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Accounting Policies of Cords Cable Industries Ltd. Company
Mar 31, 2025
Note 29: Significant accounting policies:
This note provides a list of the significant accounting policies adopted in preparation of these financial statements.
These policies have been consistently applied to all the years presented unless otherwise stated.
The financial statements were approved for issue by Board of Directors on 27 th May 2025.
a) Basis of preparation:
i. Compliance with Ind AS :
These financial statements for the year ending 31st March, 2025 comply in all material aspects with Indian
Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) read with
rule 4 of the Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the act.
ii. Historical cost convention:
The financial statements have been prepared on a historical cost basis, except for the following:
⢠Certain financial assets and liabilities and contingent consideration that are measured at fair value.
⢠Defined benefit obligations which are measured at fair value based on actuarial valuation.
b) Foreign currency transactions:
i. Functional and presentation currencies:
Items included in the financial statements of the Company are measured using the currency of the primary
economic environment in which the entity operates (âthe functional currencyâ). The financial statements are
presented in INR which is the functional and presentation currency for Cords Cable Industries Limited.
ii. Transactions and Balances:
Foreign currency transactions are translated into the functional currency at the exchange rates on the date of
transaction. Foreign exchange gains and losses resulting from settlement of such transactions and from
translation of monetary assets and liabilities at the year-end exchange rates are generally recognized in the
profit and loss. They are deferred in equity if they relate to qualifying cash flow hedges.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement
of Profit and Loss, within finance costs. All other foreign exchange gains and losses are presented in the
âStatement of Profit and Lossâ.
c) Revenue recognition:
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue
is net of GST and net of returns, trade allowances, rebates, value added taxes and amounts collected on behalf
of third parties.
The company recognizes revenue when the amount can be reliably measured, it is probable that future economic
benefits will flow to the entity and specific criteria have been met for each of the companyâs activities as described
below. The company bases its estimates on historical results, taking into consideration the type of customer, the
type of transaction and the specifics of each arrangement
i. Sale of goods:
Timing of recognition: Sale of goods is recognized when substantial risks and rewards of ownership are
passed to the customers, depending on individual terms, and are stated net of trade discounts, rebates,
incentives, subsidy and GST.
Measurement of revenue: Accumulated experience is used to estimate and provide for discounts, rebates,
incentives and subsidies. No element of financing is deemed present as the sales are made with credit
terms, which is consistent with market practice.
d) Income recognition:
i. Interest income from debt instruments is recognized using the effective interest rate method. The effective
interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate,
the company estimates the expected cash flows by considering all the contractual terms of the financial
instrument (for example, prepayment, extension, call and similar options) but does not consider the expected
credit losses.
ii. Dividends are recognized in profit or loss only when the right to receive payment is established, it is probable
that the economic benefits associated with the dividend will flow to the company, and the amount of the
dividend can be measured reliably.
iii. Revenue from royalty income is recognized on accrual basis.
e) Government Grants:
Grants from the government are recognized at their fair value where there is a reasonable assurance that the
grant will be received and the company will comply with all attached conditions.
Government grants relating to income are deferred and recognized in the profit or loss over the period necessary
to match them with the costs that they are intended to compensate and reduce from corresponding cost.
Income from export incentives such as premium on sale of import licenses, duty drawback etc. are recognized on
accrual basis to the extent the ultimate realization is reasonably certain.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities
as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related
assets and presented within other operating income.
f) Income Tax:
The income tax expense or credit for the period is the tax payable on the current periodâs taxable income based
on the applicable income tax rate for each jurisdiction adjusted by the changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions which appropriate
on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the Balance Sheet method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax
is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the
reporting period and are expected to apply when the related deferred income tax asset will be realized or the
deferred income tax liability is settled.
Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilize those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a
net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to
items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in
other comprehensive income or directly in equity, respectively.
Minimum Alternative Tax (MAT) credit, which is equal to the excess of MAT (calculated in accordance with
provisions of Section 115JB of the Income Tax Act, 1961) over normal income-tax is recognized as an item in
deferred tax asset by crediting the Statement of Profit and Loss only when and to the extent there is convincing
evidence that the Company will be able to avail the said credit against normal tax payable during the period of
fifteen succeeding assessment years.
g) Property, plant and equipment:
All items of property, plant and equipment are stated at historical cost, less accumulated depreciation/amortization
and impairments, if any. Historical cost includes taxes, duties, freight and other incidental expenses related to
acquisition and installation. Indirect expenses during construction period, which are required to bring the asset in
the condition for its intended use by the management and are directly attributable to bringing the asset to its
position, are also capitalized.
Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the company and the
cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate
asset is derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the
reporting period in which they are incurred.
Depreciation on Property, Plant and Equipment is charged on straight line method on the basis of rates arrived at
with reference to the useful life of the assets prescribed under Part C of Schedule II of the Companies Act, 2013.
The estimated useful lives are as mentioned below:
h) Depreciation and amortization:
Depreciation is calculated using the Straight Line Method. Depreciation is calculated using the useful life given in
Schedule II to the Companies Act, 2013.
Depreciation on additions / deletions during the year is provided from the day in which the asset is capitalized up
to the day in which the asset is disposed off.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting
period, with the effect of any changes in estimate accounted for on a prospective basis.
An assetâs carrying amount is written down immediately to its recoverable amount if the assetâs carrying amount
is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included
in profit or loss within other gains/(losses).
i) Intangible Assets:
i. Intangible assets with finite useful life:
Intangible assets with finite useful life are stated at cost of acquisition, less accumulated depreciation/
amortization and impairment loss, if any. Cost includes taxes, duties and other incidental expenses related
to acquisition and other incidental expenses.
Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of respective
intangible assets.
ii. Research and Development:
Capital expenditure on research and development is capitalized and depreciated as per accounting policy
mentioned in para h and i above. Revenue expenditure is charged off in the year in which it is incurred.
j) Investment property:
Property (land or a building-or part of a building-or both) that is held for long term rental yields or for capital
appreciation or both, rather than for:
i. use in the production or supply of goods or services or for administrative purposes; or
ii. Sale in the ordinary course of business.
is recognized as Investment Property in the books.
Investment property is measured initially at its cost, including related transaction costs and, where applicable,
borrowing costs. Subsequent expenditure is capitalized to the assets carrying amount only when it is probable
that future economic benefits associated with the expenditure will flow to the company and the cost of the item
can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an
investment property is replaced, the carrying amount of the replaced part is derecognized.
Depreciation is provided on all Investment Property on straight line basis, based on useful life of the assets
determined in accordance with para âhâ above.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting
period, with the effect of any changes in estimate accounted for on a prospective basis.
k) Lease:
The company has applied Ind AS 116 using the modified retrospective approach and therefore the comparative
information has not been restated and continues to be reported under Ind AS 17.
i. As a lessee:
The company recognises a right-of-use asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted
for any lease payments made at or before the commencement date, plus any initial direct costs incurred and
an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the
site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement
date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The
estimated useful lives of right-of-use assets are determined on the same basis as those of property and
equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted
for certain re-measurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, companyâs incremental borrowing rate. Generally, the company uses its incremental borrowing
rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
- Fixed payments, including in-substance fixed payments;
- Variable lease payments that depend on an index or a rate, initially measured using the index or rate as
at the commencement date;
- Amounts expected to be payable under a residual value guarantee; and
- The exercise price under a purchase option that the company is reasonably certain to exercise, lease
payments in an optional renewal period if the company is reasonably certain to exercise an extension
option, and penalties for early termination of a lease unless the company is reasonably certain not to
terminate early.
The lease liability is measured at amortized cost using the effective interest method. It is re-measured when
there is a change in future lease payments arising from a change in an index or rate, if there is a change in
the companyâs estimate of the amount expected to be payable under a residual value guarantee, or if company
changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use
asset has been reduced to zero.
Short-term leases and leases of low-value assets:
The company has elected not to recognize right-of-use assets and lease liabilities for short term leases of
real estate properties that have a lease term of 12 months. The company recognizes the lease payments
associated with these leases as an expense on a straight-line basis over the lease term.
Under Ind AS 17:
In the comparative period, as a lessee the company classified leases that transfer substantially all of the
risks and rewards of ownership as finance leases. When this was the case, the leased assets were measured
initially at an amount equal to the lower of their fair value and the present value of the minimum lease
payments. Minimum lease payments were the payments over the lease term that the lessee was required to
make, excluding any contingent rent.
Subsequently, the assets were accounted for in accordance with the accounting policy applicable to that
asset.
Assets held under other leases were classified as operating leases and were not recognized in the companyâs
statement of financial position. Payments made under operating leases were recognized in profit or loss on
a straight-line basis over the term of the lease. Lease incentives received were recognized as an integral
part of the total lease expense, over the term of the lease.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks
and rewards incidental to the ownership of an asset to the Company. All other leases are classified as
operating leases. Finance leases are capitalised at the leaseâs inception at the fair value of the leased
property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations,
net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease
payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss
over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the
liability for each period.
Land under perpetual lease for is accounted as finance lease which is recognized at upfront premium paid
for the lease and the present value of the lease rent obligation. The corresponding liability is recognized as
a finance lease obligation. Land under non-perpetual lease is treated as operating lease.
Operating lease payments for land are recognized as prepayments and amortised on a straight-line basis
over the term of the lease. Contingent rentals, if any, arising under operating leases are recognized as an
expense in the period in which they are incurred.
l) Investment and Other financial assets:
i. Classification:
The Company classifies its financial assets in the following measurement categories:
⢠those to be measured subsequently at fair value (either through other comprehensive income, or through
profit or loss), and
⢠those measured at amortized cost.
⢠Classification of debt assets will be driven by the Companyâs business model for managing the financial
assets and the contractual cash flow characteristics of the financial assets.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
comprehensive income. For investments in debt instruments, this will depend on the business model in
which the investment is held. For investments in equity instruments, this will depend on whether the company
has made an irrevocable election at the time of initial recognition to account for the equity investment at fair
value through other comprehensive income.
Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle
on a net basis, to realise the assets and settle the liabilities simultaneously
ii. Measurement:
At initial recognition, the company measures a financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition
of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are
expensed in profit or loss.
Debt instruments:
Subsequent measurement of debt instruments depends on the companyâs business model for managing the
asset and the cash flow characteristics of the asset.
⢠Amortized Cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a
debt investment that is subsequently measured at amortized cost and is not part of a hedging relationship
is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these
financial assets is included in finance income.
⢠Fair value through other comprehensive income (FVOCI): Assets that are held for collection of
contractual cash flows and for selling the financial assets, where the assets cash flow represent solely
payments of principal and interest, are measured at fair value through other comprehensive income
(FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of
impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized
in profit and loss. When the financial asset is derecognized, the cumulative gain or loss previously
recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/ (losses).
Interest income from these financial assets is included in other income.
⢠Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or FVOCI are
measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently
measured at fair value through profit or loss and is not part of a hedging relationship is recognized in
profit or loss and presented net in the statement of profit and loss within other gains/(losses) in the
period in which it arises. Interest income from these financial assets is included in other income.
Equity instruments:
The company subsequently measures all equity investments at fair value. Where the companyâs management
has elected to present fair value gains and losses on equity investments in other comprehensive income,
there is no subsequent reclassification of fair value gains and losses to profit or loss. Dividends from such
investments are recognized in profit or loss as other income when the companyâs right to receive the dividend
is established.
iii. Impairment of financial assets:
The Company assesses if there is any significant increase in credit risk pertaining to the assets and accordingly
creates necessary provisions, wherever required.
iv. De-recognition of financial assets:
A financial asset is de-recognized only when
⢠The company has transferred the rights to receive cash flows from the financial asset or
⢠retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual
obligation to pay the cash flows to one or more recipients or
⢠The contractual right to receive the cash flows of the financial assets expires.
Where the entity has transferred an asset, the company evaluates whether it has transferred substantially all
risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognized.
Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset,
the financial asset is not derecognized.
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of
ownership of the financial asset, the financial asset is derecognized if the company has not retained control
of the financial asset. Where the company retains control of the financial asset, the asset is continued to be
recognized to the extent of continuing involvement in the financial asset.
m) Derivatives and hedging activities:
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently
re-measured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair
value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item
being hedged.
The Company designates certain derivatives as either:
⢠hedges of the fair value of recognized assets or liabilities or a firm commitment (fair value hedges)
⢠hedges of a particular risk associated with the cash flows of recognized assets and liabilities and highly
probable forecast transactions (cash flow hedges).
The Company documents at the inception of the hedging transaction the relationship between hedging instruments
and hedged items, as well as its risk management objective and strategy for undertaking various hedge
transactions. The Company also documents its assessment, both at hedge inception and on an ongoing basis, of
whether the derivatives that are used in hedging transactions have been and will continue to be highly effective
in offsetting changes in fair values or cash flows of hedged items.
Cash flow hedge reserve:
The effective part of the changes in fair value of hedge instruments is recognized in other comprehensive income,
while any ineffective part is recognized immediately in the statement of profit and loss.
n) Inventories:
Raw materials, packing materials, stores and spares are valued at lower of cost and net realizable value.
Work-in-progress, finished goods and stock-in-trade (traded goods) are valued at lower of cost and net realizable
value.
By-products and unserviceable / damaged finished goods are valued at estimated net realizable value.
Cost of raw materials and traded goods comprises cost of purchases. Cost of work-in progress and finished
goods comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis of normal operating capacity. Cost of inventories also includes
all other costs incurred in bringing the inventories to their present location and condition. Cost is assigned on the
basis of First In First Out. Costs of purchased inventory are determined after deducting rebates and discounts.
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
o) Trade Receivables:
Trade receivables are recognized initially at fair value and subsequently measured at cost less provision for
impairment.
p) Trade and other payables:
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial
year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due
within 12 months after the reporting period.
q) Borrowings:
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognized in profit or loss over the period of the borrowings using effective interest rate method. Fees
paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down
occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the
fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it
relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished
or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities
assumed, is recognized in profit or loss.
r) Borrowing Cost:
General and specific borrowing costs that are directly attributable to the acquisition or construction of a qualifying
asset are capitalized during the period of time that is required to complete and prepare the asset for its intended
use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their
intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalization.
Other borrowing costs are expensed in the period in which they are incurred.
s) Employee Benefits:
i. Short term obligations:
Liabilities for wages and salaries, including non- monetary benefits that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service are recognized
in respect of employeesâ services upto the end of the reporting and are measured at the amounts expected
to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations
in the balance sheet.
ii. Provident fund:
Provident fund contributions are made by the Company. The Companyâs liability is actuarially determined
(using the Projected Unit Credit method) at the end of the year.
iii. Gratuity:
Liabilities with regard to the gratuity benefits payable in future are determined by actuarial valuation at each
Balance Sheet date using the Projected Unit Credit method and contributed to Employees Gratuity Fund.
Actuarial gains and losses arising from changes in actuarial assumptions are recognized in other
comprehensive income and shall not be reclassified to the Statement of Profit and Loss in a subsequent
period.
iv. Leave encashment / Compensated absences:
The Company provides for the encashment of leave with pay subject to certain rules. The employees are
entitled to accumulate leave for future encashment/utilization. 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.
Actuarial gains and losses arising from changes in actuarial assumptions are recognized in the âStatement of
Profit and Lossâ.
Mar 31, 2024
Note 30: Significant accounting policies:
This note provides a list of the significant accounting policies adopted in preparation of these financial statements. These policies have been consistently applied to all the years presented unless otherwise stated.
The financial statements were approved for issue by Board of Directors on 24th May 2024.
a) Basis of preparation:
i. Compliance with Ind AS :
These financial statements for the year ending 31st March, 2024 comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) read with rule 4 of the Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the act.
ii. Historical cost convention:
The financial statements have been prepared on a historical cost basis, except for the following:
⢠Certain financial assets and liabilities and contingent consideration that are measured at fair value.
⢠Defined benefit obligations which are measured at fair value based on actuarial valuation.
b) Foreign currency transactions:
i. Functional and presentation currencies:
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (âthe functional currencyâ). The financial statements are presented in INR which is the functional and presentation currency for Cords Cable Industries Limited.
ii. Transactions and Balances:
Foreign currency transactions are translated into the functional currency at the exchange rates on the date of transaction. Foreign exchange gains and losses resulting from settlement of such transactions and from translation of monetary assets and liabilities at the year-end exchange rates are generally recognized in the profit and loss. They are deferred in equity if they relate to qualifying cash flow hedges.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of Profit and Loss, within finance costs. All other foreign exchange gains and losses are presented in the âStatement of Profit and Lossâ.
c) Revenue recognition:
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue is net of GST and net of returns, trade allowances, rebates, value added taxes and amounts collected on behalf of third parties.
The company recognizes revenue when the amount can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the companyâs activities as described below. The company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
i. Sale of goods:
Timing of recognition: Sale of goods is recognized when substantial risks and rewards of ownership are passed to the customers, depending on individual terms, and are stated net of trade discounts, rebates, incentives, subsidy and GST.
Measurement of revenue: Accumulated experience is used to estimate and provide for discounts, rebates, incentives and subsidies. No element of financing is deemed present as the sales are made with credit terms, which is consistent with market practice.
d) Income recognition:
i. Interest income from debt instruments is recognized using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.
ii. Dividends are recognized in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the company, and the amount of the dividend can be measured reliably.
iii. Revenue from royalty income is recognized on accrual basis.
Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the company will comply with all attached conditions.
Government grants relating to income are deferred and recognized in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and reduce from corresponding cost.
Income from export incentives such as premium on sale of import licenses, duty drawback etc. are recognized on accrual basis to the extent the ultimate realization is reasonably certain.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other operating income.
The income tax expense or credit for the period is the tax payable on the current periodâs taxable income based on the applicable income tax rate for each jurisdiction adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions which appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the Balance Sheet method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset will be realized or the deferred income tax liability is settled.
Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
Minimum Alternative Tax (MAT) credit, which is equal to the excess of MAT (calculated in accordance with provisions of Section 115JB of the Income Tax Act, 1961) over normal income-tax is recognized as an item in deferred tax asset by crediting the Statement of Profit and Loss only when and to the extent there is convincing evidence that the Company will be able to avail the said credit against normal tax payable during the period of fifteen succeeding assessment years.
g) Property, plant and equipment:
All items of property, plant and equipment are stated at historical cost, less accumulated depreciation/amortization and impairments, if any. Historical cost includes taxes, duties, freight and other incidental expenses related to acquisition and installation. Indirect expenses during construction period, which are required to bring the asset in the condition for its intended use by the management and are directly attributable to bringing the asset to its position, are also capitalized.
Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
Depreciation on Property, Plant and Equipment is charged on straight line method on the basis of rates arrived at with reference to the useful life of the assets prescribed under Part C of Schedule II of the Companies Act, 2013.
The estimated useful lives are as mentioned below:
|
Type of Asset |
Useful Lives (in years) |
|
Leasehold Land |
99 |
|
Factory Buildings |
30 |
|
Furniture & Fittings |
10 |
|
Plant & Machinery |
15 |
|
Office Equipment |
5 |
|
Tools and Instruments |
15 |
|
Generator |
15 |
|
Computer |
3 |
|
Computer-Server |
6 |
|
Vehicle (Car) |
8 |
|
Vehicle (Bike) |
10 |
|
Right to Use Assets(Machineries) |
4 |
h) Depreciation and amortization
Depreciation is calculated using the Straight Line Method. Depreciation is calculated using the useful life given in Schedule II to the Companies Act, 2013.
Depreciation on additions / deletions during the year is provided from the day in which the asset is capitalized up to the day in which the asset is disposed off.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An assetâs carrying amount is written down immediately to its recoverable amount if the assetâs carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss within other gains/(losses).
i. Intangible assets with finite useful life:
Intangible assets with finite useful life are stated at cost of acquisition, less accumulated depreciation/ amortization and impairment loss, if any. Cost includes taxes, duties and other incidental expenses related to acquisition and other incidental expenses.
Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of respective intangible assets.
ii. Research and Development:
Capital expenditure on research and development is capitalized and depreciated as per accounting policy mentioned in para h and i above. Revenue expenditure is charged off in the year in which it is incurred.
Property (land or a building-or part of a building-or both) that is held for long term rental yields or for capital appreciation or both, rather than for:
i. use in the production or supply of goods or services or for administrative purposes; or
ii. Sale in the ordinary course of business.
is recognized as Investment Property in the books.
Investment property is measured initially at its cost, including related transaction costs and, where applicable, borrowing costs. Subsequent expenditure is capitalized to the assets carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the company and the cost of the item
can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognized.
Depreciation is provided on all Investment Property on straight line basis, based on useful life of the assets determined in accordance with para âhâ above.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
The company has applied Ind AS 116 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under Ind AS 17.
The company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, companyâs incremental borrowing rate. Generally, the company uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
- Fixed payments, including in-substance fixed payments;
- Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
- Amounts expected to be payable under a residual value guarantee; and
- The exercise price under a purchase option that the company is reasonably certain to exercise, lease payments in an optional renewal period if the company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the company is reasonably certain not to terminate early.
The lease liability is measured at amortized cost using the effective interest method. It is re-measured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the companyâs estimate of the amount expected to be payable under a residual value guarantee, or if company changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Short-term leases and leases of low-value assets
The company has elected not to recognize right-of-use assets and lease liabilities for short term leases of real estate properties that have a lease term of 12 months. The company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
In the comparative period, as a lessee the company classified leases that transfer substantially all of the risks and rewards of ownership as finance leases. When this was the case, the leased assets were measured initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Minimum lease payments were the payments over the lease term that the lessee was required to make, excluding any contingent rent.
Subsequently, the assets were accounted for in accordance with the accounting policy applicable to that asset.
Assets held under other leases were classified as operating leases and were not recognized in the companyâs statement of financial position. Payments made under operating leases were recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives received were recognized as an integral part of the total lease expense, over the term of the lease.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards incidental to the ownership of an asset to the Company. All other leases are classified as operating leases. Finance leases are capitalised at the leaseâs inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Land under perpetual lease for is accounted as finance lease which is recognized at upfront premium paid for the lease and the present value of the lease rent obligation. The corresponding liability is recognized as a finance lease obligation. Land under non-perpetual lease is treated as operating lease.
Operating lease payments for land are recognized as prepayments and amortised on a straight-line basis over the term of the lease. Contingent rentals, if any, arising under operating leases are recognized as an expense in the period in which they are incurred.
l) Investment and Other financial assets:i. Classification:
The Company classifies its financial assets in the following measurement categories:
⢠those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
⢠those measured at amortized cost.
⢠Classification of debt assets will be driven by the Companyâs business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.
Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously
ii. Measurement:
At initial recognition, the company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Debt instruments
Subsequent measurement of debt instruments depends on the companyâs business model for managing the asset and the cash flow characteristics of the asset.
⢠Amortized Cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost and is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is included in finance income.
⢠Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets cash flow represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized
in profit and loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/ (losses). Interest income from these financial assets is included in other income.
⢠Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognized in profit or loss and presented net in the statement of profit and loss within other gains/(losses) in the period in which it arises. Interest income from these financial assets is included in other income.
Equity instruments
The company subsequently measures all equity investments at fair value. Where the companyâs management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss. Dividends from such investments are recognized in profit or loss as other income when the companyâs right to receive the dividend is established.
iii. Impairment of financial assets:
The Company assesses if there is any significant increase in credit risk pertaining to the assets and accordingly creates necessary provisions, wherever required.
iv. De-recognition of financial assets:
A financial asset is de-recognized only when
⢠The company has transferred the rights to receive cash flows from the financial asset or
⢠retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients or
⢠The contractual right to receive the cash flows of the financial assets expires.
Where the entity has transferred an asset, the company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognized. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized.
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognized if the company has not retained control of the financial asset. Where the company retains control of the financial asset, the asset is continued to be recognized to the extent of continuing involvement in the financial asset.
m) Derivatives and hedging activities:
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
The Company designates certain derivatives as either:
⢠hedges of the fair value of recognized assets or liabilities or a firm commitment (fair value hedges)
⢠hedges of a particular risk associated with the cash flows of recognized assets and liabilities and highly probable forecast transactions (cash flow hedges).
The Company documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Company also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.
Cash flow hedge reserve
The effective part of the changes in fair value of hedge instruments is recognized in other comprehensive income, while any ineffective part is recognized immediately in the statement of profit and loss.
Raw materials, packing materials, stores and spares are valued at lower of cost and net realizable value.
Work-in-progress, finished goods and stock-in-trade (traded goods) are valued at lower of cost and net realizable value.
By-products and unserviceable / damaged finished goods are valued at estimated net realizable value.
Cost of raw materials and traded goods comprises cost of purchases. Cost of work-in progress and finished goods comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Cost of inventories also includes all other costs incurred in bringing the inventories to their present location and condition. Cost is assigned on the basis of First In First Out. Costs of purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
Trade receivables are recognized initially at fair value and subsequently measured at cost less provision for impairment.
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period.
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using effective interest rate method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.
General and specific borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Other borrowing costs are expensed in the period in which they are incurred.
s) Employee Benefits:i. Short term obligations:
Liabilities for wages and salaries, including non- monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employeesâ services upto the end of the reporting and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet..
Provident fund contributions are made by the Company. The Companyâs liability is actuarially determined (using the Projected Unit Credit method) at the end of the year.
iii. Gratuity:
Liabilities with regard to the gratuity benefits payable in future are determined by actuarial valuation at each Balance Sheet date using the Projected Unit Credit method and contributed to Employees Gratuity Fund. Actuarial gains and losses arising from changes in actuarial assumptions are recognized in other comprehensive income and shall not be reclassified to the Statement of Profit and Loss in a subsequent period.
iv. Leave encashment / Compensated absences:
The Company provides for the encashment of leave with pay subject to certain rules. The employees are entitled to accumulate leave for future encashment/utilization. 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. Actuarial gains and losses arising from changes in actuarial assumptions are recognized in the âStatement of Profit and Lossâ.
t) Provisions and Contingent Liabilities:
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.
Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognized for future operating losses.
Provisions are measured at the present value of managementâs best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
A contingent asset is disclosed, where an inflow of economic benefits is probable. An entity shall not recognize a contingent asset unless the recovery is virtually certain.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short- term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank Overdraft and cash credits are not included in the cash & cash equivalent according to Ind AS 7 as there is no arrangement for positive and negative balance fluctuation in those accounts, they are basically the integral part of loans and credit management.
Intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which assetâs carrying amount exceeds its recoverable amount. The recoverable amount is higher of an assetâs fair value less cost of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (cash-generating units).
Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
i. Basic earnings per share: Basic earnings per share is calculated by dividing:
⢠the profit attributable to owners of the Company
⢠by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares.
ii. Diluted earnings per share: Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
⢠the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
⢠the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
Equity shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
y) Foreign Currency
The functional currency of the company is Indian Rupee. Theses financial statements are presented in Indian Rupees.
The foreign currency transactions are recorded on initial recognition in the functional currency by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of transaction.
The foreign currency monetary items are translated using the closing rate at the end of each reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of transaction. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those which they were translated on initial recognition during the period or in previous financial statements are recognized in statement of profit and loss in the period in which they arise.
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
aa) Rounding off:
All amounts disclosed in the financial statement and notes have been rounded off to the nearest Lacs, unless otherwise stated.
Note 31: Critical Estimates and Judgements
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Companyâs accounting policies. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
The preparation of the financial statements in conformity with GAAP requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. These estimates and associated assumptions are based on historical experience and managementâs best knowledge of current events and actions the Company may take in future.
Information about critical estimates and assumptions that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities are included in the following notes:
(a) Estimation of defined benefit obligations
(b) Estimation of current tax expenses and payable
(c) Estimation of provisions and contingencies
(a) Impairment of financial assets (including trade receivable)
In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the financial assets that are debt instruments, and are measured at amortized cost e.g., Loans, Debt Securities, Deposits and Trade Receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18. The Company follows âSimplified Approachâ for recognition of impairment loss allowance on trade receivables. The application of simplified approach recognizes impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition. Trade receivables are recognized initially at fair value and subsequently measured at cost less provision for impairment. As a practical expedient the Company has adopted âSimplified Approachâ using the provision matrix method for recognition of expected loss on trade receivables. The provision matrix is based on three years rolling average default rates observed over the expected life of the trade receivables and is adjusted for forward-looking estimates. These average default rates are applied on total credit risk exposure on trade receivables and outstanding for more than one year at the reporting date to determine lifetime Expected Credit Losses. Company has a policy to recognize expected credit loss only if there is reasonable certainty of default from trade receivable. To be prudent in booking of expected credit loss, company recognize the expected credit loss when legal right to recover the debt expires which is normally after 3 years of raising sales invoice and that to on the basis of management expectation of recoverability.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, the Company reverts to recognizing impairment loss allowance based on 12-month ECL.
ECL impairment loss allowance (or reversal) recognized during the period is recognized under the head âOther Expensesâ in the statement of profit and loss. The balance sheet presentation for various financial instruments is described below:
i. Financial assets measured as at amortized cost: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount.
ii. Debt instruments measured at FVTPL: Since financial assets are already reflected at fair value, impairment allowance is not further reduced from its value. The change in fair value is taken to the statement of Profit and Loss.
iii. Debt instruments measured at FVTOCI: Since financial assets are already reflected at fair value, impairment allowance is not further reduced from its value. Rather, ECL amount is presented as âAccumulated Impairment Amountâ in the OCI. The Company does not have any Purchased or Originated Credit Impaired (POCI) financial assets, i.e., financial assets which are credit impaired on purchase/ origination.
(b) Estimation of defined benefit obligations
The liabilities of the Company arising from employee benefit obligations and the related current service cost, are determined on an actuarial basis using various assumptions. Refer note 31 for significant assumptions used.
(c) Estimation of current tax expenses and payable
Taxes recognized in the financial statements reflect managementâs best estimate of the outcome based on the facts known at the balance sheet date. These facts include but are not limited to interpretation of tax laws of various jurisdictions where the company operates. Any difference between the estimates and final tax assessments will impact the income tax as well the resulting assets and liabilities.
(d) Estimation of provisions and contingencies
Provisions are liabilities of uncertain amount or timing recognized where a legal or constructive obligation exists at the balance sheet date, as a result of a past event, where the amount of the obligation can be reliably estimated
and where the outflow of economic benefit is probable. Contingent liabilities are possible obligations that may arise from past event whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events which are not fully within the control of the Company. The Company exercises judgement and estimates in recognizing the provisions and assessing the exposure to contingent liabilities relating to pending litigations. Judgment is necessary in assessing the likelihood of the success of the pending claim and to quantify the possible range of financial settlement. Due to this inherent uncertainty in the evaluation process, actual losses may be different from originally estimated provision. Warranty provisions are determined based on the historical percentage of warranty expense to sales for the same types of goods for which the warranty is currently being determined. The same percentage to the sales is applied for the current accounting period to derive the warranty expense to be accrued. It is very unlikely that actual warranty claims will exactly match the historical warranty percentage, so such estimates are reviewed annually for any material changes in assumptions and likelihood of occurrence.
The Company measures financial instruments at fair value at each balance sheet date.
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:
i. In the principal market for asset or liability, or
ii. In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to fair value measurement as a whole) at the end of each reporting period. For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
Other Fair Value related disclosures are given in the relevant notes.
Mar 31, 2018
Significant accounting policies:
This note provides a list of the significant accounting policies adopted in preparation of these financial statements. These policies have been consistently applied to all the years presented unless otherwise stated.
The financial statements were approved for issue by Board of Directors on 28th May, 2018.
a) Basis of preparation:
i. Compliance with IND AS :
These financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) read with rule 4 of the Companies (Indian Accounting standards) Rules, 2015 and other relevant provisions of the act.
These financial statements for the year ended 31st March, 2018 are the first financials with comparatives prepared under Ind AS. For all periods upto and including the year ended 31st March, 2017, the Company prepared its financial statements in accordance with the generally accepted accounting principles (hereinafter referred to as âPrevious GAAPâ) used for its statutory reporting requirement in India immediately before adopting Ind AS.
The date of transition to Ind AS is 1st April, 2016. Refer Note 28 for the first time adoption exemptions availed by the Company
Reconciliations and explanations for the effect of the transition from Previous GAAP to Ind AS on the Companyâs Balance Sheet, Statement of Profit and Loss and Statement of Cash Flows are provided in respective notes.
ii. Historical cost convention:
The financial statements have been prepared on a historical cost basis, except for the following:
- certain financial assets and liabilities and contingent consideration that are measured at fair value.
- defined benefit plan assets measured at fair value.
b) Foreign currency transactions:
i. Functional and presentation currencies:
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (âthe functional currencyâ). The financial statements are presented in INR which is the functional and presentation currency for Cords Cable Industries Limited.
ii. Transactions and Balances:
Foreign currency transactions are translated into the functional currency at the exchange rates on the date of transaction. Foreign exchange gains and losses resulting from settlement of such transactions and from translation of monetary assets and liabilities at the year-end exchange rates are generally recognized in the profit and loss. They are deferred in equity if they relate to qualifying cash flow hedges.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of Profit and Loss, within finance costs. All other foreign exchange gains and losses are presented in the Statement of Profit and Loss .
c) Revenue recognition:
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue is net of GST and Excise Duty and net of returns, trade allowances, rebates, value added taxes and amounts collected on behalf of third parties.
The company recognizes revenue when the amount can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the companyâs activities as described below. The company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement
i. Sale of goods:
Timing of recognition: Sale of goods is recognized when substantial risks and rewards of ownership are passed to the customers, depending on individual terms, and are stated net of trade discounts, rebates, incentives, subsidy, gst.
Measurement of revenue: Accumulated experience is used to estimate and provide for discounts, rebates, incentives and subsidies. No element of financing is deemed present as the sales are made with credit terms, which is consistent with market practice.
d) Income recognition:
i. Interest income from debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.
ii. Dividends are recognised in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the company, and the amount of the dividend can be measured reliably.
iii. Revenue from royalty income is recognized on accrual basis.
e) Government Grants:
Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the company will comply with all attached conditions.
Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and reduce from corresponding cost.
Income from export incentives such as premium on sale of import licenses, duty drawback etc. are recognized on accrual basis to the extent the ultimate realization is reasonably certain.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other operating income.
f) Income Tax:
The income tax expense or credit for the period is the tax payable on the current periodâs taxable income based on the applicable income tax rate for each jurisdiction adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the Balance Sheet method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
Minimum Alternative Tax (MAT) credit, which is equal to the excess of MAT (calculated in accordance with provisions of Section 115JB of the Income Tax Act,1961) over normal income-tax is recognized as an item in deferred tax asset by crediting the Statement of Profit and Loss only when and to the extent there is convincing evidence that the Company will be able to avail the said credit against normal tax payable during the period of fifteen succeeding assessment years.
g) Property, plant and equipment:
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost, less accumulated depreciation/amortisation and impairments, if any. Historical cost includes taxes, duties, freight and other incidental expenses related to acquisition and installation. Indirect expenses during construction period, which are required to bring the asset in the condition for its intended use by the management and are directly attributable to bringing the asset to its position, are also capitalized.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
Capital work-in-progress comprises cost of fixed assets that are not yet ready for their intended use at the year end.
Transition to IND AS
On transition to Ind AS, the company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 1st April, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
The estimated useful lives area s mentioned below:
h) Depreciation and amortization
Depreciation is calculated using the Straight Line Method. Depreciation is calculated using the useful life given in Schedule II to the Companies Act, 2013.
Depreciation on additions / deletions during the year is provided from the day in which the asset is capitalized up to the day in which the asset is disposed off.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An assetâs carrying amount is written down immediately to its recoverable amount if the assetâs carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss within other gains/(losses).
i) Intangible Assets:
i. Intangible assets with finite useful life:
Intangible assets with finite useful life are stated at cost of acquisition, less accumulated depreciation/ amortization and impairment loss, if any. Cost includes taxes, duties and other incidental expenses related to acquisition and other incidental expenses.
Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of respective intangible assets.
ii. Research and Development:
Capital expenditure on research and development is capitalized and depreciated as per accounting policy mentioned in para h and i above. Revenue expenditure is charged off in the year in which it is incurred.
iii. Transition to Ind AS:
On transition to Ind AS, the company has elected to continue with the carrying value of all of its intangible assets recognized as at 1st April, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of intangible assets.
j) Investment property:
Property (land or a building-or part of a building-or both) that is held for long term rental yields or for capital appreciation or both, rather than for:
i. use in the production or supply of goods or services or for administrative purposes; or
ii. sale in the ordinary course of business.
is recognized as Investment Property in the books.
Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalized to the assets carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognized.
Depreciation is provided on all Investment Property on straight line basis, based on useful life of the assets determined in accordance with para âhâ above.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Transition to Ind AS
On transition to Ind AS, the company has elected to continue with the carrying value of all of its investment properties recognized as at 1st April, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of investment properties.
k) Lease:
i. As a lessee
Leases of property, plant and equipment where the company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary increase. Lease hold property includes land taken for perpetuity on payment of one time lumpsum amount.
l) Investment and Other financial assets:
i. Classification:
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
- those measured at amortized cost.
Classification of debt assets will be driven by the Companyâs business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.
ii. Measurement:
At initial recognition, the company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Debt instruments
Subsequent measurement of debt instruments depends on the companyâs business model for managing the asset and the cash flow characteristics of the asset.
- Amortized Cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost and is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is included in finance income.
- Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets cash flow represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in profit and loss. When the financial asset is derecognized, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/ (losses). Interest income from these financial assets is included in other income.
- Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in profit or loss and presented net in the statement of profit and loss within other gains/(losses) in the period in which it arises. Interest income from these financial assets is included in other income.
Equity instruments
The company subsequently measures all equity investments at fair value. Where the companyâs management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss. Dividends from such investments are recognised in profit or loss as other income when the companyâs right to receive the dividend is established.
iii. Impairment of financial assets:
The Company assesses if there is any significant increase in credit risk pertaining to the assets and accordingly create necessary provisions, wherever required.
iv. De-recognition of financial assets:
A financial asset is de-recognized only when
- The company has transferred the rights to receive cash flows from the financial asset or
- retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients or
- The contractual right to receive the cash flows of the financial assets expires.
Where the entity has transferred an asset, the company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the company has not retained control of the financial asset. Where the company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
m) Derivatives and hedging activities:
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
The Company designates certain derivatives as either:
- hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges)
- hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable forecast transactions (cash flow hedges).
The Company documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Company also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.
The fair values of various derivative financial instruments used for hedging purposes are disclosed in Note 27. Movements in the hedging reserve in shareholdersâ equity are shown in Note 12(c). The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability.
Cash flow hedge reserve
The effective part of the changes in fair value of hedge instruments is recognized in other comprehensive income, while any ineffective part is recognized immediately in the statement of profit and loss.
n) Inventories:
Raw materials, packing materials, stores and spares are valued at lower of cost and net realizable value.
Work-in-progress, finished goods and stock-in-trade (traded goods) are valued at lower of cost and net realizable value.
By-products and unserviceable / damaged finished goods are valued at estimated net realizable value.
Cost of raw materials and traded goods comprises cost of purchases. Cost of work-in progress and finished goods comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Cost of inventories also includes all other costs incurred in bringing the inventories to their present location and condition. Cost is assigned on the basis of First In First Out. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
o) Trade Receivables:
Trade receivables are recognised initially at fair value and subsequently measured at cost less provision for impairment.
p) Trade and other payables:
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period.
q) Borrowings:
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using effective interest rate method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
r) Borrowing Cost
General and specific borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are incurred.
s) Employee Benefits:
i. Short term obligations:
Liabilities for wages and salaries, including non- monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employeesâ services upto the end of the reporting and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
ii. Provident fund:
Provident fund contributions are made by the Company. The Companyâs liability is actuarially determined (using the Projected Unit Credit method) at the end of the year.
iii. Gratuity:
Liabilities with regard to the gratuity benefits payable in future are determined by actuarial valuation at each Balance Sheet date using the Projected Unit Credit method and contributed to Employees Gratuity Fund. Actuarial gains and losses arising from changes in actuarial assumptions are recognized in other comprehensive income and shall not be reclassified to the Statement of Profit and Loss in a subsequent period.
iv. Leave encashment / Compensated absences:
The Company provides for the encashment of leave with pay subject to certain rules. The employees are entitled to accumulate leave for future encashment / availment. 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. Actuarial gains and losses arising from changes in actuarial assumptions are recognised in the Statement of Profit and Loss.
t) Provisions and Contingent Liabilities:
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of managementâs best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
A contingent asset is disclosed, where an inflow of economic benefits is probable. An entity shall not recognise a contingent asset unless the recovery is virtually certain.
u) Cash and Cash Equivalents:
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short- term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank Overdraft and cash credits are not included in the cash & cash equivalent according to Ind AS 7 as there is no arrangement for positive and negative balance fluctuation in those accounts.
v) Impairment of assets:
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which assetâs carrying amount exceeds its recoverable amount. The recoverable amount is higher of an assetâs fair value less cost of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (cash-generating units).
Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
w) Earnings Per Share
i. Basic earnings per share: Basic earnings per share is calculated by dividing:
- the profit attributable to owners of the Company
- by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares.
ii. Diluted earnings per share: Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
x) Contributed Equity:
Equity shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
y) Foreign Currency
The functional currency of the company in Indian Rupee. Theses financial statements are presented in Indian Rupees.
The foreign currency transactions are recorded on initial recognition in the functional currency by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of transaction.
The foreign currency monetary items are translated using the closing rate at the end of each reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of transaction. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those which they were translated on initial recognition during the period or in previous financial statements are recognized in statement of profit and loss in the period in which they arise.
aa) Dividend:
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
ab) Rounding off:
All amounts disclosed in the financial statement and notes have been rounded off to the nearest Lacs, unless otherwise stated
ac) Amendments to Ind AS 7, âStatement of cash flowsâ on disclosure initiative:
The amendment to Ind AS 7 introduced an additional disclosure that will enable users of financial statements to evaluate changes in liabilities arising from financing activities. This includes changes arising from cash flows (e.g. draw downs and repayments of borrowings) and non-cash changes (i.e. changes in fair values), changes resulting from acquisitions and disposals and effect of foreign exchange differences. Changes in financial assets must be included in this disclosure if the cash flows were, or will be, included in cash flows from financing activities. This could be the case, for example, for assets that hedge liabilities arising from financing liabilities. The Company is currently assessing the potential impact of this amendment. These amendments are mandatory for the reporting period beginning on or after 1st April, 2017.
ad) Amendments to Ind AS 102, âShare based paymentsâ
The amendment to Ind AS 102 clarifies the measurement basis for cash settled share-based payments and the accounting for modifications that change an award from cash-settled to equity-settled. It also introduces an exception to the principles in Ind AS 102 that will require an award to be treated as if it was wholly equity-settled, where an employer is obliged to withhold an amount for the employeeâs tax obligation associated with a share- based payment and pay that amount to the tax authority. The Company is currently assessing the potential impact of this amendment. These amendments are mandatory for the reporting period beginning on or after 1st April, 2017.
The Company intends to adopt the amendments when it becomes effective. There are no other standards or amendments that are not yet effective and that would be expected to have a material impact on the Company in the current or future reporting periods and on foreseeable future transactions.
2 Critical Estimates and Judgements
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Companyâs accounting policies. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
The preparation of the financial statements in conformity with GAAP requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. These estimates and associated assumptions are based on historical experience and managementâs best knowledge of current events and actions the Company may take in future.
Information about critical estimates and assumptions that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities are included in the following notes:
(a) Estimation of defined benefit obligations
(b) Estimation of current tax expenses and payable
(c) Estimation of provisions and contingencies
(a) Impairment of financial assets (including trade receivable)
Allowance for doubtful receivables represent the estimate of losses that could arise due to inability of the customer to make payments when due. These estimates are based on the customer ageing, customer category, specific credit circumstances and the historical experience of the Company as well as forward looking estimates at the end of each reporting period.
(b) Estimation of defined benefit obligations
The liabilities of the Company arising from employee benefit obligations and the related current service cost, are determined on an actuarial basis using various assumptions. Refer note 29 for significant assumptions used.
(c) Estimation of current tax expenses and payable
Taxes recognized in the financial statements reflect managementâs best estimate of the outcome based on the facts known at the balance sheet date. These facts include but are not limited to interpretation of tax laws of various jurisdictions where the company operates. Any difference between the estimates and final tax assessments will impact the income tax as well the resulting assets and liabilities.
(d) Estimation of provisions and contingencies
Provisions are liabilities of uncertain amount or timing recognised where a legal or constructive obligation exists at the balance sheet date, as a result of a past event, where the amount of the obligation can be reliably estimated and where the outflow of economic benefit is probable. Contingent liabilities are possible obligations that may arise from past event whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events which are not fully within the control of the Company. The Company exercises judgement and estimates in recognizing the provisions and assessing the exposure to contingent liabilities relating to pending litigations. Judgment is necessary in assessing the likelihood of the success of the pending claim and to quantify the possible range of financial settlement. Due to this inherent uncertainty in the evaluation process, actual losses may be different from originally estimated provision.
Mar 31, 2016
1. Company Overview
Cords Cable Industries Limited (âthe Companyâ) was incorporated on October 21, 1991 as âPrivate Limitedâ and it was later converted into âPublic Limitedâ on May 10, 2006. The Company manufactured or developed a wide range of specialized cables to address the specific requirements of industries involving modern process technologies, instrumentation & communication demanding the highest standards of precisions and reliability with assured quality and safety standards .
2. Basis of Financial Statements
i) Statement of Compliance
The financial Statements are prepared under the historical cost convention on an accrual basis, in accordance with the generally accepted accounting principals in India and compliance with the applicable accounting standards as notified under the Companies (Accounts) Rules, 2014. All assets and liabilities have been classified as set out in Schedule III to Companies Act, 2013 .
ii) Use of Estimates
The presentation of financial statements conformity with the generally accepted accounting principals requires estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities as on date of the financial statements and the reported amount of revenue and expenses during the reporting year Differences between the actual results and estimates are recognized in the year in which the results are known or materialized
3. SIGNIFICANT ACCOUNTING POLICIES
i) Basis of Accounting
The financial statements are prepared under the historical cost convention on an accrual basis and in accordance with Generally Accepted Accounting Principals (GAAP) in India and Accounting Standards (AS) as notified by the Companies (Accounts) Rules, 2014. All assets and liabilities have been classified as criteria set out in Schedule III to Companies Act, 2013 .
ii) Fixed Assets
a) Tangible Assets
Tangible Assets are stated at their original cost. Cost includes acquisition price, attributable expenses and pre-operational expenses including finance charges, wherever applicable
b) Capital Work in Progress
All pre-operative expenditure & trial run expenditure are accumulated as Capital Work-in-progress and is allocated to the relevant fixed assets on a pro-rata / reasonable basis depending on the prime cost of assets
c) Expenditure (including financing cost relating to borrowed funds for construction or acquisition of fixed assets) incurred on project till date of commencement of commercial production are capitalized
iii) Depreciation
a) Depreciation on Fixed Assets is provided in accordance with the useful life as specified in Part C of Schedule II to the Companies Act, 2013 .
b) Depreciation is not recorded on capital work-in-progress until that asset is ready for its intended use
c) Lease hold lands are not depreciated.
d) Individual assets costing up to Rs.5000/-per item are fully write off in the year of purchase
iv) Impairment of Assets
The Company assesses at each reporting date whether there is any indication that an asset may be impaired If any such indication exists, the Company estimates the recoverable amount of the asset The recoverable amount is higher of, an asset''s net selling price and its value in use If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the reporting date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount and Impairment Losses previously recognized are accordingly reversed .
v) Inventories
a) Inventories (other than scrap) are valued at lower of cost or net realizable value . The cost of inventories is computed on a FIFO basis . The cost of Finished Goods and work-in-progress include cost of conversion and other cost incurred in bringing the inventories to their present location and condition. Excise duty & Cess is included in finished goods valuation.
b) Scrap is valued at net realizable value.
vi) Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
a) Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of goods The company collects all relevant applicable taxes like sales taxes, value added taxes (VAT) etc. on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue . Gross turnover is net of sales tax and inclusive of excise duty & cess.
b) All other income are accounted for on accrual basis
c) Profit on sale of investments is recognized on the date of the transaction of sale and is computed as excess of sale proceeds over its carrying amount as at the date of sale
vii) Employee Benefits
The Company''s contribution to Provident Fund and Employee State Insurance Schemes is charged to the Profit and Loss account. The Company has unfunded defined benefit plans namely leave encashment and gratuity for its employees, the liability for which is determined on the basis of actuarial valuation, conducted annually, by an independent actuary, in accordance with Accounting Standard 15 (Revised) - âEmployee Benefitsâ, notified under the Companies (Accounts) Rules, 2014. Actuarial gains and losses are recognized in Profit and Loss account as income or expenses. Employee benefits of short term nature are recognized as expenses as and when it accrues
viii) Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets . A qualifying asset is one that necessarily takes a substantial period of time to get ready for intended use All other borrowing costs are charged to revenue
ix) Foreign Currency Transactions
a) Transactions in Foreign Currency are initially recorded at the exchange rate at which the transaction is carried out.
b) Monetary Assets and Liabilities related to foreign currency transactions remaining outstanding at the year end and translated at the year end rate . The effect of Exchange rate fluctuations in respect of Monetary Assets is taken to Profit & Loss Account.
c) Exchange differences on conversion of year-end foreign currency balances pertaining to long term loans (ECB) for acquiring fixed assets including capital work in progress are adjusted in the carrying cost of these assets .
d) Non monetary foreign currency items are carried at cost
x) Government Grants
An appropriate amount in respect of subsidy benefits earned estimated on prudent basis is credited to income for the period even though the actual amount of such benefits finally settled and received after the end of relevant accounting period Government grant relatable to fixed assets is adjusted with related asset.
xi) Taxes on Income
a) Tax expense comprises of current tax and deferred tax
b) The Provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provision of the Income Tax Act 1961. Deferred tax is recognized, subject to the consideration of prudence on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods
c) Minimum Alternative Tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the profit and loss account and shown as MAT credit entitlement
xii) Financial Derivatives and Commodity Hedging Transactions
In respect of derivatives contracts, premium paid, gains/losses on settlement and losses on restatement are recognized in the Profit & Loss account except in case where they relate to acquisition or construction of fixed assets, in which case, they are adjusted to the carrying cost of such assets
xiii) Provision, Contingent Liabilities and Contingent Assets
Provisions are recognized only when there is a present obligation, as a result of past events, and when a reliable estimate of the amount of obligation can be made
xiv) Contingent liability is disclosed for:
a) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or,
b) 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 are not recognized in the financial statements since this may result in the recognition of income which may never be realized
xv) Earning Per Share
Basic Earnings per Equity Share is computed using the weighted average number of equity shares outstanding during the year Diluted Earnings per Equity Share is computed using the weighted average number of equity and dilutive potential equity shares outstanding during the year
Mar 31, 2015
I) Statement of Compliance
The financial Statements are prepared under the historical cost
convention on an accrual basis, in accordance with the generally
accepted accounting principals in India and compliance with the
applicable accounting standards as notified under the Companies
(Accounts) Rules, 2014. All assets and liabilities have been classified
as set out in Schedule III to Companies Act, 2013.
ii) Use of Estimates
The presentation of financial statements conformity with the generally
accepted accounting principals requires estimates and assumptions to be
made that affect the reported amount of assets and liabilities and
disclosure of contingent liabilities as on date of the financial
statements and the reported amount of revenue and expenses during the
reporting year. Differences between the actual results and estimates
are recognized in the year in which the results are known or
materialized.
3. SIGNIFICANT ACCOUNTING POLICIES
i) Basis of Accounting
The financial statements are prepared under the historical cost
convention on an accrual basis and in accordance with Generally
Accepted Accounting Principals (GAAP) in India and Accounting Standards
(AS) as notified by the Companies (Accounts) Rules, 2014. All assets
and liabilities have been classified as criteria set out in Schedule
III to Companies Act, 2013.
ii) Fixed Assets
a) Tangible Assets
Tangible Assets are stated at their original cost. Cost includes
acquisition price, attributable expenses and pre-operational expenses
including finance charges, wherever applicable.
b) Capital Work in Progress
All pre-operative expenditure & trial run expenditure are accumulated
as Capital Work-in-progress and is allocated to the relevant fixed
assets on a pro-rata / reasonable basis depending on the prime cost of
assets.
c) Expenditure (including financing cost relating to borrowed funds for
construction or acquisition of fixed assets) incurred on project till
date of commencement of commercial production are capitalized
iii) Depreciation
a) Depreciation on Fixed Assets is provided in accordance with the
useful life as specified in Part C of Schedule II to the Companies Act,
2013.
b) Depreciation is not recorded on capital work-in-progress until that
asset is ready for its intended use.
c) Lease hold lands are not depreciated.
d) Individual assets costing upto Rs.5000/- per item are fully write
off in the year of purchase
iv) Impairment of Assets
The Company assesses at each reporting date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. The
recoverable amount is higher of, an asset's net selling price and its
value in use. If such recoverable amount of the asset or the
recoverable amount of the cash generating unit to which the asset
belongs is less than its carrying amount, the carrying amount is
reduced to its recoverable amount. The reduction is treated as an
impairment loss and is recognized in the Statement of Profit and Loss.
If at the reporting date there is an indication that if a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount and
Impairment Losses previously recognized are accordingly reversed.
v) Inventories
a) Inventories (other than scrap) are valued at lower of cost or net
realisable value. The cost of inventories is computed on a FIFO basis.
The cost of Finished Goods and work-in-progress include cost of
conversion and other cost incurred in bringing the inventories to their
present location and condition. Excise duty & Cess is included in
finished goods valuation.
b) Scrap is valued at net realizable value.
vi) Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
a) Revenue from sale of goods is recognized when all the significant
risks and rewards of ownership of the goods have been passed to the
buyer, usually on delivery of goods. The company collects all relevant
applicable taxes like sales taxes, value added taxes (VAT) etc. on
behalf of the government and, therefore, these are not economic
benefits flowing to the company. Hence, I they are excluded from
revenue. Gross turnover is net of sales tax and inclusive of excise
duty & cess.
b) All other income are accounted for on accrual basis.
c) Profit on sale of investments is recognized on the date of the
transaction of sale and is computed as excess of sale proceeds over its
carrying amount as at the date of sale.
vii) Employee Benefits
The Company's contribution to Provident Fund and Employee State
Insurance Schemes is charged to the Profit and Loss account. The
Company has unfunded defined benefit plans namely leave encashment and
gratuity for its employees, the liability for which is determined on
the basis of actuarial valuation, conducted annually, by an independent
actuary, in accordance with Accounting Standard 15 (Revised 2005) -
"Employee Benefits", notified under the Companies (Accounts) Rules,
2014. Actuarial gains and losses are recognized in Profit and Loss
account as income or expenses. Employee benefits of short term nature
are recognized as expenses as and when it accrues.
viii) Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
ix) Foreign Currency Transactions
La) Transactions in Foreign Currency are initially recorded at the
exchange rate at which the transaction is carried out.
b) Monetary Assets and Liabilities related to foreign currency
transactions remaining outstanding at the year end and translated at
the year end rate. The effect of Exchange rate fluctuations in respect
of Monetary Assets is taken to Profit & Loss Account.
c) Exchange differences on conversion of year-end foreign currency
balances pertaining to long term loans (ECB) for acquiring fixed assets
including capital work in progress are adjusted in the carrying cost of
these assets.
d) Non monetary foreign currency items are carried at cost.
x) Government Grants
An appropriate amount in respect of subsidy benefits earned estimated
on prudent basis is credited to income for the period even though the
actual amount of such benefits finally settled and received after the
end of relevant accounting period. Government grant relatable to fixed
assets is adjusted with related asset.
xi) Taxes on Income
a) Tax expense comprises of current tax and deferred tax.
b) The Provision for taxation is ascertained on the basis of assessable
profits computed in accordance with the provision of the Income Tax Act
1961. Deferred tax is recognized, subject to the consideration of
prudence on timing differences, being the difference between taxable
income and accounting income that originate in one period and are
capable of reversal in one or more subsequent periods.
c) Minimum Alternative Tax (MAT) credit is recognized as an asset only
when and to the extent there is convincing evidence that the Company
will pay normal income tax during the specified period. In the year in
which MAT credit becomes eligible to be recognized as an asset in
accordance with the recommendations by the Institute of Chartered
Accountants of India, the said asset is created by way of credit to the
profit and loss account and shown as MAT credit entitlement.
xii) Financial Derivatives and Commodity Hedging Transactions
In respect of derivatives contracts, premium paid, gains/losses on
settlement and losses on restatement are recognized in the Profit &
Loss account except in case where they relate to acquisition or
construction of fixed assets, in which case, they are adjusted to the
carrying cost of such assets.
xiii) Provision, Contingent Liabilities and Contingent Assets
Provisions are recognized only when there is a present obligation, as a
result of past events, and when a reliable estimate of the amount of
obligation can be made.
xiv) Contingent liability is disclosed for:
a) Possible obligations which will be confirmed only by future events
not wholly within the control of the Company or,
b) 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 are not recognized in the financial statements
since this may result in the recognition of income which may never be
realized.
xv) Earning Per Share
Basic Earnings per Equity Share is computed using the weighted average
number of equity shares outstanding during the year. Diluted Earnings
per Equity Share is computed using the weighted average number of
equity and dilutive potential equity shares outstanding during the
year.
Mar 31, 2014
I) Basis of Accounting
The financial statements are prepared under the historical cost
convention on an accrual basis and in accordance with Generally
Accepted Accounting Principals (GAAP) in India and Accounting Standards
(AS) as notified by the Companies (Accounting Standard) Rules, 2006 as
amended. All assets and liabilities have been classified as current or
non- current as per company''s normal operating cycle and other criteria
set out in Revised Schedule VI to Companies Act, 1956.
ii) Fixed Assets
a) Tangible Assets
Tangible Assets are stated at their original cost. Cost includes
acquisition price, attributable expenses and pre-operational expenses
including finance charges, wherever applicable.
b) Capital Work in Progress
All pre-operative expenditure & trial run expenditure are accumulated
as Capital Work-in- progress and is allocated to the relevant fixed
assets on a pro-rata / reasonable basis depending on the prime cost of
assets.
c) Expenditure (including financing cost relating to borrowed funds for
construction or acquisition of fixed assets) incurred on project till
date of commencement of commercial production are capitalized
iii) Depreciation
a) Depreciation on Fixed Assets is provided on Straight Line method in
accordance with the rates as specified in Schedule XIV to the Companies
Act, 1956.
b) Depreciation is not recorded on capital work-in-progress until that
asset is ready for its intended use.
c) Lease hold lands are not depreciated.
d) Individual assets costing upto Rs.5000/- per item are fully write
off in the year of purchase
iv) Impairment of Assets
The Company assesses at each reporting date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. The
recoverable amount is higher of, an asset''s net selling price and its
value in use. If such recoverable amount of the asset or the
recoverable amount of the cash generating unit to which the asset
belongs is less than its carrying amount, the carrying amount is
reduced to its recoverable amount. The reduction is treated as an
impairment loss and is recognized in the Statement of Profit and Loss.
If at the reporting date there is an indication that if a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount and
Impairment Losses previously recognized are accordingly reversed.
v) Inventories
a) Inventories (other than scrap) are valued at lower of cost or net
realisable value. The cost of inventories is computed on a FIFO basis.
The cost of Finished Goods and work-in-progress include cost of
conversion and other cost incurred in bringing the inventories to their
present location and condition. Excise duty & Cess is included in
finished goods valuation.
b) Scrap is valued at net realizable value.
iv) Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
a) Revenue from sale of goods is recognized when all the significant
risks and rewards of ownership of the goods have been passed to the
buyer, usually on delivery of goods. The company collects all relevant
applicable taxes like sales taxes, value added taxes (VAT) etc. on
behalf of the government and, therefore, these are not economic
benefits flowing to the company. Hence, they are excluded from revenue.
Gross turnover is net of sales tax and inclusive of excise duty & cess.
b) All other income are accounted for on accrual basis.
c) Profit on sale of investments is recognized on the date of the
transaction of sale and is computed as excess of sale proceeds over its
carrying amount as at the date of sale.
vii) Employee Benefits
The Company''s contribution to Provident Fund and Employee State
Insurance Schemes is charged to the Profit and Loss account. The
Company has unfunded defined benefit plans namely leave encashment and
gratuity for its employees, the liability for which is determined on
the basis of actuarial valuation, conducted annually, by an independent
actuary, in accordance with Accounting Standard 15 (Revised 2005) -
"Employee Benefits", notified under the Companies (Accounting
Standards) Rules, 2006, as amended. Actuarial gains and losses are
recognized in Profit and Loss account as income or expenses. Employee
benefits of short term nature are recognized as expenses as and when it
accrues.
viii) Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
ix) Foreign Currency Transactions
a) Transactions in Foreign Currency are initially recorded at the
exchange rate at which the transaction is carried out.
b) Monetary Assets and Liabilities related to foreign currency
transactions remaining outstanding at the year end and translated at
the year end rate. The effect of Exchange rate fluctuations in respect
of Monetary Assets is taken to Profit & Loss Account.
c) Exchange differences on conversion of year-end foreign currency
balances pertaining to long term loans (ECB) for acquiring fixed assets
including capital work in progress are adjusted in the carrying cost of
these assets.
b) Non monetary foreign currency items are carried at cost.
x) Government Grants
An appropriate amount in respect of subsidy benefits earned estimated
on prudent basis is credited to income for the period even though the
actual amount of such benefits finally settled and received after the
end of relevant accounting period. Government grant relatable to fixed
assets is adjusted with related asset.
xi) Taxes on Income
a) Tax expense comprises of current tax and deferred tax.
b) The Provision for taxation is ascertained on the basis of assessable
profits computed in accordance with the provision of the Income Tax Act
1961. Deferred tax is recognized, subject to the consideration of
prudence on timing differences, being the difference between taxable
income and accounting income that originate in one period and are
capable of reversal in one or more subsequent periods.
c) Minimum Alternative Tax (MAT) credit is recognized as an asset only
when and to the extent there is convincing evidence that the Company
will pay normal income tax during the specified period. In the year in
which MAT credit becomes eligible to be recognized as an asset in
accordance with the recommendations by the Institute of Chartered
Accountants of India, the said asset is created by way of credit to the
profit and loss account and shown as MAT credit entitlement.
xii) Financial Derivatives and Commodity Hedging Transactions
In respect of derivatives contracts, premium paid, gains/losses on
settlement and losses on restatement are recognized in the Profit &
Loss account except in case where they relate to acquisition or
construction of fixed assets, in which case, they are adjusted to the
carrying cost of such assets.
xiii) Provision, Contingent Liabilities and Contingent Assets
Provisions are recognized only when there is a present obligation, as a
result of past events, and when a reliable estimate of the amount of
obligation can be made.
xiv) Contingent liability is disclosed for:
a) Possible obligations which will be confirmed only by future events
not wholly within the control of the Company or,
b) 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 are not recognized in the financial statements
since this may result in the recognition of income which may never be
realized.
xv) Earning Per Share
Basic Earnings per Equity Share is computed using the weighted average
number of equity shares outstanding during the year. Diluted Earnings
per Equity Share is computed using the weighted average number of
equity and dilutive potential equity shares outstanding during the
year.
Mar 31, 2012
I. Basis of preparation
The accounts are prepared under the historical cost convention and are
in accordance with the generally accepted accounting principles in
India and provisions of the Companies Act, 1956.
II. Use of Estimates
The preparation of financial statements requires management to make
judgments, estimates and assumptions, that affect reported amounts of
assets and liabilities on the date of financial statements and the
reported amounts of revenues and expenses during the reporting period.
a) Fixed Assets
i) Fixed Assets are stated at their original cost. Cost includes
acquisition price, attributable expenses and pre-operational expenses
including finance charges, wherever applicable.
ii) Expenditure (including financing cost relating to borrowed funds
for construction or acquisition of fixed assets) incurred on project
till date of commencement of commercial production are capitalized.
iii) Pre-Operative Expenses and Allocation thereon
All pre-operative expenditure & trial run expenditure are accumulated
as Capital Work-in- Progress and is allocated to the relevant fixed
assets on a pro-rata / reasonable basis depending on the prime cost of
assets.
b) Depreciation
i) Depreciation on Fixed Assets is provided on Straight Line method in
accordance with the rates as specified in Schedule XIV to the Companies
Act, 1956.
ii) Depreciation is not recorded on capital work-in-progress until that
asset is ready for its intended use.
iii) Lease hold lands are not depreciated.
iv) Individual assets costing upto Rs.5000/- per item are fully write
off in the year of purchase.
c) Inventories
i) Inventories (other than scrap) are valued at lower of cost or net
realisable value. The cost of inventories is computed on a FIFO basis.
The cost of Finished Goods and work-in-progress include cost of
conversion and other cost incurred in bringing the inventories to their
present location and condition. Excise duty & Cess is included in
finished goods valuation.
ii) Scrap is valued at net realisable value.
d) Revenue Recognition
i) Sale of goods is recognized at the point of dispatch of finished
goods to customers.
ii) Gross turnover is net of sales tax and inclusive of excise duty &
Cess.
iii) All other income are accounted for on accrual basis.
e) Expenses
All expenses are accounted for on accrual basis.
f) Employee Benefits
The Company's contribution to Provident Fund and Employee State
Insurance Schemes is charged to the Profit and Loss account. The
Company has unfunded defined benefit plans namely leave encashment and
gratuity for its employees, the liability for which is determined on
the basis of actuarial valuation, conducted annually, by an independent
actuary, in accordance with Accounting Standard 15 (Revised 2005) -
"Employee Benefits", notified under the Companies (Accounting
Standards) Rules, 2006, as amended. Actuarial gains and losses are
recognized in Profit and Loss account as income or expenses. Employee
benefits of short term nature are recognized as expenses as and when it
accrues.
g) Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
h) Foreign Currency Transactions
i) Transactions in Foreign Currency are initially recorded at the
exchange rate at which the transaction is carried out.
ii) Monetary Assets and Liabilities related to foreign currency
transactions remaining outstanding at the year end and translated at
the year end rate. The effect of Exchange Rate fluctuations in respect
of Monetary Assets is taken to Profit & Loss Account.
iii) Exchange differences on conversion of year-end foreign currency
balances pertaining to long term loans (ECB) for acquiring fixed assets
including capital work in progress are adjusted in the carrying cost of
these assets.
iv) Non monetary foreign currency items are carried at cost.
i) Government Grants
An appropriate amount in respect of subsidy benefits earned estimated
on prudent basis is credited to income for the period even though the
actual amount of such benefits finally settled and received after the
end of relevant accounting period. Government grant relatable to fixed
assets is adjusted with related asset.
j) Taxes on Income
i) Tax expense comprises of current tax, deferred tax and wealth tax.
ii) The Provision for taxation is ascertained on the basis of
assessable profits computed in accordance with the provision of the
Income Tax Act 1961. Deferred tax is recognized, subject to the
consideration of prudence on timing differences, being the difference
between taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
iii) Minimum Alternative Tax (MAT) credit is recognized as an asset
only when and to the extent there is convincing evidence that the
Company will pay normal income tax during the specified period. In the
year in which MAT credit becomes eligible to be recognized as an asset
in accordance with the recommendations by the Institute of Chartered
Accountants of India, the said asset is created by way of credit to the
profit and loss account and shown as MAT credit entitlement.
Mar 31, 2011
I. Basis of preparation
The accounts are prepared under the historical cost convention and are
in accordance with the generally accepted accounting principles in
India and provisions of the Companies Act, 1956.
II. Use of Estimates
The preparation of financial statements requires management to make
judgments, estimates and assumptions, that affect reported amounts of
assets and liabilities on the date of financial statements and the
reported amounts of revenues and expenses during the reporting period.
1. Fixed Assets
a) Fixed Assets are stated at their original cost. Cost includes
acquisition price, attributable expenses and pre-operational expenses
including finance charges, wherever applicable.
b) Expenditure (including financing cost relating to borrowed funds for
construction or acquisition of fixed assets) incurred on project till
date of commencement of commercial production are capitalized.
c) Pre-Operative Expenses and Allocation thereon
All pre-operative expenditure & trial run expenditure are accumulated
as Capital Work-in-Progress and is allocated to the relevant fixed
assets on a pro-rata / reasonable basis depending on the prime cost of
assets.
2. Depreciation
a) Depreciation on Fixed Assets is provided on Straight Line method in
accordance with the rates as specified in Schedule XIV to the Companies
Act, 1956.
b) Depreciation is not recorded on capital work-in-progress until
commencement of commercial production.
c) Lease hold lands are not depreciated.
3. Inventories
a) Inventories (other than scrap) are valued at lower of cost or net
realisable value. The cost of inventories is computed on a FIFO basis.
The cost of Finished Goods and work-in-progress include cost of
conversion and other cost incurred in bringing the inventories to their
present location and condition. Excise duty & Cess is included in
finished goods valuation.
b) Scrap is valued at net realisable value.
4. Revenue Recognition
a) Sale of goods is recognized at the point of dispatch of finished
goods to customers.
b) Gross turnover is net of sales tax and inclusive of excise duty &
Cess.
c) All other income are accounted for on accrual basis.
5. Expenses
All expenses are accounted for on accrual basis.
6. Employee Benefits
The Company's contribution to Provident Fund and Employee State
Insurance Schemes is charged to the Profit and Loss account. The
Company has unfunded defined benefit plans namely leave encashment and
gratuity for its employees, the liability for which is determined on
the basis of actuarial valuation, conducted annually, by an independent
actuary, in accordance with Accounting Standard 15 (Revised 2005) -
ÃEmployee BenefitsÃ, notified under the Companies (Accounting
Standards) Rules, 2006, as amended. Actuarial gains and losses are
recognized in Profit and Loss account as income or expenses. Employee
benefits of short term nature are recognized as expenses as and when it
accrues.
7. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
8. Government Grants
An appropriate amount in respect of subsidy benefits earned estimated
on prudent basis is credited to income for the period even though the
actual amount of such benefits finally settled and received after the
end of relevant accounting period. Government grant relatable to fixed
assets is adjusted with related asset.
9. Foreign Currency Transactions
a) Transactions in Foreign Currency are initially recorded at the
exchange rate at which the transaction is carried out.
b) Monetary Assets and Liabilities related to foreign currency
transactions remaining outstanding at the year end and translated at
the year end rate. The effect of Exchange Rate fluctuations in respect
of Monetary Assets is taken to Profit & Loss Account.
c) Exchange differences on conversion of year-end foreign currency
balances pertaining to long term loans (ECB) for acquiring fixed assets
including capital work in progress are adjusted in the carrying cost of
these assets.
d) Non monetary foreign currency items are carried at cost.
10. Taxes on Income
a) Tax expense comprises of current tax, deferred tax and wealth tax.
b) The Provision for taxation is ascertained on the basis of assessable
profits computed in accordance with the provision of the Income Tax Act
1961. Deferred tax is recognized, subject to the consideration of
prudence on timing differences, being the difference between taxable
income and accounting income that originate in one period and are
capable of reversal in one or more subsequent periods.
c) Minimum Alternative Tax (MAT) credit is recognized as an asset only
when and to the extent there is convincing evidence that the Company
will pay normal income tax during the specified period. In the year in
which MAT credit becomes eligible to be recognized as an asset in
accordance with the recommendations by the Institute of Chartered
Accountants of India, the said asset is created by way of credit to the
profit and loss account and shown as MAT credit entitlement.
Mar 31, 2010
The accounts are prepared under the historical cost convention and are
in accordance with the generally accepted accounting principles in
India and provisions of the Companies Act, 1956. The significant
accounting policies followed by the Company are stated below:
1) Fixed Assets
a) Fixed Assets are stated at their original cost. Cost includes
acquisition price, attributable expenses and pre-operational expenses
including finance charges, wherever applicable.
b) Depreciation on Fixed Assets is provided on Straight Line method in
accordance with the rates as specified in Schedule XIV to the Companies
Act, 1956.
c) Expenditure during construction period :
Expenditure (including financing cost relating to borrowed funds for
construction or acquisition of fixed assets) incurred on projects under
implementation are capitalized.
d) Lease hold lands are not depreciated.
a) Inventories (other than scrap) are valued at lower of cost or net
realisable value. The cost of inventories is computed on a FIFO basis.
The cost of Finished Goods and work-in-progress include cost of
conversion and other cost incurred in bringing the inventories to their
present location and condition. Excise duty & Cess is included in
finished goods valuation.
b) Scrap is valued at net realisable value.
3) Revenue Recognition
a) Sale of goods is recognized at the point of dispatch of finished
goods to customers.
b) Gross turnover is net of sales tax and inclusive of excise duty &
Cess.
c) All other income are accounted for on accrual basis.
4) Expenses
All expenses are accounted for on accrual basis.
5) Employee Benefits
The Companys contribution to Provident Fund and Employee State
Insurance Schemes is charged to the Profit and Loss account. The
Company has unfunded defined benefit plans namely leave encashment and
gratuity for its employees, the liability for which is determined on
the basis of actuarial valuation, conducted annually, by an independent
actuary, in accordance with Accounting Standard 15 (Revised 2005) -
"Employee Benefits", notified under the Companies (Accounting
Standards) Rules, 2006, as amended. Actuarial gains and losses are
recognized in Profit and Loss account as income or expenses. Employee
benefits of short term nature are recognized as expenses as and when it
accrues.
6) Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
7) Government Grants
An appropriate amount in respect of subsidy benefits earned estimated
on prudent basis is credited to income for the period even though the
actual amount of such benefits finally settled and received after the
end of relevant accounting period.
8) Foreign Currency Transactions
a) Transactions in Foreign Currency are initially recorded at the
exchange rate at which the transaction is carried out.
b) Monetary Assets and Liabilities related to foreign currency
transactions remaining outstanding at the year end and translated at
the year end rate except ECB Borrowings. The effect of Exchange Rate
fluctuations in respect of Monetary Assets is taken to Profit & Loss
Account. In view of National Advisory Committee on Accounting
Standards decision on postponing of implementation of AS-11 to
2011, the Management has deferred the provisioning of mark to market
on ECB (secured loan from bank).
9) Taxes on Income
a) Tax expense comprises of current tax, deferred tax and wealth tax.
b) The Provision for taxation is ascertained on the basis of assessable
profits computed in accordance with the provision of the Income Tax Act
1961. Deferred tax is recognized, subject to the consideration of
prudence on timing differences, being the difference between taxable
income and accounting income that originate in one period and are
capable of reversal in one or more subsequent periods.
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Stocks To Buy Today, Dec 17: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
Stocks To Buy Today, Dec 16: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
India Stock Market Weekly Review: Nifty and Sensex Fall as Caution Spreads -
Stocks To Buy Today, Dec 15: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday
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Stocks To Buy Today, Dec 12: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Market Outlook 2026: Kotak Securities Sees Nifty 50 at 30,000; THESE 4 Sectors Lead Rally, Gold To Stay Strong -
Stocks To Buy Today, Dec 10: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
D-Street Bleeds For 2nd Day! Sensex Slumps 678 Pts; Nifty Cracks 25,800; Why Stock Market Is Falling Today? -
Stocks To Buy Today, Dec 9: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
Stocks To Buy Today, Dec 8: Top 4 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stock Market Alert! Major Pre-Open Session Change From Dec 8: Full Timings, Rules & All You Need To Know -
Bank Nifty Surges: RBI’s 25 bps Rate Cut Triggers Strong Upside in Major Banking Stocks -
Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each -
Stocks To Buy Today, Dec 4: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday
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