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Accounting Policies of Banco Products (India) Ltd. Company
Mar 31, 2025
2. MATERIAL ACCOUNTING POLICIES
2.1 Statement of compliance
Standalone financial statements have been prepared in accordance with the accounting principles generally accepted
in India including Indian accounting standards (Ind AS) prescribed under the section 133 of the Companies Act, 2013
read with rule 3 of the Companies (Indian accounting standards) Rules, 2015 as amended and relevant provisions of
the Companies Act, 2013.
Accordingly, the Company has prepared these standalone financial statements which comprise the balance sheet
as at 31st March, 2025, the statement of profit and loss for the year ended 31st March 2025, the statement of cash
flows for the year ended 31st March 2025 and the statement of changes in equity for the year ended as on that date,
and accounting policies and other explanatory information (together hereinafter referred to as ''Standalone Financial
Statement''s or ''Financial Statement''s).
These financial statements are approved for issue by the Board of Directors on 17th May 2025.
2.2 Basis of preparation of financial statements
The financial statements have been prepared in accordance with Indian accounting standards (Ind AS), under the
historical cost convention on the accrual basis as per the provisions of Companies Act, 2013, except for certain
financial assets and liabilities that are measured at fair value at the end of each reporting period set out below.
The accounting policy has been applied consistently over all the periods reported in these financial statements,
except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard
requires a change in the accounting policy hitherto in use.
The standalone financial statements have been presented in Indian Rupees (INR), which is the Company''s functional
currency. All financial information presented in INR has been rounded off to the nearest two decimals of Lakhs,
unless otherwise stated.
2.3 Significant accounting judgments, estimates and assumptions
In preparing these financial statements in conformity with Ind AS, the Management is required to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
This note provides an overview of the areas where there is a higher degree of judgment or complexity. Detailed
information about each of these estimates and judgments is included in relevant notes together with information
about the basis of calculation.
The areas involving critical estimates or judgments are
⢠Fair value of unlisted equity securities - Note 4
⢠Defined benefit obligation - Note 34
⢠Measurement of contingent liabilities - Note 33
⢠Current tax expense and current tax payable - Note 7
⢠Deferred tax assets - Note 7
Estimates and underlying assumptions are reviewed on an ongoing basis. Estimates are based on historical
experience and other factors, including futuristic reasonable information that may have a financial impact on the
company. Any change in these estimates and assumptions will generally be reflected in the financial statements
in current period or prospectively, unless they are required to be treated retrospectively under relevant accounting
standards.
2.4 Classification of current/non-current assets and liabilities
All assets and liabilities are presented as Current or Non-Current as per the Company''s normal operating cycle and
the other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time
between the acquisition of assets for processing and their realization, the Company has ascertained its operating
cycle as 12 months for the purpose of Current/Non-Current classification of assets/liabilities.
2.5 Standards issued but not effective (based on exposure drafts available as on date)
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. As on the date of release of Standalone
Financial Statement the Ministry of Corporate Affairs (MCA), vide its notification dated [07 May 2025], has amended
Ind AS 21 - The Effects of Changes in Foreign Exchange Rates, introducing guidance on situations where a
currency is not exchangeable into another currency. The amendments are applicable for financial years beginning on
or after April 1, 2025.
The amendments:
⢠Define when a currency is considered not exchangeable;
⢠Prescribe a methodology to estimate the spot exchange rate in such circumstances;
⢠Introduce enhanced disclosures when estimated exchange rates are used; and
⢠Require entities to assess exchangeability for a specific purpose at the measurement date.
The amendments also introduce application guidance and make related changes to Ind AS 1, Ind AS 109 and Ind AS
101.
These amendments are to be applied retrospectively, but comparative information need not be restated. Adjustments,
if any, shall be made to retained earnings or foreign currency translation reserve as at the beginning of the annual
reporting period.
The Company has evaluated the applicability of the amendments and noted that as at the reporting date, all foreign
currency balances relate to jurisdictions where there are no restrictions on currency exchangeability. Accordingly, the
Company does not expect any material impact on its financial statements from the application of these amendments.
2.6 Property, plant and equipment
Property, plant and equipment except freehold land is stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any.
The cost of property, plant and equipment comprises its purchase price net of any trade discounts and rebates,
any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly
attributable expenditure on making the asset ready for its intended use, including relevant borrowing costs for
qualifying assets and any expected costs of decommissioning. Expenditure incurred after the property, plant and
equipment have been put into operation, such as repairs and maintenance, are charged to the statement of profit
and loss in the year in which the costs are incurred. It includes professional fees and, for qualifying assets, borrowing
costs capitalized in accordance with the Company''s accounting policy based on Ind AS 23 - Borrowing costs. Such
properties are classified to the appropriate categories of PPE when completed and ready for intended use. Items
such as spare parts, standby equipment and service equipment that meet definition of PPE are capitalized at cost.
The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement
of the asset and the resultant gains or losses are recognized in the statement of profit and loss. Assets to be disposed
off are reported at the lower of the carrying value or the fair value less cost to sell.
Capital work-in-progress
Assets in the course of construction are capitalised in the Capital Work in Progress account. At the point when an
asset is operating at management''s intended use, the cost of construction is transferred to the appropriate category
of property, plant and equipment and depreciation commences.
2.7 Intangible assets
Intangible assets with finite useful life that are acquired separately are measured on initial recognition at cost.
Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated
impairment loss, if any.
2.8 Depreciation/amortization
Depreciation is calculated on a straight-line basis or written down value as per the specified life of the assets as
provided in schedule II of the Companies Act, 2013. The useful life of item of PPE are mentioned below.
The management, based on internal technical evaluation, believes that the useful lives as given above best represent
the period over which the assets are expected to be used.
Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.
2.9 Impairment of assets
The carrying amounts of assets are reviewed at balance sheet date to check if there is any indication of impairment
based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its
recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is
identified as impaired. The impairment loss, if any, recognized in prior accounting period is reversed if there has been
a change in the estimate of recoverable amount.
2.10 Leases
The Company as a lessee
The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses
whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess
whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) The contract involves the use of an identified asset
(ii) The Company has substantially all of the economic benefits from use of the asset through the period of the
lease and
(iii) The Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and a corresponding
lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less
(short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the
lease payments as an operating expense on a straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term.
ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted
for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any
lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the
lease term and useful life of the underlying asset. Right-of-use assets are evaluated for recoverability whenever
events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of
impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is
determined on an individual asset basis unless the asset does not generate cash flows that are largely independent
of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU)
to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The
lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using
the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a
corresponding adjustment to the related right-of-use asset if the Company changes its assessment if whether it will
exercise an extension or a termination option.
Lease liability and ROU asset have been separately presented in the balance sheet and lease payments have been
classified as financing cash flows.
The lease liability is already discharged and therefore no lease liability remains to be disclosed.
Transition
Effective 1st April, 2019, the Company adopted Ind AS 116 "Leases" and applied the standard to all lease contracts
existing on 1st April, 2019. Accordingly, the Company has re-classified leasehold land from property, plant &
equipment to right-of-use asset. The leasehold land is already fully paid and hence already stated at its present value.
The same is being amortized over the period of lease (including the period renewable at the option of the Company.)
All other lease contracts of the Company are for lease tenure below 12 months and the Company has accordingly
applied the exemption not to recognize right-of-use assets for such leases.
The Company as a lessor
Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis
over the lease term. The respective leased assets are included in the balance sheet based on their nature.
Arrangements in the nature of lease
The Company enters into agreements, comprising a transaction or series of related transactions that does not take
the legal form of a lease but conveys the right of use assets in return for a payment or series of payments. In case
of such arrangements, the Company applies the requirements of Ind AS 116 - Leases to the lease element of
the arrangement. For the purpose of applying the requirements under Ind AS 116 - Leases, payments and other
consideration required by the arrangement are separated at the inception of the arrangement into those for lease and
those for other elements.
2.11 Revenue recognition
Revenue is measured based on the consideration specified in a contract with a customer.
Sale of goods
The principal activity from which the Company generates revenue is the supply of products to customers from its
various manufacturing sites and warehouses. Products are supplied under a variety of standard terms and conditions,
and in each case, revenue is recognized when contractual performance obligations between the Company and the
customer are satisfied and control of product has been transferred to the Customer. This will typically be on dispatch
or delivery. When sales discount and rebate arrangements result in variable consideration, appropriate provisions are
recognized as a deduction from revenue at the point of sale (to the extent that it is highly probable that a significant
reversal in the amount of cumulative revenue will not be required). The Company typically uses the expected value
method for estimating variable consideration, reflecting that such contracts have similar characteristics and a range
of possible outcomes.
Sale of services
Revenues for services are recognised when the service rendered has been completed.
Royalties and profit-sharing arrangements
Revenues are recognized when performance obligations between the Company and the customer are satisfied in
accordance with the substance of the underlying contract.
Interest and dividend income
Interest income is recognized on a time-proportion basis using the effective interest method. Dividend income is
recognized when the right to receive payment is established.
2.12 Inventories
(i) Raw materials, stores and spares, packing materials, work-in-process and finished goods are valued at lower
of cost and net realizable value. Damaged, unserviceable and inert stocks are suitably depreciated.
(ii) In determining cost of raw materials, stores and spares (except machinery spares which meet the definition of
PPE ) and packing materials, weighted average cost method is used. Cost of inventory comprises all costs of
purchase, duties and taxes (other than those subsequently recoverable from tax authorities) and all other costs
incurred in bringing the inventory to their present location and condition.
(iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, and an
appropriate share of fixed and variable production overheads and other costs incurred in bringing the inventories
to their present location and condition.
2.13 Financial instruments
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions
of the instrument.
(a) Financial assets
(i) Initial recognition and measurement
The Company recognizes financial assets when it becomes a party to the contractual provisions of
the instrument. All financial assets are recognized at fair value on initial recognition, except for trade
receivables which are initially measured at transaction price. Transaction costs that are directly attributable
to the acquisition of financial assets, which are not at fair value through profit or loss, are added to the fair
value on initial recognition. Regular way trade of financial assets are accounted for at trade date.
(ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
Financial assets at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose
objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
After initial measurement, debt instruments at amortised cost are subsequently measured at amortised
cost using the effective interest rate method, less impairment, if any.
Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held
within a business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding.
The Company has made an irrevocable election for its investments which are classified as equity
instruments to present the subsequent changes in fair value in other comprehensive income based on its
business model.
Financial assets at fair value through profit or loss
Financial assets which are not classified in any of the above categories are subsequently fair valued
through profit or loss.
Investment in subsidiaries
Investment in subsidiaries is carried at cost in the financial statements.
(iii) Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is derecognized (i.e. removed from the Company''s balance sheet) when any of the following
occurs
⢠The contractual rights to cash flows from the financial asset expires;
⢠The Company transfers its contractual rights to receive cash flows of the financial asset and has
substantially transferred all the risks and rewards of ownership of the financial asset;
⢠The Company retains the contractual rights to receive cash flows but assumes a contractual
obligation to pay the cash flows without material delay to one or more recipients under a âpass¬
through'' arrangement (thereby substantially transferring all the risks and rewards of ownership of
the financial asset);
⢠The Company neither transfers nor retains substantially all risk and rewards of ownership and does
not retain control over the financial asset;
(b) Financial liabilities
(i) Initial recognition and measurement
The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank
overdrafts, financial guarantee contracts. Financial liabilities are classified, at initial recognition, at fair
value through profit and loss or as those measured at amortised cost.
(ii) Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows
Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit and loss include financial liabilities held for trading.
The Company has not designated any financial liabilities upon initial recognition at fair value through profit
and loss.
Financial liabilities measured at amortised cost
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised
cost using the effective interest rate method.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or
expires.
(c) Fair value
The Company measures financial instruments at fair value in accordance with the accounting policies mentioned
above. 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. The fair value measurement is based on the
presumption that the transaction to sell the asset or transfer the liability takes place either.
⢠In the principal market for asset or liability or
⢠In the absence of principal market, in the most advantageous market for the assets or liability
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized
within the fair value hierarchy that categorizes into three levels, described as follows, the inputs to valuation
techniques used to measure value. The fair value hierarchy gives the highest priority to quoted prices in active
markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3
inputs).
Level 1 - quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly
Level 3 - inputs that are unobservable for the asset or liability
For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis,
the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing
categorization at the end of each reporting period and discloses the same.
2.14 Foreign exchange transactions
The functional currency of the Company is Indian Rupees which represents the currency of the primary economic
environment in which it operates.
Transactions in foreign currencies are initially recorded by the Company at the rate of exchange prevailing on the date
of the transaction. Monetary assets and monetary liabilities denominated in foreign currencies remaining unsettled at
the end of the year are converted at the exchange rate prevailing on the reporting date.
Differences arising on settlement or conversion of monetary items are recognised in statement of profit or loss. Non¬
monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange
rates at the date of the transaction
2.15 Trade receivables
Trade Receivables are stated after writing off debts considered as bad. Adequate provision is made for Expected
Credit Losses. Discounts due yet to be quantified at the customer level are netted of from Trade Receivables.
2.16 Borrowing costs
(i) Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of
borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded
as an adjustment to the interest cost.
(ii) Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized. All other
borrowing costs are expensed in the period they occur.
Mar 31, 2024
2. MATERIAL ACCOUNTING POLICIES
2.1 Statement of compliance
Standalone financial statements have been prepared in accordance with the accounting principles generally accepted in India including Indian accounting standards (Ind AS) prescribed under the section 133 of the Companies Act, 2013 read with rule 3 of the Companies (Indian accounting standards) Rules, 2015 as amended and relevant provisions of the Companies Act, 2013.
Accordingly, the Company has prepared these standalone financial statements which comprise the balance sheet as at 31st March, 2024, the statement of profit and loss for the year ended 31st March, 2024, the statement of cash flows for the year ended 31st March, 2024 and the statement of changes in equity for the year ended as on that date, and accounting policies and other explanatory information (together hereinafter referred to as âStandalone Financial Statementsâ or âFinancial Statementsâ).
These financial statements are approved for issue by the Board of Directors on 29th May, 2024.
2.2 Basis of preparation of financial statements
The financial statements have been prepared in accordance with Indian accounting standards (Ind AS), under the historical cost convention on the accrual basis as per the provisions of Companies Act, 2013, except for certain financial assets and liabilities that are measured at fair value at the end of each reporting period set out below.
The accounting policy has been applied consistently over all the periods reported in these financial statements, except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The standalone financial statements have been presented in Indian Rupees (INR), which is the Companyâs functional currency. All financial information presented in INR has been rounded off to the nearest two decimals of Lakhs, unless otherwise stated.
2.3 Significant accounting judgments, estimates and assumptions
In preparing these financial statements in conformity with Ind AS, the Management is required to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
This note provides an overview of the areas where there is a higher degree of judgment or complexity. Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation.
The areas involving critical estimates or judgments are
⢠Fair value of unlisted equity securities - Note 4
⢠Defined benefit obligation - Note 33
⢠Measurement of contingent liabilities - Note 32
⢠Current tax expense and current tax payable - Note 7
⢠Deferred tax assets - Note 7
Estimates and underlying assumptions are reviewed on an ongoing basis. Estimates are based on historical experience and other factors, including futuristic reasonable information that may have a financial impact on the company. Any change in these estimates and assumptions will generally be reflected in the financial statements in current period or prospectively, unless they are required to be treated retrospectively under relevant accounting standards.
2.4 Classification of current/non-current assets and liabilities
All assets and liabilities are presented as Current or Non-Current as per the Companyâs normal operating cycle and the other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle as 12 months for the purpose of Current/Non-Current classification of assets/liabilities.
2.5 Standards issued but not effective (based on exposure drafts available as on date)
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time.
2.6 Property, plant and equipment
Property, plant and equipment except freehold land is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.
The cost of property, plant and equipment comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, including relevant borrowing costs for qualifying assets and any expected costs of decommissioning. Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance, are charged to the statement of profit and loss in the year in which the costs are incurred. It includes professional fees and, for qualifying assets, borrowing costs capitalized in accordance with the Companyâs accounting policy based on Ind AS 23 - Borrowing costs. Such properties are classified to the appropriate categories of PPE when completed and ready for intended use. Items such as spare parts, standby equipment and service equipment that meet definition of PPE are capitalized at cost.
The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the statement of profit and loss. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.
Capital work-in-progress
Assets in the course of construction are capitalised in the Capital Work in Progress account. At the point when an asset is operating at managementâs intended use, the cost of construction is transferred to the appropriate category of property, plant and equipment and depreciation commences.
2.7 Intangible assets
Intangible assets with finite useful life that are acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any.
2.8 Depreciation/amortization
Depreciation is calculated on a straight-line basis or written down value as per the specified life of the assets as provided in schedule II of the Companies Act, 2013. The useful life of item of PPE are mentioned below.
The management, based on internal technical evaluation, believes that the useful lives as given above best represent the period over which the assets are expected to be used.
Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.
2.9 Impairment of assets
The carrying amounts of assets are reviewed at balance sheet date to check if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss, if any, recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
2.10 Leases
The Company as a lessee
The Companyâs lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) The contract involves the use of an identified asset
(ii) The Company has substantially all of the economic benefits from use of the asset through the period of the lease and
(iii) The Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (âROUâ) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right-of-use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right-of-use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
Lease liability and ROU asset have been separately presented in the balance sheet and lease payments have been classified as financing cash flows.
The lease liability is already discharged and therefore no lease liability remains to be disclosed. Transition
Effective 1st April, 2019, the Company adopted Ind AS 116 âLeasesâ and applied the standard to all lease contracts existing on 1st April, 2019. Accordingly, the Company has re-classified leasehold land from property, plant & equipment to right-of-use asset. The leasehold land is already fully paid and hence already stated at its present value. The same is being amortized over the period of lease (including the period renewable at the option of the Company.)
All other lease contracts of the Company are for lease tenure below 12 months and the Company has accordingly applied the exemption not to recognize right-of-use assets for such leases.
The Company as a lessor
Lease income from operating leases where the Company is a lessor is recognised in income on a straightline basis over the lease term. The respective leased assets are included in the balance sheet based on their nature.
Arrangements in the nature of lease
The Company enters into agreements, comprising a transaction or series of related transactions that does not take the legal form of a lease but conveys the right of use the asset in return for a payment or series of payments. In case of such arrangements, the Company applies the requirements of Ind AS 116 - Leases to the lease element of the arrangement. For the purpose of applying the requirements under Ind AS 116 -Leases, payments and other consideration required by the arrangement are separated at the inception of the arrangement into those for lease and those for other elements.
2.11 Revenue recognition
Revenue is measured based on the consideration specified in a contract with a customer.
Sale of goods
The principal activity from which the Company generates revenue is the supply of products to customers from its various manufacturing sites and warehouses. Products are supplied under a variety of standard terms and conditions, and in each case, revenue is recognized when contractual performance obligations between the Company and the customer are satisfied and control of product has been transferred to the Customer. This will typically be on dispatch or delivery. When sales discount and rebate arrangements result in variable consideration, appropriate provisions are recognized as a deduction from revenue at the point of sale (to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue will not be required). The Company typically uses the expected value method for estimating variable consideration, reflecting that such contracts have similar characteristics and a range of possible outcomes.
Sale of services
Revenues for services are recognised when the service rendered has been completed.
Royalties and profit-sharing arrangements
Revenues are recognized when performance obligations between the Company and the customer are satisfied in accordance with the substance of the underlying contract.
Interest and dividend income
Interest income is recognized on a time-proportion basis using the effective interest method. Dividend income is recognized when the right to receive payment is established.
2.12 Inventories
(i) Raw materials, stores and spares, packing materials, work-in-process and finished goods are valued at lower of cost and net realizable value. Damaged, unserviceable and inert stocks are suitably depreciated.
(ii) In determining cost of raw materials, stores and spares (except machinery spares which meet the definition of PPE ) and packing materials, weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties and taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.
(iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, and an appropriate share of fixed and variable production overheads and other costs incurred in bringing the inventories to their present location and condition.
2.13 Financial instruments
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument.
(a) Financial assets
(i) Initial recognition and measurement
The Company recognizes financial assets when it becomes a party to the contractual provisions of the instrument. All financial assets are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition of financial assets, which are not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way trade of financial assets a re accounted for at trade date.
(ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
Financial assets at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
After initial measurement, debt instruments at amortised cost are subsequently measured at amortised cost using the effective interest rate method, less impairment, if any.
Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model.
Financial assets at fair value through profit or loss
Financial assets which are not classified in any of the above categories are subsequently fair valued through profit or loss.
Investment in subsidiaries
Investment in subsidiaries is carried at cost in the financial statements.
(iii) Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the Companyâs balance sheet) when any of the following occurs
⢠The contractual rights to cash flows from the financial asset expires;
⢠The Company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;
⢠The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a âpass-throughâ arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);
⢠The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset;
(b) Financial liabilities
(i) Initial recognition and measurement
The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts. Financial liabilities are classified, at initial recognition, at fair value through profit and loss or as those measured at amortised cost.
(ii) Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows
Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit and loss include financial liabilities held for trading.
The Company has not designated any financial liabilities upon initial recognition at fair value through profit and loss.
Financial liabilities measured at amortised cost
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
(c) Fair value
The Company measures financial instruments at fair value in accordance with the accounting policies mentioned above. 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. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either.
⢠In the principal market for asset or liability or
⢠In the absence of principal market, in the most advantageous market for the assets or liability
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy that categorizes into three levels, described as follows, the inputs to valuation techniques used to measure value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).
Level 1 - quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3 - inputs that are unobservable for the asset or liability
For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period and discloses the same.
2.14 Foreign exchange transactions
The functional currency of the Company is Indian Rupees which represents the currency of the primary economic environment in which it operates.
Transactions in foreign currencies are initially recorded by the Company at the rate of exchange prevailing on the date of the transaction. Monetary assets and monetary liabilities denominated in foreign currencies remaining unsettled at the end of the year are converted at the exchange rate prevailing on the reporting date.
Differences arising on settlement or conversion of monetary items are recognised in statement of profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction.
2.15 Trade receivables
Trade Receivables are stated after writing off debts considered as bad. Adequate provision is made for Expected Credit Losses. Discounts due yet to be quantified at the customer level are netted of from Trade Receivables.
2.16 Borrowing costs
(i) Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
(ii) Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized. All other borrowing costs are expensed in the period they occur.
Mar 31, 2023
1. CORPORATE INFORMATION
Banco Products (India) Limited is a public limited company domiciled in India and incorporated under the Indian Companies Act, 1956. Equity shares of the company are listed on two stock exchanges in India. The Company is engaged in manufacturing and selling of Heat exchangers/Cooling systems. The company caters to both domestic and international market. The Registered office of the Company is located at Bil, Near Bhaili railway station, Padra road, Dist. Vadodara, 391410.
2. SIGNIFICANT ACCOUNTING POLICIES2.1 Statement of compliance
Standalone financial statements have been prepared in accordance with the accounting principles generally accepted in India including Indian accounting standards (Ind AS) prescribed under the section 133 of the Companies Act, 2013 read with rule 3 of the Companies (Indian accounting standards) Rules, 2015 as amended and relevant provisions of the Companies Act, 2013.
Accordingly, the Company has prepared these standalone financial statements which comprise the balance sheet as at 31st March, 2023, the statement of profit and loss for the year ended 31st March 2023, the statement of cash flows for the year ended 31 st March 2023 and the statement of changes in equity for the year ended as on that date, and accounting policies and other explanatory information (together hereinafter referred to as âStandalone Financial Statementsâ or âFinancial Statementsâ).
These financial statements are approved for issue by the Board of Directors on 20th May, 2023.
2.2 Basis of preparation of financial statements
The financial statements have been prepared in accordance with Indian accounting standards (Ind-AS), under the historical cost convention on the accrual basis as per the provisions of Companies Act, 2013, except for certain financial assets and liabilities that are measured at fair value at the end of each reporting period set out below.
The accounting policy has been applied consistently over all the periods reported in these financial statements, except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The standalone financial statements have been presented in Indian Rupees (INR), which is the Companyâs functional currency. All financial information presented in INR has been rounded off to the nearest two decimals of Lakhs, unless otherwise stated.
2.3 Significant accounting judgments, estimates and assumptions
In preparing these financial statements in conformity with Ind-AS, the Management is required to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.
This note provides an overview of the areas where there is a higher degree of judgment or complexity. Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation.
The areas involving critical estimates or judgments are
⢠Fair value of unlisted equity securities - Note 4
⢠Defined benefit obligation - Note 22 &16
⢠Measurement of contingent liabilities - Note 31
⢠Current tax expense and current tax payable - Note 7
⢠Deferred tax assets - Note 7
Estimates and underlying assumptions are reviewed on an ongoing basis. Estimates are based on historical experience and other factors, including futuristic reasonable information that may have a financial impact on
the company. Any change in these estimates and assumptions will generally be reflected in the financial statements in current period or prospectively, unless they are required to be treated retrospectively under relevant accounting standards.
2.4 Classification of current/non-current assets and liabilities
All assets and liabilities are presented as Current or Non-Current as per the Companyâs normal operating cycle and the other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle as 12 months for the purpose of Current/Non-Current classification of assets/liabilities.
2.5 Standards issued but not effective (based on exposure drafts available as on date)
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 31th March, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:
Ind AS 1 - Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after 1st April, 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of âaccounting estimatesâ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after 1st April, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.
Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after 1 st April, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statement.
2.6 Property, plant and equipment
Property, plant and equipment except freehold land is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.
The cost of property, plant and equipment comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, including relevant borrowing costs for qualifying assets and any expected costs of decommissioning. Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance, are charged to the statement of profit and loss in the year in which the costs are incurred. It includes professional fees and, for qualifying assets, borrowing costs capitalized in accordance with the Companyâs accounting policy based on Ind AS 23 - Borrowing costs. Such properties are classified to the appropriate categories of PPE when completed and ready for intended use. Items such as spare parts, standby equipment and service equipment that meet definition of PPE are capitalized at cost.
The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the statement of profit and loss. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.
Capital work-in-progress
Assets in the course of construction are capitalised in the Capital Work in Progress account. At the point when an asset is operating at managementâs intended use, the cost of construction is transferred to the appropriate category of property, plant and equipment and depreciation commences.
Intangible assets with finite useful life that are acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any.
Depreciation is calculated on a straight-line basis or written down value as per the specified life of the assets as provided in schedule II to the Companies Act, 2013. The useful life of item of PPE are mentioned below.
|
Class of assets |
Range of useful life (in years) |
|
Factory buildings |
30 |
|
Plant and equipments |
10-15 |
|
Furniture & fixtures |
10 |
|
Vehicles |
8-10 |
|
Office equipment |
5 |
|
Computer hardware |
3-6 |
|
Intangible assets - software |
3-6 |
The management, based on internal technical evaluation, believes that the useful lives as given above best represent the period over which the assets are expected to be used.
Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.
The carrying amounts of assets are reviewed at balance sheet date to check if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss, if any, recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
The Company as a lessee
The Companyâs lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) The contract involves the use of an identified asset
(ii) The Company has substantially all of the economic benefits from use of the asset through the period of the lease and
(iii) The Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (âROUâ) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right-of-use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right-of-use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
Lease liability and ROU asset have been separately presented in the balance sheet and lease payments have been classified as financing cash flows.
The lease liability is already discharged and therefore no lease liability remains to be disclosed. Transition
Effective 1st April, 2019, the Company adopted Ind AS 116 âLeasesâ and applied the standard to all lease contracts existing on 1st April, 2019. Accordingly, the Company has re-classified leasehold land from property, plant & equipment to right-of-use asset. The leasehold land is already fully paid and hence already stated at its present value. The same is being amortized over the period of lease (including the period renewable at the option of the Company.)
All other lease contracts of the Company are for lease tenure below 12 months and the Company has accordingly applied the exemption not to recognize right-of-use assets for such leases.
The Company as a lessor
Lease income from operating leases where the Company is a lessor is recognised in income on a straightline basis over the lease term. The respective leased assets are included in the balance sheet based on their nature.
Arrangements in the nature of lease
The Company enters into agreements, comprising a transaction or series of related transactions that does not take the legal form of a lease but conveys the right to use the asset in return for a payment or series of payments. In case of such arrangements, the Company applies the requirements of Ind AS 116 - Leases to the lease element of the arrangement. For the purpose of applying the requirements under Ind AS 116 -Leases, payments and other consideration required by the arrangement are separated at the inception of the arrangement into those for lease and those for other elements.
Revenue is measured based on the consideration specified in a contract with a customer.
Sale of goods
The principal activity from which the Company generates revenue is the supply of products to customers from its various manufacturing sites and warehouses. Products are supplied under a variety of standard terms and conditions, and in each case, revenue is recognized when contractual performance obligations between the Company and the customer are satisfied and control of product has been transferred to the Customer. This will typically be on dispatch or delivery. When sales discount and rebate arrangements result in variable consideration, appropriate provisions are recognized as a deduction from revenue at the point of sale (to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue will not be required). The Company typically uses the expected value method for estimating variable consideration, reflecting that such contracts have similar characteristics and a range of possible outcomes.
Revenues for services are recognised when the service rendered has been completed.
Royalties and profit-sharing arrangements
Revenues are recognized when performance obligations between the Company and the customer are satisfied in accordance with the substance of the underlying contract.
Interest and dividend income
Interest income is recognized on a time-proportion basis using the effective interest method. Dividend income is recognized when the right to receive payment is established.
(i) Raw materials, stores and spares, packing materials, work-in-process and finished goods are valued at lower of cost and net realizable value. Damaged, unserviceable and inert stocks are suitably depreciated.
(ii) In determining cost of raw materials, stores and spares (except machinery spares which meet the definition of PPE) and packing materials, weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties and taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.
(iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, and an appropriate share of fixed and variable production overheads and other costs incurred in bringing the inventories to their present location and condition.
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument.
(a) Financial assets
(i) Initial recognition and measurement
The Company recognizes financial assets when it becomes a party to the contractual provisions of the instrument. All financial assets are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition of financial assets, which are not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way trade of financial assets a re accounted for at trade date.
(ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
Financial assets at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
After initial measurement, debt instruments at amortised cost are subsequently measured at amortised cost using the effective interest rate method, less impairment, if any.
Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model.
Financial assets at fair value through profit or loss
Financial assets which are not classified in any of the above categories are subsequently fair valued through profit or loss.
Investment in subsidiaries is carried at cost in the financial statements.
(iii) Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the Companyâs balance sheet) when any of the following occurs
(i) The contractual rights to cash flows from the financial asset expires;
(ii) The Company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;
(iii) The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a âpass-throughâ arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);
(iv) The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.
(b) Financial liabilities
(i) Initial recognition and measurement
The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts. Financial liabilities are classified, at initial recognition, at fair value through profit and loss or as those measured at amortised cost.
(ii) Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows
Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit and loss include financial liabilities held for trading.
The Company has not designated any financial liabilities upon initial recognition at fair value through profit and loss.
Financial liabilities measured at amortised cost
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
The Company measures financial instruments at fair value in accordance with the accounting policies mentioned above. 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either.
⢠In the principal market for asset or liability or
⢠In the absence of principal market, in the most advantageous market for the assets or liability
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy that categorizes into three levels, described as follows, the inputs to valuation techniques used to measure value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).
Level 1 - quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3 - inputs that are unobservable for the asset or liability
For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period and discloses the same.
2.14 Foreign exchange transactions
The functional currency of the Company is Indian Rupees which represents the currency of the primary economic environment in which it operates.
Transactions in foreign currencies are initially recorded by the Company at the rate of exchange prevailing on the date of the transaction. Monetary assets and monetary liabilities denominated in foreign currencies remaining unsettled at the end of the year are converted at the exchange rate prevailing on the reporting date.
Differences arising on settlement or conversion of monetary items are recognised in statement of profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction
Trade Receivables are stated after writing off debts considered as bad. Adequate provision is made for Expected Credit Losses. Discounts due yet to be quantified at the customer level are netted of from Trade Receivables.
(i) Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
(ii) Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized. All other borrowing costs are expensed in the period they occur.
2.17 Provisions, contingent liabilities and contingent assets
(a) Provisions
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. The expense relating to a provision is presented in the statement of profit and loss.
(b) Contingent liabilities
Contingent liabilities are disclosed for
(i) Possible obligations which will be confirmed only by the future events not wholly within the control of the company or
(ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
(c) Contingent assets
Contingent assets are not recognised in the financial statements. Contingent assets if any, are disclosed in the notes to the financial statements.
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Taxable profit differs from âprofit before taxâ as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates that have been enacted by the end of reporting period for the amounts expected to be recovered from or paid to the taxation authorities.
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit under Income Tax Act, 1961.
Deferred tax liabilities are generally recognized for all taxable temporary differences. However, in case of temporary differences that arise from initial recognition of assets or liabilities in a transaction (other than business combination) that affect neither the taxable profit nor the accounting profit, deferred tax liabilities are not recognized. Deferred tax assets are generally recognized for all deductible temporary differences to the extent it is probable that taxable profits will be available against which those deductible temporary difference can be utilized. In case of temporary differences that arise from initial recognition of assets or liabilities in a transaction (other than business combination) that affect neither the taxable profit nor the accounting profit, deferred tax assets are not recognized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefits of part or all of such deferred tax assets to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Minimum alternate tax (MAT)
Deferred tax assets include Minimum alternate tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the asset can be measured reliably, and it is probable that the future economic benefit associated with asset will be realised.
Presentation of current and deferred tax
Current and deferred tax are recognized as income or an expense in the statement of profit and loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax income/expense are recognized in other comprehensive income.
The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. In case of deferred tax assets and deferred tax liabilities, the same are offset if the Company has a legally enforceable right to set off corresponding current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the Company.
(i) All revenue expenses related to research and development including expenses in relation to development of product/processes which does not meet the criteria for recognition as an intangible Assets, are charged to the statement of profit and loss in the year in which it is incurred.
(ii) Items of property, plant and equipment and acquired intangible assets utilized for research and development are capitalized and depreciated in accordance with the policies stated for property, plant and equipment and intangible assets.
(i) Provident fund is a defined contribution scheme and the contribution as required by the statute paid to government provident fund and it is charged to the statement of profit and loss.
(ii) Gratuity liability is a defined benefit obligation and is funded through a gratuity fund administered by trustees and managed by the Life Insurance Corporation of India. The Company accounts for liability for future gratuity benefits based on actuarial valuation carried out as at the end of each financial year, using the projected unit credit method. Actuarial gain and/or losses are recognised in the statement of other comprehensive income.
(iii) The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation carried out as at the end of each financial year, using the projected unit credit method. Actuarial gain and/or losses are recognised in the statement of profit and loss.
2.21 Cash and cash equivalents
Cash and cash equivalents for the purpose of cash flow statement comprise cash and cheques in hand, bank balances, demand deposits with banks and other short term highly liquid investments where the original maturity is three months or less.
Basic earnings per equity share are computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
Government grants (including export incentives, incentives on specified goods manufactured in the eligible unit) are recognized only when there is reasonable assurance that the Company will comply with the conditions attached to them and the grants will be received.
Government grants relating to income are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes as expenses, the related costs for which the grants are intended to compensate.
When items of income and expense within statement of profit and loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such material items are disclosed separately as exceptional items.
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The Chief Operating Decision Maker (CODM) is responsible for allocating resources and assessing performance of the operating segments of the Company.
The company has opted to provide segment information in its consolidated Ind AS financial statements in accordance with para 4 of Ind AS 108 - operating segments.
Mar 31, 2018
1. CORPORATE INFORMATION
Banco Products (India) Limited is a Public limited company domiciled in India and incorporated under the Indian Companies Act, 1956. Equity shares of the company are listed on two stock exchanges in India. The Company is engaged in manufacturing and selling of Heat Exchangers / Cooling Systems. The company caters to both domestic and international market. The Registered Office of the Company is located at Bil, Near Bhaili Railway Station, Padra Road, Dist. Vadodara , 391410.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation of financial statements
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed under Section 133 of the Act to be read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies ( Indian Accounting Standards) Amendment Rules, 2016. The Companyâs Financial Statements for the year ended 31st March, 2018 comprises of the Balance Sheet, Statement of Profit and Loss, Cash Flow Statement, Statement of Changes in Equity and the Notes to Financial Statements.
For all periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with Indian IGAAP, including accounting standards specified under section 133 of the Companies Act, 2013 read with rule 7 of Companies (Accounts) Rules, 2014. The financial statements for the year ended 31st March 2018 are the first Financial Statements of the Company prepared in accordance with Ind AS based on the permissible options and exemptions available to the Company in terms of Ind AS 101 âFirst time adoption of Indian Accounting Standardsâ in Note No. 38
Reconciliations and descriptions of the effect of the transition have been summarized in Note No. 38
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The financial statements have been prepared on a historical cost convention on the accrual basis except for certain financial Assets and liabilities that are measured at fair value at the end of each reporting period set out below. The Accounting Policy has been applied consistently over all the periods reported in these Financial Statements..
2.2 Significant accounting judgments, estimates and assumptions
In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Any change in these estimates and assumptions will generally be reflected in the financial statements in current period or prospectively, unless they are required to be treated retrospectively under relevant accounting standards.
2.3 Classification of current/non current assets and liabilities
All assets and liabilities are presented as Current or Non Current as per the Companyâs normal operating cycle and the other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle as 12 months for the purpose of Current/Non Current classification of assets/liabilities.
2.4 Property, plant and equipment
Property, Plant and Equipment were carried on historical cost /value transferred as per the scheme of arrangement in the balance sheet as on 31 March 2016 prepared in accordance with Indian IGAAP. The Company has elected to regard those values as deemed cost at the date of the transition i.e 1st April, 2016 as permitted under Ind AS 101.
Property, Plant and Equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost comprises of the purchase price net of Cenvat, Service Tax , Value Added Tax , Goods and Service Tax and any attributable cost of bringing the assets to its working condition for its intended use, including the cost of replacing parts, borrowing costs for long-term construction projects if the recognition criteria are met. Items such as Spare Parts, Standby Equipments and Service Equipments that meet definition of PPE are capitalized at cost.
The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the statement of profit and loss. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.
Capital work-in-progress
Projects under construction wherein assets are not ready for use in the manner as intended by the management are shown as Capital Work-In-Progress.
2.5 Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any.
The management, based on internal technical evaluation, believes that the useful lives as given above best represent the period over which the assets are expected to be used.
Leasehold Land is amortized over the period of lease.
Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.
2.7 Impairment of assets
The carrying amounts of assets are reviewed at balance sheet date to check if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss, if any, recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
2.8 Revenue recognition
(i) The Company recognises revenue in accordance with Ind AS 18. Revenue from the sale of goods is recognised when,
(a) It is probable that the economic benefits associated with the transaction will flow to the entity and the amount revenue can be measured reliably.
(b) The significant risks and rewards of ownership of the goods have been passed to the buyer; and
(c) The entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold.
Revenue represents net invoice value after the deduction of discounts and allowances given and accruals for estimated future rebates and returns. The methodology and assumptions used to estimate the allowances and accruals are monitored and adjusted regularly in the light of contractual and legal obligations, historical trends, past experience. Revenue is disclosed inclusive of excise duty but net of sales return, service tax, VAT, CST and GST.
Income from operations includes revenue earned, as per the terms agreed with the customers, from development of products and assignment of patent rights.
Export benefits available under prevalent schemes are accounted to the extent considered receivable.
(ii) Interest income is accounted on time proportionate basis at contractual rates.
(iii) Dividend income is recognized when the right to receive payment is established.
(iv) Export incentives in respect of export made under duty drawback and other schemes as per the foreign trade policy are recognized on accrual basis and to the extent of certainty of realization of ultimate collection.
2.9 Inventories
(i) Raw materials, stores and spares, packing materials, work-in-process and finished goods are valued at lower of cost and net realizable value. Damaged, unserviceable and inert stocks are suitably depreciated.
(ii) In determining cost of raw materials, stores and spares (except machinery spares which meet the definition of PPE) and packing materials, weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties and taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.
(iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, and an appropriate share of fixed and variable production overheads and other costs incurred in bringing the inventories to their present location and condition.
2.10 Financial instruments
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument.
a. Financial assets
(i) Initial recognition and measurement
The Company recognizes financial assets when it becomes a party to the contractual provisions of the instrument. All financial assets are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition of financial assets, that are not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way trade of financial assets are accounted for at trade date.
(ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
- Financial assets at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
After initial measurement, debt instruments at amortised cost are subsequently measured at amortised cost using the effective interest rate method, less impairment, if any.
- Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model.
- Financial assets at fair value through profit or loss
Financial assets which are not classified in any of the above categories are subsequently fair valued through profit or loss.
- Investment in Subsidiaries
Investment in subsidiaries is carried at cost in the financial statements.
(iii) Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the Companyâs Balance Sheet) when any of the following occurs:
i. The contractual rights to cash flows from the financial asset expires;
ii. The Company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;
iii. The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a âpassthroughâ arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);
iv. The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.
b. Financial liabilities
(i) Initial recognition and measurement
The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts. Financial liabilities are classified, at initial recognition, at fair value through profit and loss or as those measured at amortised cost.
(ii) Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit and loss include financial liabilities held for trading.
The Company has not designated any financial liabilities upon initial recognition at fair value through profit and loss.
Financial liabilities measured at amortised cost
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
c. Fair value
The company measures financial instruments at fair value in accordance with the accounting policies mentioned above. 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for asset or liability or
- In the absence of principal market, in the most advantageous market for the assets or liability
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy that categorizes into three levels, described as follows, the inputs to valuation techniques used to measure value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).
Level 1 â quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 â inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3 â inputs that are unobservable for the asset or liability
For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period and discloses the same.
2.11 Foreign exchange transactions
Transactions in foreign currencies are initially recorded by the Company at the rate of exchange prevailing on the date of the transaction. Monetary assets and monetary liabilities denominated in foreign currencies remaining unsettled at the end of the year are converted at the exchange rate prevailing on the reporting date.
Differences arising on settlement or conversion of monetary items are recognised in statement of profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction.
2.12 Trade receivable
Trade receivable is stated after writing off debts considered as bad. Adequate provision is made for debts considered as doubtful. Discounts due yet to be quantified at the customer level are included under the head other Current Liabilities.
2.13 Borrowing costs
(i) Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
(ii) Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized. All other borrowing costs are expensed in the period they occur.
2.14 Provisions, contingent liabilities and contingent assets
a. Provisions
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. The expense relating to a provision is presented in the statement of profit and loss.
b. Contingent liabilities
Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by the future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
c. Contingent assets
Contingent Assets are not recognised in the financial statements. Contingent Assets if any, are disclosed in the notes to the financial statements.
2.15 Taxes
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.
Current tax
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Taxable profit differs from âprofit before taxâ as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates that have been enacted by the end of reporting period for the amounts expected to be recovered from or paid to the taxation authorities.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit under Income Tax Act, 1961.
Deferred tax liabilities are generally recognized for all taxable temporary differences. However, in case of temporary differences that arise from initial recognition of assets or liabilities in a transaction (other than business combination) that affect neither the taxable profit nor the accounting profit, deferred tax liabilities are not recognized. Deferred tax assets are generally recognized for all deductible temporary differences to the extent it is probable that taxable profits will be available against which those deductible temporary difference can be utilized. In case of temporary differences that arise from initial recognition of assets or liabilities in a transaction (other than business combination) that affect neither the taxable profit nor the accounting profit, deferred tax assets are not recognized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefits of part or all of such deferred tax assets to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Presentation of current and deferred tax
Current and deferred tax are recognized as income or an expense in the Statement of Profit and Loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax income/ expense are recognized in other comprehensive income.
The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. In case of deferred tax assets and deferred tax liabilities, the same are offset if the Company has a legally enforceable right to set off corresponding current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the Company.
2.16 Research and development
(i) All revenue expenses related to research and development including expenses in relation to development of product/processes which does not meet the criteria for recognition as an intangible Assets , are charged to the statement of profit and loss in the year in which it is incurred.
(ii) Items of property, plant and equipment and acquired Intangible assets utilized for Research and Development are capitalized and depreciated in accordance with the policies stated for Property, Plant and Equipment and Intangible Assets.
2.17 Employees benefits
(i) Provident fund is a defined contribution scheme and the contribution as required by the statute paid to government provident fund and it is charged to the statement of profit and loss.
(ii) Gratuity liability is a defined benefit obligation and is funded through a gratuity fund administered by trustees and managed by the Life Insurance Corporation of India. The Company accounts for liability for future gratuity benefits based on actuarial valuation carried out as at the end of each financial year, using the projected unit credit method. Actuarial gain and/or losses are recognised in the statement of other comprehensive income.
(iii) The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation carried out as at the end of each financial year, using the projected unit credit method. Actuarial gain and/or losses are recognised in the statement of profit and loss.
2.18 Cash and cash equivalents
Cash and cash equivalents for the purpose of cash flow statement comprise cash and cheques in hand, bank balances, demand deposits with banks and other short term highly liquid investments where the original maturity is three months or less.
2.19 Earnings per share
Basic earnings per equity share are computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
2.20 Lease accounting
Assets given on operating lease
The Company has given certain properties to a company on an operating lease basis. Lease rental income is accounted on accrual basis in accordance with the lease agreement. Assets given on operating leases are included in Property, Plant and Equipment.
2.21 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The Chief Operating Decision Maker (CODM) is responsible for allocating resources and assessing performance of the operating segments of the Company.
Mar 31, 2017
1.1 Basis of accounting
The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (âIndian GAAPâ) to comply with the Accounting standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013(âthe 2013 Actâ)/Companies Act, 1956 (âthe 1956 Actâ) to the extent applicable. The Financial Statements have been prepared on accrual basis under the historical cost convention except for categories of fixed assets i.e. land which is carried at revalued amounts. The accounting policies adopted in the preparation of the Financial Statements are consistent with those followed in the previous year.
1.2 Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements and reported amounts of Revenue and expenses during the reporting period. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Actual results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known/materialize.
1.3 Classification of Current/Non Current Assets and Liabilites
All other assets and liabilities are presented as Current or Non Current as per the Companyâs normal operating cycle and the other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle as 12 months for the purpose of Current/Non Current classification of assets/liabilities.
1.4 Fixed assets
(i) Tangible fixed assets
Tangible fixed assets are carried at the cost of acquisition or construction, less accumulated depreciation/ accumulated impairment losses if any. Acquisition cost of fixed assets comprises of its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use. Expenses directly attributable to new manufacturing facility during its construction period are capitalized. Profit or Loss on disposal of tangible assets is recognised in the statement of profit and loss.
(ii) Intangible fixed assets
Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Acquisition cost of intangible fixed assets comprises of the purchase price and other non-refundable taxes or levies and any attributable cost of bringing the assets to its working condition for its intended use.
(iii) Capital work in progress and capital advances
Cost of Assets not ready for intended use, as on the balance sheet date, is shown as capital work in progress. Advances given towards acquisition of fixed assets outstanding at each balance sheet date are disclosed under long term loans and advances.
(iv) As per revised AS-10 (property, plant and equipments) machinery spares included in stores and spares has been segregated and transferred to capital work in progress as on 31st March 2017.
1.5 Depreciation and amortization
Depreciation on plant and machinery (except electrical installations), computers, laboratory equipmentâs, machine tools and effluent tmreatment plant purchased on or after 1st October, 1982 has been provided on straight line basis and on other assets on written down value basis over the useful lives of assets as prescribe in Schedule II of the Companies Act, 2013. Individual items of fixed assets costing up to Rs.5,000 are fully depreciated in the year of purchase.
Leasehold land and leasehold improvement are amortized over the primary period of lease.
Intangible assets are amortised on a straight line basis over a period of five years. Purchase cost, user license fees and consultancy fees for major software are amortized over the useful lives of assets as specified in schedule II of the Companies Act, 2013.
1.6 Impairment of assets
The carrying amounts of assets are reviewed at balance sheet date to check if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss, if any, recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
1.7 Revenue recognition
(i) Sale of products is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. The amount recognized as sales is exclusive of net of returns and discounts excise duty, sales tax/ VAT and other charges. Sales are stated gross of excise duty as well as net of excise duty (on goods manufactured), excise duty being the amount included in the amount of gross turnover. The excise duty related to the difference between the closing stock and opening stock is recognized separately as part of changes in inventories of finished goods and work-in- progress.
(ii) Interest income is accounted on time proportionate basis at contractual rates.
(iii) Dividend income is recognized when the right to receive payment is established.
(iv) Export incentives in respect of export made under duty drawback and other schemes as per the foreign trade policy are recognized on accrual basis and to the extent of certainty of realization of ultimate collection.
1.8 Inventories
(i) Raw materials, stores and spares, packing materials, work-in-process and finished goods are valued at lower of cost and net realizable value. Damaged, unserviceable and inert stocks are suitably depreciated.
(ii) In determining cost of raw materials, stores and spares (except machinery spares which as per revised accounting standard AS-10 property, plant and equipments, machinery spares included in stores and spares has been segregated and transferred to capital work in progress as on 31st March 2017) and packing materials weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties and taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.
(iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads and excise duty as applicable on the finished goods and other costs incurred in bringing the inventories to their present location and condition.
1.9 Investments
Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.
1.10 Transactions in foreign currency
(i) Initial recognition:
Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss.
(ii) Measurement of foreign currency items at the balance sheet date:
Foreign currency monetary items of the Company are restated at the closing exchange rates. Nonmonetary items are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising out of these translations are recognized in the statement of profit and loss.
1.11 Trade receivable
Trade receivable is stated after writing off debts considered as bad. Adequate provision is made for debts considered as doubtful. Discounts due yet to be quantified at the customer level are included under the head other Current Liabilities.
1.12 Borrowing costs
(i) Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
(ii) Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized. All other borrowing costs are expensed in the period they occur.
1.13 Provisions, contingent liabilities and contingent assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent liabilities which are not recognized are disclosed by way of notes. Contingent assets are neither recognized nor disclosed in the financial statements.
1.14 Taxes on Income
(i) Tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period).
(ii) The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date.
(iii) Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed at each Balance Sheet date to reassess realisation.
1.15 Research and development
(i) Research and Development expenditure of a revenue nature is expensed out and shown separately as research and development expenses under the respective heads of account in the year in which it is incurred.
(ii) Fixed assets utilized for research and development are capitalized and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets
1.16 Employees benefits
(i) Provident fund is a defined contribution scheme and the contribution as required by the statute paid to government provident fund and it is charged to the statement of profit and loss.
(ii) Gratuity liability is a defined benefit obligation and is funded through a gratuity fund administered by trustees and managed by the Life Insurance Corporation of India. The Company accounts for liability for future gratuity benefits based on actuarial valuation carried out as at the end of each financial year, using the projected unit credit method.
(iii) The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation carried out as at the end of each financial year, using the projected unit credit method.
(iv) Actuarial gain and/or losses are recognised in the statement of profit and loss.
1.17 Cash and Cash Equivalents
Cash and cash equivalents for the purpose of cash flow statement comprise cash and cheques in hand, bank balances, demand deposits with banks and other short term highly liquid investments where the original maturity is three months or less.
1.18 Proposed Dividend
The final dividend recommended by the Board of Directors is accounted in the financial year in which it is approved by the Shareholders in the Annual General Meeting.
1.19 Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
1.20 Lease Accounting
Assets given on operating lease:
The Company has provided certain properties to a company on an operating lease basis. Lease rental income is accounted on accrual basis in accordance with the lease agreement. Assets given on operating leases are included in the fixed assets.
Mar 31, 2016
1. CORPORATE INFORMATION
Banco Products (India) Limited is a Public limited company domiciled in India and incorporated under the Indian Companies Act, 1956. Equity shares of the company are listed on two stock exchanges in India. The Company is engaged in manufacturing and selling of radiators. The company caters to both domestic and international market.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of accounting
The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (âIndian GAAPâ) to comply with the Accounting standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013(âthe 2013 Actâ)/Companies Act, 1956 (âthe 1956 Actâ) as applicable. The Financial Statements have been prepared on accrual basis under the historical cost convention except for categories of fixed assets i.e. land which is carried at revalued amounts. The accounting policies adopted in the preparation of the Financial Statements are consistent with those followed in the previous year.
2.2 Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements and reported amounts of Revenue and expenses during the reporting period. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Actual results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known/materialize.
2.3 Classification of Current/Non Current Assets and Liabilities
All other assets and liabilities are presented as Current or Non Current as per the Companyâs normal operating cycle and the other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle as 12 months for the purpose of Current/Non Current classification of assets/liabilities.
2.4 Fixed assets
(i) Tangible fixed assets
Tangible fixed assets are carried at the cost of acquisition or construction, less accumulated depreciation/ accumulated impairment losses if any. Acquisition cost of fixed assets comprises of its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use. Expenses directly attributable to new manufacturing facility during its construction period are capitalized. Profit or Loss on disposal of tangible assets is recognized in the statement of profit and loss.
(ii) Intangible fixed assets
Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Acquisition cost of intangible fixed assets comprises of the purchase price and other non-refundable taxes or levies and any attributable cost of bringing the assets to its working condition for its intended use.
(iii) Capital work in progress and capital advances
Cost of Assets not ready for intended use, as on the balance sheet date, is shown as capital work in progress. Advances given towards acquisition of fixed assets outstanding at each balance sheet date are disclosed as long term loans and advances.
2.5 Depreciation and amortization
Depreciation on plant and machinery (except electrical installations), computers, laboratory equipmentâs, machine tools and effluent treatment plant purchased on or after 1st October, 1982 has been provided on straight line basis and on other assets on written down value basis over the useful lives of assets as prescribed in Schedule
II of the Companies Act, 2013. Individual items of fixed assets costing up to Rs. 5,000 are fully depreciated in the year of purchase.
Leasehold land and leasehold improvement are amortized over the primary period of lease.
Intangible assets are amortized on a straight line basis over a period of five years. Purchase cost, user license fees and consultancy fees for major software are amortized over the useful lives of assets as specified in schedule II of the Companies Act, 2013.
2.6 Impairment of assets
The carrying amounts of assets are reviewed at balance sheet date to check if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss, if any, recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
2.7 Revenue recognition
(i) Sale of products is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. The amount recognized as sales is exclusive of net of returns and discounts excise duty, sales tax/ VAT and other charges. Sales are stated gross of excise duty as well as net of excise duty (on goods manufactured), excise duty being the amount included in the amount of gross turnover. The excise duty related to the difference between the closing stock and opening stock is recognized separately as part of changes in inventories of finished goods and work-in- progress.
(ii) Interest income is accounted on time proportionate basis at contractual rates.
(iii) Dividend income is recognized when the right to receive payment is established.
(iv) Export incentives in respect of export made under duty drawback and other schemes as per the foreign trade policy are recognized on accrual basis and to the extent of certainty of realization of ultimate collection.
2.8 Inventories
(i) Raw materials, stores and spares, packing materials, work-in-process and finished goods are valued at lower of cost and net realizable value. Damaged, unserviceable and inert stocks are suitably depreciated.
(ii) In determining cost of raw materials, stores and spares and packing materials weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties and taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.
(iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads and excise duty as applicable on the finished goods and other costs incurred in bringing the inventories to their present location and condition.
2.9 Investments
Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.
2.10 Transactions in foreign currency
(i) Initial recognition:
Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss.
(ii) Measurement of foreign currency items at the balance sheet date:
Foreign currency monetary items of the Company are restated at the closing exchange rates. Non-monetary items are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising out of these translations are recognized in the statement of profit and loss.
2.11 Trade receivable
Trade receivable is stated after writing off debts considered as bad. Adequate provision is made for debts considered as doubtful. Discounts due yet to be quantified at the customer level are included under the head other Current Liabilities.
2.12 Borrowing costs
(i) Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
(ii) Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized. All other borrowing costs are expensed in the period they occur.
2.13 Provisions, contingent liabilities and contingent assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent liabilities which are not recognized are disclosed by way of notes. Contingent assets are neither recognized nor disclosed in the financial statements.
2.14 Taxes on Income
(i) Tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period).
(ii) The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the Balance Sheet date.
(iii) Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future however, where there is unabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each Balance Sheet date to reassess realization.
2.15 Research and development
(i) Research and Development expenditure of a revenue nature is expensed out and shown separately as research and development expenses under the respective heads of account in the year in which it is incurred.
(ii) Fixed assets utilized for research and development are capitalized and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets
2.16 Employees benefits
(i) Provident fund is a defined contribution scheme and the contribution as required by the statute paid to government provident fund is charged to the statement of profit and loss.
(ii) Gratuity liability is a defined benefit obligation and is funded through a gratuity fund administered by trustees and managed by the Life Insurance Corporation of India. The Company accounts for liability for future gratuity benefits based on actuarial valuation carried out as at the end of each financial year, using the projected unit credit method.
(iii) The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation carried out as at the end of each financial year, using the projected unit credit method.
(iv) Actuarial gain and losses are recognized in the statement of profit and loss.
2.17 Cash and Cash Equivalents
Cash and cash equivalents for the purpose of cash flow statement comprise cash and cheques in hand, bank balances, demand deposits with banks and other short term highly liquid investments where the original maturity is three months or less.
2.18 Proposed Dividend
Dividend recommended by the board of directors is provided for in the accounts, pending approval at Annual General Meeting.
2.19 Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
2.20 Lease Accounting
Assets given on operating lease:
The Company has provided certain properties to a company on an operating lease basis. Lease rental income is accounted on accrual basis in accordance with the lease agreement. Assets given on operating leases are included in the fixed assets.
Mar 31, 2015
1.1 Basis of accounting
i) The financial statements have been prepared under the historical
cost convention (except for certain fixed assets, which have been
revalued) in accordance with the generally accepted accounting
principles (GAAP) to comply with the applicable Accounting Standards as
prescribed under section 133 of the companies act, 2013 (Act) read with
rule 7 of the Companies (Accounts) Rules 2014.
The company generally follows the mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
ii) Use of estimates: The preparation of financial statements in
conformity with generally accepted accounting principles in India
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities on the date of the financial statements and reported
amounts of income and expenses during the period.
2.2 Fixed assets and depreciation/amortization
i) Fixed Assets are stated at cost (net of cenvat/service tax credit
wherever claimed) less accumulated depreciation and impairment, if any,
other than land and building at Bhaili division which are shown at
revalued cost. The cost of assets comprises of purchase price and
directly attributable cost of bringing the assets to its working
condition for its intended use including borrowing cost and incidental
expenditure incurred up to the date the assets are ready for its
intended use.
ii) Depreciation on plant & machinery (except electrical
installations), computers, laboratory equipments, machine tools and
effluent treatment plant purchased on or after 1st October, 1982 has
been provided on straight line basis and on other assets on written
down value basis over the useful lives of assets as specified in
schedule II of the Companies Act, 2013. Individual items of fixed
assets costing upto Rs. 5,000 are fully depreciated in the year of
purchase.
iii) Leasehold land is amortized over the period of lease.
iv) Intangible assets are amortized over a period of five years.
v) Purchase cost and user license fees on software are amortized on
straight line basis over the useful lives of assets as specified in
schedule II of the Companies Act, 2013.
2.3 Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date
to check if there is any indication of impairment based on internal or
external factors. An asset is treated as impaired when the carrying
cost of assets exceeds its recoverable value. An impairment loss is
charged to the statement of profit & loss in the year in which an asset
is identified as impaired. The impairment loss, if any, recognized in
prior accounting period is reversed if there has been a change in the
estimate of recoverable amount.
2.4 Foreign currency transactions
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Monetary items denominated in
foreign currencies at the year-end are translated at the year-end
rates. Any exchange differences arising on settlement/transaction are
dealt with in the statement of profit and loss except those relating to
acquisition of fixed assets, which are adjusted to the cost of the
asset.
2.5 Investments
Non-current Investments are stated at cost. No provision for diminution
in value, if any, has been made as these are long-term investments and
in the opinion of the management any decline is temporary. Current
investments are stated at lower of cost and fair value.
2.6 Inventories
i) Raw materials, stores & spares, packing materials, work-in-process
and finished goods are valued at lower of cost and net realizable
value. Damaged, unserviceable and inert stocks are suitably
depreciated.
ii) In determining cost of raw materials, stores & spares and packing
materials weighted average cost method is used. Cost of inventory
comprises all costs of purchase, duties and taxes other than those
subsequently recoverable from tax authorities.
iii) Cost of finished products and work-in-process include the cost of
raw materials, packing materials, an appropriate share of fixed and
variable production overheads and excise duty as applicable on the
finished goods.
2.7 Retirement benefits
The Company has defined contribution plan for its employee's
retirement benefits comprising of provident fund. The Company
contributes to provident fund for its employees. The Company has
defined benefit plan comprising of gratuity fund and leave encashment
entitlement. The liability for the gratuity fund and leave encashment
has been determined on the basis of an independent actuarial valuation
done at the year-end. Actuarial gains and losses comprise adjustments
and the effects of changes in the actuarial assumptions are recognised
in the statement of profit and loss as income or expense. Contribution
in respect of gratuity is paid to the Life Insurance Corporation of
India (LIC).
2.8 Research and development
i) Capital expenditure related to scientific research is shown
separately under the respective head of fixed assets. In note 45 of the
financial statement.
ii) Revenue expenses including depreciation are charged to the
statement of profit & loss and shown separately as research and
development expenses in note 45 of the financial statement.
2.9 Revenue Recognition
i) Sale of products are recognized only when it can be reliably
measured and it is reasonable to expect ultimate collection. Sales are
net of returns and discounts and exclude value added tax, excise duty
and other charges.
ii) Interest income is accounted on accrual basis/time proportionate
basis at contractual rates
iii) Divided income is recognized when the company's right to receive
dividend is established.
2.10 Provision for current and deferred tax
i) Provision for current tax is calculated after taking into
consideration the deductions allowable under the provisions of the
Income-tax Act, 1961.
ii) Deferred tax resulting from 'timing difference' between book
and taxable profit is accounted by using the tax rate that have been
enacted or substantively enacted as on the balance sheet date. The
deferred tax liability is provided in the statement of profit and loss.
Deferred tax assets are recognised only if there is reasonable
certainty that the assets can be realized in future.
2.11 Borrowing costs
Borrowing costs attributable to the acquisition or construction of a
qualifying asset is capitalized as part of the cost of the asset. Other
borrowing cost is recognized as an expense in the period in which they
are incurred.
2.12 Export Incentives
Export incentives in respect of export made under duty drawback scheme
as per the import export policy is recognised on accrual basis and to
the extent of certainty of realization of ultimate collection.
2.13 Provisions, contingent liabilities and contingent assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
event and it is probable that there will be an outflow of resources.
Contingent Liabilities which are not recognised are disclosed by way of
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
2.14 Sundry debtors
Sundry debtors are stated after writing off debts considered as bad.
Provision is made for debts considered as doubtful, if any. Discounts
due yet to be quantified at the customer level are included under the
head "Current Liabilities and provisions'.
2.15 Earning per share
The basic and diluted earning per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
2.16 Proposed dividend
Dividend recommended by the board of directors is provided for in the
accounts, pending approval at annual general meeting.
2.17 Lease accounting
Lease rental income is accounted on accrual basis in accordance with
the lease agreement.
Mar 31, 2014
2.1 Basis of accounting
i) The financial statements have been prepared under the historical
cost convention (except for certain fixed assets, which have been
revalued) in accordance with the generally accepted accounting
principles to comply with the applicable Accounting Standards as
prescribed under the Companies (Accounting Standards) Rules, 2006 and
the relevant provisions of the Companies Act, 1956.
The Company generally follows the mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
ii) Use of estimates: The preparation of financial statements in
conformity with generally accepted accounting principles in India
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities on the date of the financial statements and reported
amounts of income and expenses during the period.
2.2 Fixed assets and depreciation/amortization
i) Fixed Assets are stated at cost (net of cenvat/service tax credit
wherever claimed) less accumulated depreciation and impairment, if any,
other than land and building at Bhaili division which are shown at
revalued cost. The cost of assets comprises of purchase price and
directly attributable cost of bringing the assets to its working
condition for its intended use including borrowing cost and incidental
expenditure incurred up to the date the assets are ready for its
intended use.
ii) Depreciation on plant & machinery (except electrical
installations), computers, laboratory equipments, machine tools and
effluent treatment plant purchased on or after 1st October, 1982 has
been provided on straight line basis and on other assets on written
down value basis at the rates specified in schedule XIV of the
Companies Act, 1956. Individual items of fixed assets costing upto Rs.
5,000 are fully depreciated in the year of purchase.
iii) Leasehold land is amortized over the period of lease.
iv) Purchase cost and user license fees on software are amortized on
straight line basis on rates of computer.
2.3 Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date
to check if there is any indication of impairment based on internal or
external factors. An asset is treated as impaired when the carrying
cost of assets exceeds its recoverable value. An impairment loss is
charged to the statement of profit & loss in the year in which an asset
is identified as impaired. The impairment loss, if any, recognized in
prior accounting period is reversed if there has been a change in the
estimate of recoverable amount.
2.4 Foreign currency transactions
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Monetary items denominated in
foreign currencies at the year-end are translated at the year-end
rates. Any exchange differences arising on settlement/transaction are
dealt with in the statement of profit and loss except those relating to
acquisition of fixed assets, which are adjusted to the cost of the
asset.
2.5 Investments
Non-current Investments are stated at cost. No provision for diminution
in value, if any, has been made as these are long-term investments and
in the opinion of the management any decline is temporary. Current
investments are stated at lower of cost and fair value.
2.6 Inventories
i) Raw materials, stores & spares, packing materials, work-in-process
and finished goods are valued at lower of cost and net realizable
value. Damaged, unserviceable and inert stocks are suitably
depreciated.
ii) In determining cost of raw materials, stores & spares and packing
materials weighted average cost method is used. Cost of inventory
comprises all costs of purchase, duties and taxes other than those
subsequently recoverable from tax authorities.
iii) Cost of finished products and work-in-process include the cost of
raw materials, packing materials, an appropriate share of fixed and
variable production overheads and excise duty as applicable on the
finished goods.
2.7 Retirement benefits
The Company has defined contribution plan for its employee's retirement
benefits comprising of provident fund. The Company contributes to
provident fund for its employees. The Company has defined benefit plan
comprising of gratuity fund and leave encashment entitlement. The
liability for the gratuity fund and leave encashment has been
determined on the basis of an independent actuarial valuation done at
the year-end. Actuarial gains and losses comprise adjustments and the
effects of changes in the actuarial assumptions are recognised in the
statement of profit and loss as income or expense. Contribution in
respect of gratuity is paid to the Life Insurance Corporation of India
(LIC).
2.8 Research and development
i) Capital expenditure related to scientific research is shown
separately under the respective head of fixed assets.
ii) Revenue expenses including depreciation are charged to the
statement of profit & loss.
2.9 Revenue Recognition
i) Sale of products are recognised only when it can be reliably
measured and it is reasonable to expect ultimate collection. Sales are
net of returns and discounts and exclude sales tax, excise duty and
other charges.
ii) Interest income is accounted on accrual basis/time proportionate
basis at contractual rates
iii) Divided income is considered on receipt basis.
2.10 Provision for current and deferred tax
i) Provision for current tax is calculated after taking into
consideration the deduction allowable under the provisions of the
Income-tax Act, 1961.
ii) Deferred tax resulting from 'timing difference' between book and
taxable profit is accounted by using the tax rate that have been
enacted or substantively enacted as on the balance sheet date. The
deferred tax liability is provided in the statement of profit and loss.
Deferred tax assets are recognised only if there is reasonable
certainty that the assets can be realized in future.
2.11 Borrowing costs
Borrowing costs attributable to the acquisition or construction of a
qualifying asset is capitalized as part of the cost of the asset. Other
borrowing cost is recognized as an expense in the period in which they
are incurred.
2.12 Export Incentives
Export incentives in respect of export made under duty drawback scheme
as per the import export policy is recognised on accrual basis and to
the extent of certainty of realization of ultimate collection.
2.13 Provisions, contingent liabilities and contingent assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
event and it is probable that there will be an outflow of resources.
Contingent Liabilities which are not recognised are disclosed by way of
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
2.14 Sundry debtors
Sundry debtors are stated after writing off debts considered as bad.
Provision is made for debts considered as doubtful, if any. Discounts
due yet to be quantified at the customer level are included under the
head "Current Liabilities and provisions".
2.15 Earning per share
The basic and diluted earning per share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
2.16 Proposed dividend
Dividend recommended by the board of directors is provided for in the
accounts, pending approval at annual general meeting.
2.17 Lease accounting
Lease rental income is accounted on accrual basis in accordance with
the lease agreement.
Mar 31, 2013
A. Basis of accounting
i) The financial statements have been prepared under the historical
cost convention (except for certain fixed assets, which have been
revalued) in accordance with the generally accepted accounting
principles to comply with the applicable Accounting Standards as
prescribed under the Companies (Accounting Standards) Rules, 2006 and
the relevant provisions of the Companies Act, 1956.
The Company generally follows the mercantile system of accounting and
recognises significant items of income and expenditure on accrual
basis.
ii) Use of estimates: The preparation of financial statements in
conformity with generally accepted accounting principles in India
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities on the date of the financial statements and reported
amounts of income and expenses during the period.
b. Fixed assets and depreciation/amortization
i) Fixed Assets are stated at cost (net of cenvat/service tax credit
wherever claimed) less accumulated depreciation and impairment, if any,
other than land and building at Bhaili division which are shown at
revalued cost. The cost of assets comprises of purchase price and
directly attributable cost of bringing the assets to its working
condition for its intended use including borrowing cost and incidental
expenditure incurred up to the date the assets are ready for its
intended use.
ii) Depreciation on plant & machinery (except electrical
installations), computers, laboratory equipments, machine tools and
effluent treatment plant purchased on or after 1st October, 1982 has
been provided on straight line basis and on other assets on written
down value basis at the rates specified in schedule XIV of the
Companies Act, 1956. Individual items of fixed assets costing upto Rs.
5,000 are fully depreciated in the year of purchase.
iii) Leasehold land is amortized over the period of lease.
iv) Purchase cost and user license fees on software are amortized on
straight line basis on rates of computer.
c. Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal or external
factors. An asset is treated as impaired when the carrying cost of
assets exceeds its recoverable value. An impairment loss is charged to
the profit & loss in the year in which an asset is identified as
impaired. The impairment loss, if any, recognised in prior accounting
period is reversed if there has been a change in the estimate of
recoverable amount.
d. Foreign currency transactions
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Monetary items denominated in
foreign currencies at the year-end are translated at the year-end
rates. Any exchange differences arising on settlement/transaction are
dealt with in the statement of profit and loss except those relating to
acquisition of fixed assets, which are adjusted to the cost of the
asset.
e. Investments
Non-current Investments are stated at cost. No provision for diminution
in value, if any, has been made as these are long-term investments and
in the opinion of the management any decline is temporary. Current
investments are stated at lower of cost and fair value.
f. Inventories
i) Raw materials, stores & spares, packing materials, work-in-process
and finished goods are valued at lower of cost and net realisable
value. Damaged, unserviceable and inert stocks are suitably
depreciated.
ii) In determining cost of raw materials, stores & spares and packing
materials weighted average cost method is used. Cost of inventory
comprises all costs of purchase, duties and taxes other than those
subsequently recoverable from tax authorities.
iii) Cost of finished products and work-in-process include the cost of
raw materials, packing materials, an appropriate share of fixed and
variable production overheads and excise duty as applicable on the
finished goods. g. Retirement benefits
The Company has defined contribution plan for its employee''s retirement
benefits comprising of provident fund. The Company contributes to
provident fund for its employees. The Company has defined benefit plan
comprising of gratuity fund and leave encashment entitlement. The
liability for the gratuity fund and leave encashment has been
determined on the basis of an independent actuarial valuation done at
the year-end. Actuarial gains and losses comprise adjustments and the
effects of changes in the actuarial assumptions are recognised in the
statement of profit and loss as income or expense. Contribution in
respect of gratuity is paid to the Life Insurance Corporation of India
(LIC).
h. Research and development
i) Capital expenditure related to scientific research is shown
separately under the respective head of fixed
assets. ii) Revenue expenses including depreciation are charged to the
statement of profit and loss. i. Sales
Revenue from sale of goods is recognised only when it can be reliably
measured and it is reasonable to expect ultimate collection. Sales are
net of returns and discounts and exclude sales tax, excise duty and
other charges.
j. Provision for current and deferred tax
i) Provision for current tax is calculated after taking into
consideration the deduction allowable under the provisions of the
Income-tax Act, 1961.
ii) Deferred tax resulting from ''timing difference'' between book and
taxable profit is accounted by using the tax rate that have been
enacted or substantively enacted as on the balance sheet date. The
deferred tax liability is provided in the statement of profit and loss.
Deferred tax assets are recognised only if there is reasonable
certainty that the assets can be realised in future.
k. Borrowing costs
Borrowing costs attributable to the acquisition or construction of a
qualifying asset is capitalised as part of the cost of the asset. Other
borrowing cost is recognised as an expense in the period in which they
are incurred.
I. Dividend
Dividend income is considered on receipt basis
m. Provisions, contingent liabilities and contingent assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
event and it is probable that there will be an outflow of resources.
Contingent Liabilities which are not recognised are disclosed by way of
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
n. Sundry debtors
Sundry debtors are stated after writing off debts considered as bad.
Provision is made for debts considered as doubtful, if any. Discounts
due yet to be quantified at the customer level are included under the
head "Current Liabilities and provisions".
o. Earning per share
The basic and diluted earning per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
p. Proposed dividend
Dividend recommended by The Board of Directors is provided for in the
accounts, pending approval at annual general meeting.
q. Lease accounting
Lease rental income is accounted on accrual basis in accordance with
the lease agreement.
Mar 31, 2012
A. Fixed Assets and Depreciation / Amortisation
i) Fixed Assets are stated at cost (net of cenvat /service tax credit
wherever claimed) less accumulated depreciation and impairment, if any,
other than land and building at Bhaili division which are shown at
revalued cost. The cost of assets comprises of purchase price and
directly attributable cost of bringing the assets to its working
condition for its intended use including borrowing cost and incidental
expenditure incurred up to the date the assets are ready for its
intended use.
ii) Depreciation on plant & machinery (except electrical
installations), computers, laboratory equipments, machine tools and
effluent treatment plant purchased on or after 1st October, 1982 has
been provided on straight line basis and on other assets on written
down value basis at the rates specified in schedule XIV of the
Companies Act, 1956. Individual items of fixed assets costing up to Rs
5,000 are fully depreciated in the year of purchase.
iii) Technical know-how recognised as intangible asset was stated at
the consideration paid for acquisition and amortised on straight-line
basis at plant & machinery rates.
b. Impairment of Assets
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal or external
factors. An asset is treated as impaired when the carrying cost of
assets exceeds its recoverable value. An impairment loss is charged to
the profit & loss account in the year in which an asset is identified
as impaired. The impairment loss, if any, recognised in prior
accounting period is reversed if there has been a change in the
estimate of recoverable amount.
c. Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Monetary items denominated in
foreign currencies at the year-end are translated at the year-end
rates. Any exchange differences arising on settlement/transaction are
dealt with in the Statement of Profit and Loss except those relating to
acquisition of fixed assets, which are adjusted to the cost of the
asset.
d. Investments
Non-current Investments are stated at cost. No provision for diminution
in value, if any, has been made as these are long-term investments and
in the opinion of the management any decline is temporary. Current
Investments are stated at lower of cost and fair value.
e. Inventories
i) Raw materials, stores & spares, packing materials, work-in-process
and finished goods are valued at lower of cost and net realisable
value. Damaged, unserviceable and inert stocks are suitably
depreciated.
ii) In determining cost of raw materials, stores & spares and packing
materials weighted average cost method is used. Cost of inventory
comprises all costs of purchase, duties and taxes other than those
subsequently recoverable from tax authorities.
iii) Cost of finished products and work-in-process include the cost of
raw materials, packing materials, an appropriate share of fixed and
variable production overheads and excise duty as applicable on the
finished goods.
f. Retirement Benefits
The Company has defined contribution plan for its employee's
retirement benefits comprising of provident fund. The Company
contributes to provident fund for its employees. The Company has
defined benefit plan comprising of gratuity fund and leave encashment
entitlement. The liability for the gratuity fund and leave encashment
has been determined on the basis of an independent actuarial valuation
done at the year-end. Actuarial gains and losses comprise adjustments
and the effect of changes in the actuarial assumptions and are
recognised in the Statement of Profit and Loss as income or expense.
Contribution in respect of gratuity is paid to the Life Insurance
Corporation of India (LIC).
g. Research and Development
i) Capital expenditure related to scientific research is shown
separately under the respective head of fixed assets.
ii) Revenue expenses including depreciation are charged to Statement of
Profit and Loss.
h. Sales
Revenue from sale of goods is recognised only when it can be reliably
measured and it is reasonable to expect ultimate collection. Sales are
net of returns and discounts and exclude sales tax, excise duty and
other charges.
i. Provision for Current and Deferred Tax
i) Provision for current tax is calculated after taking into
consideration the deduction allowable under the provisions of the
Income-tax Act, 1961.
ii) Deferred tax resulting from âÃÃtiming difference' between book
and taxable profit is accounted by using the tax rate that have been
enacted or substantively enacted as on the balance sheet date. The
deferred tax liability is provided in the Statement of Profit and Loss.
Deferred tax assets are recognised only if there is reasonable
certainty that the assets can be realised in future.
j. Borrowing Costs
Borrowing costs attributable to the acquisition or construction of a
qualifying asset is capitalised as part of the cost of the asset. Other
borrowing cost is recognised as an expense in the period in which they
are incurred,
k. Dividend
Dividend income is considered on receipt basis
I. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
event and it is probable that there will be an outflow of resources.
Contingent Liabilities which are not recognised are disclosed by way of
notes. Contingent assets are neither recognised nor disclosed in the
financial statements
m. Trade Receivables
Trade Receivables are stated after writing off debts considered as bad.
Provision is made for debts considered as doubtful, if any. Discounts
due yet to be quantified at the customer level are included under the
head Provisions,
n. Earning Per Share
The Basic and Diluted Earning Per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
o. Proposed Dividend
Dividend recommended by The Board of Directors is provided for in the
accounts, pending approval at annual general meeting.
Mar 31, 2011
1) Basis of Accounting
i) The financial statements have been prepared under the historical
cost convention (except for certain fixed assets, which have been
revalued) in accordance with the generally accepted accounting
principles to comply with the applicable Accounting Standards as
prescribed under the Companies (Accounting Standards) Rules, 2006 and
the relevant provisions of the Companies Act, 1956.
ii) The Company generally follows the mercantile system of accounting
and recognizes significant items of income and expenditure on accrual
basis.
iii) Use of estimates: The preparation of financial statements in
conformity with generally accepted accounting principles in India
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements.
2) Fixed Assets and Depreciation
i) Fixed Assets are stated at cost (net of cenvat/service tax credit
wherever claimed) less accumulated depreciation and impairment, if any,
other than land and building at Bhaili division which are shown at
revalued cost. The cost of assets comprises of purchase price and
directly attributable cost of bringing the assets to its working
condition for its intended use including borrowing cost and incidental
expenditure incurred up to the date the assets are ready for its
intended use.
ii) Depreciation on plant-,& machinery except electrical installations,
computers, laboratory equipments, machine tools and effluent treatment
plant purchased on or after 1st October, 1982 has been provided on
straight line basis and on other assets on written down value basis at
the rates specified in schedule XIV of the Companies Act, 1956.
Individual items of fixed assets costing upto Rs. 5,000 are fully
depreciated in the year of purchase.
iii) Technical know-how recognized as intangible asset is stated at the
consideration paid for acquisition and amortised on straight-line basis
at plant & machinery rates.
3) Impairment of Assets
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal or external
factors. An asset is treated as impaired when the carrying cost of
assets exceeds its recoverable value. An impairment loss is charged to
the profit & loss account in the year in which an asset is identified
as impaired. The impairment loss, if any, recognized in prior
accounting period is reversed if there has been a change in the
estimate of recoverable amount.
4) Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Monetary items denominated in
foreign currencies at the year-end are translated at the year-end
rates. Any exchange differences arising on settlement/transaction are
dealt with in the profit and loss account except those relating to
acquisition of fixed assets, which are adjusted to the cost of the
asset.
5) Investments
Investments are stated at cost. No provision for diminution in value,
if any, has been made as these are long-term investments and in the
opinion of the management any decline is temporary.
6) Inventories
i) Raw materials, stores & spares, packing materials, work-in-process
and finished goods are valued at lower of cost and net realizable
value. Damaged, unserviceable and inert stocks are suitably
depreciated.
ii) In determining cost of raw materials, stores & spares and packing
materials weighted average cost method is used. Cost of inventory
comprises all costs of purchase, duties and taxes other than those
subsequently recoverable from tax authorities.
iii) Cost of finished products and work-in-process include the cost of
raw materials, packing materials, an appropriate share of fixed and
variable production overheads and excise duty as applicable on the
finished goods.
7) Retirement Benefits
The Company has defined contribution plan for its employees' retirement
benefits comprising of provident fund. The Company contributes to
provident fund for its employees. The Company has defined benefit plan
comprising of gratuity fund and leave encashment entitlement. The
liability for the gratuity fund and leave encashment has been
determined on the basis of an independent actuarial valuation done at
the year-end. Actuarial gains and losses comprise adjustments and the
effect of changes in the actuarial assumptions and are recognised in
the profit and loss account as income or expense. Contribution in
respect of gratuity is paid to the Life Insurance Corporation of India
(LIC).
8) Research and Development
i) Capital expenditure is shown separately under the respective head of
fixed assets. ii) Revenue expenses including depreciation are charged
to profit & loss account.
9) Sales
Revenue from sale of goods is recognised only when it can be reliably
measured and it is reasonable to expect ultimate collection. Sales are
net of returns and discounts and exclude sales tax, excise duty and
other charges.
10) Provision for Current and Deferred Tax
i) Provision for current tax is made after taking into consideration
the deduction allowable under the provisions of the Income-tax Act,
1961.
ii) Deferred tax resulting from 'timing difference' between book and
taxable profit is accounted by using the tax rate that have been
enacted or substantively enacted as on the balance sheet date. The
deferred tax liability is provided in the profit and loss account.
Deferred tax assets are recognised only if there is reasonable
certainty that the assets can be realized in future.
11) Borrowing Costs
Borrowing costs attributable to the acquisition or construction of a
qualifying asset is capitalized as part of the cost of the asset. Other
borrowing cost is recognized as an expense in the period in which they
are incurred.
12) Dividend
Dividend income is considered on receipt basis
13) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
event and it is probable that there will be an outflow of resources.
Contingent Liabilities which are not recognised are disclosed by way of
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
14) Sundry Debtors
Sundry debtors are stated after writing off debts considered as bad.
Provision is made for debts considered as doubtful, if any. Discounts
due yet to be quantified at the customer level are included under the
head "Current Liabilities and provisions'.
15) Earning Per Share
The basic and diluted earning per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
16) Proposed Dividend
Dividend recommended by The Board of Directors is provided for in the
accounts, pending approval at annual general meeting.
Mar 31, 2010
1) Basis of Accounting:
i) The financial statements have been prepared under the historical
cost convention (except for certain fixed assets, which have been
revalued) in accordance with the generally accepted accounting
principles to comply with the applicable Accounting Standards as
prescribed under the Companies (Accounting Standards) Rules, 2006 and
the relevant provisions of the Companies Act, 1956.
ii) The Company generally follows the mercantile system of accounting
and recognizes significant items of income and expenditure on accrual
basis.
iii) Use of Estimates : The preparation of financial statements in
conformity with generally accepted accounting principles in India
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements.
2) Fixed Assets and Depreciation:
i) Fixed Assets are stated at cost (net of cenvat/service tax credit
wherever claimed) less accumulated depreciation less impairment, if
any, other than land and building at Bhaili division which are shown at
revalued cost. The cost of assets comprises of purchase price and
directly attributable cost of bringing the assets to its working
condition for its intended use including borrowing cost and incidental
expenditure incurred up to the date the assets are ready for its
intended use.
ii) Depreciation on plant & machinery (except electrical
installations), computers, laboratory equipments, machine tools and
effluent treatment plant purchased on or after 1st October, 1982 has
been provided on straight line basis and on other assets on written
down value basis at the rates specified in schedule XIV of the
Companies Act, 1956. Individual items of fixed assets costing upto Rs.
5,000 are fully depreciated in the year of purchase.
iii) Technical know-how recognized as intangible asset is stated at the
consideration paid for acquisition and amortised on straight-line basis
at plant & machinery rates.
3) Impairment of Assets:
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal or external
factors. An asset is treated as impaired when the carrying cost of
assets exceeds its recoverable value. An impairment loss is charged to
the profit & loss account in the year in which an asset is identified
as impaired. The impairment loss, if any, recognized in prior
accounting period is reversed if there has been a change in the
estimate of recoverable amount.
4) Foreign Currency Transactions:
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Monetary items denominated in
foreign currencies at the year-end are translated at the year-end
rates. Any exchange differences arising on settlement/transaction are
dealt with in the profit and loss account except those relating to
acquisition of fixed assets, which are adjusted to the cost of the
asset.
5) Investments:
Investments are stated at cost. No provision for diminution in value,
if any, has been made as these are long-term investments and in the
opinion of the management any decline is temporary.
6) Inventories:
i) Raw materials, stores & spares and packing materials are valued at
cost. Cost is determined on weighted average basis.
ii) Work-in-process is valued at cost.
iii) Finished products are valued at cost or market value whichever is
lower. Cost includes cost of raw material, packing materials, an
appropriate share of fixed & variable production overheads. Excise
duty applicable thereon is included for valuation purpose.
7) Retirement Benefits:
The Company has defined contribution plan for its employees retirement
benefits comprising of provident fund. The Company contributes to
provident fund for its employees. The Company has defined benefit plan
comprising of gratuity fund and leave encashment entitlement. The
liability for the gratuity fund and leave encashment has been
determined on the basis of an independent actuarial valuation done at
the year-end. Actuarial gains and losses comprise adjustments and the
effect of changes in the actuarial assumptions and are recognised in
the profit and loss account as income or expense. Contribution in
respect of gratuity is paid to the Life Insurance Corporation of India
(LIC).
8) Research and Development:
i) Capital expenditure is shown separately under the respective head of
fixed assets. ii) Revenue expenses including depreciation are charged
to profit & loss account.
9) Sales:
Revenue from sale of goods is recognised only when it can be reliably
measured and it is reasonable to expect ultimate collection. Sales are
net of returns and discounts and exclude sales tax, excise duty and
other charges.
10) Provision for Current and Deferred Tax:
i) Provision for current tax is made after taking into consideration
the deduction allowable under the provisions of the Income-tax Act,
1961.
ii) Deferred tax resulting from timing difference between book and
taxable profit is accounted by using the tax rate that have been
enacted or substantively enacted as on the balance sheet date. The
deferred tax liability is provided in the profit and loss account.
Deferred tax assets are recognised only if there is reasonable
certainty that the assets can be realized in future.
11) Borrowing Costs:
Borrowing costs attributable to the acquisition or construction of a
qualifying asset is capitalized as part of the cost of the asset. Other
borrowing cost is recognized as an expense in the period in which they
are incurred.
12) Dividend:
Dividend income is considered on receipt basis
13) Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
event and it is probable that there will be an outflow of resources.
Contingent Liabilities which are not recognised are disclosed by way of
notes. Contingent assets are neither recognised nor disclosed in the
financial statements.
14) Sundry Debtors:
Sundry debtors are stated after making adequate provision for debt
considered doubtful.
15) Earning Per Share:
The basic and diluted earning per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
16) Proposed Dividend:
Dividend recommended by Board of Directors is provided for in the
accounts, pending approval at annual general meeting.
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