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Accounting Policies of Cosco (India) Ltd. Company
Mar 31, 2024
1. CORPORATE INFORMATION
Cosco (India) Limited (âthe Companyâ) is a public limited company domiciled in India and incorporated under the provisions of the erstwhile Companies Act, 1956. The registered office of the Company is located at 2/8 Roop Nagar, New Delhi, India. Its shares are listed on Bombay Stock Exchange (BSE). The Company is primarily engaged in the manufacture and sale of inflatable sports balls, tennis balls etc. and trading of health equipments and fitness accessories and other sports goods. The company has one manufacturing location, situated in the state of Haryana at Gurugram. The company markets its products under the Brand name COSCO.
2. SIGNIFICANT ACCOUNTING POLICIES2.1 Basis of preparation, Measurement and Significant Accounting Policies
(i) The financial statements have been prepared in accordance with Indian Accounting Standards (IndAS) notified under Section 133 of the Companies Act, 2013 read together with Rule 3 of the Companies (Indian Accounting Standard) Rules, 2015, as amended from time to time and the presentation requirements of Division II of Schedule III to the Companies Act, 2013.
(ii) These financial statements have been prepared on going concern basis following accrual system of accounting, applying consistent accounting policies for all the periods presented therein. The financial statements were approved for issue by the Board of Directors in accordance with the resolution passed on May 30th, 2024.
(iii) Transactions in currencies other than the Company''s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.
At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items are recognized in the Statement of Profit and Loss in the period in which they arise.
Non- monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
2.2 Current versus non-current classification
All assets and Liabilities have been classified as current or non-current considering the normal operating cycle of 12 months, paragraph 66 and 69 of IndAS 1 and other criteria as per Division II of Schedule III of Companies Act, 2013. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively as per presentation requirement of Schedule III.
The IndAS Financial Statements have been prepared under historical cost convention, except for certain financial assets and liabilities, including derivative financial instruments which have been measured at fair value as described below and defined benefit plans which have been measured at Fair value as required by relevant IndASs.
Recent Accounting Developments:
Ministry of Corporate Affairs (MCA), vide notification dated 31st March, 2023, has made the following amendments to Ind AS which are effective 1st April, 2023:
a. Amendments to IndAS 1, Presentation of Financial Statements where the companies are now required to disclose material accounting policies rather than their significant accounting policies.
b. Amendments to IndAS 8, Accounting policies, Changes in Accounting Estimates and Errors where the definition of ''change in account estimate'' has been replaced by revised definition of ''accounting estimate''.
c. Amendments to IndAS 12, Income Taxes where the scope of Initial Recognition Exemption (IRE) has been narrowed down.
Based on preliminary assessment, the Company does not expect these amendments to have any significant impact on its standalone financial statements.
The significant accounting policies used in preparation of the standalone financial statements are as follows:
2.4 Property, Plant and Equipment
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses, if any.
The initial cost of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, attributable borrowing cost and any other directly attributable costs of bringing an asset to working condition and location for its intended use. It also includes the present value of the expected cost for the decommissioning and removing of an asset and restoring the site after its use, if the recognition criteria for a provision are met.
Subsequent expenditure related to an item of property, plant and equipment is added to its carrying amount only if it increases the future benefits from the existing assets beyond its previously assessed standard of performance.
Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance, are normally charged to the statements of profit and loss in the period in which the costs are incurred.
When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the statement of profit and loss as incurred.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
When an item of property, plant and equipment is scrapped or otherwise disposed off, the cost and related deprecation are removed from the books of account and resultant profit or loss, if any, is reflected in the Statement of Profit & Loss.
The Company has not revalued any of its property, plant and equipment during the year.
(ii) Capital work in progress
Capital work in progress is stated at cost, net of accumulated impairment loss, if any. Assets in the course of construction are capitalized in capital work in progress account. At the point when an asset is capable of operating in the manner intended by management, the cost of construction is transferred to the appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset are capitalised when the asset is available for use but incapable of operating at normal levels until the period of commissioning has been completed. Cost includes financing cost relating to borrowed funds attributable to construction.
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under âOther Non-Current Assetsâ
(iii) Depreciation
The Company depreciates property, plant and equipment over the estimated useful life as prescribed in schedule II of the Companies Act, 2013 on the written down value method on pro rata basis (completed month of use) from the date of addition / up to the date the assets are sold / discarded, demolished or destroyed. Assets in the course of construction and freehold land are not depreciated. The estimated useful lives of major components of PPE are as follows:
⢠Buildings 30-60 years
⢠Plant and equipments 15 years
⢠Furniture and fixtures 10 years
⢠Vehicles 8 - 10 years
⢠Office equipments 3 - 6 years
The Company measures certain financial instruments, defined benefit liabilities at fair value at each reporting 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 the 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 a 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 participant''s 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 minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, which are described as follows: level I - III
Level I input are quoted price in active market for identical assets or liabilities that the entity can access at the measurement date, a quoted market in an active market provided the most reliable evidence of fair value and is used without adjustment to measure fair value whenever available, with limited exception. If an entity holds a position in a single assets or liabilities and the assets or liabilities is traded in an active market, the fair value of assets or liabilities held by the entity, even if the market normal daily trading volume is not sufficient to absorb the quantity held and placing orders to sell the position in a single transaction might affect the quoted price.
Level II input are input other than quoted market prices included within level I that are observable for the assets or liabilities either directly or indirectly.
Level II inputs include:
- quoted price for similarly assets or liabilities in active market.
- quoted price for identical or similar assets or liabilities in market that are not active.
- input other than quoted prices that are observable for the assets or liabilities, for example -interest rate and yield curve observable at commonly quoted interval.
- implied volatilise.
- credit spreads.
- input that are derived principally from or corroborated market data correlation or other means (''market corroborated inputs'').
Level III inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that relevant observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. An entity develops unobservable inputs using the best information available in the circumstances, which might include the entity''s own data, taking into account all information about market participant assumptions that is reasonably available.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
2.6 Functional and presentation currency
These IndAS Financial Statements are prepared in Indian Rupee which is the Company''s functional currency. All financial information presented in Rupees has been rounded to the nearest lacs.
Transactions and balances with values below the rounding off norm adopted by the Company have been reflected as â0â in the relevant notes to these financial statements.
Computer software are amortised over a period of 3 years on written down value basis.
The Company''s lease asset classes consist of leases for land and buildings for the purpose of having offices and plant and equipment. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control, the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and
(iii) the Company has the right to direct the use of the asset.
As a Lessee
Right of Use Assets
At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, lease payments made at or before the commencement date less any lease incentives received and estimate of costs to dismantle. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
Short Term Leases and leases of low value of assets
The Company applies the short-term lease recognition exemption to its short-term leases. It also applies the lease of low value assets recognition exemption that are considered to be low value. The Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. The Company incurred t 9.05 lakhs for the year ended 31st March, 2024 (31st March, 2023: t 9.05 lakhs) towards expenses relating to short-term leases and leases of low-value assets.
As a lessee, the Company determines the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities include these options when it is reasonably certain that they will be exercised.
Lease Liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date if the discount rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The carrying amount is remeasured when there is a change in future lease payments arising from a change in index or rate. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.
Impairment of Right of Use Assets
ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate that
their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e., the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
For lease commitments and lease liabilities: Refer note 17.
The Company has not revalued / impaired any of its right-of-use assets during the year.
2.9 Impairment of Non-Financial Assets
At the end of each reporting period, the Company assesses whether there is any indication that an assets or a group of assets (cash generating unit) may be impaired. If any such indication exists, the recoverable amount of the asset or cash generating unit is estimated in order to determine the extent of impairment loss (if any). If it is not possible to estimate the recoverable amount of an individual asset, the entity should determine the recoverable amount of the Cash Generated Unit (CGU) to which the asset belongs.
It is not possible to estimate the recoverable amount of the individual asset if:
The asset''s Value in use (VIU) cannot be estimated to be close to its fair value less cost to sell (FLVCS). The asset does not generate cash inflows that are largely independent of those from other assets Recoverable amount is the higher of fair value less cost of disposal and value in use. In assessing the value in use, the estimated future cash flow are discounted at their present value using the appropriate discount rate that reflects current market assessment of time, value of money and the risks specific to the assets for which the estimates of future cash flow have not been adjusted.
In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the Statement of Profit & Loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss recognized immediately in the Statement of Profit & Loss.
No Impairment was identified in FY 2023-24 and in previous FY 2022-23.
Cash and cash equivalent in the balance sheet comprise cash at banks which are unrestricted for withdrawal and usage and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash at banks, on hand and short-term deposits, as defined above. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
A financial instrument is any contact that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when a Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition of financial assets or issue of financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the statement of profit and Loss.
(i) Initial recognition and measurement:
The classification of financial assets at initial recognition depends on the financial asset''s contractual cash flow characteristics and the Company''s business model for managing them.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ''solely payments of principal and interest (SPPI)'' on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model. The Company''s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling.
All regular way purchases or sales of financial assets are recognised and de-recognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the market place.
Trade receivables are initially recognised at transaction price as they do not contain a significant financing component. This implies that the effective interest rate for these receivables is zero.
(ii) Subsequent measurement of financial assets:
All recognised financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets and are classified in four categories: Financial assets at amortised cost.
⢠Financial assets at fair value through other comprehensive income (FVTOCI) with recycling of cumulative gains and losses (debt instruments)
⢠Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)
⢠Financial assets at fair value through profit or loss.
(iii) Derecognition of financial assets :
The Company derecognises a financial asset when
- the contractual rights to the cash flows from the asset expire,
- the Company has transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass through'' arrangement; and either
a) it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party or
b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in the Statement of Profit and Loss if such gain or loss would have otherwise been recognized in the Statement of Profit and loss on disposal of that financial asset.
(iv) Impairment of financial assets:
In accordance with IndAS 109, the Company applies the expected credit loss model for recognizing impairment loss on financial assets carried at amortised cost and FVOCI debt instruments. In respect of trade receivables only, the Company applies the simplified approach permitted by IndAS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables. The application of simplified approach does not require the Company to track changes in credit risk.
(i) Initial Recognition and Measurement
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortised cost unless at initial recognition, they are classified as fair value through profit and loss. The Company''s financial liabilities include trade and other payables and loans and borrowings including bank overdrafts/cash credits.
(ii) Subsequent measurement of financial liabilities:
All the financial liabilities are subsequently measured at amortized cost using the effective interest rate method or at fair value through profit and loss. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the standalone statement of profit and loss.
(iii) De-recognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts and consideration paid is recognised in the Statement of Profit and Loss.
Reclassification of financial assets and liabilities
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company''s senior management determines change in the business model as a result of external or internal changes which are significant to the Company''s operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.
Since the company does not hold financial asset in the form of any equity or debt, no re-classification of financial assets and liabilities were made during the year.
Offsetting of financial instruments
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 recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Present obligations arising under onerous contracts are recognised and measured as provisions with charge to Statement of Profit and Loss. An onerous contract is considered to exist where the Company has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract.
When the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss, net of any reimbursement.
Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. If the effect of the time value of money is material, 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 finance cost.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that the outflow of resources would be required to settle the obligation, the provision is reversed.
Company provides for warranty claims on the basis of ratio of actual claims / average sales made in the previous 3 financial years.
Inventories are valued at the lower of cost and net realisable value (NRV) except scrap and by products which are valued at net realisable value. Inventory of trading goods, where the movement during the year is less than 20% is classified as slow moving goods, the net realisable value is estimated at 40% of its cost and traded goods, raw materials and store & spares with no movement during the year, are classified as non-moving and the NRV is estimated at 5% of the respective cost and valued accordingly.
Costs comprises as follow:
(i) Raw materials and store and spares: Cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis. The aforesaid items are valued at net realisable value if the finished products in which they are to be incorporated are expected to be sold at a loss.
(ii) Finished goods: Cost of conversion. The cost of conversion is worked out for all the products on the basis of weighted average cost derived by preparing the manufacturing account wherein 50% of the fixed production overheads are allocated to the units of production having regard to capacity utilisation which is reviewed after three years and accordingly allocation of overheads is made. In the case of Synthetic Panel Sets, the net realisable value (NRV) of synthetic balls is taken and from the NRV, the cost of conversion of panel sets to balls is reduced to arrive at the cost. Synthetic panel sets are considered in finished goods valuation due to the fact that the same is tradable in the market.
(iii) Work-in-progress: Work-in-progress is valued at direct cost (weighted average cost) plus cost of conversion at the relevant stage. The indirect expenses are proportionately allocated in the ratio of raw material lying in work-in-progress to total raw material consumed.
(iv) For trading goods cost means direct cost incurred to bring inventory at intended place.
Net realisable value (NRV):
(i) Net realisable value is the listed selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
(ii) In case of export surplus and non-moving finished goods: The net realisable value is estimated by the management considering the overall situation of market forces prevalent at the close of the year.
Company follows IndAS 19 as detailed below:-
Short Term Benefits
(a) Short-term benefits including salaries and performance incentives are recognized as expense at the undiscounted amount in the Statement of Profit & Loss of the year on accrual basis.
(b) Company provides bonus to eligible employees as per Bonus Act 2015 and accordingly liability is provided on ad-hoc basis at the year end pending agreement with the labour. The differential amount on account of actual liability is adjusted in the subsequent year.
Defined Contribution Plan:
(c) Provident Fund and Employee State Insurance:
The eligible employees of the company are entitled to receive benefits under the Provident Fund, a defined contribution plan in which both employees and the company make monthly contributions at a specified percentage of the covered employee''s salary. The contributions as specified under the law are paid to the respective Regional Provident Fund Commissioner and the Central Provident Fund under the State Pension Scheme. Company has statutory obligation to contribute monthly towards employee''s state insurance. The amount is calculated at specified percentage of eligible employees'' salary and wages and is paid to ESIC.
Defined Benefit Plan:
(d) Gratuity
The Company has an obligation towards gratuity liability in respect of Employees who have completed five years of continuous service (other than directors in the whole time employment of the company) below 60 years of age which is fully covered under the Group Gratuity Scheme of Life Insurance Corporation of India. Amount paid to the approved Gratuity Trust (under Income Tax Act) is charged in Statement of Profit and Loss. The Trust contributes to Life Insurance Corporation of India who administers the plan and determines the contributions required to be made by the trust. The plan provides for a lump sum payment to employees at retirement / determination of service on the basis of 15 days terminal salary for each completed year of service subject to maximum amount of '' 20 lakhs. In respect of directors in the whole time employment of the company, gratuity is provided during the year on actuarial valuation basis subject to limit of '' 20 lakhs.
Company''s liability towards gratuity and compensated absences is determined by using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Re-measurement gains and losses of the net defined benefit liability / (asset) are recognised immediately in other comprehensive income. The service cost and net interest on the net defined benefit liability / (asset) is treated as a net expense within employment costs. The retirement benefit obligation recognized in the balance sheet represents the present value of the defined benefit obligation as reduced by the fair value of plan assets. Similarly, excess of Plan assets over present value of defined benefit obligation is shown as a current asset.
Past service cost is recognized in statement of profit or loss on the earlier of:
- The date of the plan amendment or curtailment, and
- The date that the Company recognises related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognises the following changes in the net defined benefit obligation as an expense in the Statement of Profit and Loss:
- Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and
- Net interest expense or income.
Leave Encashment
Accumulated compensated absences which are expected to be availed or encashed within twelve months from the year end are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlements as at the year end.
Accumulated compensated absences which are expected to be availed or encashed beyond twelve months from the year end are treated as other long term employee benefits. The Company''s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial loss / gains are recognised in the Statement of Profit and Loss in the year in which they arise.
Sale of Products/Services
Revenue from sale of goods is recognised when control of the products being sold is transferred to our customer and when there are no longer any unfulfilled obligations. The Performance Obligations in our
contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on terms with customers. Performance obligations satisfied over a period of time are recognized as per the terms of relevant contractual agreements / arrangements.
Revenue is measured on the basis of contracted price, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the Government such as Goods and Services Tax, etc. Accumulated experience is used to estimate the provision for such discounts and rebates. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur. A contract liability is recognised for expected volume discounts payable to customers in relation to sales made until the end of the reporting period.
(a) Interest Income is recorded on time proportion basis by reference to the principal outstanding using the applicable effective rate of Interest (EIR)
(b) Export entitlements i.e., duty free scrip, duty drawback and remission of duties and taxes are accounted for on the basis of export of goods on FOB value determined for custom purpose.
(c) Revenue from contract with customers is recognized when the Company satisfies performance obligation by transferring promised goods and services to the customer. Performance obligations may be satisfied at a point of time or over a period of time. Performance obligations are said to be satisfied at a point of time when the customer obtains controls of the asset.
Revenue is recognized based on the price specified in the contract, net of the estimated trade discounts. Accumulated experience is used to estimate and provide for the discounts, using the expected value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur.
Current income tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in profit or loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company''s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
A provision is recognized for those matters for which the tax determination is uncertain but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. The assessment is based on the judgement of tax professionals within the Company supported by previous experience in respect of such activities and in certain cases based on specialist independent tax advice.
Deferred tax is recognised on temporary differences between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary differences, except when it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets are recognised for all deductible temporary differences, unused tax losses including unabsorbed depreciation. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Income tax, in so far as it relates to items disclosed under other comprehensive income or equity, are disclosed separately under other comprehensive income or equity, as applicable.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Goods and Service Tax (GST) paid on acquisition of assets or on incurring expenses.
Expenses and assets are recognised excluding amount of GST paid, except:
When the tax incurred on a purchase of assets or on incurring expenses / receipt of services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
Borrowing costs include interest, other costs incurred in connection with borrowing and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to the interest cost. General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Premium in the form of fees paid on refinancing of loans are accounted for as an expense over the life of the loan using effective interest rate method. All other borrowing costs are recognised in the Statement of profit and loss in the period in which they are incurred.
2.18 Foreign Currency Transactions
Foreign Currency Transactions involving export sales / import purchases are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency on the customs rate on the date of transaction. Monetary assets and liabilities unsettled at the year end, are converted at the year end rate and difference if any between the book balance and converted amount are transferred to the statement of profit and loss. The difference between the rates recorded and the rates on the date of actual realization/ payment is transferred to the statement of profit and loss. The premium or discount arising at the inception of a forward exchange contract is amortized as expenses / income over the life of the contract. Any profit or loss arising on cancellation or renewal of such forward contract is recognized as income / expenses for the period. Nonmonetary items that are measured in historical cost in a foreign currency are not retranslated. Company has not entered into any forward contract during the year.
The Company presents basic and diluted earnings per share (âEPSâ) data for its equity shares. Basic EPS is calculated by dividing the profit attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. Diluted EPS is determined by taking into account the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, for calculating the basic earnings per share by and the weighted average number of equity shares outstanding that could have been issued upon conversion of all dilutive potential equity shares.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Company''s Managing Director assesses the financial performance and position of the Company, and makes strategic decision and has been identified as the chief operating decision maker. The Company''s primary business segment is reflected based on principal business activities carried on by the Company. As per IndAS 108 âOperating Segmentsâ the company has identified two operating segments viz. Own Manufactured Products and Traded Goods.
(a) Assets and liabilities:
All Segment assets and liabilities are the ones that are directly attributable to the segment. Segment assets include all operating assets used by the segment and consist principally of PPE, inventories, trade receivable, financial assets. Segment assets and liabilities do not include inter-corporate deposits, cash and bank balances, share capital, reserves and surplus, borrowings, and income tax (both current and deferred).
(b) Segment revenue and expenses:
Segment revenue and expenses are the ones that are directly attributable to segment. It does not include interest income on inter-corporate deposits, interest expense and income tax. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities".
Cash flows are reported using indirect method as set out in Ind AS -7 âStatement of Cash Flows", whereby profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability. Therefore, to determine the amount to be recognised as a liability or to be disclosed as a contingent liability, in each case, is inherently subjective, and needs careful evaluation and judgement to be applied by the management. In case of provision for litigations, the judgements involved are with respect to the potential exposure of each litigation and the likelihood and/or timing of cash outflows from the Company, and requires interpretation of laws and past legal rulings. The Company does not recognize a contingent liability but discloses its existence in the standalone Ind AS financial statements.
2.23 Assets classified as held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. As at each balance sheet date, the management reviews the appropriateness of such classification. Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Property, plant and equipments once classified as held for sale are not depreciated.
2.24 Use of Key accounting estimates and judgments
The preparation of financial statements requires management to make estimates judgments and assumptions in the application of accounting policy that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which it is known / materialized. Continuous evaluation is done on the estimation and judgements based on historical experience and other factors, including expectations of future events that are believed to be reasonable. Revisions to accounting estimates are recognised prospectively.
In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are in respect of useful lives and impairment of Property, plant and equipment, commitments and contingencies, retirement and other employees benefits, Taxes on income, net realizable values of slow / non-moving inventories and measurement of lease liability and right to use assets included in the respective notes to the financial statements.
Mar 31, 2023
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation, Measurement and Significant Accounting Policies
(i) The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read together with Rule 3 of the Companies (Indian Accounting Standard) Rules, 2015, as amended from time to time and the presentation requirements of Division II of Schedule III to the Companies Act, 2013.
(ii) These financial statements have been prepared on going concern basis following accrual system of accounting, applying consistent accounting policies for all the periods presented therein. The financial statements were approved for issue by the Board of Directors in accordance with the resolution passed on April 3rd, 2023.
(iii) Transactions in currencies other than the Company''s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are re translated at the rates prevailing at that date. Exchange differences on monetary items are recognized in the Statement of Profit and Loss in the period in which they arise.
Non- monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.
2.2 Current versus non-current classification
All assets and Liabilities have been classified as current or non-current considering the normal operating cycle of 12 months, paragraph 66 and 69 of Ind AS 1 and other criteria as per Division II of Schedule III of Companies Act, 2013. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively as per presentation requirement of Schedule III.
2.3 Basis of measurement
The Ind AS Financial Statements have been prepared under historical cost convention, except for certain financial assets and liabilities, including derivative financial instruments which have been measured at fair value as described below and defined benefit plans which have been measured at Fair value as required by relevant Ind ASs.
Recent Accounting Developments:
Ministry of Corporate Affairs (MCA), vide notification dated 31st March, 2023, has made the following amendments to Ind AS which are effective 1st April, 2023:
a. Amendments to Ind AS 1, Presentation of Financial Statements where the companies are now required to disclose material accounting policies rather than their significant accounting policies.
b. Amendments to Ind AS 8, Accounting policies, Changes in Accounting Estimates and Errors where the definition of ''change in account estimate'' has been replaced by revised definition of ''accounting estimate''.
c. Amendments to Ind AS 12, Income Taxes where the scope of Initial Recognition Exemption (IRE) has been narrowed down.
Based on preliminary assessment, the Company does not expect these amendments to have any significant impact on its standalone financial statements.
The significant accounting policies used in preparation of the standalone financial statements are as follows:
2.4 (i) Property, Plant and Equipment
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses, if any.
The initial cost of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, attributable borrowing cost and any other directly attributable costs of bringing an asset to working condition and location for its intended use. It also includes the present value of the expected cost for the decommissioning and removing of an asset and restoring the site after its use, if the recognition criteria for a provision are met.
Subsequent expenditure related to an item of property, plant and equipment is added to its carrying amount only if it increases the future benefits from the existing assets beyond its previously assessed standard of performance.
Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance, are normally charged to the statements of profit and loss in the period in which the costs are incurred.
When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the statement of profit and loss as incurred.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
When an item of property, plant and equipment is scrapped or otherwise disposed off, the cost and related deprecation are removed from the books of account and resultant profit or loss, if any, is reflected in the Statement of Profit & Loss.
The Company has not revalued any of its property, plant and equipment during the year.
(ii) Capital work in progress
Capital work in progress is stated at cost, net of accumulated impairment loss, if any. Assets in the course of construction are capitalized in capital work in progress account. At the point when an asset is capable of operating in the manner intended by management, the cost of construction is transferred to the appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset are capitalised when the asset is available for use but incapable of operating at normal levels until the period of commissioning has been completed. Cost includes financing cost relating to borrowed funds attributable to construction.
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under âOther Non-Current Assetsâ
(iii) Depreciation
The Company depreciates property, plant and equipment over the estimated useful life as prescribed in schedule II of the Companies Act, 2013 on the written down value method on pro rata basis (completed month of use) from the date of addition / up to the date the assets are sold / discarded, demolished or destroyed. Assets in the course of construction and freehold land are not depreciated. The estimated useful lives of major components of PPE are as follows:
⢠Buildings 30-60 years
⢠Plant and equipments 15 years
⢠Furniture and fixtures 10 years
⢠Vehicles 8 - 10 years
⢠Office equipments 3 - 6 years
2.5 Fair value measurement
The Company measures certain financial instruments, defined benefit liabilities at fair value at each reporting 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 the 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 a 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 participant''s 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 minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, which are described as follows: level I - III
Level I input
Level I input are quoted price in active market for identical assets or liabilities that the entity can access at the measurement date, a quoted market in an active market provided the most reliable evidence of fair value and is used without adjustment to measure fair value whenever available, with limited exception. If an entity holds a position in a single assets or liabilities and the assets or liabilities is traded in an active market, the fair value of assets or liabilities held by the entity, even if the market normal daily trading volume is not sufficient to absorb the quantity held and placing orders to sell the position in a single transaction might affect the quoted price.
Level II input
Level II input are input other than quoted market prices included within level I that are observable for the assets or liabilities either directly or indirectly.
Level II inputs include:
- quoted price for similarly assets or liabilities in active market.
- quoted price for identical or similar assets or liabilities in market that are not active.
- input other than quoted prices that are observable for the assets or liabilities, for example -interest rate and yield curve observable at commonly quoted interval.
- implied volatilise.
- credit spreads.
- input that are derived principally from or corroborated market data correlation or other means (''market corroborated inputs'').
Level III input
Level III inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that relevant observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. An entity develops unobservable inputs using the best information available in the circumstances, which might include the entity''s own data, taking into account all information about market participant assumptions that is reasonably available.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
2.6 Functional and presentation currency
These Ind AS Financial Statements are prepared in Indian Rupee which is the Company''s functional currency. All financial information presented in Rupees has been rounded to the nearest lacs. Transactions and balances with values below the rounding off norm adopted by the Company have been reflected as â0â in the relevant notes to these financial statements.
2.7 Intangible Assets
Computer software are amortised over a period of 3 years on written down value basis.
2.8 Leases Assets
The Company''s lease asset classes consist of leases for land and buildings for the purpose of having offices and plant and equipment. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and
(iii) the Company has the right to direct the use of the asset.
As a Lessee Right of Use Assets
At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, lease payments made at or before the commencement date less any lease incentives received and estimate of costs to dismantle. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
Short Term Leases and leases of low value of assets
The Company applies the short-term lease recognition exemption to its short-term leases. It also applies the lease of low value assets recognition exemption that are considered to be low value. The Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. The Company incurred k 9.05 lakhs for the year ended 31st March, 2023 (31st March, 2022: k 9.05 lakhs) towards expenses relating to short-term leases and leases of low-value assets.
Determination of Lease term
As a lessee, the Company determines the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
Lease Liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date if the discount rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The carrying amount is remeasured when there is a change in future lease payments arising from a change in index or rate. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.
Impairment of Right of Use Assets
ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e., the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
For lease commitments and lease liabilities: Refer note 17.
The Company has not revalued / impaired any of its right-of-use assets during the year.
2.9 Impairment of Non-Financial Assets
At the end of each reporting period, the Company assesses whether there is any indication that an assets or a group of assets (cash generating unit) may be impaired. If any such indication exists, the recoverable amount of the asset or cash generating unit is estimated in order to determine the extent of impairment loss (if any). If it is not possible to estimate the recoverable amount of an individual asset, the entity should determine the recoverable amount of the Cash Generated Unit (CGU) to which the asset belongs.
It is not possible to estimate the recoverable amount of the individual asset if:
The asset''s Value in use (VIU) cannot be estimated to be close to its fair value less cost to sell (FLVCS).
The asset does not generate cash inflows that are largely independent of those from other assets
Recoverable amount is the higher of fair value less cost of disposal and value in use. In assessing the value in use, the estimated future cash flow are discounted at their present value using the appropriate discount rate that reflects current market assessment of time, value of money and the risks specific to the assets for which the estimates of future cash flow have not been adjusted.
In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the Statement of Profit & Loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss recognized immediately in the Statement of Profit & Loss.
No Impairment was identified in FY 2022-23 and in previous FY 2021-22.
2.10 Cash and Cash equivalent
Cash and cash equivalent in the balance sheet comprise cash at banks which are unrestricted for withdrawal and usage and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash at banks, on hand and short-term deposits, as defined above. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
2.11 Financial instruments
A financial instrument is any contact that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when a Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition of financial assets or issue of financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the statement of profit and Loss.
FINANCIAL ASSETS
(i) Initial recognition and measurement:
The classification of financial assets at initial recognition depends on the financial asset''s contractual cash flow characteristics and the Company''s business model for managing them. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ''solely payments of principal and interest (SPPI)'' on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model. The Company''s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling.
All regular way purchases or sales of financial assets are recognised and de-recognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the market place.
Trade receivables are initially recognised at transaction price as they do not contain a significant financing component. This implies that the effective interest rate for these receivables is zero.
(ii) Subsequent measurement of financial assets:
All recognised financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets and are classified in four categories: Financial assets at amortised cost
Financial assets at fair value through other comprehensive income (FVTOCI) with recycling of cumulative gains and losses (debt instruments)
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)
Financial assets at fair value through profit or loss
(iii) Derecognition of financial assets :
The Company derecognises a financial asset when
- the contractual rights to the cash flows from the asset expire,
- the Company has transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''passthrough'' arrangement; and either
a) it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party or
b) the company has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in the Statement of Profit and Loss if such gain or loss would have otherwise been recognized in the Statement of Profit and loss on disposal of that financial asset.
(iv) Impairment of financial assets:
In accordance with Ind AS 109, the Company applies the expected credit loss model for recognizing impairment loss on financial assets carried at amortised cost and FVOCI debt instruments. In respect of trade receivables only, the Company applies the simplified approach permitted by Ind AS 109
Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables. The application of simplified approach does not require the Company to track changes in credit risk.
FINANCIAL LIABILITIES
(i) Initial Recognition and Measurement
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortised cost unless at initial recognition, they are classified as fair value through profit and loss. The Company''s financial liabilities include trade and other payables and loans and borrowings including bank overdrafts/cash credits.
(ii) Subsequent measurement of financial liabilities:
All the financial liabilities are subsequently measured at amortized cost using the effective interest rate method or at fair value through profit and loss. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the standalone statement of profit and loss.
(iii) De-recognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts and consideration paid is recognised in the Statement of Profit and Loss.
Reclassification of financial assets and liabilities
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company''s senior management determines change in the business model as a result of external or internal changes which are significant to the Company''s operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.
Since the company does not hold financial asset in the form of any equity or debt, no reclassification of financial assets and liabilities were made during the year.
Offsetting of financial instruments
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 recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Mar 31, 2018
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 Basis of preparation and compliance with IndAS
(I) For all periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with Generally Accepted Accounting Principles (GAAP) in India and complied with the Accounting Standards (Previous GAAP) as notified under Section 133 of the Companies Act, 2013 read together with Rule 7 of the Companies (Accounts) Rules, 2014, as amended, to the extent applicable, and the presentation requirements of the Companies Act, 2013. In accordance with the notification dated February 16, 2015, issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (IndAS) notified under Section 133 read with Rule 4A of Companies (Indian Accounting Standards) Rules, 2015, as amended, and the relevant provisions of the Companies Act, 2013 (collectively, âInd ASsâ) with effect from April 1, 2017 and the Company is required to prepare its financial statements in accordance with Ind ASs for the year ended March 31, 2018. These financial statements as and for the year ended March 31, 2018 (the âInd AS Financial Statementsâ) are the first financial statements, the Company has prepared in accordance with IndAS.
(ii) The Company had prepared a separate set of financial statements for the year ended March 31, 2017 and March 31, 2016 in accordance with the Accounting Standards referred to in section 133 of the Companies Act, 2013 (the âAudited Previous GAAP Financial Statementsâ), which were approved by the Board of Directors of the Company on May 30, 2017 and May 30, 2016 respectively. The management of the Company has compiled the Special Purpose Comparative IndAS Financial Statements using the Audited Previous GAAP Financial Statements and made required IndAS adjustments. The Audited Previous GAAP Financial Statements, and the Special Purpose Comparative Ind AS Financial Statements, do not reflect the effects of events that occurred subsequent to the respective dates of approval of the Audited Previous GAAP Financial Statements.
(iii) These financial statements were approved for issue by the Board of Directors on May 30,2018.
(iv) Transactions in currencies other than the Companyâs functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.
At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items are recognized in the Statement of Profit and Loss in the period in which they arise.
Non - monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
1.2 Current versus non-current classification
All assets and Liabilities have been classified as current or non-current considering the operating cycle of 12 months.
Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively.
1.3 Basis of measurement
The Ind AS Financial Statements have been prepared on a going concern basis using historical cost convention and on an accrual method of accounting, except for certain financial assets and liabilities, including derivative financial instruments which have been measured at fair value as described below and defined benefit plans which have been measured at actuarial valuation as required by relevant IndASs.
1.4 Fair value measurement
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. Fair value for measurement and / or disclosed in these financial statement is determined on such a basis.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, which are described as follows; level I - III Level I input
Level I input are quoted price in active market for identical assets or liabilities that the entity can access at the measurement date, a quoted market in an active market provided the most reliable evidence of fair value and is used without adjustment to measure fair value whenever available, with limited exception. If an entity hold a position in a single assets or liabilities and the assets or liabilities is traded in an active market, the fairvalue of assets or liabilities held by the entity, even if the market normal daily trading volume is not sufficient to absorb the quantity held and placing orders to sell the position in a single transaction might affect the quoted price.
Level II input
Level II input are input other than quoted market prices included within level I that are observable for the assets or liabilities either directly or indirectly.
Level II inputs include:
- quoted price for similarly assets or liabilities in active market.
- quoted price for identical orsimilar assets or liabilities in market that are not active.
- Input other than quoted prices that are observable for the assets or liabilities, for example - interest rate and yield curve observable at commonly quoted interval.
-implied volatilise.
-credit spreads.
- input that are derived principally from or corroborated market data correlation or other means (âmarket corroborated inputsâ).
Level III input
Level III inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that relevant observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. An entity develops unobservable inputs using the best information available in the circumstances, which might include the entityâs own data, taking into account all information about market participant assumptions that is reasonably available.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
1.5 Functional and presentation currency
These Ind AS Financial Statements are prepared in Indian Rupee which is the Companyâs functional currency. All financial information presented in Rupees has been rounded to the nearest lacs.
1.6 Property, Plant and Equipment
(I) Property, plant and equipment
The Company has applied Ind AS 16 with retrospective effect for all of its property, plant and equipment as at the transition date,viz., 1 April 2016.
The initial cost of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, attributable borrowing costand any other directly attributable costs of bringing an asset to working condition and location for its intended use. It also includes the present value of the expected cost for the decommissioning and removing of an asset and restoring the site after its use, if the recognition criteria for a provision are met.
Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance, are normally charged to the statements of profit and loss in the period in which the costs are incurred. Major inspection and overhaul expenditure is capitalized if the recognition criteria are met.
When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the Statement of Profit and Loss as incurred.
The residual values, useful lives and methods of depreciation of property, plantand equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
When an item of property, plant and equipment is scrapped or otherwise disposed off, the cost and related deprecation are removed from the books of account and resultant profit or loss, if any, is reflected in Statement of Profit & Loss.
(ii) Capital work in progress
Assets in the course of construction are transferred to Capital Work in Progress account. At the point when an asset is capable of operating in the manner intended by management, the cost of construction is transferred to the appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset are capitalised when the asset is available for use but incapable of operating at normal levels until the period of commissioning has been completed. Cost includes financing cost relating to borrowed funds attributable to construction.
(iii) Depreciation
The Company depreciates property, plant and equipment over the useful life as prescribed in Schedule II of the Companies Act, 2013 on the Written Down Value method on pro rata basis (completed month of use) from the date the assets are ready for intended use. Assets in the course of construction and freehold land are not depreciated. The estimated useful lives of assets are as follows:
- Buildings 30-60 years
- Plant and equipments 15 years
- Furniture and fixtures 8-10 years
- Vehicles 8-10 years
- Officeequipments3-6years (Including computer software)
1.7 Intangible Assets
Intangible assets acquired are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.
The useful lives of intangible assets are assessed as either finite or indefinite. The Company currently does not have any intangible assets with indefinite useful life. Intangible assets are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.
1.8 Impairment of Assets
At the end of each reporting period, the Company assesses whether there is any indication that an assets or a group of assets (cash generating unit) may be impaired. If any such indication exists, the recoverable amount of the asset or cash generating unit is estimated in order to determine the extent of impairment loss (if any). When it is not possible to estimate the recoverable amount of the cash generating unit to which the assets belongs. Recoverable amount is the higher of fair value less cost of disposal and value in use. In assessing the value in use, the estimated future cash flow are discounted at their present value using the pre-tax discount rate that reflects current market assessment of time value of money and the risks specific to the assets for which the estimates of future cash flow have not been adjusted .
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the Statement of Profit & Loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss recognized immediately in the Statement of Profit & Loss.
1.9 Cash and Cash equivalent
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant riskof changes in value.
For the purpose of the Statement of Cash Flows, cash and cash equivalents consist of cash and short-term deposits, as defined above.
1.10 Financial instruments
A financial instrument is any contact that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when a Company becomes a party to the contractual provisions of the instruments.
(i) Initial recognition and measurement:
Financial assets and financial liabilities are recognized when a Company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition of financial assets or issue of financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets orfinancial liabilities at fair value through profit or loss are recognized immediately in the Statement of Profit and Loss.
(ii) Subsequent measurement of financial assets:
For purposes of subsequent measurement, financial assets are classified in four categories and measured as under:
(a) Debt instruments at amortised cost.
(b) Debt instruments at fair value through other comprehensive income (FVTOCI).
(c) Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL).
(d) Equity instruments measured at fair value through other comprehensive income (FVTOCI).
(a) A âdebt instrumentâ is measured at the amortised cost, if both the following conditions are met:
(i) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows; and
(ii) Contractual terms of the asset gives rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade and other receivables.
(b) A âdebt instrumentâ is classified as FVTOCI, if both of the following criteria are met:
(i) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets; and
(ii) The assetâs contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in OCI. However, the Company recognizes interest income, impairment losses and foreign exchange gain or loss in the profit or loss. On de-recognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to profit or loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
(c) FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit or loss.
(d) All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit orloss.
(iii) Derecognition of Financial Assets:
The Company derecognises a financial asset when and only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. On derecognition of a financial asset in its entirety, the difference between the assetâs carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in the Statement of Profit and Loss if such gain or loss would have otherwise been recognized in the Statement of Profit and Loss on disposal of that financial asset.
(iv) Impairment of financial assets:
The Company applies the expected credit loss model for recognizing impairment loss on financial assets. The Company follows âsimplified approachâ for recognition of impairment loss allowance, the application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
(v) Subsequent measurement of financial liabilities:
All the financial liabilities are subsequently measured at amortized cost using the effective interest rate method or at fair value through profit and loss. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.
(vi) Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
1.11 Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the Statement of Profit and Loss, net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
1.12 Inventories
Inventories are valued at the lower of cost and net realisable value except scrap and by products which are valued at net realisable value. Costs comprises as follow:
(i) Raw materials: Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.
(ii) Finished goods: Cost includes cost of conversion. The cost of conversion has been worked out for all the products on the basis of weighted average cost derived by preparing the manufacturing account wherein 50% of the fixed production overheads are allocated to the units of production having regard to capacity utilisation which is reviewed after three years and accordingly allocation of overheads is made.
(iii) Work-in-progress: Work-in-progress is valued at direct cost plus cost of conversion (weighted average cost).The indirect expenses have been allocated on the proportionate basis of raw material lying in work-in-progress to total raw material consumed.
(iv) Net realisable value is the list selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
(v) In the case of Synthetic Panel Sets the net realisable value of synthetic balls is taken and from the NRV, the cost of conversion of panel sets to balls is reduced there from to arrive at the cost.
(vi) The net realizable value of the finished goods in respect of export surplus balls has been determined consistently as under:
Stock lying for less than two years : List price
Stock lying more than two years but less than five years : List price less 25%
Stock lying more than five years : List price less 40%
(vii) For trading goods cost means direct cost incurred to bring inventory at intended place.
1.13 Retirement Benefits
Company follows INDAS-19 as detailed below:-
(a) Short-term benefits are recognized as expense at the undiscounted amount in the Statement of Profit & Loss of the year in which the related service is rendered.
(b) Company provides bonus to eligible employees as per Bonus Act 1965 and accordingly liability is provided on actual cost at the end of the year.
(c) Provident Fund:
The eligible employees of the company are entitled to receive benefits under the Provident Fund, a defined contribution plan in which both employees and the company make monthly contributions at a specified percentage of the covered employeeâs salary. The contributions as specified under the law are paid to the respective Regional Provident Fund Commissioner and the Central Provident Fund under the State Pension Scheme.
(d) The Company has an obligation towards gratuity liability in respect of Employees who have completed two years of service (other than directors in the whole time employment of the company) below 60 years of age is fully covered under the Group Gratuity Scheme of Life Insurance Corporation of India. Amount paid to the trust/LIC has been charged to Statement of Profit and Loss. In respect of directors, gratuity is provided during the year on actuarial valuation basis. The plan provides for a lump sum payment to employees at retirement/determination of service on the basis of 15 days terminal salary for each completed year of service subject to maximum amount of Rs. 20 Lacs. Companyâs liability towards gratuity and compensated absences is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income (OCI) in the period in which they occur. Remeasurement recognized in the other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the defined benefit liability or asset.
Defined benefit costs are categorized as follows:
- Service cost (including current service cost, past service cost as well as gains and losses on curtailments and settlements);
- Net interest expense or income; and
- Remeasurement
1.14 Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefit will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable taking in to account contractually defined terms of payment excluding others taxes or duties collected on behalf of the government. In respect of following source(s) revenue is recognised as per following criteria:
(a) Export sales are recognized on the basis of date of bill of lading.
(b) Export entitlements i.e. duty free scrip and duty draw back are accounted for on the basis of export of goods on FOB value determined for custom purpose.
(c) Interest Income is recorded on time proportion basis using the effective rate of Interest (EIR).
(d) Income from Value of licence granted by DGFT subsequent to the date of Balance Sheet, on account of exports made is accounted for in terms of IndAS-18.
1.16 Taxation
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary differences, except when it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses including unabsorbed depreciation. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Goods and Service Tax/Sales Tax/ value added taxes paid on acquisition of assets or on incurring expenses.
Expenses and assets are recognised net of the amount of GST/sales/value added taxes paid, except:
When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
When receivables and payables are stated with the amount of tax included, the net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
Minimum Alternate Tax (MAT): MAT paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.
1.17 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
1.18 Foreign Currency Transactions
Foreign Currency Transactions involving export sales are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency on the customs rate on the date of dispatch of goods. The difference between the rates recorded and the rates on the date of actual realization is transferred to difference in exchange fluctuation account .At the year end, the balances are converted at the year end rate and difference if any between the book balance and converted amount are transferred to the exchange fluctuation account. The premium or discount arising at the inception of a forward exchange contract is amortized as expenses / income over the life of the contract. Any profit or loss arising on cancellation or renewal of such a forward contract is recognized as income / expenses for the period. Nonmonetary items that are measured in historical cost in a foreign currency are not retranslated.
1.19 Earning per shares
The Company presents basic and diluted earnings per share (âEPSâ) data for its equity shares. Basic EPS is calculated by dividing the profit and loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit and loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares.
1.20 Segment Reporting
As per IND AS-108 âSegment Reportingâ the company has identified two segments viz. Own Manufactured Products and Traded Goods.
(a) Assets and Liabilities:
All Segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used by the segment and consist principally of PPE, inventories, trade receivable, financial assets and operating cash and bank balances. Segment assets and liabilities do not include inter-corporate deposits, share capital, reserves and surplus, borrowings, and income tax (both current and deferred).
(b) Segment revenue and expenses:
Segment revenue and expenses are directly attributable to segment. It does not include interest income on intercorporate deposits, interest expense and income tax.
Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under âunallocated revenue/expenses/assets/liabilitiesâ.
1.21 Cash Flow Statement
Cash flows are reported using indirect method as set out in Ind AS -7 âStatement of Cash Flowsâ, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
1.22 Contingent liabilities
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability. The Company does not recognize a contingent liability but discloses its existence in the standalone Ind AS financial statements.
1.23 Leases
Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments under operating leases are recognised as an expense on a straight line basis in the Statement of Profit and Loss over the lease term except where the lease payments are structured to increase in line with expected general inflation.
1.24 Use of estimates and judgments
The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which is known/materialised.
In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are included in the following notes:
(i) Property, Plant and Equipments -
(ii) Intangible assets -
(iii) Taxes on income -
(iv) Retirement and other employee benefits â
Mar 31, 2016
The Significant Accounting Policies followed by the Company are as stated below :
A. GENERAL
The Financial Statements are prepared on Mercantile Basis of Accounting following the Historical Cost Convention and the Principle of going concern. All assets and liabilities have been classified as Current or Non-Current considering the operational cycle of 12 months.
B. FIXEDASSETS
Fixed Assets including capital work in progress are stated at cost (net of grants received) including Taxes, Duties, Freight and other incidental expenses incurred in relation to acquisition and installation of the same. Depreciation has been provided to the extent of depreciable amount on Written Down Value method on pro-rata basis (completed months of use). Depreciation is provided based on useful life of assets as prescribed in Schedule 11 to the Companies Act,2013.
C. INVENTORIES
(1) The inventories other than work-in-progress have been valued at the lower of cost and the net realizable value, cost means weighted average cost determined on FIFO basis.
(2) The Company is engaged in the manufacturing and trading of various products. The cost of conversion has been worked out for all the products on the basis of weighted average cost derived by preparing the manufacturing account wherein 50% of the fixed production overheads are allocated to the units of production having regard to capacity utilization which is reviewed after three years and accordingly allocation of overheads is made. For trading goods, cost means direct cost.
(3) The net realizable value in respect of each category of products has been determined on the basis of list price less the necessary estimated cost to make the sale.
(4) Work-in-progress is valued at direct cost plus cost of conversion (weighted average cost). The indirect expenses have been allocated on the proportionate basis of raw material lying in work-in-progress to total raw material consumed.
(5) In the case of Synthetic Panel Sets the net realizable value of synthetic balls is taken and from the cost arrived, the cost of conversion of panel sets in to balls is reduced there from.
(6) The net realizable value of finished goods in respect of export surplus balls has been determined consistently as under -
a) Stock lying for less than two years List price.
b) Stock lying for more than two years but less than five years List price less 25%.
c) Stock lying for more than five years List price less 40%.
D. RETIREMENT BENEFITS
a) Defined Contribution Plans
Contributions paid / payable to defined contribution plans comprising of provident fund and pension fund are charged on accrual basis.
b) Defined Benefit Plan
Gratuity for employees who have completed two years of service other than Directors in the whole time employment of the Company below 60 years of age is fully covered under the Group Gratuity scheme of Life Insurance Corporation of India. The amount paid to the trust has been charged to Statement of Profit & Loss. In respect of Directors, gratuity is provided during the year on actuarial valuation basis.
c) Other Long term employee benefits
Other long term employee benefits comprise of leave encashment which is provided for based on the actuarial valuation carried out in accordance with revised AS 15 as at the end of the year.
E. FOREIGN EXCHANGE TRANSACTIONS
Transactions in Foreign Currency including investments made in wholly owned subsidiary abroad are recorded at the exchange rate as on the date of transaction. For all foreign currency liabilities and monetary assets are stated at the exchange rate prevailing as at the date of Balance Sheet or at the contracted rate and the difference taken to Statement of Profit & Loss as exchange fluctuation loss or gain except in respect of liabilities, if any, for acquisition of fixed assets, in which case such exchange difference is adjusted in the carrying cost of the respective fixed assets.
F. INVESTMENT
Investments are classified into current and long term investments. Current investments are stated at lower of cost or fair market value. Long Term Investments are valued at cost. Provision is made for diminution in value to recognize decline if any other than that of temporary nature.
G. REVENUE / EXPENDITURE
The Company is following mercantile system of accounting but certain items, i.e., overdue Bank Interest on export and domestic sales realization, insurance claims and interest in respect of import under since LC other than Buyerâs Credit are accounted for on actual / receipt basis.
H. EXPORT SALES
Export Sales are accounted for on the basis of date of shipment irrespective of the date of invoice as per Impex Policy.
I. BORROWING COST
Borrowing costs that are attributable to acquisition / construction of qualifying assets within the meaning of AS-16 issued by The Institute of Chartered Accountants of India are capitalized as a part of total cost of such assets. All other borrowing costs are charged to revenue. During the year R nil (previous year Rnil) has been capitalized.
Mar 31, 2015
The Significant Accounting Policies followed by the Company are as
stated below :
A. GENERAL
The Financial Statements are prepared on Mercantile Basis of Accounting
following the Historical Cost Convention and the Principle of going
concern. All assets and liabilities have been classified as Current or
Non-Current considering the operational cycle of 12 months.
B. FIXED ASSETS
Fixed Assets including capital work in progress are stated at cost (net
of grants received) including Taxes, Duties, Freight and other
incidental expenses incurred in relation to acquisition and
installation of the same. Depreciation has been provided to the extent
of depreciable amount on Written Down Value method on pro-rata basis
(completed months of use). Depreciation is provided based on useful
life of assets as prescribed in Schedule II to the Companies Act,2013.
C. INVENTORIES
(1) The inventories other than work-in-progress have been valued at the
lower of cost and the net realisable value, cost means weighted average
cost determined on FIFO basis.
(2) The Company is engaged in the manufacturing and trading of various
products. The cost of conversion has been worked out for all the
products on the basis of weighted average cost derived by preparing the
manufacturing account wherein 50% of the fixed production overheads are
allocated to the units of production having regard to capacity
utilisation which is reviewed after three years and accordingly
allocation of overheads is made. For trading goods, cost means direct
cost.
(3) The net realisable value in respect of each category of products
has been determined on the basis of list price less the necessary
estimated cost to make the sale.
(4) Work-in-progress is valued at direct cost plus cost of conversion
(weighted average cost). The indirect expenses have been allocated on
the proportionate basis of raw material lying in work-in-progress to
total raw material consumed.
(5) In the case of Synthetic Panel Sets the net realisable value of
synthetic balls is taken and from the cost arrived, the cost of
conversion of panel sets in to balls is reduced therefrom.
(6) The net realisable value of finished goods in respect of export
surplus balls has been determined consistently as under -
a) Stock lying for less than two years List price.
b) Stock lying for more than two years but less than five years List
price less 25%.
c) Stock lying for more than five years List price less 40%.
D. RETIREMENT BENEFITS
a) Defined Contribution Plans
Contributions paid / payable to defined contribution plans comprising
of provident fund and pension fund are charged on accrual basis.
b) Defined Benefit Plan
Gratuity for employees who have completed two years of service other
than Directors in the whole time employment of the Company below 60
years of age is fully covered under the Group Gratuity scheme of Life
Insurance Corporation of India. The amount paid to the trust has been
charged to Statement of Profit & Loss. In respect of Directors,
gratuity is provided during the year on actuarial valuation basis.
c) Other Long term employee benefits
Other long term employee benefits comprise of leave encashment which is
provided for based on the actuarial valuation carried out in accordance
with revised AS 15 as at the end of the year.
E. FOREIGN EXCHANGE TRANSACTIONS
Transactions in Foreign Currency including investments made in wholly
owned subsidiary abroad are recorded at the exchange rate as on the
date of transaction. For all foreign currency liabilities and monetary
assets are stated at the exchange rate prevailing as at the date of
Balance Sheet or at the contracted rate and the difference taken to
Statement of Profit & Loss as exchange fluctuation loss or gain except
in respect of liabilities, if any, for acquisition of fixed assets, in
which case such exchange difference is adjusted in the carrying cost of
the respective fixed assets.
F. INVESTMENT
Investments are classified into current and long term investments.
Current investments are stated at lower of cost or fair market value.
Long Term Investments are valued at cost. Provision is made for
diminution in value to recognise decline if any other than that of
temporary nature.
G. REVENUE / EXPENDITURE
The Company is following mercantile system of accounting but certain
items, i.e., over due Bank Interest on export and domestic sales
realisation, insurance claims and interest in respect of import under
usance LC other than Buyer's Credit are accounted for on actual /
receipt basis.
H. EXPORT SALES
Export Sales are accounted for on the basis of date of shipment
irrespective of the date of invoice as per Impex Policy.
I. BORROWING COST
Borrowing costs that are attributable to acquisition / construction of
qualifying assets within the meaning of AS-16 issued by The Institute
of Chartered Accountants of India are capitalised as a part of total
cost of such assets. All other borrowing costs are charged to revenue.
During the year J nil (previous year J nil) has been capitalised.
Mar 31, 2014
The Significant Accounting Policies followed by the Company are as
stated below :
A. GENERAL
The Financial Statements are prepared on Mercantile Basis of Accounting
following the Historical Cost Convention and the Principle of going
concern. All assets and liabilities have been classified as Current or
Non-Current considering the operational cycle of 12 months.
B. FIXED ASSETS
Fixed Assets including capital work in progress are stated at cost (net
of grants received) including Taxes, Duties, Freight and other
incidental expenses incurred in relation to acquisition and
installation of the same. Depreciation has been provided on pro-rata
basis (completed months of use) by Written Down value Method at the
rate and manner prescribed in Schedule XIV of the Companies Act,1956.
C. INVENTORIES
(1) The inventories other than work-in-progress have been valued at the
lower of cost and the net realisable value, cost means weighted average
cost determined on FIFO basis.
(2) The Company is engaged in the manufacturing and trading of various
products. The cost of conversion has been worked out for all the
products on the basis of weighted average cost derived by preparing the
manufacturing account wherein 50% of the fixed production overheads are
allocated to the units of production having regard to capacity
utilisation which is reviewed after three years and accordingly
allocation of overheads is made. For trading goods, cost means direct
cost.
(3) The net realisable value in respect of each category of products
has been determined on the basis of list price less the necessary
estimated cost to make the sale.
(4) Work-in-progress is valued at direct cost plus cost of conversion
(weighted average cost). The indirect expenses have been allocated on
the proportionate basis of raw material lying in work-in-progress to
total raw material consumed.
(5) In the case of Synthetic Panel Sets the net realisable value of
synthetic balls is taken and from the cost arrived, the cost of
conversion of panel sets in to balls is reduced therefrom.
(6) The net realisable value of finished goods in respect of export
surplus balls has been determined consistently as under -
a) Stock lying for less than two years List price.
b) Stock lying for more than two years but less than five years List
price less 25%.
c) Stock lying for more than five years List price less 40%.
D. RETIREMENT BENEFITS
a) Defined Contribution Plans
Contributions paid / payable to defined contribution plans comprising
of provident fund and pension fund are charged on accrual basis.
b) Defined Benefit Plan
Gratuity for employees who have completed two years of service other
than Directors in the whole time employment of the Company below 60
years of age is fully covered under the Group Gratuity scheme of Life
Insurance Corporation of India. The amount paid to the trust has been
charged to Statement of Profit & Loss. In respect of Directors,
gratuity is provided during the year on actuarial valuation basis,
subject to maximum limit of Rs.10 lacs per director as per the Payment
of Gratuity Act,1972.
c) Other Long term employee benefits
Other long term employee benefits comprise of leave encashment which is
provided for based on the actuarial valuation carried out in accordance
with revised AS 15 as at the end of the year.
E. FOREIGN EXCHANGE TRANSACTIONS
Transactions in Foreign Currency including investments made in wholly
owned subsidiary abroad are recorded at the exchange rate as on the
date of transaction. For all foreign currency liabilities and monetary
assets are stated at the exchange rate prevailing as at the date of
Balance Sheet or at the contracted rate and the difference taken to
Statement of Profit & Loss as exchange fluctuation loss or gain except
in respect of liabilities, if any, for acquisition of fixed assets, in
which case such exchange difference is adjusted in the carrying cost of
the respective fixed assets.
F. INVESTMENT
Investments are classified into current and long term investments.
Current investments are stated at lower of cost or fair market value.
Long Term Investments are valued at cost. Provision is made for
diminution in value to recognise decline if any other than that of
temporary nature.
G. REVENUE / EXPENDITURE
The Company is following mercantile system of accounting but certain
items, i.e., over due Bank Interest on export and domestic sales
realisation, insurance claims and interest in respect of import under
usance LC other than Buyer''s Credit are accounted for on actual /
receipt basis.
H. EXPORT SALES
Export Sales are accounted for on the basis of date of shipment
irrespective of the date of invoice as per Impex Policy.
I. BORROWING COST
Borrowing costs that are attributable to acquisition / construction of
qualifying assets within the meaning of AS-16 issued by The Institute
of Chartered Accountants of India are capitalised as a part of total
cost of such assets. All other borrowing costs are charged to revenue.
During the year Rs nil (previous year Rs nil) has been capitalised.
Mar 31, 2013
The Significant Accounting Policies followed by the Company are as
stated below:
A. GENERAL
The''Financial Statements are prepared on Mercantile Basis of Accounting
following the Historical Cost Convention and the Principle of going
concern. All assets and liabilities have been classified as Current or
Non-Current considering the operational cycle of 12 months.
B. FIXED ASSETS
Fixed Assets including capital work in progress are stated at cost (net
of grants received) including Taxes, Duties, Freight and other
incidental expenses incurred in relation to acquisition and
installation of the same. Depreciation has been provided on pro-rata
basis (completed months of use) by Written Down value Method atthe rate
and manner prescribed in Schedule XIV of the CompaniesAct,1956
C. INVENTORIES
(1) The inventories other than work-in-progress have been valued at the
lower of cost and the net realisable value, cost means weighted average
cost determined on FIFO basis.
(2) The Company is engaged in the manufacturing and trading of various
products. The cost of conversion has been worked out for all the
products on the basis of weighted average cost derived by preparing the
manufacturing account wherein 50% of the fixed production overheads are
allocated to the units of production having regard to capacity
utilisation which is reviewed after three years and accordingly
allocation of overheads is made. For trading goods, cost means direct
cost.
(3) The net realisable value in respect of each category of products
has been determined on the basis of list price less the necessary
estimated cost to make the sale.
(4) Work-in-progress is valued at direct cost plus cost of conversion
(weighted average cost). The indirect expenses have been allocated on
the proportionate basis of raw material lying in work-in-progress to
total raw material consumed.
(5) In the case of Synthetic Panel Sets the net realisable value of
synthetic balls is taken and from the cost arrived, the cost of
conversion of panel sets in to bails is reduced therefrom.
(6) The net realisable value of finished goods in respect of export
surplus balls has been determined consistently as under -
a) Stock lying for less than two years List price.
b) Stock lying for more than two years but less than five years
Listprice Iess25%.
c) Stock lying for more than five years Listpriceless40%.
0. RETIREMENT BENEFITS
a) Defined Contribution Plans
Contributions paid / payable to defined contribution plans comprising
of provident fund and pension fund are charged on accrual basis.
b) Defined Benefit Plan
Gratuity for employees who have completed two years of service other
than Directors in the whole time employment of the Company below 60
years of age is fully covered under the Group Gratuity scheme of Life
Insurance Corporation of India. The amount paid to the trust has been
charged to Statement of Profit & Loss. In respect of Directors,
gratuity is provided during the year on actuarial valuation basis,
subject to maximum limit of Rs. 10 lacs (previous year Rs.3.5 lacs)
perdirectorasperthe Payment of Gratuity Act,1972.
c) Other Long term employee benefits
Other long term employee benefits comprise of leave encashment which is
provided for based on the actuarial valuation carried out in accordance
with revised AS 15 as at the end of the year.
E. FOREIGN EXCHANGE TRANSACTIONS
Transactions in Foreign Currency including investments made in wholly
owned subsidiary abroad are recorded at the exchange rate as on the
date of transaction. For all foreign currency liabilities and monetary
assets are stated atthe exchange rate prevailing as at the date of
Balance Sheet or at the contracted rate and the difference taken to
Statement of Profit & Loss as exchange fluctuation loss or gain except
in respect of liabilities, if any, for acquisition of fixed assets, in
which case such exchange difference is adjusted in the carrying cost of
the respective fixed assets.
F. INVESTMENT
Investments are classified into current and long term investments.
Current investments are stated at lower of cost or fair market value.
Long Term Investments are valued at cost. Provision is made for
diminution in value to recognise decline if any other than that of
temporary nature.
G. REVENUE/EXPENDITURE
The Company is following mercantile system of accounting but certain
items, i.e., overdue Bank Interest on export and domestic sales
realisation, insurance claims and interest in respect of import under
usance LC other than Buyer''s Credit are accounted for on actual /
receipt basis.
H. EXPORT SALES
Export Sales are accounted for on the basis of date of shipment
irrespective of the date of invoice as per Impex Policy.
I. BORROWING COST
Borrowing costs that are attributable to acquisition / construction of
qualifying assets within the meaning of AS-16 issued by The Institute
of Chartered Accountants of India are capitalised as a part of total
cost of such assets. All other borrowing costs are charged to revenue.
During the year Rs. nil (previous year Rs. nil) has been capitalised.
Mar 31, 2012
A. GENERAL
The Financial Statements are prepared on Mercantile Basis of Accounting
following the Historical Cost Convention and the Principle of going
concern. All assets and liabilities have been classified as Current or
Non-Current considering the operational cycle of 12 months.
B. FIXED ASSETS
Fixed Assets including capital work in progress are stated at cost (net
of grants received) including Taxes' Duties' Freight and other
incidental expenses incurred in relation to acquisition and
installation of the same. Depreciation has been provided on pro-rata
basis (completed months of use) by Written Down value Method at the
rate and manner prescribed in Schedule XIV of the Companies Act'1956.
C. INVENTORIES
(1) The inventories other than work-in-progress have been valued at the
lower of cost and the net realisable value' cost means weighted average
cost determined on FIFO basis.
(2) The Company is engaged in the manufacturing and trading of various
products. The cost of conversion has been worked out for all the
products on the basis of weighted average cost derived by preparing the
manufacturing account wherein 50% of the fixed production overheads are
allocated to the units of production having regard to capacity
utilisation which is reviewed after three years and accordingly
allocation of overheads is made. For trading goods' cost means direct
cost.
(3) The net realisable value in respect of each category of products
has been determined on the basis of list price less the necessary
estimated cost to make the sale.
(4) Work-in-progress is valued at direct cost plus cost of conversion
(weighted average cost). The indirect expenses have been allocated on
the proportionate basis of raw material lying in work-in-progress to
total raw material consumed.
(5) The net realisable value of finished goods in respect of export
surplus balls has been determined consistently as under
a) Stock lying for less than two years List price.
b) Stock lying for more than two years but less than five years List
price less 25%.
c) Stock lying for more than five years List price less 40%.
D. RETIREMENT BENEFITS
a) Defined Contribution Plans
Contributions paid / payable to defined contribution plans comprising
of provident fund and pension fund are charged on accrual basis.
b) Defined Benefit Plan
Gratuity for employees who have completed two years of service other
than Directors in the whole time employment of the Company below 60
years of age is fully covered under the Group Gratuity scheme of Life
Insurance Corporation of India. The amount paid to the trust has been
charged to Statement of. In respect of Directors' gratuity is provided
during the year on actuarial valuation basis' subject to maximum limit
oR 10 lacs (previous year f 3.5 lacs) per director as per the Payment
of Gratuity Act'1972.
c) Other Long term employee benefits
Other long term employee benefits comprise of leave encashment which is
provided for based on the actuarial valuation carried out in accordance
with revised AS 15 as at the end of the year.
E. FOREIGN EXCHANGE TRANSACTIONS
Transactions in Foreign Currency including investments made in wholly
owned subsidiary abroad are recorded at the exchange rate as on the
date of transaction. For all foreign currency liabilities and monetary
assets are stated at the exchange rate prevailing as at the date of
Balance Sheet or at the contracted rate and the difference taken to
Statement of Profit & Loss as exchange fluctuation loss or gain except
in respect of liabilities' if any' for acquisition of fixed assets' in
which case such exchange difference is adjusted in the carrying cost of
the respective fixed assets.
F. INVESTMENT
Investments are classified into current and long term investments.
Current investments are stated at lower of cost or fair market value.
Long Term Investments are valued at cost. Provision is made for
diminution in value to recognise decline if any other than that of
temporary nature.
G. REVENUE/EXPENDITURE
The Company is following mercantile system of accounting but certain
items' i.e.' over due Bank Interest on export and domestic sales
realisation' insurance claims and interest in respect of import under
usance LC other than Buyer's Credit are accounted for on actual /
receipt basis.
H. EXPORT SALES
Export Sales are accounted for on the basis of date of shipment
irrespective of the date of invoice as per Impex Policy.
I. BORROWING COST
Borrowing costs that are attributable to acquisition / construction of
qualifying assets within the meaning of AS-16 issued by The Institute
of Chartered Accountants of India are capitalised as a part of total
cost of such assets. All other borrowing costs are charged to revenue.
During the year Rs. nil (previous year Rs. nil) has been capitalised.
Mar 31, 2010
A. GENERAL
The Financial Statements are prepared on Mercantile Basis of Accounting
following the Hisssstorical Cost Convention and the Principle of going
concern.
B. FIXED ASSETS
Fixed Assets including capital work in progress are stated at cost (net
of grants received) including Taxes, Duties, Freight and other
incidental expenses incurred in relation to acquisition and
installation of the same. Depreciation has been provided on pro-rata
basis (completed months of use) by Written Down value Method at the
rate and manner prescribed in Schedule XIV of the Companies Act, 1956.
C. INVENTORIES
(1) The inventories other than work-in-progress have been valued at the
lower of cost and the net realisable value, cost means weighted average
cost determined on FIFO basis.
(2) The Company is engaged in the manufacturing and trading of various
products. The cost of conversion has been worked out for all the
products on the basis of weighted average cost derived by preparing the
manufacturing account wherein 50% of the fixed production overheads are
allocated to the units of production having regard to capacity
utilisation which is reviewed after three years and accordingly
allocation of overheads is made. For trading goods, cost means direct
cost.
(3) The net realisable value in respect of each category of products
has been determined on the basis of list price less the necessary
estimated cost to make the sale.
(4) Work-in-progress is valued at direct cost plus cost of conversion
(weighted average cost) (previous year only bladder was valued at list
price being lower than cost). The indirect expenses have been allocated
on the proportionate basis of raw mat< rial lying in work-in-progress
to total raw material consumed.
(5) The net realisable value of finished goods in respect of export
surplus balls has been determined as under :-
a) Stock lying for less than two years List price
b) Stock lying for more than two years but less
than five years List price less 25%
c) Stock lying for more than five years List price less 40%
As a result, the inventories have been written down by Rs. 26 lacs
(previous year Rs. 20.40 lacs) to its net realisable value.
D. RETIREMENT BENEFITS
a) Defined Contribution Plans
Contributions paid / payable to defined contribution plans comprising
of provident fund and pension fund are charged on accrual basis.
b) Defined Benefit Plan
Gratuity for employees who have completed two years of service other
than Directors in the whole time employment of the Company below 60
years of age is fully covered under the Group Gratuity scheme of Life
insurance Corporation of India. The amount paid to the trust has been
charged to Profit & Loss Account. In respect of Directors, gratuity is
provided during the year on actuarial valuation basis, subject to
maximum limit of Rs.3.50 lacs per director as per the Payment of
Gratuity Act, 1972. The company is of the view that amendment in
Gratuity Act,1972 raising the maximum limit to Rs.10 lacs is applicable
from F.Y.2010-11 and hence gratuity provision has been made on the
basis of maximum limit of Rs.3.50 lacs instead on the limit of Rs.10
lacs.
c) Other Long term employee benefits
Other long term employee benefits comprise of leave encashment which is
provided for based on the actuarial valuation carried out in accordance
with revised AS 15 as at the end of the year.
E. FOREIGN EXCHANGE TRANSACTIONS
Transactions in Foreign Currency including investments made in wholly
owned subsidiary abroad are recorded at the exchange rate as on the
date of transaction. For all foreign currency liabilities and monetary
assets are stated at the exchange rate prevailing as at the date of
Balance Sheet or at the contracted rate and the difference taken to
Profit & Loss Account as exchange fluctuation loss or gain except in
respect of liabilities, if any, for acquisition of fixed assets, in
which case such exchange difference is adjusted in the carrying cost of
the respective fixed assets.
F. INVESTMENT
Investments are classified into current and long term investments.
Current investments are stated at lower of cost or fair market value.
Long Term Investments are valued at cost. Provision is made for
diminution in value to recognise decline if any other than that of
temporary nature, in value of Long Term Investments.
G. REVENUE / EXPENDITURE
The Company is following mercantile system of accounting but certain
items, i.e., over due Bank Interest on export and domestic sales
realisation, insurance claims and interest in respect of import under
usance LC are accounted for on actual / receipt basis.
H. EXPORT SALES
Export Sales are accounted for on the basis of date of shipment
irrespective of the date of invoice as per Impex Policy.
I. BORROWING EXPENDITURE
Borrowing costs that are attributable to acquisition / construction of
qualifying assets within the meaning of AS-16 issued by The Institute
of Chartered Accountants of India are capitalised as a part of total
cost of such assets. All other borrowing costs are charged to revenue.
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