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Accounting Policies of Hisar Metal Industries Ltd. Company
Mar 31, 2025
Note: 1 Company Information
Hisar Metal Industries Limited (The Company) was incorporated in 1990 having its registered office at Near IDC, Delhi Road, Hisar-125005, Haryana, India. The Company is listed in BSE Limited (BSE) & National Stock Exchange (NSE).
The Company deals in stainless steel products and engaged in manufacturing of Cold Rolling Strips and Pipe. The functional and presentation currency of the Company is Indian Rupee ('') which is the currency of the primary economic environment in which the Company operates. The financial statements for the quarter cum year ending on 31st March 2025 were approved by the Board of Directors and authorized for issue on 28th May 2025.
Note: 2 Significant Accounting Policies
This note provides a list of the significant accounting policies adopted in the preparation and presentation of these financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (referred to as "Ind AS") as prescribed under section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules and the guidelines issued by the Securities and Exchange Board of India ("SEBI'''') as amended from time to time.
i) These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS), under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 ("the Act") (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy thereto in use.
ii) Historical cost convention: - The financial statements have been prepared on a historical cost basis, except for the following:
⢠Certain financial assets and liabilities that are measured at fair value (duly reported if any);
⢠Defined benefit plans - plan assets measured at fair value;
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Company has identified Managing Director and Chief Financial
Officer as chief operating decision maker. Refer Note 37 for segment information presented.
d) Foreign currency transactions
i) Functional and presentation currency: Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The financial statements are presented in Indian National Rupee (''), which is the Company''s functional and presentation currency.
ii) Transactions and balances: Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Exchange differences arising from foreign currency fluctuations are dealt with on the date of payment/receipt. Assets and Liabilities related to foreign currency transactions remaining unsettled at the end of the period/year are translated at the year end rate wherever necessary. The exchange difference is credited/ charged to Profit & Loss Account in case of revenue items and transfered to assets in case of capital items.
The Company recognizes revenue in accordance with Ind- AS 115. Revenue is recognized upon transfer of control of promised goods to customers i.e., when the performance obligation gets fulfilled in an amount that reflects the consideration which the company expects to receive in exchange for that particular performance obligation. Revenue is measured based on the transaction price, which is the net of variable consideration, adjusted for discounts, price concessions, and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.
Revenue from sale of products is recognized when the control on the goods have been transferred to the customer. The performance obligation in case of product is satisfied at a point in time i.e., when the material is shipped / delivered to the customer or when it is delivered to a carrier for export sale, as may be specified in the contract. Revenue is measured at fair value of the consideration received or receivable. The Company recognizes revenue from sale of products net of discounts, sales incentives, rebates granted, returns, GST, VAT, sales tax and duties when the products are delivered to customer or when delivered to a carrier for export sale, which is when significant risks and rewards of ownership pass to the customer.
Export benefits available are accounted for in the year of export, to the extent the realisation of the same is not considered uncertain by the Company.
Revenue from the services are recorded as and when the service is provided to the customers or as the work has been completed in accordance with the contract made with the customer.
ii) Other Revenue(a) Customs Duty
Customs Duty/incentive entitlement as and when eligible is accounted on an accrual basis.
Accordingly, import duty benefits against exports affected during the year are accounted on estimate basis as incentive till the end of the year in respect of duty-free imports of raw material yet to be made.
Interest income is accrued on a time basis by reference to the principal outstanding and the effective interest rate.
(c) Other Income/Miscellaneous Income
Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably.
Income tax expenses comprise current tax expense and net changes in the deferred tax asset or Liability during the year. Current & deferred taxes are recognized in the statement of Profit & Loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current & deferred tax are also recognized in other comprehensive income or directly in equity, respectively.
Current Income Tax for the current and prior periods are measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. The tax rates and tax laws used to compute the current tax amounts are those that are enacted or substantively enacted as at the reporting date and applicable for the period. While determining the tax provisions, the Company assesses whether each uncertain tax position is to be considered separately or together with one or more uncertain tax positions depending the nature and circumstances of each uncertain tax position.
The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and liability simultaneously.
Income tax expense is the aggregate amount of Current tax. Current tax is the amount of income tax determined to be payable in respect of taxable income for an accounting period or computed on the basis of the provisions of Section 115BAA of Income Tax Act, 1961 by way of minimum alternate tax at the prescribed percentage on the adjusted book profits of a year, when Income Tax Liability under the normal method of tax payable basis works out either a lower amount or nil amount compared to the tax liability u/s 115JA.
Deferred tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying values in the financial statements. However, deferred taxes are not recognized if they arise from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred Tax Liability are generally recognised for all taxable temporary differences. In contrast,
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. However, if these are unabsorbed depreciation, carry forward losses and items relating to capital losses, deferred tax assets are recognized when there is reasonable certainty that there will be sufficient future taxable income available to realize the assets. Deferred tax assets in respect of unutilized tax credits which mainly relate to minimum alternate tax are recognised to the extent it is probable that such unutilized tax credits will get realized.
The unrecognized deferred tax assets/ carrying amount of deferred tax assets are reviewed at each reporting date for recoverability and adjusted appropriately.
Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the reporting date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Income tax assets and liabilities are off-set against each other and the resultant net amount is presented in the balance sheet, if and only when, (a) the Company currently has a right to set-off the current income tax assets and liabilities, and (b) when it relate to income tax levied by the same taxation authority and where there is an intention to settle the current income tax balances on net basis. (Ref. Note No. 13 and 29)
MAT Credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal Income Tax during the specified period. In the year in which the MAT Credit becomes eligible to be recognised as an asset in accordance with the recommendation contained in Guidance Notes issued by the ICAI, the said asset is created by way of a credit to the statement of profit & loss and shown as MAT Credit entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
The general practice adopted by the company for valuation of inventory is as under:
i) Raw Materials - *At lower of cost and net realizable value.
ii) Stores and spares - At cost
iii) Work-in-process/semi-finished goods - At material cost plus labour and other appropriate portions of production and administrative overheads and depreciation
iv) Finished Goods/Traded Goods - At lower of cost and net realizable value.
v) Finished Goods at the end of trial run - At net realizable value.
vi) Scrap material - At net realizable value.
vii) Tools and equipment - At lower cost and disposable value.
*Material and other supplies held for use in the production of the inventories are not written down below cost if the finished goods in which they will be incorporated are expected to be sold at or above cost.
Costs of inventories are determined on a FIFO Basis. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash, and which are subject to an insignificant risk of changes in value.
j) Investments and other financial assetsi) Classification
The Company classifies its financial assets in the following measurement categories:
⢠Those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
⢠Those measured at amortized cost.
The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.
Investment Property:- Property that are held for long term rental yields or for Capital Appreciation or both is classified as Investment Property. Investment Property is measured at its cost, including related transaction cost and where applicable borrowing costs. Current investments are carried at lower of cost or quoted/fair value. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.
For assets measured at fair value, gains and losses will either be recorded in statement of profit & loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for equity investment at fair value through other comprehensive income. The Company reclassifies debt investments when and only when its business model for managing those assets changes.
At initial recognition, the company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expenses in profit or loss.
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. However, where the impact of discounting / transaction costs is significant, the amortised cost is measured using the effective interest rate (EIR'') method. Interest income from these financial assets is included in Other Income.
iii) Impairment of financial assets
The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, debt instruments at FVTOCI, lease receivables, trade receivables, other contractual rights to receive cash or other financial assets, and financial guarantees not designated as at FVTPL.
Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Company estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.
The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. 12-month expected credit losses are portion of the life-time expected credit losses and represent the lifetime cash shortfalls that will result if default occurs within the 12 months after the reporting date and thus, are not cash shortfalls that are predicted over the next 12 months.
If the Company measured loss allowance for a financial instrument at lifetime expected credit loss model in the previous year, but determines at the end of a reporting year that the credit risk has not increased significantly since initial recognition due to improvement in credit quality as compared to the previous year, the Company again measures the loss allowance based on 12-month expected credit losses.
When making the assessment of whether there has been a significant increase in credit risk since initial recognition, the Company uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition.
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.
The impairment requirements for the recognition and measurement of a loss allowance are equally applied to debt instruments at FVTOCI except that the loss allowance is recognised in other comprehensive income and is not reduced from the carrying amount in the balance sheet. The Company has performed sensitivity analysis on the assumptions used and based on current indicators of future economic conditions, the Company expects to recover the carrying amount of these assets.
iv) Derecognition of financial assets
Financial asset is derecognized only when:
⢠The Company has transferred the rights to receive cash flow from the financial asset or
⢠Retains the contractual rights to receive the cash flows of the financial assets, but assumes a contractual obligation to pay cash flows to one or more recipients.
Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognized. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset is not derecognized.
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognized if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognized to the extent of continuing involvement in the financial asset.
Costs and expenses are recognized when incurred and have been classified according to their nature. The costs of the Company are broadly categorized in to material consumption, cost of trading goods, employee benefit expenses, depreciation and amortization, other operating expenses and finance cost. Employee benefit expenses include employee compensation, gratuity, leave encashment, contribution to various funds and staff welfare expenses. Other expenses broadly comprise manufacturing expenses, administrative expenses and selling and distribution expenses.
Financial Assets Initial Recognition
All financial assets are recognized initially at fair value. Transaction costs that are directly attributable to the acquisition of financial assets (other than financial assets at fair value through profit or loss) are added to the fair value measured on initial recognition of financial asset. However, trade receivables that do not contain a significant financing component are measured at transaction price.
l) Property, plant and equipment
An item of PPE is recognized as an asset if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. PPE are initially measured at cost of acquisition/ construction including decommissioning or restoration cost wherever required. The cost of land includes expenditures which are directly attributable to the acquisition of the land like, rehabilitation expenses, resettlement cost and compensation in lieu of employment incurred for displaced persons concerned etc.
Property, plant and equipment are carried at cost less accumulated depreciation and impairment loss, if any in accordance with Ind-AS 16. The Company reviews the fair value with sufficient frequency to ensure that the carrying amount does not differ materially from its fair value.
Cost excludes Input credit under GST and such other taxes which can utilize against GST liabilities and other refundable taxes. Depreciation on assets is claimed on such ''reduced'' cost. All items of repairs and maintenance are recognized in the statement of profit and loss, except those that meet the recognition principle as defined in Ind-AS 16. Any revaluation of an asset is recognized in other comprehensive income and shown as revaluation reserves in other equity.
On transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant and equipment recognized as at 1st April, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
Depreciation/Amortization methods estimated useful lives and residual value.
Depreciation is calculated using the straight-line basis at the rates arrived at based on the useful lives prescribed in Schedule II of the Companies Act, 2013. The company follows the policy of charging depreciation on a pro-rata basis on the assets acquired or disposed off during the year. Leasehold assets are amortized over the period of lease.
The residual values are not more than 5% of the original cost of the asset. The assets'' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount. Gains or losses on disposal are determined by comparing proceeds with carrying amount.
m) Intangible assetsi) Recognition
Intangible assets are recognized only when future economic benefits arising out of the assets flow to the enterprise and are amortized over their useful life. Intangible assets purchased are measured at cost or fair value as of the date of acquisition, as applicable, less accumulated amortization and accumulated impairment, if any.
ii) Amortization methods and periods
The Company amortized intangible assets on a straight line method over their estimated useful life not exceeding 10 years. Software are amortized over a period of years according to the life as decided by the management of the company.
On transition to Ind AS, the company has elected to continue with the carrying value of all of intangible assets recognized as at 1st April, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of intangible assets.
Financial Liabilities Initial Recognition
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The subsequent measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. Changes in fair value of such liability are recognized in the statement of profit or loss
Financial liabilities at amortized cost
The Company''s financial liabilities at amortized cost are initially recognized at net of transaction costs and includes trade payables, borrowings including bank overdrafts and other payables.
After initial recognition, financial liabilities are subsequently measured at amortized cost using the effective interest rate (EIR) method except for deferred consideration recognized in a business combination which is subsequently measured at fair value through profit and loss. Gains and losses are recognized in the statement of profit and loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized 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 amortization is included as finance costs in the statement of profit and loss.
Financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
These amounts represent liabilities for goods and services provided to the company prior to the end of the financial year which are unpaid. The amounts that are unsecured are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value.
Borrowings are initially recognized at fair value, net of transaction cost incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method. Fees Paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all the facility will be drawn down, there is capitalized as prepayment for liquidity services and amortized over the period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in statement of profit & loss.
Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognized in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instrument issued.
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset as defined in Ind-AS 23 are capitalized during the period of time that it is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalization. Any related foreign currency fluctuations on account of qualifying asset under construction is capitalized and added to the cost of assets concerned. Other borrowing costs are expensed as incurred.
i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
ii) Other long-term employee benefit obligations
The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured at the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligations.
Remeasurements as a result of the experience adjustments and changes in actuarial assumptions are recognized in statement of profit & loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period,
regardless of when the actual settlement is expected to occur.
iii) Post-employment obligations
The Company operates the following post-employment schemes:
(a) Defined benefit plans such as gratuity; and(b) Defined contribution plans such as provident fund and superannuation funds.(c) Defined benefit plans such as Leave encashment.iv) Gratuity & Leave Encashment obligations
The liability or assets recognized in the balance sheet in respect of gratuity & Leave Encashment plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expenses in the statement of profit and loss.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailment are recognized immediately in statement of profit & loss.
The company pays provident fund contributions to publicly administered funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognized as employee benefit expenses when they are due.
The Company recognizes a liability and an expense for bonus. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
Provision is made for the amount of any dividend declared, being appropriately authorized and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
i) Basic earnings per share: Basic earnings per share are calculated by dividing:
⢠The profit attributable to owners of the company.
⢠By the weighted average number of equity shares outstanding during the financial year.
ii) Diluted earnings per share: Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take into account:
⢠The after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
⢠The weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
t) Custom duty and its benefits
Custom Duty payable on imported raw materials, components and stores and spares is recognized to the extent assessed by the customs department.
Custom duty entitlement eligible under passbook scheme / DEPB is accounted on an accrual basis. Accordingly, import duty benefits against exports affected during the year are accounted on estimate basis as incentive till the end of the year in respect of duty free imports of raw material yet to be made.
u) The Treatment of expenditure during construction period
All expenditure and interest cost during the project construction period, are accumulated and shown as Capital Work-in- Progress provided they meet the recognition criteria as per IND AS 16 until the project/ assets commences commercial production. Assets under construction are not depreciated. Expenditure/Income arising out of trial run is part of pre-operative expenses included in Capital Work-in-Progress.
v) Accounting for Provisions, Contingent Liabilities & Contingent Assets
In conformity with Ind-AS 37, Provisions, Contingent Liabilities and Contingent Assets'', issued by the ICAI. A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits and compensated absences) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date adjusted to reflect the current best estimates.
Contingent liabilities are not recognized in the financial statements.
A contingent asset is neither recognized nor disclosed in financial statements.
w) Provision for doubtful debts
The Management reviews on a periodical basis the outstanding debtors with a view to determine as to whether the debtors are good, bad or doubtful after taking into consideration all the relevant aspects. On the basis of such review and in pursuance of other prudent financial considerations the management determines the extent of provision to be made in the accounts.
All amounts disclosed in the financial statements and notes have been rounded off to the nearest to Lakhs as per the requirement of Schedule III, unless otherwise stated.
Mar 31, 2024
Note: 1 Nature of Business Operations:
Hisar Metal Industries Limited (hereinafter referred to as ''the company'') is a manufacturer of Cold Rolling Strips and Pipe.
Hisar Metal Industries Limited company incorporated and domiciled in India. The address of its registered office is Near IDC Road, Hisar. The company is listed in both BSE Ltd. (Bombay Stock Exchange) and NSE Ltd. (National Stock Exchange).
Note: 2 Accounting Policies
2.1 BASIS OF PREPARTION OF FINANCIAL STATEMENTS
i) The standalone financial statements have been prepared in accordance with Indian Accounting Standards ("Ind AS"), the provisions of the Companies Act, 2013 ("the Companies Act"), as applicable and guidelines issued by the Securities and Exchange Board of India ("SEBI"). The Ind AS are prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
ii) The Financial Statements are prepared on accural basis under the historical cost convention, except for certain Fixed Assets which are carried at revalued amounts.
iii) All amounts included in the financial statements are reported in lakhs of Indian rupees (Rs. in lakhs) except share and per share data, unless otherwise stated. Due to rounding off, the numbers presented throughout the document may not add up precisely to the totals and percentages may not precisely reflect the absolute figures. Previous year figures have been regrouped/re-arranged, wherever necessary.
2.2 USE OF ESTIMATES
The prepration of financial statements in confirmity with Indian Acccounting Standards requires mangement to make estimates, judgements and assumptions. These estimates, judements and assumptions affect the application of accounting policies and reported amounts of assets and liablities, the disclosures of contingent assets and liabilities at the date of the financial statments and reported amounts of revenue and expenses during the year. Accounting Estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes and estimates are made as Management become aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
2.3 PROPERTY, PLANT AND EQUIPMENT
i) Tangible assets :
Property, Plant and Equipment are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation, less accumulated depreciation and impairment loss, if any. The cost of Assets comprises its purchase price, borrowing cost and
any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
Subsequent expenditures related to an item of Property, Plant and Equipment are added to its book value only if they increase the future benefits from the existing assets beyond its previously assessed standard of performance.
Projects under which assets are not ready for their intended use are disclosed under Capital Work-in-Progress.
Depreciation on Property, Plant and Equipment is provided on Straight Line Method (SLM). Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act , 2013 except in respect of the following assets, where useful life is diiferent than those prescribed in Schedule II are used. The residual value are not more than 5% of the original cost of the Asset. The Asset residual value, useful lives and method of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.
In respect of addition or extensions forming an integral part of existing assets and insurance spares, including incremental cost arising on account of translation of foreign currency liabilities for acquisition of Fixed Assets, depreciaton is provided as aforesaid over the residual life of the respective assets.
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation/depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.
The amortisation of the intangible assets with a finite useful life reflects the manner in which the economic benefit is expected to be generated. The estimated useful life of amortised intangible are reviewed and where appopriate are adjusted, annually.
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
Property that are held for long term rental yields or for Capital Appreciation or both is classified as Investment Property. Investment Property is measured at its cost, including related transaction cost and where applicable borrowing costs. Current investments are carried at lower of cost or quoted/fair value. Provision for diminution in the value of long term investments is made only if
such a decline is other than temporary.
Items of Inventories are measured at lower of cost or net realisable value after providing for obsolescence, if any, except in case of by-products which are valued at the net realisable value. Cost of inventories comprises of all costs of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. Cost of raw materials, process chemicals, store and spares, packing materials, trading and other products are determined on the basis of valuation of the finished goods as per the provisions so applicable according to IND AS-2.
i) Raw Material, Components, stores and spares
Raw Material, Components, stores and spares are valued at cost, as per the provision of IND-AS-2.
ii) Work-in-Progress and Finished Goods
Work-in-Progress is valued at lower of cost and net relizable value. Cost include direct materials and labour and a proportion of manufacturing overhead based on normal operating capacity.
Net Realizable value is the estimated selling price in the ordinary course of business, less estimeated cost of completion and estimated costs necessary to make the sale.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be readily measured, regardless of when the payment is being made. Revenue is measured at fair value of the consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government which are levied on sales such as Goods and Services Tax. Revenue is recognised either in time or point of time, when (or as) the Company satisfies performance obligations by transfering the goods or services to its customers.
The company applies the revenue recognition criteria to each separately identifiable component of the sales transaction as mentioned in Statement of Profit & Loss.
i) Sale of Goods : Revenue from sale of coils and pipe is recognised at the point of dispatch of the finished goods to the customers against invoice. The company collects Goods & Service Tax on behalf of the government and therefore these are not economic benefits flowing to the companies, hence, they are excluded from the revenues.
ii) Export Benefits : Export Benefits constituting import duty benefits under Duty Draw Back are accounted for on accural basis. The same is recognised in the books of accounts in the year in which the right to receive the duty draw back credit as per the terms of the scheme is established in respect of the export made.
iii) Dividends : Dividend Income is recognised when the right to receive payment is established.
iv) Interest Income : Interest Income is recognised on a time proportion basis taking into account
the amount outstanding and the interest rate applicable.
v) Insurance Claims : Claims receivable on account of insurance are accounted for on accural basis.
2.7 FOREIGN EXCHANGE TRANSACTION
Transactions denominated in foreign currencies are translated into functional currency using the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.
Monetary items denominated in foregin currencies at the year end are restated at year end rates. In the case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.
Non-monetary foreign currency items are carried at cost.
In respect of integral foreign operations, all transactions are translated at rates prevailing on the date of transaction or that approximates the actual rate at the date of transaction. Monetary assets and liabilities are restated at the year end rates.
Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Statement of Profit and Loss, except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.
2.8 BORROWING COSTS
Borrowing cost attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of such asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred. Borrowing Cost consist of Interest, Other Cost that an entity incurs in connection with the borrowing of funds. Investment income earned on the temporary investment of specific borrowing pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalization.
2.9 EMPLOYEE BENEFITS
i) POST EMPLOYMENT BENEFITS
Defined Contribution Plan : A defined contribution plan is a post-employment benefit plan under which the Company pays specified contibutions to a separate entity. The Company makes specified monthly contributions towards Provident Fund, Superannuation Fund and Pension Scheme. The Company''s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Defined benefit and other Long term Benefit plan : The liability in respect of defined benefit plan and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefits is expected to be derived from employees'' services.
Actuarial gains and losses in respect of post-employment and other long term benefits are
charged to the Statement of Profit and Loss. ii) SHORT TERM EMPLOYEE BENEFITS
All employee benefits payable wholly within twelve months of rendering the services are classified as short-term employee benefits, such as salaries, wages, bonus etc.The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services. These benefits include performance incentive and compensated absences.
2.10 TAXATION
Income Tax comprised of Current, Deferred Taxes and Mat Credit.
i) Current Income Tax :
Current Income Tax for the current and prior periods are measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. The tax rates and tax laws used to compute the current tax amounts are those that are enacted or substantively enacted as at the reporting date and applicable for the period. While determining the tax provisions, the Company assesses whether each uncertaintax position is to be considered separately or together with one or more uncertain tax positions depending the nature and circumstances of each uncertain tax position.
The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either tosettle on a net basis, or to realize the asset and liability simultaneously.
ii) Deferred Income Tax :
Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in financial statements, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profits or loss at the time of the transaction.
Deferred income tax assets are recognized to the extent it is probable that taxable profit will be available against whichthe deductible temporary differences and the carry forwardof unused tax credits and unused tax losses can be utilized. The carrying amount of deferred income 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 income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
iii) MAT Credit :
MAT Credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal Income Tax during the specified period. In the year in
which the MAT Credit becomes eligible to be recognised as an asset in accordance witht the recommendation contained in Guidance Notes issued by the ICAI, the said asset is created by way of a credit to the statement of profit & loss and shown as MAT Credit entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.
2.11 ACCOUNTING FOR DERIVATIVE INSTRUMENT
In respect of derivative contracts, premium paid, gains/losses on settlement and losses on restatement are recognised in the Profit and Loss Statement except in case where they relate to the acquisition or construction of Fixed Assets, in which case, adjusted to the carrying cost of such assets.
2.12 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions are recognised in the accounts, when there is a present obligation as a result of past event(s) and when a reliable estimate of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the currrent best estimate. Provisions are discounted to their present values, where the time value of money is material.
Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent Assets are neither recognised nor disclosed in the financial statements.
2.13 EARNING/(LOSS) PER SHARE
Basic earnings/(Loss) per share are calculated by dividing the net profit/ (Loss) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year are adjusted for events of bonus issue to existing shareholders; share split; and reverse share split (consolidation of shares).
For the purpose of calculating diluted earnings/(Loss) per share, the net profit/(Loss) for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
Mar 31, 2018
1.1 BASIS OF PREPARTION OF FINANCIAL STATEMENTS
i) The financial statements have been prepared to comply with the Generally Accepted Accounting Principle in India (Indian GAAP), including the Accounting Standards notified under the relevent provisions of the Companies Act, 203.
ii) The Financial Statements are prepared on accural basis under the historical cost convention, except for certain Fixed Assets which are carried at revalued amounts.
1.2 USE OF ESTIMATES
The prepration of financial statements in confirmity with Indian Generally Accepted Accounting Principles requires judgement, estimates and assumptions to be made that affect the reported amount of asssets and liablities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period.Differences between the actual results and estimates are recognised in the period in which the results are known/materialised.
1.3 REVENUE RECOGNITION
Revenue is recognised only when risks and rewards incidential to ownership are transferred to the customer, it can be reliably measured and it is resonable to except ultimate collection. Revenue from operation includes sale of goods, services, service tax, excise duty and sales during trial run period, adjusted for discounts (net), and gain/loss on corresponding hedge contracts.
Dividend Income is recognised when the right to receive payment is established.
Interest Income is recognised on a time proportion basis taking into account the amount outstanding and the interest rate applicable.
1.4 TAXATION
Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deffered tax assets are recognised only to the extent that there is a reasonable certainity that sufficient further income will be available except that deferred tax assets, in case there are unabsorbed depreciation or losses, are recognised if there is virtual certainty that sufficient further taxable income will be available to realise the same.
Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.
1.5 FIXED ASSETS
i) Tangible assets
Tangible assets are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation, less accumulated depreciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
Subsequent expenditures related to an item of Tangible Assets are added to its book value only if they increase the future benefits from the existing assets beyond its previously assessed standard of performance.
Projects under which assets are not ready for their intended use are disclosed under Capital Work-in-Progress.
ii) Intangible assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation/ depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.
1.6 ACCOUNTING FOR DERIVATIVE INSTRUMENT
In respect of derivative contracts, premium paid, gains/losses on settlement and losses on restatement are recognised in the Profit and Loss Statement except in case where they relate to the acquisition or construction of Fixed Assets, in which case, adjusted to the carrying cost of such assets.
1.7 DEPRECIATION
Depreciation on Fixed Assets is provided on Straight Line Method (SLM). Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act , 2013 except in respect of the following assets, where useful life is diiferent than those prescribed in Schedule II are used.
In respect of addition or extensions forming an integral part of existing assets and insurance spares, including incremental cost arising on account of translation of foreign currency liabilities for acquisition of Fixed Assets, depreciaton is provided as aforesaid over the residual life of the respective assets.
1.8 VALUATION OF INVENTORIES
Items of Inventories are measured at lower of cost or net realisable value after providing for obsolescence , if any, except in case of by-products which are valud at the net realisable value. Cost of inventories comprises of all costs of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. Cost of raw materials, process chemicals, store and spares, packing materials, trading and other products are determined on weighted average basis.
1.9 EMPLOYEE BENEFITS
POST EMPLOYMENT BENEFITS
i) Defined Contribution Plan
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contibutions to a separate entity. The Company makes specified monthly contributions towards Provident Fund, Superannuation Fund and Pension Scheme. The Companys contribution is recognised as an expense in the Profit and Loss Statement during the period in which the employee renders the related service.
ii) Defined benefit and other Long term Benefit plan:
The liability in respect of defined benefit plan and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefits is expected to be derived from employeesâ services.
Actuarial gains and losses in respect of post-employment and other long term benefits are charged to the Profit and Loss Statement.
SHORT TERM EMPLOYEE BENEFITS
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services. These benefits include performance incentive and compensated absences.
1.10 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provision is recognised in the accounts, when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Contingent liabilities are disclosed unless the possibility of outflow of resources is remote.
Contingent Assets are neither recognised nor disclosed in the financial statements.
1.11 INVESTMENTS
Current investments are carried at lower of cost or quoted/fair value. Long term investments are stated £ cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.
1.12 BORROWING COSTS
Borrowing cost attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of such asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.
1.13 IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
1.14 EARNING/ (LOSS) PER SHARE
Basic earnings/(Loss) per share are calculated by dividing the net profit/ (Loss) for the year attributable tc equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year are adjusted for events of bonus issue to existing shareholders; share split; and reverse share split (consolidation of shares).
For the purpose of calculating diluted earnings/(Loss) per share, the net profit/(Loss) for the year attributabl to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
1.15 FOREIGN EXCHANGE TRANSACTION
a. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.
b. Monetaty items denominated in foregin currencies at the year end are restated at year end rates. In the case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract .
c. Non -monetary foreign currency items are carried at cost.
d. In respect of integral foreign operations, all transactions are translated at rates prevailing on the date of transaction or that approximates the actual rate at the date of transaction . Monetary assets and liabilities are restated at the year end rates.
e. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss Statement , except in case of long term liabilities , where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.
Mar 31, 2015
1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS
i) The financial statements have been prepared to comply with the
Generally Accepted Accounting Prin- ciple in India (Indian GAAP),
including the Accounting Standards notified under the relevant
provisions of the Companies Act, 2013.
ii) The Financial Statements are prepared on accural basis under the
historical cost convention, except for certain Fixed Assets which are
carried at revalued amounts.
1.2 USE OF ESTIMATES
The preparation of financial statements in confirmity with Indian
Generally Accepted Accounting Prin- ciples requires judgement,
estimates and assumptions to be made that affect the reported amount of
assets and labilities, disclosure of contingent liabilities on the date
of the financial statements and the reported amount of revenues and
expenses during the reporting period. Differences between the actual
results and estimates are recognised in the period in which the results
are known/materialised.
1.3 REVENUE RECOGNITION
Revenue is recongnised only when risks and rewards incidential to
ownership are transferred to the customer, it can be reliably measured
and it is reasonable to except ultimate collection. Revenue from
operation includes sale of goods, services, service tax, excise duty
and sales during trial run period, adjusted for discounts (net), and
gain/loss on corresponding hedge contracts.
Dividend Income is recognised when the right to receive payment is
established.
Interest Income is recognised on a time proportion basis taking into
account the amount outstanding and the interest rate applicable.
1.4 TAXATION
Tax expense comprises of current tax and deferred tax. Current tax is
measured at the amount expected to be paid to the tax authorities,
using the applicable tax rates. Deferred income tax reflect the current
period timing differences between taxable income and accounting income
for the period and reversal of timing differences of earlier
years/period. Deferred tax assets are recognised only to the extent
that there is a reasonable certainity that sufficient further income
will be available except that deferred tax assets, in case there are
unabsorbed depreciation or losses, are recognised if there is virtual
certainty that suffi- cient further taxable income will be available to
realise the same.
Deferred tax assets and liabilities are measured using the tax rates
and tax law that have been enacted or substantively enacted by the
Balance Sheet date.
1.5 FIXED ASSETS
i) Tangible assets
Tangible assets are stated at cost net of recoverable taxes, trade
discounts and rebates and include amounts added on revaluation, less
accumulated depreciation and impairment loss, if any. The cost of
Tangible Assets comprises its purchase price, borrowing cost and any
cost directly attributable to bringing the asset to its working
condition for its intended use, net charges on foreign exchange
contracts and adjustments arising from exchange rate variations
attributable to the assets.
Subsequent expenditures related to an item of Tangible Assets are added
to its book value only if they increase the future benefits from the
existing assets beyond its previously assessed standard of perfor-
mance.
Projects under which assets are not ready for their intended use are
disclosed under Capital Work-in- Progress.
ii) Intangible assets
Intangible Assets are stated at cost of acquisition net of recoverable
taxes less accumulated amorti- sation/depletion and impairment loss, if
any. The cost comprises purchase price, borrowing costs, and any cost
directly attributable to bringing the asset to its working condition
for the intended use and net charges on foreign exchange contracts and
adjustments arising from exchange rate variations attributable to the
intangible assets.
1.6 ACCOUNTING FOR DERIVATIVE INSTRUMENT
In respect of derivative contracts, premium paid, gains/losses on
settlement and losses on restatement are recognised in the Profit and
Loss Statement except in case where they relate to the acquisition or
construction of Fixed Assets, in which case, adjusted to the carrying
cost of such assets.
1.7 DEPRECIATION
Depreciation on Fixed Assets is provided on Straight Line Method (SLM).
Depreciation is provided based on useful life of the assets as
prescribed in Schedule II to the Companies Act , 2013 except in respect
of the following assets, where useful life is different than those
prescribed in Schedule II are used.
In respect of addition or extensions forming an integral part of
existing assets and insurance spares, including incremental cost
arising on account of translation of foreign currency liabilities for
acquisition of Fixed Assets, depreciation is provided as aforesaid over
the residual life of the respective assets.
1.8 VALUATION OF INVENTORIES
Items of Inventories are measured at lower of cost or net realisable
value after providing for obsoles- cence , if any, except in case of
by-products which are valued at the net releasable value. Cost of
inven- tories comprises of all costs of purchase, cost of conversion
and other costs including manufacturing overhead incurred in bringing
them to their respective present location and condition. Cost of raw
mate- rials, process chemicals, store and spares, packing materials,
trading and other products are determined on weighted average basis.
1.9 EMPLOYEE BENEFITS
POST EMPLOYMENT BENEFITS
i) Defined Contribution Plan
A defined contribution plan is a post-employment benefit plan under
which the Company pays speci- fied contributions to a separate entity.
The Company makes specified monthly contributions towards Provident
Fund, Superannuation Fund and Pension Scheme. The Company's
contribution is recognised as an expense in the Profit and Loss
Statement during the period in which the employee renders the related
service.
ii) Defined benefit and other Long term Benefit plan:
The liability in respect of defined benefit plan and other
post-employment benefits is calculated using the Projected Unit Credit
Method and spread over the period during which the benefits is expected
to be derived from employees' services.
Actuarial gains and losses in respect of post-employment and other long
term benefits are charged to the Profit and Loss Statement.
SHORT TERM EMPLOYEE BENEFITS
The undiscounted amount of short term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
as an expense during the period when the employees render the services.
These benefits include performance incentive and compensated absences.
1.10 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provision is recognised in the accounts, when there is a present
obligation as a result of past event(s) and it is probable that an
outflow of resources will be required to settle the obligation and a
reliable estimate can be made. Provisions are not discontinued to their
present value and are determined based on the best estimate required to
settle the obligation at the reporting date. These estimates are
reviewed at each reporting date and adjusted to reflect the current
best estimates.
Contingent liabilities are disclosed unless the possibility of outflow
of resources is remote.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
1.11 INVESTMENTS
Current investments are carried at lower of cost or quoted/fair value.
Long term investments are stated at cost. Provision for diminution in
the value of long term investments is made only if such a decline is
other than temporary.
1.12 BORROWING COSTS
Borrowing cost attributable to the acquisition or construction of a
qualifying asset are capitalised as part of the cost of such asset. A
qualifying asset is one that necessarily takes substantial period of
time to get ready for intended use. All other borrowing costs are
recognised as an expense in the period in which they are incurred.
1.13 IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impair- ment loss is charged to the profit
and loss account in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount.
1.14 EARNING/ (LOSS) PER SHARE
Basic earnings/(Loss) per share are calculated by dividing the net
profit/ (Loss) for the year attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year.
The weighted average number of equity shares outstanding during the
year are adjusted for events of bonus issue to existing shareholders;
share split; and reverse share split (consolidation of shares).
For the purpose of calculating diluted earnings/(Loss) per share, the
net profit/(Loss) for the year attribut- able to equity shareholders
and the weighted average number of shares outstanding during the year
are adjusted for the effects of all dilutive potential equity shares.
1.15 FOREIGN EXCHANGE TRANSACTION
a. Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction or that
approximates the actual rate at the date of the transaction.
b. Monetary items denominated in foreign currencies at the year end are
restated at year end rates. In the case of items which are covered by
forward exchange contracts, the difference between the year end rate
and rate on the date of the contract is recognised as exchange
difference and the premium paid on forward contracts is recognised over
the life of the contract .
c. Non -monetary foreign currency items are carried at cost.
d. In respect of integral foreign operations, all transactions are
translated at rates prevailing on the date of transaction or that
approximates the actual rate at the date of transaction . Monetary
assets and liabilities are restated at the year end rates.
e. Any income or expense on account of exchange difference either on
settlement or on translation is recognised in the Profit and Loss
Statement , except in case of long term liabilities , where they relate
to acquisition of fixed assets, in which case they are adjusted to the
carrying cost of such assets.
Mar 31, 2014
1.1 BASIS OF PREPARTION OF FINANCIAL STATEMENTS
i) The financial statements are prepared under the historical cost
convention, in accordance with the generally accepted accounting
principles in India, the provisions of the Companies Act, 1956 and
applicable accounting standards.
ii) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
principles.
iii) Financial statements for the year ended 31 st March, 2014 have
been prepared based on revised Schedule VI of the Companies Act, 1956.
The adoption of revised Schedule VI does not impact recognition and
measurement principles of individual items within this Financial
stalments. However, it has significant impact on presentation and
disclosures made in the financial statements. The Company has
accordingly reclassified the previous year''s figures to meet the
requirements applicable for the current year.
1.2 USE OF ESTIMATES
The prepratlon of financial statements in confiunity with generally
accepted accounting principles requires estimates and assumptions to be
made that effect the reported amount of asssets and liabilities on the
date of the financial statements and the reported amount of revenue and
expenses during the reporting period.Differences between the actual
results and estimates are recognised in the period in which ihe results
are known/materialised.
1.3 REVENUE RECOGNITION
Revenue is recongnised only when it can be reliably measured and is
reasonable to expect ultimate collection. Revenue from operations
includes sale of goods, services, sales tax, excise duty and sales
during the trial run period, adjusted lor discounts, value added tax
and gain/loss on corresponding hedge contracts.
1.4 TAXATION
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, I 96 I.
Deferred tax resulting from timing differences between book and taxable
profit is accounted for using the tax rates and laws that have been
etiacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognised and carried forward only to the extent
that there is a reason able/virtual certainty, as the case may be, that
the asset will be realised in future.
1.5 FIXED ASSETS
i) Tangible assets
Owned tangible fixed assets are stated at cost less accumulated
depreciation and impairment loss, if any. All costs relating to
acquistion and installation of fixed assets upto the time tire assets
get ready for their intended use are capitalised.
ii) Intangible assets
Intangible assets are recognised only if acquired and it is probable
that the future economic benefits that are attributable to (he assets
will flow to (he Company and the cost of assets can be measured
reliably. The intangible assets are recorded at cost and are carried at
cost less accumulated depreciation and accumulated impairment losses,
if any.
1.6 ACCOUNTING FOR DERIVATIVE INSTRUMENTS
In respect of derivative contracts, premium paid, gains/losses on
settlement and losses on rcstatment are recognised in the profit and
loss account except in case where they arc relate to the acquisition or
construction of fixed assets, in which case, they are adjusted to the
carrying cost of such assets.
1.7 DEPRECIATION
Depreciation on fixed assets has been provided on the Straight line
method in accordance with the provisions of Section 205{2XbJ of the
Companies Act, 1956 and in the manner and at the rates specified in
Schedule XIV of the Companies Act, 1956,,
1.8 VALUATION OF INVENTORIES
Inventories ate valued at lower of cost or net realisable value after
providing for obsolescence, if any. Cost of inventories comprises of
all costs of purchase* cost of conversion and other costs including
manufacturing overheads incurred in bringing them lo their respective
present location and condition. Cost of raw material store and spares
and other products are determined on E:IFO basis. By- products.11 Scrap
are valued at net realisable value.
1.9 EMPLOYEE BENEFITS
i) Defined Contribution Plan
Company''s contribution paid/payable for the year to defined
contribution schemes are charged to statement of Profit & Lj>ss,
ii) Defined benefit and other Long term Benefit plan;
Company liablity towards defined benefit plans and other long term
benefit plan arc determined on the basis of actuarial valuations.
Actuarial valuations are carried out at the balance sheet date,
Actuarial gains and losses are recognised in the statement of profit
and loss in the period of occurence of such gain and losses.
The employee benefit obligation recognised in the balance sheet
represent the present value of the defined benefit obligation as
adjusted for unrecognised past service cost.
iii) Short Term Employee Benefits:
Short-term employees benefit expected to be paid in exchange for the
services rendered by employees are recongnised undiscounted during the
period employee renders services.
1.10 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving a substantial degree of estimation in measurement
arc recognised when (here is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed iu the
notes. Contingent assets arc neither recognised nor disclosed in the
financial statements
1.11 INVESTMENTS
Current investments are carried at lower of cost or quoted/fkir value,
Long term investments are seated at cost. Provision for diminution in
the value of long term investments is made only if such a decline is
other than temporary,
1.12 BORROWING COSTS
Borrowing cost attributable to the acquisition or construction of a
qualifying asset are capitalised as pad of (he cost of such asset, A
qualifying asset is one that necessarily lakes substantial period of
time to get ready for intended use, Ad other borrowing costs are
recognised as an expense in the period in which they are incurred.
1.13 IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the profit and
loss account in the year in which an asset is identified as impaired.
The impairment loss recognised in prior accounting period is reversed
if there has been a change in the estimate of recoverable amount.
1.14 EARNING/ (LOSS) PER SHARE
fiasic earnings/(Loss) per share are calculated by dividing the net
profit'' (Loss) for the year attributable to equity shareholders by the
Weighted average number of equity shares outstanding during the year.
The weighted average number of equity shares outstanding during the
year are adjusted for events of bonus issue to existing shareholders:
share split; and reverse share split (consolidation of shares),
For the purpose of calculating diluted earnings/(Loss) per share, the
net pro ft t/( Loss) for the year attributable to equity shareholders
and the weighted average number of shares outstanding during the year
are adjusted for the effects of all dilutive potential equity shares,
1.15 FOREIGN EXCHANGE TRANSACTON
Transaction in Foreign Currency are recorded at ihe exchange rates
prevailing on the date of transaction. Monetary'' items are restated at
the period end rates. The exchange difference between the rate
prevailing on the date of transaction and on settlement/restalment is
recognised as income or expense us the case may be.
Mar 31, 2013
1.1 BASIS OF PREPARTION OF FINANCIAL STATEMENTS
i) The financial statements are prepared under the historical cost
convention, in accordance with the generally accepted accounting
principles in India, the provisions of the Companies Act, 1956 and
applicable accounting standards.
ii) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
principles.
iii) Financial statements for the year ended 31 st March, 2013 have
been prepared based on revised Schedule VI of the Companies Act, 1956.
The adoption of revised Schedule VI does not impact recognition and
measurement principles of individual items within this Financial
statments. However, it has significant impact on presentation and
disclosures made in the financial statements. The Company has
accordingly reclassified the previous year''s figures to meet the
requirements applicable for the current year.
1.2 USE OF ESTIMATES
The prepration of financial statements in confirmity with generally
accepted accounting principles requires estimates and assumptions to be
made that effect the reported amount of assets and liablities on the
date of the financial statements and the reported amount of revenue and
expenses during the reporting period.Differences between the actual
results and estimates are recognised in the period in which the results
are known/materialised.
1.3 REVENUE RECOGNITION
Revenue is recongnised only when it can be reliably measured and is
reasonable to expect ultimate collection. Revenue from operations
includes sale of goods, services, sales tax, excise duty and sales
during the trial run period, adjusted for discounts, value added tax
and gain/loss on corresponding hedge contracts.
1.4 TAXATION
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from timing differences between book and taxable
profit is accounted for using the tax rates and laws that have been
enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognised and carried forward only to the extent
that there is a reasonable/virtual certainty, as the case may be, that
the asset will be realised in future.
1.5 FIXED ASSETS
i) Tangible assets : Owned tangible fixed assets are stated at cost
less accumulated depreciation and impairment loss, if any. All costs
relating to acquistion and installation of fixed assets upto the time
the assets get ready for their intended use are capitalised.
ii) Intangible assets : Intangible assets are recognised only if
acquired and it is probable that the future economic benefits that are
attributable to the assets will flow to the Company and the cost of
assets can be measured reliably. The intangible assets are recorded at
cost and are carried at cost less accumulated depreciation and
accumulated impairment losses, if any.
1.6 ACCOUNTING FOR DERIVATIVE INSTRUMENTS
In respect of derivative contracts, premium paid, gains/losses on
settlement and losses on restatment are recognised in the profit and
loss account except in case where they are relate to the acquisition or
construction of fixed assets, in which case, they are adjusted to the
carrying cost of such asset.
1.7 DEPRECIATION
Depreciation on fixed assets has been provided on the Straight line
method in accordance with the provisions of Section 205(2)(b) of the
Companies Act, 1956 and in the manner and at the rates specified in
Schedule XIV of the Companies Act, 1956.
1.8 VALUATION OF INVENTORIES
Inventories are valued at lower of cost or net realisable value after
providing for obsolescence, if any. Cost of inventories comprises of
all costs of purchase, cost of conversion and other costs including
manufacturing overheads incurred in bringing them to their respective
present location and condition. Cost of raw material store and spares
and other products are determined on FIFO basis. By- products/ Scrap
are valued at net realisable value.
1.9 EMPLOYEE BENEFITS
i) Defined Contribution Plan : Company''s contribution paid/payable for
the year to defined contribution schemes are charged to statement of
Profit & Loss.
ii) Defined benefit and other Long term Benefit plan : Company liablity
towards defined benefit plans and other long term benefit plan are
determined on the basis of actuarial valuations. Actuarial valuations
are carried out at the balance sheet. Actuarial gains and losses are
recognised in the statement of profit and loss in the period of
occurence of such gain and losses.
The employee benefit obligation recognised in the balance sheet
represent the present value of the defined benefit obligation as
adjusted for unrecognised past service cost.
iii) Short Term Employee Benefits : Short-term employees benefit
expected to be paid in exchange for the services rendered by employees
are recongnised undiscounted during the period employee renders
services.
1.10 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving a substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liablities are not recognised but are disclosed in the
notes. Contingent assets are neither recognised nor disclosed in the
financial statements
1.11 INVESTMENTS
Current investments are carried at lower of cost or quoted/fair value.
Long term investments are stated at cost. Provision for diminution in
the value of long term investments is made only if such a decline is
other than temporary.
1.12 BORROWING COSTS
Borrowing cost attributable to the acquisition or construction of a
qualifying asset are capitalised as part of the cost of such asset. A
qualifying asset is one that necessarily takes substantial period of
time to get ready for intended use. All other borrowing costs are
recognised as an expense in the period in which they are incurred.
1.13 IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the profit and
loss account in the year in which an asset is identified as impaired.
The impairment loss recognised in prior accounting period is reversed
if there has been a change in the estimate of recoverable amount.
1.14 EARNING/(LOSS) PER SHARE
Basic earnings/(Loss) per share are calculated by dividing the net
profit/ (Loss) for the year attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year.
The weighted average number of equity shares outstanding during the
year are adjusted for events of bonus issue to existing shareholders;
share split; and reverse share split (consolidation of shares).
For the purpose of calculating diluted earnings/(Loss) per share, the
net profit/(Loss) for the year attributable to equity shareholders and
the weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
1.15 FOREIGN EXCHANGE TRANSACTON
Transaction in Foreign Currency are recorded at the exchange rates
prevailing on the date of transaction. Monetary items are restated at
the period end rates. The exchange difference between the rate
prevailing on the date of transaction and on settlement/res.tatment is
recognised as income or expense as the case may be.
Mar 31, 2012
1.1 BASIS OF PREPARTION OF FINANCIAL STATEMENTS
i) The financial statements are prepared under the historical cost
convention, in accordance with the generally accepted accounting
principles in India, the provisions of the Companies Act, 1956 and
applicable accounting standards.
ii) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
principles.
1.2 USE OF ESTIMATES
The prepration of financial statements in confirmity with generally
accepted accounting principles requires estimates and assumptions to be
made that effect the reported amount of asssets and liablities on the
date of the financial statements and the reported amount of revenue and
expenses during the reporting period.Differences between the actual
results and estimates are recognised in the period in which the results
are known/materialised.
1.3 REVENUE RECOGNITION
Revenue is recongnised only when it can be reliably measured and is
reasonable to expect ultimate collection. Revenue from operations
includes sale of goods, services, sales tax, excise duty and sales
during the trial run period, adjusted for discounts, value added tax
and gain/loss on corresponding hedge contracts.
1.4 TAXATION
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from timing differences between book and taxable
profit is accounted for using the tax rates and laws that have been
enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognised and carried forward only to the extent
that there is a reasonable/virtual certainty, as the case may be, that
the asset will be realised in future.
1.5 FIXED ASSETS
i) Tangible assets
Owned tangible fixed assets are stated at cost less accumulated
depreciation and impairment loss, if any. All costs relating to
acquistion and installation of fixed assets upto the time the assets
get ready for their intended use are capitalised.
ii) Intangible assets
Intangible assets are recognised only if acquired and it is probable
that the future economic benefits æ
that are attributable to the assets will flow to the Company and the
cost of assets can be measured reliably. The intangible assets are
recorded at cost and are carried at cost less accumulated depreciation
and accumulated impairment losses, if any.
1.6 ACCOUNTING FOR DERIVATIVE INSTRUMENTS
In respect of derivative contracts, premium paid, gains/losses on
settlement and losses on restatment are recognised in the profit and
loss account except in case where they are relate to the acquisition or
construction of fixed assets, in which case, they are adjusted to the
carrying cost of such asset.
1.7 DEPRECIATION
Depreciation on fixed assets has been provided on the Straight line
method in accordance with the provisions of Section 205(2)(b) of the
Companies Act, 1956 and in the manner and at the rates specified in
Schedule XIV of the Companies Act, 1956..
1.8 VALUATION OF INVENTORIES
Inventories are valued at lowe of cost or net realisable value after
providing for obsolescence , if any.. Cost of inventories comprises of
all costs of purchase, cost of conversion and other costs including
manufacturing overheads incurred in bringing them to their respective
present location and condition. Cost of raw material
store and spares and other products are determined on FIFO basis. By-
products/ Scrap are valued at net realisable value.
1.9 EMPLOYEE BENEFITS
i) Defined Contribution Plan
Company's contribution paid/payable for the year to defined
contribution schemes are charged to statement of Profit & Loss.
ii) Defined benefit and other Long term Benefit plan :
Company liablity towards defined benefit plans and other long term
benefit plan are determined on the basis of actuarial valuations.
Actuarial valuations are carried out at the balance sheet. Actuarial
gains and losses are recognised in the statement of profit and loss in
the period of occurence of such gain and losses.
The employee benefit obligation recognised in the balance sheet
represent the present value of the defined benefit obligation as
adjusted for unrecognised past service cost.
iii) Short Term Employee Benefits:
Short-term employees benefit expected to be paid in exchange for the
services rendered by employees are recongnised undiscounted during the
period employee renders services.
1.10 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving a substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liablities are not recognised but are disclosed in the
notes. Contingent assets are neither recognised nor disclosed in the
financial statements
1.11 INVESTMENTS
Current investments are carried at lower of cost or quoted/fair value.
Long term investments are stated at cost. Provision for diminution in
the value of long term investments is made only if such a decline is
other than temporary.
1.12 BORROWING COSTS
Borrowing cost attributable to the acquisition or construction of a
qualifying asset are capitalised as part of the cost of such asset. A
qualifying asset is one that necessarily takes substantial period of
time to get ready for intended use. All other borrowing costs are
recognised as an expense in the period in which they are incurred.
1.13 IMPAIRMENT OFASSETS
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the profit and
loss account in the year in which an asset is identified as impaired.
The impairment loss recognised in prior accounting period is reversed
if there has been a change in the estimate of recoverable amount.
1.14 EARNING/(LOSS) PER SHARE
Basic earnings/(Loss) per share are calculated by dividing the net
profit/ (Loss) for the year attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year.
The weighted average number of equity shares outstanding during the
year are adjusted for events of bonus issue to existing shareholders;
share split; and reverse share split (consolidation of shares).
For the purpose of calculating diluted earnings/(Loss) per share, the
net profit/(Loss) for the year attributable to equity shareholders and
the weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
1.15 FOREIGN EXCHANGE TRANSACTON
Transaction in Foreign Currency are recorded at the exchange rates
prevailing on the date of transaction. Monetary items are restated at
the period end rates. The exchange differnce between the rate
prevailing on the date of transaction and on settlement/restatment is
recognised as income or expense as the case may be.
Mar 31, 2010
I) GENERAL
a) The financial statements are prepared under the historical cost
convention and in accordance with the requirement of the Companies Act,
1956.
b) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
principles.
ii) BASIS OF ACCOUNTING
The Company follows the mercantile system of Accounting and recognises
income and expenditure on accrual basis.
iii) SALES Sales are inclusive of Excise Duty but net of Sales Tax.
iv) TAXATION
The current charge for income tax is calculated in accordance with the
relevant tax regulations applicable to the Company. Deferred tax assets
and liabilities are recognised for future tax consequences attributable
to the timing differences that result between the profit offered for
income tax and the profit as per the financial statements. Deferred tax
assets and liabilities are measured as per the tax rates / laws that
have been enacted or substantively enacted by the Balance Sheet date.
v) FIXED ASSETS AND DEPRECIATION
a) VALUATION OF FIXED ASSETS
Fixed Assets are stated at cost of acquisition inclusive of all
incidental expenses related thereto.
b) DEPRECIATION
Depreciation on all fixed assets has been provided on straight line
method on pro-rata basis for the period of use at the rates specified
in SCHEDULE XIV to the Companies Act, 1956.
vi) VALUATION OF INVENTORIES
Raw Materials, stores and spare parts are valued at cost. Finished
Goods & Scrap are valued at cost or Market value whichever is lower.
vii) RETIREMENT BENEFITS.
Gratuity and Leave Encashment is accounted for on accrual basis, on the
basis of actuarial valuations.
viii) CONTINGENT LIABILITIES
Contingent liabilities are usually not provided for unless it is
probable that the future outcome may be materially detrimental to the
Company and are disclosed by way of notes.
ix) INVESTMENTS
Investments are stated at cost.
x) IMPAIRMENT
i. The carrying amounts of assets are reviewed at each balance sheet
date if there is any indication of impairment based on
internal/external factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is the greater of the assets net selling price and
value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value at the weighted average
cost of capital.
ii. After impairment, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life.
iii. A previously recognized impairment loss is increased or reversed
depending on changes in circumstances. However the carrying value after
reversal is not increased beyond the carrying value that would have
prevailed by charging usual depreciation if there was no impairment.
xi) EXPENDITURE ON NEW PROJECTS AND SUBSTANTIAL EXPANSION
Expenditure directly relating to construction activity is capitalized.
Indirect expenditure incurred during construction period is capitalized
as part of the indirect construction cost to the extent to which the
expenditure is indirectly related to construction or is incidental
thereto. Other indirect expenditure (including borrowing costs)
incurred during the construction period, which are not related to the
construction activity nor is incidental thereto are charged to the
Profit & Loss Account. Income earned during construction period is
deducted from the total of the indirect expenditure.
All direct capital expenditure on expansion is capitalized. As regards
indirect expenditure on expansion, only that portion is capitalized
which represents the marginal increase in such expenditure involved as
a result of expansion. Both direct and indirect expenditure are
capitalized only if they increase the value of the asset beyond its
originally assessed standard of performance.
xii) EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they were entitled to participate in dividends relative to
a fully paid equity share during the reporting period. The weighted
average number of equity shares outstanding during the year is adjusted
for events of bonus issue to existing shareholders; share split; and
reverse share split (consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
xiii) PROVISIONS
A provision is recognized when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions except those disclosed
elsewhere in the notes to the financial statements, are not discounted
to its present value and are determined based on best estimate required
to settle the obligation at the balance sheet date. These are reviewed
at each balance sheet date and adjusted to reflect the current best
estimates.
xiv) FOREIGN EXCHANGE TRANSACTON
Transaction in Foreign Currency are converted at the rates prevailing
on the date of transaction. Gain/Loss on Realization/Payment of revenue
transaction in the same year is charged to "Exchange Fluctuation
Account" in the Profit & Loss Account.
Mar 31, 2009
GENERAL
a) The financial statements are prepared under the historical cost
convention and in accordance with the requirement of the Companies Act,
1956.
b) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
principles.
ii) BASIS OF ACCOUNTING
The Company follows the mercantile system of Accounting and recognises
income and expenditure on accrual basis.
iii) SALES
Sales are inclusive of Excise Duty but net of Sales Tax.
iv) TAXATION
The current charge for income tax is calculated in accordance with the
relevant tax regulations applicable to the Company. Deferred tax assets
and liabilities are recognised for future tax consequences attributable
to the timing differences that result between the profit offered for
income tax and the profit as per the financial statements. Deferred tax
assets and liabilities are measured as per the tax rates / laws that
have been enacted or substantively enacted by the Balance Sheet date.
v) FIXED ASSETS AND DEPRECIATION
a) VALUATION OF FIXED ASSETS
Fixed Assets are stated at cost of acquisition inclusive of all
incidental expenses related thereto.
b) DEPRECIATION
Depreciation on all fixed assets has been provided on straight line
method on pro-rata basis for the period of use at the rates specified
in SCHEDULE XIV to the Companies Act, 1956.
vi) VALUATION OF INVENTORIES
Raw Materials, stores and spare parts are valued at cost. Finished
Goods & Scrap are valued at cost or Market value whichever is lower.
vii) RETIREMENT BENEFITS.
Gratuity and Leave Encashment is accounted for on accrual basis, on the
basis of actuarial valuations.
viii) CONTINGENT LIABILITIES
Contingent liabilities are usually not provided for unless it is
probable that the future outcome may be materially detrimental to the
Company and are disclosed by way of notes.
ix) INVESTMENTS
Investments are stated at cost.
x) IMPAIRMENT
i. The carrying amounts of assets are reviewed at each balance sheet
date if there is any indication of impairment based on
internal/external factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is the greater of the assets net selling price and
value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value at the weighted average
cost of capital.
ii. After impairment, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life.
iii. A previously recognized impairment loss is increased or reversed
depending on changes in circumstances. However the carrying value after
reversal is not increased beyond the carrying value that would have
prevailed by charging usual depreciation if there was no impairment.
xi) EXPENDITURE ON NEW PROJECTS AND SUBSTANTIAL EXPANSION
Expenditure directly relating to construction activity is capitalized.
Indirect expenditure incurred during construction period is capitalized
as part of the indirect construction cost to the extent to which the
expenditure is indirectly related to construction or is incidental
thereto. Other indirect expenditure (including borrowing costs)
incurred during the construction period, which are not related to the
construction activity nor is incidental thereto are charged to the
Profit & Loss Account. Income earned during construction period is
deducted from the total of the indirect expenditure.
AH direct capital expenditure on expansion is capitalized. As regards
indirect expenditure on expansion, only that portion is capitalized
which represents the marginal increase in such expenditure involved as
a result of expansion. Both direct and indirect expenditure are
capitalized only if they increase the value of the asset beyond its
originally assessed standard of performance.
xii) EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they were entitled to participate in dividends relative to
a fully paid equity share during the reporting period. The weighted
average number of equity shares outstanding during the year is adjusted
for events of bonus issue to existing shareholders; share split; and
reverse share split (consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profit or foss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
xiii) PROVISIONS
A provision is recognized when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions except those disclosed
elsewhere in the notes to the financial statements, are not discounted
to its present value and are determined based on best estimate required
to settle the obligation at the balance sheet date. These are reviewed
at each balance sheet date and adjusted to reflect the current best
estimates.
xiv) FOREIGN EXCHANGE TRANSACTON
Transaction in Foreign Currency are converted at the rates prevailing
on the date of transaction. Gain/ Loss on Realization/Payment of
revenue transaction in the same year is charged to "Exchange
Fluctuation Account" in the Profit & Loss Account.
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