fair valued at each reporting date and the resultant gain or loss is
recognised directly in Shareholders'' Funds under ''Cash Flow Hedge
Reserve Account'' to the extent considered highly effective and are
reclassified into the statement of profit & loss upon occurrence of the
hedged transactions.
Gain or loss on derivative instruments that are either not designated
as cash flow hedges or designated as cash flow hedges to the extent
considered ineffective is recognised in the statement of profit and
loss.
If the hedged transaction is no longer expected to occur, the net
cumulative gain or loss on the hedging instrument recognised in
Shareholders'' Funds under Cash Flow Hedge Reserve is transferred to the
statement of profit and loss.
RESEARCH AND DEVELOPMENT
Revenue expenditure on Research and Development is recognised in the
statement of profit and loss in the year it is incurred. Capital
expenditure on research and development is included under fixed assets.
PROPOSED DIVIDEND
Dividend (including related income tax thereon), proposed by the
Directors, is provided for in the books of account, pending approval at
the Annual General Meeting.
Mar 31, 2014
BASIS OF PREPARATION OF ACCOUNTS
The financial statements have been prepared on the basis of going
concern, under the historic cost convention, except for certain,
tangible assets which are being carried at revalued amounts. These
financial statements have been prepared to comply in all material
aspects with applicable accounting principles in India, the applicable
accounting standards notified under Section 211 (3C) of the Companies
Act, 1956 ("the Act") 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 and the other relevant
provisions of the Act.
USE OF ESTIMATES
The preparation of financial statements, require estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities as on the date of the financial statements and reported
amount of revenues and expenses during the reported period. The
estimates made are based on the principles of prudence and
reasonableness, however, actual results could differ from these
estimates. Any revision to such accounting estimates is recognised
prospectively in the current and future periods.
FIXED ASSETS
TANGIBLE ASSETS
Tangible assets are stated at historical cost, net of accumulated
depreciation and accumulated impairment loss, if any, except so far as
they relate to the revaluation of land and buildings. Historical cost
is inclusive of freight, installation cost, duties and taxes, interest
on specific borrowings utilised for financing the assets and other
incidental expenses.
Accelerated depreciation is provided based on technical evaluation of
estimated useful life of an asset. All assets costing
less than Rs.5,000 are fully depreciated in the year of purchase.
Depreciation on the revalued assets is calculated on the revalued costs
and the Revaluation Reserve is adjusted with the difference between the
depreciation calculated on such revalued costs and historic costs.
INTANGIBLE ASSETS
Intangible assets are stated at cost net of accumulated amortisation
and accumulated impairment loss, if any. Computer software (including
license fees and cost of implementation/system integration services) is
capitalised where it is expected to provide future enduring economic
benefits. Cost of upgradation/enhancements is charged off as revenue
expenditure unless they bring similar significant additional benefits.
Intangible assets are amortised on a straight line basis over their
estimated useful life. Useful life is determined based on the period of
the underlying contract and the period of time the intangible asset is
expected to be used i.e.
Rights on time share - over 20 years Computer software - over 4 years
IMPAIRMENT OF ASSETS
All the fixed assets are assessed for any indication of impairment, at
the end of each financial year. On such indication, the impairment
loss, being the excess of carrying value over the recoverable value of
the assets, is charged to the statement of profit and loss in the
respective financial years. The impairment loss recognised in the prior
years is reversed in cases where the recoverable value exceeds the
carrying value, upon re-assessment in the subsequent years.
INVESTMENTS
Long term investments are valued at cost net of provision, for
permanent diminution, if any. Current investments are stated at lower
of cost and net realisable value.
INVENTORIES
Inventories are valued at lower of cost and net realisable value. Cost
is computed on weighted average method. Cost includes purchase cost net
of CENVAT credit availed and attributable expenses.
Consumption and/or other stock diminution is accounted for at the
aforesaid weighted average cost. In the case of finished goods, cost
comprises of material, direct labour, applicable overhead expenses,
applicable excise duty and taxes paid/ payable thereon.
Obsolete, slow moving and defective inventories are identified at the
time of physical verification of inventories and where necessary,
provision is made for such inventories.
Goods in transit/with third parties are valued at cost which represents
the costs incurred upto the stage at which the goods are in
transit/with third parties.
PROPOSED DIVIDEND
Dividend (including related income tax thereon), proposed by the
Directors, is provided for in the books of account, pending approval at
the Annual General Meeting.
REVENUE RECOGNITION
Sales are recognised when the property in the goods is transferred and
are recorded net of trade discounts, rebates and value added tax. Gross
Sales are inclusive of excise duty. Net Sales are stated after
deducting such excise duty.
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and rate of interest applicable.
Dividend income from investments is recognised in the year in which the
right to receive dividend is established.
EMPLOYEE BENEFITS
Contribution to various recognised provident funds, approved pension
and gratuity funds and contributions to other retiral benefits are
charged to revenue. Liabilities for retiral benefits which are in the
nature of defined benefit schemes are determined on the basis of
actuarial valuation as per the requirements of Accounting Standard 15
on ''Employee Benefits'' as at the end of the accounting period. Payments
under Voluntary Retirement Scheme are charged to revenue on accrual
basis in the year in which they become due for payment.
LEASES
Assets acquired by way of finance lease are capitalised at the lower of
the fair value and the present value of the minimum lease payments at
the inception of the lease term and disclosed as leased assets. Lease
payments are apportioned between finance charge and reduction of the
lease liability based on the implicit rate of return. Finance charges
are charged in the statement of profit and loss.
Lease rentals paid in respect of operating leases are charged to the
statement of profit and loss.
TAXES ON INCOME
Current tax is determined as the amount of tax payable in respect of
taxable income for the period.
Deferred tax is recognised on timing differences between taxable income
and accounting income that originate in one period and are capable of
reversal in one or more subsequent periods, subject to consideration of
prudence. 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.
FOREIGN EXCHANGE TRANSACTIONS
The transactions in foreign currency are accounted for at the exchange
rate prevailing on the date of the transaction. Gains and losses
resulting from the settlement of such transactions and from translation
of monetary assets and liabilities denominated in foreign currencies
are recognised in the statement of profit and loss.
The Company uses foreign exchange forward contracts and currency
options to hedge risks associated with movements in foreign exchange
rates. The use of these foreign exchange forward contracts and currency
options is to reduce the risk or cost to the company and are not meant
for trading or speculation purposes.
The Company adopted Accounting Standard 30 on ''Financial Instruments:
Recognition and Measurement'' issued by the Institute of Chartered
Accountants of India to the extent the adoption does not contradict
with existing accounting standards and other authoritative
pronouncements of the company law and other regulatory requirements.
Foreign exchange forward contracts and currency options that are
designated as cash flow hedges and qualify for hedge accounting are
fair valued at each reporting date and the resultant gain or loss is
recognised directly in Shareholders'' Funds under ''Cash Flow Hedge
Reserve Account'' to the extent considered highly effective and are
reclassified into the statement of profit and loss upon occurrence of
the hedged transactions.
Gain or loss on derivative instruments that are either not designated
as cash flow hedges or designated as cash flow hedges to the extent
considered ineffective is recognised in the statement of profit and
loss.
If the hedged transaction is no longer expected to occur, the net
cumulative gain or loss on the hedging instrument recognised in
Shareholders'' Funds under Cash Flow Hedge Reserve is transferred to the
statement of profit and loss.
RESEARCH AND DEVELOPMENT
Revenue expenditure on research and development is recognised in the
statement of profit and loss in the year it is incurred. Capital
expenditure on research and development is included under fixed assets.
Mar 31, 2013
BASIS OF PREPARATION OF ACCOUNTS
The financial statements have been prepared on the basis of going
concern, under the historic cost convention, except for certain,
tangible assets which are being carried at revalued amounts. These
financial statements have been prepared to comply in all material
aspects with applicable accounting principles in India, the applicable
Accounting standards notified under Section 211 (3C) of the Companies
Act, 1956 ("the Act") and the relevant provisions of the Act.
USE OF ESTIMATES
The preparation of financial statements, require estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities as on the date of the financial statements and reported
amount of revenues and expenses during the reported period. The
estimates made are based on the principles of prudence and
reasonableness, however, actual results could differ from these
estimates. Any revision to such accounting estimates is recognised
prospectively in the current and future periods.
FIXED ASSETS
TANGIBLE ASSETS
Tangible assets are stated at historical cost, net of accumulated
depreciation and accumulated impairment loss, if any, except so far as
they relate to the revaluation of land and buildings. Historical cost
is inclusive of freight, installation cost, duties and taxes, interest
on specific borrowings utilised for financing the assets and other
incidental expenses.
Depreciation is provided on plant and machinery on straight line basis
at the rates specified in Schedule XIV of the Act. On other assets,
depreciation is provided on straight line basis at rates determined
based on estimated useful life of assets. Such rates adopted being
higher than the Schedule XIV rates as given below:
Rate of Depreciation %
Buildings Freehold 5
Leasehold Property 5
Furniture and Fixtures 15 - 25
Office Equipment 15- 25
Motor Vehicles etc. 25
Accelerated depreciation is provided based on technical evaluation of
estimated useful life of an asset. All assets costing less than Rs.5,000
are fully depreciated in the year of purchase.
Depreciation on the revalued assets is calculated on the revalued costs
and the Revaluation Reserve is adjusted with the difference between the
depreciation calculated on such revalued costs and historic costs.
INTANGIBLE ASSETS
Intangible assets are stated at cost net of accumulated amortisation
and accumulated impairment loss, if any. Computer software (including
license fees and cost of implementation/system integration services) is
capitalised where it is expected to provide future enduring economic
benefits. Cost of upgradation/enhancements is charged off as revenue
expenditure unless they bring similar significant additional benefits.
Intangible assets are amortised on a straight line basis over their
estimated useful life. Useful life is determined based on the period of
the underlying contract and the period of time the intangible asset is
expected to be used i.e.
Rights on time share - over 20 years Computer software - over 4 years
IMPAIRMENT OF ASSETS
All the fixed assets are assessed for any indication of impairment, at
the end of each financial year. On such indication, the impairment
loss, being the excess of carrying value over the recoverable value of
the assets, is charged to the statement of profit and loss in the
respective financial years. The impairment loss recognised in the prior
years is reversed in cases where the recoverable value exceeds the
carrying value, upon re-assessment in the subsequent years.
INVESTMENTS
Long-term investments are valued at cost net of provision, for
permanent diminution, if any. Current investments are stated at lower
of cost and net realisable value.
INVENTORIES
Inventories are valued at lower of cost and net realisable value. Cost
is computed on weighted average method. Cost includes purchase cost net
of CENVAT credit availed and attributable expenses.
Consumption and/or other stock diminution is accounted for at the
aforesaid weighted average cost. In the case of finished goods, cost
comprises of material, direct labour, applicable overhead expenses,
applicable excise duty and taxes paid/ payable thereon.
Obsolete, slow moving and defective inventories are identified at the
time of physical verification of inventories and where necessary,
provision is made for such inventories.
Goods in transit/with third parties are valued at cost which represents
the costs incurred upto the stage at which the goods are in
transit/with third parties.
REVENUE RECOGNITION
Sales are recognised when the property in the goods is transferred and
are recorded net of trade discounts, rebates and value added tax. Sales
are inclusive of excise duty.
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and rate of interest applicable.
Dividend income from investments is recognised in the year in which the
right to receive dividend is established.
EMPLOYEE BENEFITS
Contribution to various recognised provident funds, approved pension
and gratuity funds and contributions to secured retiral benefits are
charged to revenue. Liability for gratuity and leave encashment is
determined on the basis of actuarial valuation as at the end of the
accounting period. Payments under Voluntary Retirement Scheme are
charged to revenue on accrual basis in the year in which they become
due for payment.
LEASES
Assets acquired by way of finance lease are capitalised at the lower of
the fair value and the present value of the minimum lease payments at
the inception of the lease term and disclosed as leased assets. Lease
payments are apportioned between finance charge and reduction of the
lease liability based on the implicit rate of return. Finance charges
are charged in the Statement of Profit and Loss.
Lease rentals paid in respect of operating leases are charged to the
Statement of Profit and Loss.
RESEARCH AND DEVELOPMENT
Revenue expenditure on Research and Development is recognised in the
Statement of Profit and Loss in the year it is incurred. Capital
expenditure on research and development is included under fixed assets.
TAXES ON INCOME
Current tax is determined as the amount of tax payable in respect of
taxable income for the period.
Deferred tax is recognised on timing differences between taxable income
and accounting income that originate in one period and are capable of
reversal in one or more subsequent periods, subject to consideration of
prudence. 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.
FOREIGN EXCHANGE TRANSACTIONS
The transactions in foreign currency are accounted for at the exchange
rate prevailing on the date of the transaction. Gains and losses
resulting from the settlement of such transactions and from translation
of monetary assets and liabilities denominated in foreign curriencies
are recognised in the Statement of Profit and Loss.
The Company uses foreign exchange forward contracts and currency
options to hedge risks associated with movements in foreign exchange
rates. The use of these foreign exchange forward contracts and currency
options is to reduce the risk or cost to the Company and are not meant
for trading or speculation purposes.
Effective 1st April, 2012, the Company adopted Accounting Standard 30,
"Financial Instruments: Recognition and Measurement" issued by the
Institute of Chartered Accountants of India to the extent the adoption
does not contradict with existing accounting standards and other
authoritative pronouncements of the Company Law and other regulatory
requirements.
Foreign exchange forward contracts and currency options that are
designated as cash flow hedges and qualify for hedge accounting are
fair valued at each reporting date and the resultant gain or loss is
recognised directly in Shareholders'' Funds under ''Cash Flow Hedge
Reserve Account'' to the extent considered highly effective and are
reclassified into the Statement of Profit and Loss upon occurrence of
the hedged transactions.
Gain or loss on derivative instruments that are either not designated
as cash flow hedges or designated as cash flow hedges to the extent
considered ineffective is recognised in the Statement of Profit and
Loss.
If the hedged transaction is no longer expected to occur, the net
cummulative gain or loss on the hedging instrument recognised in
Shareholders'' Funds under Cash Flow Hedge Reserve is transferred to the
Statement of Profit and Loss.
PROPOSED DIVIDEND
Dividend (including related income tax thereon), proposed by the
Directors, is provided for in the books of account, pending approval at
the Annual General Meeting.
Mar 31, 2011
BASIS OF PREPARATION OF ACCOUNTS
The financial statements have been prepared on the basis of going
concern, under the historic cost convention, (with the exception of
land and buildings, which have been revalued), to comply in all
material aspects with applicable accounting principles in India, the
applicable Accounting Standards notified under Section 211 (3C) of the
Companies Act, 1956 ("the Act") and the relevant provisions of the Act.
REVENUE RECOGNITION
Sales are recognised when the property in the goods is transferred and
are recorded net of trade discounts, rebates and value added tax. Sales
are inclusive of excise duty.
Income from investments is accounted for when accrued.
FIXED ASSETS INCLUDING INTANGIBLES
Fixed Assets are stated at historic cost except so far as they relate
to the revaluation of Land and Buildings. Historical cost is inclusive
of freight, installation cost, duties and taxes, interest on specific
borrowings utilised for financing the assets and other incidental
expenses.
Rights on time shares are amortised over a period of 20 years.
Assets costing less than Rs. 5,000 are fully depreciated in the year of
purchase. Depreciation on the revalued assets is calculated on the
revalued costs and the Revaluation Reserve is adjusted with the
difference between the depreciation calculated on such revalued costs
and historic costs. All the fixed assets are assessed for any
indication of impairment, at the end of each financial year.
On such indication, the impairment loss, being the excess of carrying
value over the recoverable value of the assets, is charged to the
Profit and Loss Account in the respective financial years. The
impairment loss recognised in the prior years is reversed in cases
where the recoverable value exceeds the carrying value, upon re-
assessment in the subsequent years.
INVENTORIES
Inventories are valued at cost or below. Cost is computed based on the
weighted average cost per unit after taking into account receipts at
actual cost net of CENVAT credit availed. Consumption and/or other
stock diminution is accounted for at the aforesaid weighted average
cost. In the case of finished goods, cost comprises of material, direct
labour, applicable overhead expenses, applicable excise duty and taxes
paid/payable thereon.
Goods in transit/with third parties are valued at cost which represents
the costs incurred upto the stage at which the goods are in
transit/with third parties.
TAXES ON INCOME
Current tax is determined as the amount of tax payable in respect of
taxable income for the period.
Deferred tax is recognised on timing differences between taxable income
and accounting income that originate in one period and are capable of
reversal in one or more subsequent periods, subject to consideration of
prudence.
INVESTMENTS
Long term investments are valued at cost net of provision, for
permanent diminution, if any. Current investments are stated at lower
of cost and fair value.
EMPLOYEE BENEFITS
Contribution to various recognised provident funds/approved pension and
gratuity funds and contributions to secured retiral benefits are
charged to revenue. Liability for gratuity and leave encashment is
determined on the basis of actuarial valuation as at the end of the
accounting period.
Payments under Voluntary Retirement Scheme are charged to revenue on
accrual basis in the year in which they become due for payment.
RESEARCH AND DEVELOPMENT
Revenue expenditure on Research and Development is charged to Profit
and Loss Account in the year it is incurred.
Capital expenditure on research and development is included under fixed
assets.
FOREIGN EXCHANGE TRANSACTIONS
The transactions in foreign currency are accounted for at the exchange
rate prevailing at the date of the transaction. Gains and losses
resulting from the settlement of such transactions and from translation
of monetary assets and liabilities denominated in foreign curriencies
are recognised in the Profit and Loss Account.
Forward exchange contracts outstanding as at the period end on account
of firm commitment/highly probable forecast transaction are marked to
market and the resultant gain/loss is dealt in the Profit and Loss
Account.
Difference between the forward exchange contract rate and the exchange
rate as at the date of transaction is recognised as income or expense
over the life of the said contract.
PROPOSED DIVIDEND
Dividend proposed by the Directors, pending approval at the Annual
General Meeting, is provided for in the books of account.
LEASES
Assets acquired by way of finance lease are capitalised at the lower of
the fair value and the present value of the minimum lease payments at
the inception of the lease term and disclosed as leased assets. Lease
payments are apportioned between finance charge and reduction of the
lease liability based on the implicit rate of return. Finance charges
are charged in the Profit and Loss Account.
Lease rentals paid in respect of operating leases are charged to Profit
and Loss Account.
Mar 31, 2010
The financial statements have been prepared on the basis of going
concern, under the historic cost convention, (with the exception of
Land and Buildings, which have been revalued), to comply in all
material aspects with applicable accounting principles in India, the
applicable Accounting Standards notified under Section 211 (3C) of the
Companies Act, 1956 ("the Act") and the relevant provisions of the Act.
REVENUE RECOGNITION
Sales are recognised when the property in the goods is transferred and
are recorded net of trade discounts, rebates and value added tax. Sales
are inclusive of excise duty.
Income from Investments is accounted for when accrued.
FIXED ASSETS
Fixed Assets are stated at historic cost except so far as they relate
to the revaluation of Land and Buildings. Historical cost is inclusive
of freight, installation cost, duties and taxes, interest on specific
borrowings utilised for financing the assets and other incidental
expenses.
Depreciation is provided on plant and machinery on straight line basis
at the rates specified in Schedule XIV of the Companies Act, 1956 and
on other assets on straight line basis at rates based on estimated
useful life of assets as determined by the management and such rates
adopted are higher than the Schedule XIV rates as given below.
Rate of Depreciation %
Buildings Freehold 5
Leasehold Property 5
Furniture & Fixtures 15- 25
Motor Vehicles etc. 25
Assets costing less than Rs.5,000 are fully depreciated in the year of
purchase. Depreciation on the revalued assets is calculated on the
revalued costs and the Revaluation Reserve is adjusted with the
difference between the depreciation calculated on such revalued costs
and historic costs. All the fixed assets are assessed for any
indication of impairment, at the end of each financial year. On such
indication, the impairment loss, being the excess of carrying value
over the recoverable value of the assets, is charged to the Profit and
Loss Account in the respective financial years. The impairment loss
recognised in the prior years is reversed in cases where the
recoverable value exceeds the carrying value, upon re- assessment in
the subsequent years.
INVENTORIES
Inventories are valued at cost or below. Cost is computed based on the
weighted average cost per unit after taking into account receipts at
actual cost net of CENVAT credit availed. Consumption and/or other
stock diminution is accounted for at the aforesaid weighted average
cost. In the case of finished goods, cost comprises of material, direct
labour, applicable overhead expenses, applicable excise duty and taxes
paid/payable thereon.
Goods in transit/with third parties are valued at cost which represents
the costs incurred upto the stage at which the goods are in
transit/with third parties.
TAXES ON INCOME
Current tax is determined as the amount of tax payable in respect of
taxable income for the period.
Deferred tax is recognised on timing differences between taxable income
and accounting income that originate in one period and are capable of
reversal in one or more subsequent periods, subject to consideration of
prudence.
INVESTMENTS
Long term investments are valued at cost net of provision, for
permanent diminution, if any; Current investments are stated at lower
of cost and fair value.
EMPLOYEE BENEFITS
Contribution to various recognised provident funds/approved pension and
gratuity funds and contributions to secured retiral benefits are
charged to revenue. Liability for gratuity and leave encashment is
determined on the basis of actuarial valuation as at the end of the
accounting period.
Payments under Voluntary Retirement Scheme are charged to revenue on
accrual basis in the year in which they become due for payment.
RESEARCH AND DEVELOPMENT
Revenue expenditure on Research and Development is charged to Profit
and Loss Account in the year it is incurred.
Capital expenditure on research and development is included under fixed
assets.
FOREIGN EXCHANGE TRANSACTIONS
The transactions in foreign currency are accounted for at the exchange
rate prevailing at the date of the transaction. Gains and losses
resulting from the settlement of such transactions and from translation
of monetary assets and liabilities denominated in foreign currencies
are recognised in the Profit and Loss Account.
Forward exchange contracts outstanding as at the period end on account
of firm commitment/highly probable forecast transaction are marked to
market and the resultant gain/loss is dealt in the Profit and Loss
Account.
Difference between the forward exchange contract rate and the exchange
rate as at the date of transaction is recognised as income or expense
over the life of the said contract.
PROPOSED DIVIDEND
Dividend proposed by the Directors, pending approval at the Annual
General Meeting, is provided for in the books of account.
LEASES
Assets acquired by way of finance lease are capitalised at the lower of
the fair value and the present value of the minimum lease payments at
the inception of the lease term and disclosed as leased assets. Lease
payments are apportioned between finance charge and reduction of the
lease liability based on the implicit rate of return. Finance charges
are charged in the Profit and Loss Account.
Lease rentals paid in respect of operating leases are charged to Profit
and Loss Account.
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VST Industries Ltd. Tools
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VST Industries Ltd. Company Details
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VST Industries Ltd. Key Financial Ratios
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VST Industries Ltd. Results
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VST Industries Ltd. Financial Data
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VST Industries Ltd. Reports
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VST Industries Ltd. Corporate Announcements
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