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Accounting Policies of Ind-Swift Ltd. Company
Mar 31, 2024
A - SIGNIFICANT ACCOUNTING POLICIES
1. Basis of Preparation of Financial Statements
These financial statements have been prepared to comply with the Indian Accounting Standards (Ind AS). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015 and Companies (Indian Accounting Standards) Amendment Rules 2016.
The Financial Statements are prepared on accrual basis under the historical cost convention. The financial statements are presented in Indian rupees rounded off to the nearest rupees in lacs.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
2. Use of Estimates
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes 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.
3. Property, Plant & Equipment
(a) Freehold land is carried at cost. All others items of Property, Plant and equipment have been stated at cost less accumulated depreciation and impairment loss if any. Cost of acquisition or construction is inclusive of freight, non refundable taxes or Levies, fees and incidental expenses to bring the assets to its present condition and location and interest on loans attributable to the acquisition of assets up to the date of commissioning of assets. Cost of assets not ready for intended use before the year end, are shown as capital -work-in- progress.
(b) The Company is following the useful life by applying straight line method of depreciation as per the useful life specified in part C of Schedule II of the Companies Act 2013.
On assets sold, discarded etc, during the year depreciation is provided up to the date of sale/discard.
4. Leases
The Company''s lease asset classes consist primarily of land and buildings . The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether : (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset. At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases.
For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses. ROU assets are depreciated
from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases.
Lease liabilities are remeasured with a corresponding adjustment to the related ROU asset if the Company changes its assessment of whether it will exercise an extension or a termination option. Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
5. Intangible Assets
(a) Intangible assets are measured at cost and amortized over their useful life.
(b) Expenditure on Research phase is recognised as an expense when it is incurred.
(c) Expenditure on product development phase is recognised as an Intangible Asset, These assets are amortized over the useful period of life starting from the year when the asset first meets the following recognition criteria:
⢠The technical feasibility of completing the intangible asset so that it will be available for use or sale;
⢠The intention to complete the intangible asset and use or sell it;
⢠the ability to use or sell the intangible asset;
⢠how the intangible asset will generate probable future economic benefits;
⢠the availability of adequate technical , financial and other resources to complete the development and to use or sell the intangible asset; and
⢠the ability to measure reliably the expenditure attributable to the intangible asset during its development.
(d) Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected form use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset , are recognised in statement of profit and loss when the asset is derecognized.
6. Inventories are valued as under
(a) Stock of Raw Material, Packing Material and Store & Spares :- At Cost or Net Realizable Value, whichever is lower. Cost ascertained on FIFO basis, excluding recoverable rates and taxes. Cost includes cost of purchase & other cost incurred in bringing the inventories to their present location.
(b) Stock of work in progress: - At material cost plus apportioned manufacturing overheads or net realizable value whichever is lower.
(c) Stock of Finished Goods: - At Cost or Net Realizable Value, whichever is lower. Cost includes material cost plus apportioned manufacturing overheads and expenditure incurred in the normal course of business in bringing such inventories to its present location.
(d) Stock in Transit: At Cost
7. Investments
Investments are classified into current and long term Investments.
(a) Long term investments are stated at cost of acquisition. Provision for diminution is made only to recognize a decline
other than temporary, if any, in the value of investments.
(b) Current investments are carried at lower of cost and fair market value.
8. Revenue Recognition
The Company derives revenues primarily from sale of pharmaceutical formulation business.
Ind AS 115 "Revenue from Contracts with Customers" provides a control-based revenue recognition model and provides a Five step application approach to be followed for revenue recognition.
"1. Identify the contract(s) with a customer;
2. Identify the performance obligations;
3. Determine the transaction price;
4. Allocate the transaction price to the performance obligations;
5. Recognise revenue when or as an entity satisfies performance obligation."
"Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements, except for the agency services below, because it typically controls the goods or services before transferring them to the customer.
Revenue excludes amounts collected on behalf of third parties.The disclosures of significant accounting judgements, estimates and assumptions relating to revenue from contracts with customers are provided in Note 19 and disclosures of transition approach along with impact of adoption of Ind AS 115 on financial statements are provided in Note 20.1"
9.1 Sale of Goods
"For sale of goods, revenue is recognised when control of the goods has transferred at a point in time i.e. when the goods have been delivered to the specific location (delivery). Following delivery, the customer has full discretion over the responsibility, manner of distribution, price to sell the goods and bears the risks of obsolescence and loss in relation to the goods. A receivable is recognised by the Company when the goods are delivered to the customer as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time is required before payment is due. Payment is due within 0-180 days. The Company considers the effects of variable consideration, the existence of significant financing components, noncash consideration, and consideration payable to the customer (if any)."
Net sales are exclusive of GST and Trade discount.
9.2 Contract Balances Trade receivables
A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets.
Contract liabilities
"A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract."
9.3 Cost to obtain a contract
The Company pays sales commission to its selling agents for as per the agreement. The Company has elected to apply
the optional practical expedient for costs to obtain a contract which allows the Company to immediately expense sales commissions (included in selling and distribution expenses) because the amortization period of the asset that the Company otherwise would have used is one year or less.
Costs to fulfil a contract i.e. freight, insurance and other selling expenses are recognized as an expense in the period in which related revenue is recognised.
9.4 Other revenue streams
Export and Other Incentives
"In case of sale made by the Company as Manufacturer, export benefits arising from Duty Entitlement Pass Book(DEPB), Merchandise Export Incentive Scheme, and Focus Market Scheme are recognised on date of actual receipt of such liecense from authority ."
In case of sale made by the Company as Manufacturer, export benefits arising from Duty Drawback scheme, Rebate of State Levies (ROSL), and Rebate of State and Central Taxes and Levies (ROSCTL), are recognised on sale of such goods in accordance with the agreed terms and conditions with customers.
"Revenue from exports benefits measured at the fair value of consideration received or receivable net of returns and allowances, cash discounts, trade discounts and volume rebates."
Obligation / entitlements on account of Advance Licenses Scheme for import of raw materials are not accounted for as income and correspondingly no expenses is booked at time of payment of custom duty. Custom duty amount of pending export obligations are shown as contingent liability by way of note.
Rendering of Services
Revenue from rendering of services is recognised when the performance obligation to render the services are completed as per contractually agreed terms.
Dividend
Revenue is recognised when the Company''s right to receive the payment is established, which is generally when shareholders approve the dividend.
10. Financial Instruments
(a) Other financial assets and financial liabilities
Other financial assets and financial liabilities are recognised when Company becomes a party to the contractual provisions of the instruments.
(b) Initial recognition and measurement:
The financial assets and financial liabilities are initially Measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through (profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized Immediately in statement of profit and loss.
(c) Subsequent measurement:
Financial assets are subsequently measured at amortized cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and contractual terms of financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(d) Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.
(e) Financial assets at fair value through profit & loss account
Financial assets are measured at fair value through profit or loss unless it measured at amortised cost or fair value through other comprehensive income on initial recognition. The transaction cost directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in the statement of profit and loss.
(f) Financial liabilities
(i) Recognition of Financial liabilities
Financial liabilities are measured at amortized cost using effective interest rate method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(ii) De-Recognition of Financial liabilities
The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid, including any non cash assets transferred or liabilities assumed shall be recognized in profit or loss account. Further the company applies extinguishment accounting/modification accounting as per IND-AS 109
(iii) Equity Instruments
An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Equity instruments recognised by the Company are recognised at the proceeds received net off direct issue cost.
11. Foreign Exchange Transactions
(a) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transaction and variation, if any, is accounted for on the date of payment, if squared up during the same accounting year.
(a) Monetary items denominated in foreign currencies remaining unsettled at the year end if not covered by forward exchange contracts are translated at year end rates.
(b) Any income/expense arising from foreign currency transactions is dealt in the profit and loss account for the year except in cases where they relate to acquisition of fixed assets in which case they are adjusted in the carrying cost of such assets.
(c) Where company enters into a forward exchange contract, the difference between the forward rate and the exchange rate at the date of the transaction is recognised as income or expense over the life of the contract except in the case of fixed assets, in which case, such difference is adjusted in the carrying amount of respective fixed assets.
(d) The Company has opted for voluntary exemption given in Ind AS-101,which allows first time adopter to continue its Indian GAAP policy for accounting of exchange difference arising on translation of long term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period.
12. Borrowing Costs:
Borrowing costs that are attributable to the acquisition or construction or production of qualifying assets are capitalised as part of cost of such assets. Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an expense in the period in which incurred.
13. Employee Benefits:
Current employee benefit
a) 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 incurred when the liabilities are settled.
b) Expense in respect of other short-term benefits is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee.
Post Retirement Employee Benefits :
a) Post retirement benefits plan are determined on the basis of an actuary valuation by an independent Actuary. Liability recognized in the balance sheet in respect of defined benefit obligation is the present Value of the defined benefit obligation at the end of reporting period.
b) The Company has adopted a policy of compensated earned leave which are accumulating in nature and Is determined by actuarial valuation at each reporting date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date.
c) Gratuity liability accounted for on the basis of actuarial valuation as per Ind AS 19 "Employee Benefits" Liability recognized in the Balance Sheet in respect of gratuity is the present value of the defined Benefit obligation at the end of each reporting period. The present value of defined benefit is Determined by discounting the estimated future cash outflows by reference to market yield at the end of each reporting period. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation. This cost is included in employee benefit expense in the Statement of Profit and Loss Actuarial gain/loss pertaining to gratuity are accounted for as OCI.
14. Income Tax:
a) Current tax: Provision is made for income tax, based on the liability as computed after taking credit for allowances and exemptions. Adjustments in books are made only after the completion of the assessment.
b) Deferred Tax : The differences that result between the profit offered for income tax and the profit as per the financial statement are identified and thereafter a deferred tax liability/assets is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another.The tax effect is calculated on the accumulated timing difference at the end of an accounting period based on prevailing enacted regulations. Deferred tax assets are recognised only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.
c) MAT: Minimum alternative tax payable under the provisions of the Income Tax Act, 1961 is recognised as an asset in the year in which credit becomes eligible and is set off in the year in which the Company becomes liable to pay income taxes at the enacted tax rates and shall be reversed in the year in which it lapses
d) In respect of disputed income tax demands, where the company is in appeal, provision for tax is made when the matter is finally decided.
Mar 31, 2023
A - SIGNIFICANT ACCOUNTING POLICIES
1. Basis of Preparation of Financial Statements
These financial statements have been prepared to comply with the Indian Accounting Standards (Ind AS). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015 and Companies (Indian Accounting Standards) Amendment Rules 2016.
The Financial Statements are prepared on accrual basis under the historical cost convention. The financial statements are presented in Indian rupees rounded off to the nearest rupees in lacs.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
2. Use of Estimates
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes 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.
3. Property, Plant & Equipment
(a) Freehold land is carried at cost. All others items of Property, Plant and equipment have been stated at cost less accumulated depreciation and impairment loss if any. Cost of acquisition or construction is inclusive of freight, non refundable taxes or Levies, fees and incidental expenses to bring the assets to its present condition and location and interest on loans attributable to the acquisition of assets up to the date of commissioning of assets. Cost of assets not ready for intended use before the year end, are shown as capital -work-in- progress.
(b) The Company is following the useful life by applying straight line method of depreciation as per the useful life specified in part C of Schedule II of the Companies Act 2013.
On assets sold, discarded etc, during the year depreciation is provided up to the date of sale/discard.
4. Leases
The Company''s lease asset classes consist primarily of land and buildings . The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether : (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset. At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases.
For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses. ROU assets are depreciated
from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases.
Lease liabilities are remeasured with a corresponding adjustment to the related ROU asset if the Company changes its assessment of whether it will exercise an extension or a termination option. Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
5. Intangible Assets
(a) Intangible assets are measured at cost and amortized over their useful life.
(b) Expenditure on Research phase is recognised as an expense when it is incurred.
(c) Expenditure on product development phase is recognised as an Intangible Asset, These assets are amortized over the useful period of life starting from the year when the asset first meets the following recognition criteria:
⢠The technical feasibility of completing the intangible asset so that it will be available for use or sale;
⢠The intention to complete the intangible asset and use or sell it;
⢠the ability to use or sell the intangible asset;
⢠how the intangible asset will generate probable future economic benefits;
⢠the availability of adequate technical , financial and other resources to complete the development and to use or sell the intangible asset; and
⢠the ability to measure reliably the expenditure attributable to the intangible asset during its development.
(d) Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected form use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset , are recognised in statement of profit and loss when the asset is derecognized.
6. Inventories are valued as under
(a) Stock of Raw Material, Packing Material and Store & Spares :- At Cost or Net Realizable Value, whichever is lower. Cost ascertained on FIFO basis, excluding recoverable rates and taxes. Cost includes cost of purchase & other cost incurred in bringing the inventories to their present location.
(b) Stock of work in progress: - At material cost plus apportioned manufacturing overheads or net realizable value whichever is lower.
(c) Stock of Finished Goods: - At Cost or Net Realizable Value, whichever is lower. Cost includes material cost plus apportioned manufacturing overheads and expenditure incurred in the normal course of business in bringing such inventories to its present location.
(d) Stock in Transit: At Cost
7. Investments
Investments are classified into current and long term Investments.
(a) Long term investments are stated at cost of acquisition. Provision for diminution is made only to recognize a decline other than temporary, if any, in the value of investments.
(b) Current investments are carried at lower of cost and fair market value.
8. Revenue Recognition
The Company derives revenues primarily from sale of pharmaceutical formulation business.
Ind AS 115 "Revenue from Contracts with Customers" provides a control-based revenue recognition model and provides a Five step application approach to be followed for revenue recognition.
" 1. Identify the contract(s) with a customer;
2. Identify the performance obligations;
3. Determine the transaction price;
4. Allocate the transaction price to the performance obligations;
5. Recognise revenue when or as an entity satisfies performance obligation."
"Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements, except for the agency services below, because it typically controls the goods or services before transferring them to the customer.
Revenue excludes amounts collected on behalf of third parties.The disclosures of significant accounting judgements, estimates and assumptions relating to revenue from contracts with customers are provided in Note 19 and disclosures of transition approach along with impact of adoption of Ind AS 115 on financial statements are provided in Note 20.1"
9.1 Sale of Goods
"For sale of goods, revenue is recognised when control of the goods has transferred at a point in time i.e. when the goods have been delivered to the specific location (delivery). Following delivery, the customer has full discretion over the responsibility, manner of distribution, price to sell the goods and bears the risks of obsolescence and loss in relation to the goods. A receivable is recognised by the Company when the goods are delivered to the customer as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time is required before payment is due. Payment is due within 0-180 days. The Company considers the effects of variable consideration, the existence of significant financing components, noncash consideration, and consideration payable to the customer (if any)."
Net sales are exclusive of GST and Trade discount.
9.2 Contract Balances Trade receivables
A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets.
Contract liabilities
"A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract."
9.3 Cost to obtain a contract
The Company pays sales commission to its selling agents for as per the agreement. The Company has elected to apply
the optional practical expedient for costs to obtain a contract which allows the Company to immediately expense sales commissions (included in selling and distribution expenses) because the amortization period of the asset that the Company otherwise would have used is one year or less.
Costs to fulfil a contract i.e. freight, insurance and other selling expenses are recognized as an expense in the period in which related revenue is recognised.
9.4 Other revenue streams
Export and Other Incentives
"In case of sale made by the Company as Manufacturer, export benefits arising from Duty Entitlement Pass Book(DEPB), Merchandise Export Incentive Scheme, and Focus Market Scheme are recognised on date of actual receipt of such liecense from authority ."
In case of sale made by the Company as Manufacturer, export benefits arising from Duty Drawback scheme, Rebate of State Levies (ROSL), and Rebate of State and Central Taxes and Levies (ROSCTL), are recognised on sale of such goods in accordance with the agreed terms and conditions with customers.
"Revenue from exports benefits measured at the fair value of consideration received or receivable net of returns and allowances, cash discounts, trade discounts and volume rebates."
Obligation / entitlements on account of Advance Licenses Scheme for import of raw materials are not accounted for as income and correspondingly no expenses is booked at time of payment of custom duty. Custom duty amount of pending export obligations are shown as contingent liability by way of note.
Rendering of Services
Revenue from rendering of services is recognised when the performance obligation to render the services are completed as per contractually agreed terms.
Dividend
Revenue is recognised when the Company''s right to receive the payment is established, which is generally when shareholders approve the dividend.
10. Financial Instruments
(a) Other financial assets and financial liabilities
Other financial assets and financial liabilities are recognised when Company becomes a party to the contractual provisions of the instruments.
(b) Initial recognition and measurement:
The financial assets and financial liabilities are initially Measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through (profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in statement of profit and loss.
(c) Subsequent measurement:
Financial assets are subsequently measured at amortized cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and contractual terms of financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(d) Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.
(e) Financial assets at fair value through profit & loss account
Financial assets are measured at fair value through profit or loss unless it measured at amortised cost or fair value through other comprehensive income on initial recognition. The transaction cost directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in the statement of profit and loss.
(f) Financial liabilities
(i) Recognition of Financial liabilities
Financial liabilities are measured at amortized cost using effective interest rate method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(ii) De-Recognition of Financial liabilities
The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid, including any non cash assets transferred or liabilities assumed shall be recognized in profit or loss account. Further the company applies extinguishment accounting/modification accounting as per IND-AS 109
(iii) Equity Instruments
An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Equity instruments recognised by the Company are recognised at the proceeds received net off direct issue cost.
11. Foreign Exchange Transactions
(a) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transaction and variation, if any, is accounted for on the date of payment, if squared up during the same accounting year.
(a) Monetary items denominated in foreign currencies remaining unsettled at the year end if not covered by forward exchange contracts are translated at year end rates.
(b) Any income/expense arising from foreign currency transactions is dealt in the profit and loss account for the year except in cases where they relate to acquisition of fixed assets in which case they are adjusted in the carrying cost of such assets.
(c) Where company enters into a forward exchange contract, the difference between the forward rate and the exchange rate at the date of the transaction is recognised as income or expense over the life of the contract except in the case of fixed assets, in which case, such difference is adjusted in the carrying amount of respective fixed assets.
(d) The Company has opted for voluntary exemption given in Ind AS-101,which allows first time adopter to continue its Indian GAAP policy for accounting of exchange difference arising on translation of long term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period.
12. Borrowing Costs:
Borrowing costs that are attributable to the acquisition or construction or production of qualifying assets are capitalised as part of cost of such assets. Qualifying asset is one that necessarily takes substantial period of time to get ready for its
intended use. All other borrowing costs are recognised as an expense in the period in which incurred.
13. Employee Benefits:
Current employee benefit
a) 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 incurred when the liabilities are settled.
b) Expense in respect of other short-term benefits is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee.
Post Retirement Employee Benefits :
a) Post retirement benefits plan are determined on the basis of an actuary valuation by an independent Actuary. Liability recognized in the balance sheet in respect of defined benefit obligation is the present Value of the defined benefit obligation at the end of reporting period.
b) The Company has adopted a policy of compensated earned leave which are accumulating in nature and is determined by actuarial valuation at each reporting date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date.
c) Gratuity liability accounted for on the basis of actuarial valuation as per Ind AS 19 "Employee Benefits" Liability recognized in the Balance Sheet in respect of gratuity is the present value of the defined Benefit obligation at the end of each reporting period. The present value of defined benefit is Determined by discounting the estimated future cash outflows by reference to market yield at the end of each reporting period. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation. This cost is included in employee benefit expense in the Statement of Profit and Loss Actuarial gain/loss pertaining to gratuity are accounted for as OCI.
14. Income Tax:
a) Current tax: Provision is made for income tax, based on the liability as computed after taking credit for allowances and exemptions. Adjustments in books are made only after the completion of the assessment.
b) Deferred Tax: The differences that result between the profit offered for income tax and the profit as per the financial statement are identified and thereafter a deferred tax liability/assets is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another.The tax effect is calculated on the accumulated timing difference at the end of an accounting period based on prevailing enacted regulations. Deferred tax assets are recognised only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.
c) MAT: Minimum alternative tax payable under the provisions of the Income Tax Act, 1961 is recognised as an asset in the year in which credit becomes eligible and is set off in the year in which the Company becomes liable to pay income taxes at the enacted tax rates and shall be reversed in the year in which it lapses.
d) In respect of disputed income tax demands, where the company is in appeal, provision for tax is made when the matter is finally decided.
Mar 31, 2018
A - SIGNIFICANT ACCOUNTING POLICIES
1. Basis of Preparation of Financial Statements
These financial statements have been prepared to comply with the Indian Accounting Standards (Ind-AS). The Ind-AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015 and Companies (Indian Accounting Standards) Amendment Rules 2016.
The Financial Statements are prepared on accrual basis under the historical cost convention. The financial statements are presented in Indian rupees rounded off to the nearest rupees in lacs.
The Company has adopted all the ind-AS standards mandatorily applicable and the adoption was carried out in accordance with ind-AS 101 "First time adoption of Indian Accounting Standards". The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (iGAAP), which was the previous GAAP. Reconciliations of Balance Sheet as at 01.04.2016 and as at 31.03.2017 along with Statement of Profit & Loss for the year ended 31.03.2017 has been summarized in Note.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
2. Use of Estimates
The preparation of the financial statements in conformity with Ind-AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes 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.
3. Property, Plant & Equipment
(a) Freehold land is carried at cost. All others items of Property, Plant and equipment have been stated at cost less accumulated depreciation and any impairment loss. Cost of acquisition or construction is inclusive of freight, non refundable taxes or Levis, fees and incidental expenses to bring the assets to its present condition and location and interest on loans attributable to the acquisition of assets up to the date of commissioning of assets. Cost of assets not ready for intended use before the year end, are shown as capital -work-in- process.
(b) The Company is following the useful life method of depreciation as per the useful life specified in part C of Schedule II of the Companies Act 2013.
On assets sold, discarded etc, during the year depreciation is provided up to the date of sale/discard.
(c) Premium on Lease hold land is amortized over the period of Lease.
4. Intangible Assets
(a) intangible assets are measured at cost and amortized over their useful life.
(b) Expenditure on Research phase is recognised as an expense when it is incurred.
(c) Expenditure on product development phase is recognised as an intangible Asset, These assets are amortized over the useful period of life starting from the year when the asset first meets the following recognition criteria:
- The technical feasibility of completing the intangible asset so that it will be available for use or sale;
- The intention to complete the intangible asset and use or sell it;
- the ability to use or sell the intangible asset;
- how the intangible asset will generate probable future economic benefits;
- the availability of adequate technical , financial and other resources to complete the development and to use or sell the intangible asset; and
- the ability to measure reliably the expenditure attributable to the intangible asset during its development.
(d) Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected form use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset , are recognised in statement of profit and loss when the asset is derecognized.
(e) Deemed cost on Transition to ind-AS
For transition to ind-AS, the Company has elected to continue with carrying value of all of its intangible assets recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
5. Inventories are valued as under:-
(a) Stock of Raw Material, Packing Material and Store & Spares :- At Cost or Net Realizable Value, whichever is lower. Cost ascertained on FiFO basis, excluding recoverable rates and taxes. Cost includes cost of purchase & other cost incurred in bringing the inventories to their present location.
(b) Stock of work in process: - At material cost plus apportioned manufacturing overheads or net realizable value whichever is lower.
(c) Stock of Finished Goods: - At Cost or Net Realizable Value, whichever is lower. Cost includes material cost plus apportioned manufacturing overheads and expenditure incurred in the normal course of business in bringing such inventories to its present location.
(d) Stock in Transit: At Cost
6. Investments
Investments are classified into current and long term Investments.
(a) Long term investments are stated at cost of acquisition. Provision for diminution is made only to recognize a decline other than temporary, if any, in the value of investments.
(b) Current investments are carried at lower of cost and fair market value.
7. Revenue Recognition
Revenue is recognised upon the transfer of title of goods and when all significant risks and rewards of ownership have been transferred to the buyer. Transfer of the title generally coincides with the delivery of the goods. Revenue is recognised when there is reasonable certainty of its ultimate realization.
Net Sales are exclusive of GST, net of VAT and trade discount but includes excise duty.
8. Export Incentives
Export incentives under MEIS and other schemes are recognized at the time of utilisaiton /sales.
9. FINANCIAL INSTRUMENTS
(a) Other financial assets and financial liabilities
Other financial assets and financial liabilities are recognised when Company becomes a party to the contractual provisions of the instruments.
(b) Initial recognition and measurement:
The financial assets and financial liabilities are initially Measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through (profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized Immediately in statement of profit and loss.
(c) Subsequent measurement:
Financial assets are subsequently measured at amortized cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and contractual terms of financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(d) Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.
(e) Financial assets at fair value through profit & loss account
Financial assets are measured at fair value through profit or loss unless it measured at amortised cost or fair value through other comprehensive income on initial recognition. The transaction cost directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in the statement of profit and loss.
(f) Financial liabilities
(i) Recognition of Financial liabilities
Financial liabilities are measured at amortized cost using effective interest rate method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(ii) De-Recognition of Financial liabilities
The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid, including any non cash assets transferred or liabilities assumed shall be recognized in profit or loss account. Further the company applies extinguishment accounting/modification accounting as per IND-AS 109.
(iii) Equity Instruments
An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Equity instruments recognised by the Company are recognised at the proceeds received net off direct issue cost.
10. Foreign Exchange Transactions
a. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transaction and variation, if any, is accounted for on the date of payment, if squared up during the same accounting year.
b. Monetary items denominated in foreign currencies remaining unsettled at the year end if not covered by forward exchange contracts are translated at year end rates.
c. Any income/expense arising from foreign currency transactions is dealt in the profit and loss account for the year except in cases where they relate to acquisition of fixed assets in which case they are adjusted in the carrying cost of such assets.
d. Where company enters into a forward exchange contract, the difference between the forward rate and the exchange rate at the date of the transaction is recognised as income or expense over the life of the contract except in the case of fixed assets, in which case, such difference is adjusted in the carrying amount of respective fixed assets.
e. The Company has opted for voluntary exemption given in Ind-AS-101,which allows first time adopter to continue its Indian GAAP policy for accounting of exchange difference arising on translation of long term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind-AS financial reporting period.
11. Borrowing Costs:
Borrowing costs that are attributable to the acquisition or construction or production of qualifying assets are capitalised as part of cost of such assets. Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an expense in the period in which incurred.
12. Employee Benefits:
a) Short term Employee Benefits:
Short term employee benefits including accumulated compensated absences as at the Balance Sheet date are recognised as an expense as per company''s schemes based on expected obligation on an undiscounted basis.
b) Defined Contribution Plans:
Contributions paid/payable to defined contribution plans comprising of Gratuity and Provident Funds for employees covered under the respective schemes are recognised in the Profit & Loss Account each year.
13. Income Tax:
a) Current tax: Provision is made for income tax, based on the liability as computed after taking credit for allowances and exemptions. Adjustments in books are made only after the completion of the assessment.
Deferred Tax : The differences that result between the profit offered for income tax and the profit as per the financial statement are identified and thereafter a deferred tax liability/assets is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another.The tax effect is calculated on the accumulated timing difference at the end of an accounting period based on prevailing enacted regulations. Deferred tax assets are recognised only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.
b) MAT: Minimum alternative tax payable under the provisions of the income Tax Act, 1961 is recognised as an asset in the year in which credit becomes eligible and is set off in the year in which the Company becomes liable to pay income taxes at the enacted tax rates and shall be reversed in the year in which it lapses.
d.) in respect of disputed income tax demands, where the company is in appeal, provision for tax is made when the matter is finally decided.
14. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources and reliable estimate can be made to settle the amount of obligation. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements
15. Government Grant
Government Grants are recognized in Profit & Loss account in accordance with the related schemes and in the period in which these are accrued.
Grants toward the specific assets are treated as deferred income in Profit & Loss Account are recognised on rational basis over the useful life of the depreciable asset
16. Impairment of Assets
An Asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit & Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.
17. Leases
Finance lease, which effectively transfer to the company all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged as expenses in the profit and loss account.
18. Trade Receivable/Advances
Trade receivables/advances outstanding for more than three years and other Trade receivables/advances outstanding for less than three years but are doubtful of recovery at the balance sheet date will be written off/provided in the books of accounts except those Trade receivables/advances pertaining to related parties and disputed Trade receivables/advances having matter pending before different courts.
19. Accounting policies not specifically referred to are consistent with generally accepted accounting principles.
20. FIRST-TIME ADOPTION - MANDATORY EXCEPTIONS, OPTIONAL EXEMPTIONS
a. Overall principle
The Company has prepared the opening standalone balance sheet as per ind-AS of April 1, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by ind-AS, not recognising items of assets or liabilities which are not permitted by ind-AS, by reclassifying items from previous GAAP to ind-AS required under ind-AS, and applying ind-AS in measurement of recognised assets and liabilities. However, this principle is subject to the certain exception and certain optional exemptions availed by the Company.
b. Derecognition of financial assets and financial
The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2016 (the transition date).
c. Deemed cost for property, plant and equipment Investment property, and intangible assets.
The Company has elected to continue with the carrying value of all items of its plant and equipment, investment property, and intangible assets recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
d. Government Grant
Pursuant to ind-AS 101 "First-time Adoption of Indian Accounting Standards", the Company has opted the exemption to use the carrying amount of the Government grants at the date of transition to ind-AS, as the carrying amount of the Govt. grants.
e. Long Term Foreign Currency Monetary Items
Pursuant to ind-AS 101 "First-time Adoption of Indian Accounting Standards", the Company has opted the exemption to use the carrying amount of long term foreign currency monetary items at the date of transition to ind-AS, as the carrying amount of the Loan in the financial statements.
Mar 31, 2015
1. Accounting Convention:
The Financial statements are prepared in accordance with applicable
Accounting Standards in India. A summary of important Accounting
Policies, which have been applied consistently, is set out below.
Accounting Policies comprises Accounting Standards specified by the
Central Government u/s 133 of the Companies Act 2013, other
pronouncements of The Institute of Chartered Accountant of India and
Guidelines issued by SEBI. The Financial Statement have also been
prepared in accordance with relevant presentational requirements of the
Companies Act 1956. The Financial Statements are rounded of to the
nearest in Lacs.
2. Basis of Accounting:
The accounts are prepared under the historical cost convention and on
the basis of going concern. All Expenses and incomes to the extent
ascertained as payable and receivable respectively are accounted for on
mercantile basis unless otherwise stated.
3. Use of Estimates
The presentation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of financial statements and the reported amount
of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known/materialized.
4. Fixed Assets and Depreciation
(a) All fixed assets are stated at cost less accumulated depreciation.
Cost of acquisition or construction is inclusive of freight, duties,
fees and incidental expenses to bring the assets to its present
condition and location and interest on loans attributable to the
acquisition of assets up to the date of commissioning of assets.
(b) The company has changed the method of charging depreciation as
prescribed by the companies act 2013. Now the Company is following the
useful life method of depreciation as per the useful life specified in
part C of Schedule II of the Companies Act 2013 instead of straight
line method of depreciation at the rates as specified in schedule XIV
of the Companies Act 1956. The Carrying amount of assets is being
depreciated over the remaining useful life of the assets. In case the
remaining useful life of an asset is exhausted, the depreciation amount
after retaining the residual value is transferred to General Reserve.
On assets sold, discarded etc, during the year depreciation is provided
up to the date of sale/discard.
(c) Premium on Lease hold land is amortised over the period of Lease.
5. Inventories are valued as under:-
(a) Stock of Raw Material and Packing Material :- At Cost or Net
Realizable Value, whichever is lower (As per AS-2 "Valuation of
Inventories"). Cost ascertained on FIFO basis, excluding recoverable
rates and taxes.
(b) Stock of work in process: - At material cost plus apportioned
manufacturing overheads or net realizable value whichever is lower.
(c) Stock of Finished Goods: - At Cost or Net Realizable Value,
whichever is lower. Cost includes material cost plus apportioned
manufacturing overheads and expenditure incurred in the normal course
of business in bringing such inventories to its present location. It
also includes excise duty paid or payable in accordance with Accounting
Standard - 2 "Valuation of Inventories" issued by ICAI.
(d) Stock in Transit: At Cost
6. Investments
Investments are classified into current and long term
Investments.
(a) Long term investments are stated at cost of acquisition. Provision
for diminution is made only to recognize a decline other than
temporary, if any, in the value of investments.
(b) Current investments are carried at lower of cost and fair market
value.
7. Revenue Recognition
Revenue is recognized upon the transfer of title of goods and when all
significant risks and rewards of ownership have been transferred to the
buyer. Transfer of the title generally coincides with the delivery of
the goods. Revenue is recognized when there is reasonable certainty of
its ultimate realization.
Net Sales are exclusive of Excise Duty and net of VAT, breakage,
leakage and trade discount.
8. Foreign Exchange Transactions
(a) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of transaction and
variation, if any, is accounted for on the date of payment, if squared
the same accounting year.
(b) Monetary items denominated in foreign currencies remaining
unsettled at the year end if not covered by forward exchange contracts
are translated at year end rates.
(c) Any income/expense arising from foreign currency transactions is
dealt in the profit and loss account for the year except in cases where
they relate to acquisition of fixed assets in which case they are
adjusted in the carrying cost of such assets.
(d) Where company enters into a forward exchange contract, the
difference between the forward rate and the exchange rate at the date
of the transaction is recognized as income or expense over the life of
the contract except in the case of fixed assets, in which case, such
difference is adjusted in the carrying amount of respective fixed
assets.
9. Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction or production of qualifying assets are capitalised as part
of cost of such assets. Qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other
borrowing costs are recognized as an expense in the period in which
incurred.
10. Employee Benefits:
a) Short term Employee Benefits:
Short term employee benefits including accumulated compensated absences
as at the Balance Sheet date are recognised as an expense as per
company's schemes based on expected obligation on an undiscounted
basis.
b) Defined Contribution Plans:
Contributions paid/payable to defined contribution plans comprising of
Gratuity and Provident Funds for employees covered under the respective
schemes are recognised in the Profit & Loss Account each year.
11. Income Tax:
a) Current tax: Provision is made for income tax, based on the
liability as computed after taking credit for allowances and
exemptions. Adjustments in books are made only after the completion of
the assessment.
b) Deferred Tax : Consequent to the Accounting Standard -22 "
Accounting for taxes on income '' becoming mandatory the differences
that result between the profit offered for income tax and the profit as
per the financial statement are identified and thereafter a deferred
tax liability is recorded for timing differences, namely the
differences that originate in one accounting period and reverse in
another.
The tax effect is calculated on the accumulated timing difference at
the end of an accounting period based on prevailing enacted
regulations.
Deferred tax assets are recognized only if there is reasonable
certainty that they will be realized and are reviewed for the
appropriateness of their respective carrying values at each balance
sheet date.
c) MAT: Minimum alternative tax payable under the provisions of the
Income Tax Act, 1961 is recognized as an asset in the year in which
credit becomes eligible and is set off in the year in which the Company
becomes liable to pay income taxes at the enacted tax rates and shall
be reversed in the year in which it lapses.
12. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements
13. Government Grant
Government Grants are recognized in Profit & Loss account in accordance
with the related schemes and in the period in which these are accrued.
Grants toward the specific assets are treated as deffered income in
Profit & Loss Account are recognized on rational basis over the useful
life of the depreciable asset.
14. Intangible Assets
(a) Intangible Assets are recognised only if they meet the recognition
criteria as laid by Accounting Standard (AS) 26 on "Intangible assets".
(b) Intangible assets are measured at cost and amortised over their
useful life.
(c) Expenditure on Research phase is recognised as an expense when it
is incurred.
(d) Expenditure on development phase is recognised as an Intangible
Asset only if it meets the recognition criteria as laid by AS 26 issued
by institute of Chartered Accountant of India on Intangible Assets.
These assets are amortised over the useful period of life starting from
the year when the asset first meets the recognition criteria.
15. Impairment of Assets
An Asset is treated as impaired when the carrying cost of assets exceeds
its recoverable value. An impairment loss is charged to the Profit &
Loss Account in the year in which an asset is identified as impaired.
The impairment loss recognised in prior accounting periods is reversed
if there has been a change in the estimate of recoverable amount.
16. Leases:
Finance lease, which effectively transfer to the company all the risks
and benefits incidental to ownership of the leased item, are
capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. Lease payments are apportioned between the finance
charges and reduction of the lease liability based on the implicit rate
of return. Finance charges are charged as expenses in the profit and
loss account.
17. Accounting policies not specifically referred to are consistent
with generally accepted accounting principles.
Mar 31, 2014
1. Accounting Convention:
The Financial statements are prepared in accordance with applicable
Accounting Standards in India. A summary of im- portant Accounting
Policies, which have been applied con- sistently, is set out below.
Accounting Policies comprises Ac- counting Standards specified by the
Central Government u/s 211 (3C) of the Companies Act 1956, other
pronouncements of The Institute of Chartered Accountant of India and
Guide- lines issued by SEBI. The Financial Statement have also been
prepared in accordance with relevant presentational require- ments of
the Companies Act 1956. The Financial Statements are rounded of to the
nearest in Lacs.
2. Basis of Accounting:
The accounts are prepared under the historical cost conven- tion and on
the basis of going concern. All Expenses and incomes to the extent
ascertained as payable and receiv- able respectively are accounted for
on mercantile basis unless otherwise stated.
3. Use of Estimates
The presentation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of financial statements and the reported amount
of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the re- sults are known/materialized.
4. Fixed Assets and Depreciation
(a) All fixed assets are stated at cost less accumulated deprecia-
tion. Cost of acquisition or construction is inclusive of freight,
duties, fees and incidental expenses to bring the assets to its present
condition and location and interest on loans attrib- utable to the
acquisition of assets up to the date of commis- sioning of assets.
(b) The company is following the straight line method of depre- ciation
at the rates as specified in schedule XIV of the Com- panies Act, 1956.
Depreciation is calculated on a pro-rata basis from the date of
additions, except in the case of assets costing up to Rs.5000/- each,
where each such asset is fully depreciated in the year of purchase.
On assets sold, discarded etc, during the year depreciation is provided
up to the date of sale/discard.
(c) Premium on Lease hold land is amortised over the period of Lease.
5. Inventories are valued as under:-
(a) Stock of Raw Material and Packing Material :- At Cost or Net
Realizable Value, whichever is lower (As per AS-2 "Valua- tion of
Inventories"). Cost ascertained on FIFO basis, exclud- ing recoverable
rates and taxes.
(b) Stock of work in process: - At material cost plus appor- tioned
manufacturing overheads or net realizable value whichever is lower.
(c) Stock of Finished Goods: - At Cost or Net Realizable Value,
whichever is lower. Cost includes material cost plus appor- tioned
manufacturing overheads and expenditure incurred in the normal course
of business in bringing such inventories to its present location. It
also includes excise duty paid or pay- able in accordance with
Accounting Standard - 2 "Valuation of Inventories" issued by ICAI.
(d) Stock in Transit: At Cost
6. Investments
Investments are classified into current and long term Invest- ments.
(a) Long term investments are stated at cost of acquisition. Pro-
vision for diminution is made only to recognize a decline other than
temporary, if any, in the value of investments.
(b) Current investments are carried at lower of cost and fair mar- ket
value.
7. Revenue Recognition
Revenue is recognized upon the transfer of title of goods and when all
significant risks and rewards of ownership have been transferred to the
buyer. Transfer of the title generally coincides with the delivery of
the goods. Revenue is recog- nized when there is reasonable certainty
of its ultimate reali- zation.
Net Sales are exclusive of Excise Duty and net of VAT, break- age,
leakage and trade discount.
8. Foreign Exchange Transactions
(a) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of trans- action
and variation, if any, is accounted for on the date of payment, if
squared the same accounting year.
(b) Monetary items denominated in foreign currencies re- maining
unsettled at the year end if not covered by for- ward exchange
contracts are translated at year end rates.
(c) Any income/expense arising from foreign currency transac- tions is
dealt in the profit and loss account for the year ex- cept in cases
where they relate to acquisition of fixed assets in which case they are
adjusted in the carrying cost of such assets.
(d) Where company enters into a forward exchange contract, the
difference between the forward rate and the exchange rate at the date
of the transaction is recognized as income or expense over the life of
the contract except in the case of fixed assets, in which case, such
difference is adjusted in the carrying amount of respective fixed
assets.
9. Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction or production of qualifying assets are capital- ised as
part of cost of such assets. Qualifying asset is one that necessarily
takes substantial period of time to get ready for its intended use. All
other borrowing costs are recognized as an expense in the period in
which incurred.
10. Employee Benefits:
a) Short term Employee Benefits:
Short term employee benefits including accumulated com- pensated
absences as at the Balance Sheet date are recog- nised as an expense as
per company''s schemes based on expected obligation on an undiscounted
basis.
b) Defined Contribution Plans:
Contributions paid/payable to defined contribution plans comprising of
Gratuity and Provident Funds for employees covered under the respective
schemes are recognised in the Profit & Loss Account each year.
11. Income Tax:
(a) Current tax: Provision is made for income tax, based on the
liability as computed after taking credit for allowances and
exemptions. Adjustments in books are made only after the completion of
the assessment.
(b) Deferred Tax : Consequent to the Accounting Standard -22 "
Accounting for taxes on income "becoming mandatory the differences that
result between the profit offered for income tax and the profit as per
the financial statement are identified and thereafter a deferred tax
liability is recorded for timing differences, namely the differences
that originate in one ac- counting period and reverse in another.
The tax effect is calculated on the accumulated timing differ- ence at
the end of an accounting period based on prevailing enacted
regulations.
Deferred tax assets are recognized only if there is reasonable
certainty that they will be realized and are reviewed for the
appropriateness of their respective carrying values at each balance
sheet date.
c) MAT: Minimum alternative tax payable under the provisions of the
Income Tax Act, 1961 is recognized as an asset in the year in which
credit becomes eligible and is set off in the year in which the Company
becomes liable to pay income taxes at the enacted tax rates and shall
be reversed in the year in which it lapses.
12. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obliga- tion as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial state- ments
13. Government Grant
Government Grants are recognized in Profit & Loss account in accordance
with the related schemes and in the period in which these are accrued.
Grants toward the specific assets are treated as deffered in- come in
Profit & Loss Account are recognized on rational basis over the useful
life of the depreciable asset.
14. Intangible Assets
(a) Intangible Assets are recognised only if they meet the recognition
criteria as laid by Accounting Standard (AS) 26 on "Intangible assets".
(b) Intangible assets are measured at cost and amortised over their
useful life.
(c) Expenditure on Research phase is recognised as an ex- pense when it
is incurred.
(d) Expenditure on development phase is recognised as an Intangible
Asset only if it meets the recognition criteria as laid by AS 26 issued
by institute of Chartered Account- ant of India on Intangible Assets.
These assets are amor- tised over the useful period of life starting
from the year when the asset first meets the recognition criteria.
15. Impairment of Assets
An Asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Profit & Loss Account in the year in which as asset is identified as
impaired. The impairment loss rec- ognised in prior accounting periods
is reversed if there has been a change in the estimate of recoverable
amount.
Mar 31, 2013
1. Accounting Convention:
The Financial statements are prepared in accordance with applicable
Accounting Standards in India. A summary of important Accounting
Policies, which have been applied consistently, is set out below.
Accounting Policies comprises Accounting Standards specified by the
Central Government u/s 211 (3C) of the Companies Act 1956, other
pronouncements of The Institute of Chartered Accountant of India and
Guidelines issued by SEBI. The Financial Statement have also been
prepared in accordance with relevant presentational requirements of the
Companies Act 1956. The Financial Statements are rounded of to the
nearest in Lacs.
2. Basis of Accounting:
The accounts are prepared under the historical cost convention and on
the basis of going concern. All Expenses and incomes to the extent
ascertained as payable and receivable respectively are accounted for on
mercantile basis unless otherwise stated.
3. Use of Estimates
The presentation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of financial statements and the reported amount
of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known/materialized.
4. Fixed Assets and Depreciation
(a) All fixed assets are stated at cost less accumulated depreciation.
Cost of acquisition or construction is inclusive of freight, duties,
fees and incidental expenses to bring the assets to its present
condition and location and interest on loans attributable to the
acquisition of assets up to the date of commissioning of assets.
(b) The company is following the straight line method of depreciation
at the rates as specified in schedule XIV of the Companies Act, 1956.
Depreciation is calculated on a pro-rata basis from the date of
additions, except in the case of assets costing up to Rs.5000/- each,
where each such asset is fully depreciated in the year of purchase.
On assets sold, discarded etc, during the year depreciation is provided
up to the date of sale/discard.
(c) Premium on Lease hold land is amortised over the period of Lease.
5. Inventories are valued as under:-
(a) Stock of Raw Material and Packing Material :- At Cost or Net
Realizable Value, whichever is lower (As per AS-2 "Valuation of
Inventories"). Cost ascertained on FIFO basis, excluding recoverable
rates and taxes.
(b) Stock of work in process: - At material cost plus apportioned
manufacturing overheads or net realizable value whichever is lower.
(c) Stock of Finished Goods: - At Cost or Net Realizable Value,
whichever is lower. Cost includes material cost plus apportioned
manufacturing overheads and expenditure incurred in the normal course
of business in bringing such inventories to its present location. It
also includes excise duty paid or payable in accordance with Accounting
Standard - 2 "Valuation of Inventories" issued by ICAI.
(d) Stock in Transit: At Cost
6. Investments
Investments are classified into current and long term Investments.
(a) Long term investments are stated at cost of acquisition. Provision
for diminution is made only to recognize a decline other than
temporary, if any, in the value of investments.
(b) Current investments are carried at lower of cost and fair market
value.
7. Revenue Recognition
Revenue is recognized upon the transfer of title of goods and when all
significant risks and rewards of ownership have been transferred to the
buyer. Transfer of the title generally coincides with the delivery of
the goods. Revenue is recognized when there is reasonable certainty of
its ultimate realization.
Net Sales are exclusive of Excise Duty and net of VAT, breakage,
leakage and trade discount.
8. Foreign Exchange Transactions
(a) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of transaction
and variation, if any, is accounted for on the date of payment, if
squared the same accounting year.
(b) Monetary items denominated in foreign currencies remaining
unsettled at the year end if not covered by forward exchange contracts
are translated at year end rates.
(c) Any income/expense arising from foreign currency transactions is
dealt in the profit and loss account for the year except in cases where
they relate to acquisition of fixed assets in which case they are
adjusted in the carrying cost of such assets.
(d) Where company enters into a forward exchange contract, the
difference between the forward rate and the exchange rate at the date
of the transaction is recognized as income or expense over the life of
the contract except in the case of fixed assets, in which case, such
difference is adjusted in the carrying amount of respective fixed
assets.
9. Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction or production of qualifying assets are capitalised as part
of cost of such assets. Qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other
borrowing costs are recognized as an expense in the period in which
incurred.
10. Employee Benefits:
a) Short term Employee Benefits:
Short term employee benefits including accumulated compensated absences
as at the Balance Sheet date are recognised as an expense as per
company's schemes based on expected obligation on an undiscounted
basis.
b) Defined Contribution Plans:
Contributions paid/payable to defined contribution plans comprising of
Gratuity and Provident Funds for employees covered under the respective
schemes are recognised in the Profit & Loss Account each year.
11. Income Tax:
a) Current tax: Provision is made for income tax, based on the
liability as computed after taking credit for allowances and
exemptions. Adjustments in books are made only after the completion of
the assessment.
b) Deferred Tax : Consequent to the Accounting Standard -22 "
Accounting for taxes on income becoming mandatory the differences that
result between the profit offered for income tax and the profit as per
the financial statement are identified and thereafter a deferred tax
liability is recorded for timing differences, namely the differences
that originate in one accounting period and reverse in another.
The tax effect is calculated on the accumulated timing difference at
the end of an accounting period based on prevailing enacted
regulations.
Deferred tax assets are recognized only if there is reasonable
certainty that they will be realized and are reviewed for the
appropriateness of their respective carrying values at each balance
sheet date.
c) MAT: Minimum alternative tax payable under the provisions of the
Income Tax Act, 1961 is recognized as an asset in the year in which
credit becomes eligible and is set off in the year in which the Company
becomes liable to pay income taxes at the enacted tax rates and shall
be reversed in the year in which it lapses.
12. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
13. Government Grant
Government Grants are recognized in Profit & Loss account in accordance
with the related schemes and in the period in which these are accrued.
Grants toward the specific assets are treated as deffered income in
Profit & Loss Account are recognized on rational basis over the useful
life of the depreciable asset.
14. Intangible Assets
(a) Intangible Assets are recognised only if they meet the recognition
criteria as laid by Accounting Standard (AS) 26 on "Intangible assets".
(b) Intangible assets are measured at cost and amortised over their
useful life.
(c) Expenditure on Research phase is recognised as an expense when it
is incurred.
(d) Expenditure on development phase is recognised as an Intangible
Asset only if it meets the recognition criteria as laid by AS 26 issued
by institute of Chartered Accountant of India on Intangible Assets.
These assets are amortised over the useful period of life starting from
the year when the asset first meets the recognition criteria.
15. Impairment of Assets
An Asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Profit & Loss Account in the year in which as asset is identified as
impaired. The impairment loss recognised in prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
16. Leases:
Finance lease, which effectively transfer to the company all the risks
and benefits incidental to ownership of the leased item, are
capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. Lease payments are apportioned between the finance
charges and reduction of the lease liability based on the implicit rate
of return. Finance charges are charged as expenses in the profit and
loss account.
17. Accounting policies not specifically referred to are consistent
with generally accepted accounting principles.
Mar 31, 2011
1. Accounting Convention:
The Financial statements are prepared in accordance with applicable
Accounting Standards in India. A summary of important Accounting
Policies, which have been applied consistently, is set out below.
Accounting Policies comprises Accounting Standards specified by the
Central Government u/s 211 (3C) of the Companies Act 1956, other
pronouncements of The Institute of Chartered Accountant of India and
Guidelines issued by SEBI. The Financial Statement have also been
prepared in accordance with relevant presentational requirements of the
Companies Act 1956. The Financial Statements are rounded of to the
nearest Rupees.
2. Basis of Accounting:
The accounts are prepared under the historical cost convention and on
the basis of going concern. All Expenses and incomes to the extent
ascertained as payable and receivable respectively are accounted for on
mercantile basis unless otherwise stated.
3. Use of Estimates
The presentation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of financial statements and the reported amount
of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known/materialized.
4. Fixed Assets and Depreciation
(a) All fixed assets are stated at cost less accumulated depreciation.
Cost of acquisition or construction is inclusive of freight, duties,
fees and incidental expenses to bring the assets to its present
condition and location and interest on loans attributable to the
acquisition of assets up to the date of commissioning of assets.
(b) The company is following the straight line method of depreciation
at the rates as specified in schedule XIV of the Companies Act, 1956.
Depreciation is calculated on a pro-rata basis from the date of
additions, except in the case of assets costing up to Rs.5000/- each,
where each such asset is fully depreciated in the year of purchase.
On assets sold, discarded etc, during the year depreciation is provided
up to the date of sale/discard.
(c) Premium on Lease hold land is amortised over the period of Lease.
(d) Capital work in Progress include advance paid towards the
acquisition of Fixed Assets outstanding at each Balance Sheet date and
the cost of Fixed Assets not ready for their intended use before such
date.
5. Inventories are valued as under:- (a) Stock of Raw Material and
Packing Material :- At Cost or Net Realizable Value, whichever is lower
(As per AS-2 "Valuation of Inventories"). Cost ascertained on FIFO
basis, excluding recoverable rates and taxes.
(b) Stock of work in process: - At material cost plus apportioned
manufacturing overheads or net realizable value whichever is lower.
(c) Stock of Finished Goods: - At Cost or Net Realizable Value,
whichever is lower. Cost includes material cost plus apportioned
manufacturing overheads and expenditure incurred in the normal course
of business in bringing such inventories to its present location. It
also includes excise duty paid or payable in accordance with Accounting
Standard - 2 "Valuation of Inventories" issued by ICAI.
(d) Stock in Transit: At Cost
6. Investments
Investments are classified into current and long term Investments.
(a) Long term investments are stated at cost of acquisition. Provision
for diminution is made only to recognize a decline other than
temporary, if any, in the value of investments.
(b) Current investments are carried at lower of cost and fair market
value.
7. Revenue Recognition
Revenue is recognized upon the transfer of title of goods and when all
significant risks and rewards of ownership have been transferred to the
buyer. Transfer of the title generally coincides with the delivery of
the goods. Revenue is recognized when there is reasonable certainty of
its ultimate realization.
Sales are net of VAT, breakage, leakage and trade discount but include
Excise Duty.
8. Foreign Exchange Transactions
(a) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of transaction and
variation, if any, is accounted for on the date of payment, if squared
the same accounting year.
(b) Monetary items denominated in foreign currencies remaining
unsettled at the year end if not covered by forward exchange contracts
are translated at year end rates.
(c) Any income/expense arising from foreign currency transactions is
dealt in the profit and loss account for the year except in cases where
they relate to acquisition of fixed assets in which case they are
adjusted in the carrying cost of such assets.
(d) Where company enters into a forward exchange contract, the
difference between the forward rate and the exchange rate at the date
of the transaction is recognized as income or expense over the life of
the contract except in the case of fixed assets, in which case, such
difference is adjusted in the carrying amount of respective fixed
assets.
9. Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction or production of qualifying assets are capitalised as part
of cost of such assets. Qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other
borrowing costs are recognized as an expense in the period in which
incurred.
10. Employee Benefits:
a) Short term Employee Benefits:
Short term employee benefits including accumulated compensated absences
as at the Balance Sheet date are recognised as an expense as per
company's schemes based on expected obligation on an undiscounted
basis.
b) Defned Contribution Plans:
Contributions paid/payable to defned contribution plans comprising of
Gratuity and Provident Funds for employees covered under the respective
schemes are recognised in the Profit & Loss Account each year.
11. Proposed Dividend
Dividends (including income tax thereon) as proposed by the Board of
Directors are provided in the books of account, pending approval at the
Annual General Meeting.
12. Income Tax:
a) Current tax:
Provision is made for income tax, based on the liability as computed
after taking credit for allowances and exemptions. Adjustments in books
are made only after the completion of the assessment.
b) Deferred Tax :
Consequent to the Accounting Standard Ã22 " Accounting for taxes on
income '' becoming mandatory the differences that result between the
profit offered for income tax and the profit as per the financial
statement are identified and thereafter a deferred tax liability is
recorded for timing differences, namely the differences that originate
in one accounting period and reverse in another.
The tax effect is calculated on the accumulated timing difference at
the end of an accounting period based on prevailing enacted
regulations.
Deferred tax assets are recognized only if there is reasonable
certainty that they will be realized and are reviewed for the
appropriateness of their respective carrying values at each balance
sheet date.
Minimum alternative tax payable under the provisions of the Income Tax
Act, 1961 is recognized as an asset in the year in which credit becomes
eligible and is set off in the year in which the Company becomes liable
to pay income taxes at the enacted tax rates and shall be reversed in
the year in which it lapses.
13. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outfow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements
14. Intangible Assets
(a) Intangible Assets are recognised only if they meet the recognition
criteria as laid by Accounting Standard (AS) 26 on "Intangible assets".
(b) Intangible assets are measured at cost and amortised over their
useful life.
(c) Expenditure on Research phase is recognised as an expense when it
is incurred.
(d) Expenditure on development phase is recognised as an Intangible
Asset only if it meets the recognition criteria as laid by AS 26 on
Intangible Assets. These assets are amortised over the useful period of
life starting from the year when the asset frst meets the recognition
criteria.
15. Impairment of Assets
An Asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Profit & Loss Account in the year in which as asset is identified as
impaired. The impairment loss recognised in prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount. During the year no impairment of Assets is recognised.
16. Accounting policies not specifically referred to are consistent
with generally accepted accounting principles.
Mar 31, 2010
1. Accounting Convention:
The Financial statements are prepared in accordance with applicable
Accounting Standards in In- dia. A summary of important Accounting
Policies, which have been applied consistently, is set out below.
Accounting Policies comprises Accounting Standards specified by the
Central Government u/s 211 (3C) of the Companies Act 1956, other
pronouncements of The Institute of Chartered Accountant of India and
Guidelines issued by SEBI. The Financial Statement have also been pre-
pared in accordance with relevant presentational requirements of the
Companies Act 1956. The Financial Statements are rounded of to the
nearest Rupees.
2. Basis of Accounting:
The accounts are prepared under the historical cost convention and on
the basis of going concern. All Expenses and incomes to the extent
ascertained as payable and receivable respectively are ac- counted for
on mercantile basis unless otherwise stated.
3. Use of Estimates
The presentation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of financial statements and the reported amount
of revenues and expenses during the reporting period. Difference
between the actual re- sults and estimates are recognized in the period
in which the results are known/materialized.
4. Fixed Assets and Depreciation
(a) All fixed assets are stated at cost less accumulated depreciation.
Cost of acquisition or con- struction is inclusive of freight, duties,
fees and incidental expenses to bring the assets to its present
condition and location and interest on loans attributable to the
acquisition of assets up to the date of commissioning of assets.
(b) The company is following the straight line method of depreciation
at the rates as specified in schedule XIV of the Companies Act, 1956.
Depreciation is calculated on a pro-rata basis from the date of
additions, except in the case of assets costing up to Rs.5000/- each,
where each such asset is fully depreciated in the year of purchase.
On assets sold, discarded etc, during the year depreciation is provided
up to the date of sale/ discard.
(c) Premium on Lease hold land is amortised over the period of Lease.
(d) Capital work in Progress include advance paid towards the
acquisition of Fixed Assets out- standing at each Balance Sheet date
and the cost of Fixed Assets not ready for their intended use before
such date.
5. Inventories are valued as under:-
(a) Stock of Raw Material and Packing Material :- At Cost or Net
Realizable Value, whichever is lower (As per AS-2 "Valuation of
Inventories"). Cost ascertained on FIFO basis, excluding recoverable
rates and taxes.
(b) Stock of work in process: - At material cost plus apportioned
manufacturing overheads or net realizable value whichever is lower.
(c) Stock of Finished Goods: - At Cost or Net Realizable Value,
whichever is lower. Cost includes material cost plus apportioned
manufacturing overheads and expenditure incurred in the normal course
of business in bringing such inventories to its present location. It
also includes excise duty paid or payable in accordance with Accounting
Standard - 2 "Valuation of Inven- tories" issued by ICAI.
(d) Stock in Transit: At Cost
6. Investments
Investments are classified into current and long term Investments.
(a) Long term investments are stated at cost of acquisition. Provision
for diminution is made only to recognize a decline other than
temporary, if any, in the value of investments.
(b) Current investments are carried at lower of cost and fair market
value.
7. Revenue Recognition
Revenue is recognized upon the transfer of title of goods and when all
significant risks and rewards of ownership have been transferred to the
buyer. Transfer of the title generally coincides with the delivery of
the goods. Revenue is recognized when there is reasonable certainty of
its ultimate realization.
Sales are net of VAT, breakage, leakage and trade discount but include
Excise Duty.
8. Foreign Exchange Transactions
(a) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of transaction and
variation, if any, is accounted for on the date of pay- ment, if
squared the same accounting year.
(b) Monetary items denominated in foreign currencies remaining
unsettled at the year end if not covered by forward exchange contracts
are translated at year end rates.
(c) Any income/expense arising from foreign currency transactions is
dealt in the profit and loss account for the year except in cases where
they relate to acquisition of fixed assets in which case they are
adjusted in the carrying cost of such assets.
(d) Where company enters into a forward exchange contract, the
difference between the forward rate and the exchange rate at the date
of the transaction is recognized as income or expense over the life of
the contract except in the case of fixed assets, in which case, such
difference is adjusted in the carrying amount of respective fixed
assets.
9. Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction or production of qualifying assets are capitalised as part
of cost of such assets. Qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other
borrowing costs are recognized as an expense in the period in which
incurred.
10. Employee Benefits:
a) Short term Employee Benefits:
Short term employee benefits including accumulated compensated absences
as at the Balance Sheet date are recognised as an expense as per
companys schemes based on expected obligation on an undiscounted
basis.
b) Defined Contribution Plans:
Contributions paid/payable to defined contribution plans comprising of
Gratuity and Provident Funds for employees covered under the respective
schemes are recognised in the Profit & Loss Account each year.
11. Proposed Dividend
Dividends (including income tax thereon) as proposed by the Board of
Directors are provided in the books of account, pending approval at the
Annual General Meeting.
12. Income Tax:
a) Current tax: Provision is made for income tax, based on the
liability as computed after taking credit for allowances and
exemptions. Adjustments in books are made only after the comple- tion
of the assessment.
b) Deferred Tax : Consequent to the Accounting Standard -22 "
Accounting for taxes on income " becoming mandatory the differences
that result between the profit offered for income tax and the profit as
per the financial statement are identified and thereafter a deferred
tax liabil- ity is recorded for timing differences, namely the
differences that originate in one accounting period and reverse in
another.
The tax effect is calculated on the accumulated timing difference at
the end of an accounting period based on prevailing enacted
regulations.
Deferred tax assets are recognized only if there is reasonable
certainty that they will be real- ized and are reviewed for the
appropriateness of their respective carrying values at each bal- ance
sheet date.
Minimum alternative tax payable under the provisions of the Income Tax
Act, 1961 is rec- ognized as an asset in the year in which credit
becomes eligible and is set off in the year in which the Company
becomes liable to pay income taxes at the enacted tax rates and shall
be reversed in the year in which it lapses.
13. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent As- sets are neither recognised nor disclosed in the
financial statements.
14. Intangible Assets
(a) Intangible Assets are recognised only if they meet the recognition
criteria as laid by Account- ing Standard (AS) 26 on "Intangible
assets".
(b) Intangible assets are measured at cost and amortised over their
useful life.
(c) Expenditure on Research phase is recognised as an expense when it
is incurred.
(d) Expenditure on development phase is recognised as an Intangible
Asset only if it meets the recognition criteria as laid by AS 26 on
Intangible Assets. These assets are amortised over the useful period of
life starting from the year when the asset first meets the recognition
criteria.
15. Impairment of Assets
An Asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Profit & Loss Account in the year in which as asset is identified as
impaired. The impairment loss recognised in prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount. During the year no impairment of Assets is recognised.
16. Accounting policies not specifically referred to are consistent
with generally accepted accounting principles.
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