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Accounting Policies of Lakshmi Electrical Control Systems Ltd. Company
Mar 31, 2025
F MATERIAL ACCOUNTING POLICIES
1 Revenue Recognition
Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange for
transferring distinct goods or services to a customer as specified in the contract, excluding amounts collected on
behalf of third parties (for example taxes and duties collected on behalf of the government). Consideration is generally
due upon satisfaction of performance obligations and a receivable is recognised when it becomes unconditional.
Sale of goods
Revenue is recognised when a promise in a customer contract (performance obligation) has been satisfied by
transferring control over the promised goods to the customer. Control over a promised good refers to the ability
to direct the use of, and obtain substantially all of the remaining benefits from, those goods. Control is usually
transferred upon shipment, delivery to, upon receipt of goods by the customer, in accordance with the individual
delivery and acceptance terms agreed with the customers.
The amount of revenue to be recognised (transaction price) is based on the consideration expected to be received in
exchange for goods, excluding amounts collected on behalf of third parties such as sales tax or other taxes directly
linked to sales.
Income from service
Revenue from rendering of services is recognised over time as and when the customer receives the benefit of the
Company''s performance and the Company has an enforceable right to payment for services transferred.
! Property, plant and equipment
Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation less
accumulated impairment, if any.
Such assets are classified to the appropriate categories of property, plant and equipment when completed and ready
for intended use.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Company and the cost
of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is
derecognised when replaced. The other repairs and maintenance of revenue nature are charged to profit or loss
during the reporting period in which they are incurred.
Depreciation methods, estimated useful lives and residual value :
Depreciation is calculated using the straight-line method on a pro-rata basis from the month in which each asset is
put to use to allocate their cost, net of their residual values, over their estimated useful lives.
The assets'' residual values, estimated useful lives and depreciation method are reviewed at the end of each reporting
period, with the effect of any changes in estimate accounted for on a prospective basis.
Gains and losses on disposal are determined by comparing proceeds with carrying amount and are credited / debited
to profit or loss.
I Inventories
Inventories are valued at the lower of cost and net realizable value after providing for obsolescence and other losses
where considered necessary.
Cost is determined on weighted average basis. The cost of finished goods and work in progress comprises raw
materials, direct labor, other direct costs and appropriate proportion of variable and fixed overhead expenditure and
also other costs incurred in bringing the inventories to their present location and condition. Overhead expenditures
are being allocated on the basis of normal operating capacity. Costs of purchased inventory are determined after
deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business,
less the estimated costs of completion and the estimated costs necessary to make the sale.
Non- production inventory (other than those supplied along with main plant and machinery, which are capitalised
and depreciated accordingly) are charged to profit or loss on consumption.
Raw Materials and other items held for use in the production of inventories are not written down below cost if the
finished products in which they will be incorporated are expected to be sold at or above cost. Work in progress and
finished goods are valued at cost or Net Realisable Value whichever is lower. Saleable scrap is valued at the net
realisable value.
Impairment of Assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible assets, intangible assets
and investments to determine whether there is any indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the
impairment loss (if any) and if the carrying amount exceeds the recoverable amount the impairment is recognised.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset for which the estimates of future
cash flows have not been adjusted.
Impairment of financial assets
The Company assesses impairment based on Expected Credit Losses (ECL) model to the following :
⢠financial assets measured at amortised cost
⢠financial assets measured at fair value through other comprehensive income
Expected credit loss are measured through a loss allowance at an amount equal to :
⢠the twelve month expected credit losses (expected credit losses that result from those default events on the financial
instruments that are possible within twelve months after the reporting date); or
⢠full life time expected credit losses (expected credit losses that result from all possible default events over the life
of the financial instrument).
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions
that are within the scope of Ind AS 115, the Company always measures the loss allowance at an amount equal to life
time expected credit losses.
As a practical expedient, the Company uses a provision matrix to determine impairment loss on portfolio of its trade
receivable. The provision matrix is based on its historically observed default rates over the expected life of the trade
receivable and is adjusted for forward-looking estimates. At regular intervals, the historically observed default rates
are updated and changes in forward-looking estimates are analysed. In addition to the historical pattern of credit loss,
the Company has considered the likelihood of increased credit risk and consequential default by customers including
revisions in the credit period provided to the customers. In making this assessment, the Company has considered
current and anticipated future economic conditions relating to industries/business verticals that the company deals
with and the countries where it operates. In addition the Company has also considered credit reports and other credit
information for its customers to estimate the probability of default in future. The Company believes that the carrying
amount of allowance for expected credit loss with respect to trade receivables, unbilled revenue and other financial
assets is adequate.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity. Financial assets and financial liabilities are recognised when the Company becomes a
party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial instruments (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 profit or loss. Subsequently,
financial instruments are measured according to the category in which they are classified.
Segment reporting
An operating segment is a component of the Company that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s
other components and for which discrete financial information is available. Operating segments are reported in a
manner consistent with the internal reporting provided to the chief operating decision maker. All operting segments''
operating results are reviewed regularly by the Company''s Chairperson and Managing Director [CMD], who is the
Chief Operating Decision Maker [CODM], to make decisions about resources to be allocated to the segments and
assess their performance. Information reported to the CODM for the purpose of resource allocation and assessment
of segment performance focuses on the type of goods or services delivered or provided. The accounting policies
adopted for segment reporting are in conformity with the accounting policies adopted for the Company. Revenue
and expenses have been identified to segments on the basis of their relationship to the operating activities of the
segment. Income / costs which relate to the Company as a whole and are not allocable to segments on a reasonable
basis, have been included under unallocated income / costs. Interest income and expenses are not allocated to
respective segments. Inter segment pricing is determined on arm''s length basis. The Company has three reportable
segments viz., Electricals, Plastics and Wind Power generation. Geographic information is based on business sources
from respective geographic regions.
Employee Benefits
Short term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12
months after the end of the period in which the employees render the related service are recognized in respect of
employees'' services upto the end of the reporting period and are measured at the amounts expected to be paid when
the liabilities are settled. The liabilities are presented as current employee benefit obligations in the Balance Sheet.
Other long term employee benefit
The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in
which the employees render the related service. They are therefore measured as the present value of the expected
future payments to be made in respect of services provided by employee upto the end of reporting period using
the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting
period that have terms approximating to the terms of the related obligation. Measurements as a result of experience
adjustments and changes in actuarial assumptions are recognized in Statement of Profit and Loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional
right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement
is expected to occur.
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee
benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay
as a result of the unused entitlement that has accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term
employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the
actuarial valuation using the projected unit credit method at the period-end. Actuarial gains/losses are immediately
taken to the statement of profit and loss and are not deferred. The Company presents the leave as a current liability in
the balance sheet to the extent it does not have an unconditional right to defer its settlement for 12 months after the
reporting date. Where Company has the unconditional legal and contractual right to defer the settlement for a period
beyond 12 months, the same is presented as non-current liability.
Post-employment obligation
The Company operates the following post-employment schemes:
a) Defined benefit plans such as gratuity for its eligible employees, and
b) Defined contribution plans such as provident fund.
Defined contribution plan:
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation,
other than the contribution payable to the provident fund. The Company recognizes contribution payable to the
provident fund scheme and pension scheme as expenditure, when an employee renders the related service. If the
contribution payable to the scheme for service received before the balance sheet date exceeds the contribution
already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already
paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet
date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction
in future payment or a cash refund.
Voluntary Retirement Scheme : A liability for termination benefits like expenditure on Voluntary Retirement Scheme
is recognised at the earlier of when the Company can no longer withdraw the offer of termination benefit or when
the Company recognises any related restructuring costs.
Defined benefit plan:
The Company has a gratuity defined benefit plans for its employees. The costs of providing benefits under these
plans are determined on the basis of actuarial valuation at each year end. Separate actuarial valuation is carried
out for each plan using the projected unit credit method. Re-measurement gains and losses arising from experience
adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other
comprehensive income. They are included in retained earnings in the statement of changes in equity and the balance
sheet. The Company has funded this with Life Insurance Corporation of India (''LIC''). The contributions made to the
LIC are treated as plan assets. The defined benefit obligation recognised in the balance sheet represents the present
value of the defined benefit obligation as reduced by the fair value of plan assets.
Bonus plans
The Company recognizes a liability and an expense for bonus. The Company recognizes a provision where
contractually obliged or where there is a past practice that has created a constructive obligation.
] OTHER ACCOUNTING POLICIES
Foreign Currencies
Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment
in which the Company operates (''the functional currency''). The financial statements are presented in Indian rupee,
which is the Company''s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are
generally recognized in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the
exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on
translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on
the change in fair value of the item (i.e. translation differences on items whose fair value gain or loss is recognised in
Other Comprehensive Income or Statement of Profit and Loss are also recognised in Other Comprehensive Income
or Statement of Profit and Loss, respectively)"
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The income tax expenses or credit is based on taxable profit for the year determined in accordance with the provisions
of Income Tax Act, 1961. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss
because of items of income or expense that are taxable or deductible in other years and items that are never taxable
or deductible. The Company''s current tax is calculated using tax rates that have been enacted.
Deferred tax
Deferred tax is provided in full, using the balance sheet approach, on temporary differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation
of taxable profits. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets
are recognised for all deductible temporary differences and incurred tax losses to the extent that it is probable that
taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred
tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than
in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which
the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount
of its assets and liabilities.
Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in
other comprehensive income or directly in equity, in which case, the income taxes are also recognised in other
comprehensive income or directly in equity respectively.
Investment property
Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties are
measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are
measured in accordance with Ind AS 16''s requirements for cost model. The cost of Investment property includes the
cost of replacing parts and borrowing costs if the recognition criteria are met. When significant parts of the investment
property are required to be replaced at intervals, the Company depreciates them separately based on their specific
useful lives. All other repair and maintenance costs are recognised in Statement of Profit and Loss as incurred.
The Company''s Investment property consists of Land and Buildings in India. Depreciation on Buildings has been
provided on Straight Line Method as per useful life prescribed in Schedule II to Companies Act, 2013. Fair values
are determined based on evaluation performed by accredited external independent valuers. An investment property
is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future
economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property is
included in Statement of Profit and Loss in the period in which the property is derecognised.
Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance
Internally generated intangible assets
Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally
generated intangible asset arising from development (or from the development phase of an internal project) is
recognised if, and only if, all of the following have been demonstrated:
- 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.
The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from
the date when the intangible asset first meets the recognition criteria listed above. Where no internally generated
intangible asset can be recognised, development expenditure is recognised in profit and loss in the period in
which it is incurred. Subsequent to initial recognition, internally generated intangible assets are reported at cost
less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are
acquired separately.
Amortization of Intangible assets
An intangible asset with finite useful life that are acquired separately and where the useful life is 2 years or
more is capitalised and carried at cost less accumulated amortization. Amortization is recognised on a straight line
basis over the useful life of the asset.
Internally generated intangible assets are amortized over the period for which the company expects to derive the
economic benefits from such assets.
Estimated useful life of intangible assets are as follows which is based on technical evaluation of the useful lives of
the assets:
De-recognition
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from 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 derecognised.
Intangible assets are stated at cost of acquisition or construction less accumulated depreciation less accumulated
impairment, if any.
Mar 31, 2024
A COMPANY OVERVIEW
Lakshmi Electrical Control Systems Limited (''the Company'') (CIN: L31200TZ1981PLC001124) is a public limited company incorporated in India under the Companies Act, 1956 on 3rd December 1981. The company''s equity shares are listed on BSE. The address of its registered office and principal place of business are disclosed in the introduction to the Annual Report. The company is engaged in the manufacturing and selling of control panels and plastic components.
The financial statements have been prepared as a going concern in accordance with Indian Accounting Standards (Ind AS) notified under the Section 133 of the Companies Act, 2013 ("the Act") read with the Companies (Indian Accounting Standards) Rules, 2015. The presentation of the financial statements is based on the requirements of the relevant provisions of the Act.
C (i) RECENT ACCOUNTING DEVELOPMENTS AND CHANGES IN ACCOUNTING STANDARDS
The following amendments to the Indian Accounting Standards were applicable from the financial year commencing from 1st April 2023 read with the clarifications / guidances relating thereto:
(i) Ind AS 1-Presentation of Financial Statements & Ind AS 34-Interim Financial Reporting- Material Accounting Policy Information (including focus on those and entity applied the requirements of Ind AS) shall be disclosed instead of significant accounting policies as part of the financial statements.
(ii) Ind AS 8- Accounting Policies, changes in accounting estimate and errors-Clarification on what constitutes an accounting estimate provided.
(iii) Ind AS 12-Income Taxes-In case of a transaction which gives rise to equal taxable and deductible temporary differences, the initial recognition exemption from deferred tax is no longer applicable and deferred tax liability & deferred tax asset shall be recognised on gross basis for such cases.
(iv) Ind AS 101-First time adoption of Ind AS-Deferred tax assets and deferred tax liabilities to be recognised for all temporary differences associated with right-of-use assets, lease liabilities, decomissioning / restoration / similar liabilities.
(v) Ind AS 107-Financial Instruments: Disclosures- Information about the measurement basis for financial instruments shall be disclosed as part of material accounting policy information.
None of the above amendments had any material effect on the company''s financial statements, except for disclosure of Material Accounting Policies instead of Significant Accounting Policies in the financial statements
(ii) CHANGES IN ACCOUNTING STANDARDS THAT MAY AFFECT THE COMPANY AFTER 31st MARCH 2024
New Accounting Standards / Recent Accounting pronouncements not yet effective
The Ministry of Corporate Affairs ("MCA") notifies new Indian Accounting Standards or amendments to existing Indian Accounting Standards under the Companies (Indian Accounting Standards) Rules from time to time. During the year ended 31st March 2024, the MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
D BASIS OF PREPARATION AND PRESENTATIOIN OF FINANCIAL STATEMENTS
The financial statements are presented in Indian Rupees which is the functional currency and presentation currency of the Company and all values are rounded to the nearest lakhs, except where otherwise indicated.
The financial statements have been prepared on the historical cost convention on accrual basis except for certain financial instruments which are measured at fair value at the end of each reporting period. Historical cost is generally based on the fair value of the consideration given in exchange of goods or services.
All assets and liabilities have been classified as current or non-current according to the Company''s normal operating cycle and other criteria set out in the Act. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
The board of directors have considered the financial position of the Company at 31st March, 2024 and projected cash flows and financial performance of the Company for at least twelve months from the date of approval of these financial statements as well as planned cost and cash improvement actions, and believe that the plan for sustained profitability remains on course.
The board of directors have taken actions to ensure that appropriate long-term cash resources are in place at the date of signing the accounts to fund the Company''s operations.
E USE OF CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these financial statements and the reported amount of revenues and expenses for the years presented. Actual results may differ from the estimates.
Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods affected.
The accounting policies which have the most material effect on the figures disclosed in the financial statements are mentioned below and these should be read in conjunction with the disclosure of the material Ind AS accounting policies provided below:
(i) Useful life of Property, Plant and Equipment and Intangible assets and depreciation
The assessment of the useful life of each asset by considering the historical experience and expectations regarding future operations and expected usage, estimated technical obsolescence, residual value, physical wear and tear, the operating environment in which the asset is located and providing for depreciation thereon needs significant judgement by the management. In case of intangible assets the useful life is determined based on the period over which future economic benefit will flow to the Company.
(ii) Income Tax & Deferred Tax
The calculation of income taxes requires judgment in interpreting tax rules and regulations. Management judgment is used to determine the amounts of deferred tax assets and liabilities and future tax liabilities to be recognised. The Company estimates the possible utilisation of unabsorbed losses while recognising deferred tax asset considering the future business plans and economic environment.
(iv) Measurement of defined benefit obligations
Gratuity actuarial valuation considers various assumptions which are based on the past experience and general economic conditions
(v) Expected Credit Loss (ECL) on financial assets
Providing for impairment on financial assets on the Expected Credit Loss (ECL) model involves using a provision matrix based on historically observed default rates over expected life of trade receivables and has to be adjusted for forward looking estimates, review of such default rates, considering the credit reports and other credit information of the customers
(vi) Net realisable value of Inventory
Determining the net realisable value of Inventory after providing for obsolescence and other losses where considered necessary involves ascertaining events and effects of events after the close of the year.
F MATERIAL ACCOUNTING POLICIES1 Revenue Recognition
Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange for transferring distinct goods or services to a customer as specified in the contract, excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government). Consideration is generally due upon satisfaction of performance obligations and a receivable is recognised when it becomes unconditional.
Revenue is recognised when a promise in a customer contract (performance obligation) has been satisfied by transferring control over the promised goods to the customer. Control over a promised good refers to the ability to direct the use of, and obtain substantially all of the remaining benefits from, those goods. Control is usually transferred upon shipment, delivery to, upon receipt of goods by the customer, in accordance with the individual delivery and acceptance terms agreed with the customers.
The amount of revenue to be recognised (transaction price) is based on the consideration expected to be received in exchange for goods, excluding amounts collected on behalf of third parties such as sales tax or other taxes directly linked to sales.
Revenue from rendering of services is recognised over time as and when the customer receives the benefit of the Company''s performance and the Company has an enforceable right to payment for services transferred.
2 Property, plant and equipment
Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation less accumulated impairment, if any.
Such assets are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. The other repairs and maintenance of revenue nature are charged to profit or loss during the reporting period in which they are incurred.
Depreciation methods, estimated useful lives and residual value :
Depreciation is calculated using the straight-line method on a pro-rata basis from the month in which each asset is put to use to allocate their cost, net of their residual values, over their estimated useful lives.
Estimated useful life of assets are as follows which is based on technical evaluation of the useful lives of the assets:
|
Particulars |
Useful life in years (Nos) |
|
Buildings |
30 |
|
Plant and equipments |
15 |
|
Furniture and fixtures |
10 |
|
Vehicles |
10 |
The assets'' residual values, estimated useful lives and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Gains and losses on disposal are determined by comparing proceeds with carrying amount and are credited / debited to profit or loss.
Inventories are valued at the lower of cost and net realizable value after providing for obsolescence and other losses where considered necessary.
Cost is determined on weighted average basis. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and appropriate proportion of variable and fixed overhead expenditure and also other costs incurred in bringing the inventories to their present location and condition. Overhead expenditures are being allocated on the basis of normal operating capacity. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
Non- production inventory (other than those supplied along with main plant and machinery, which are capitalised and depreciated accordingly) are charged to profit or loss on consumption.
Raw Materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Work in progress and finished goods are valued at cost or Net Realisable Value whichever is lower. Saleable scrap is valued at the net realisable value.
At the end of each reporting period, the Company reviews the carrying amounts of its tangible assets, intangible assets and investments to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any) and if the carrying amount exceeds the recoverable amount the impairment is recognised.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
5 Impairment of financial assets
The Company assesses impairment based on Expected Credit Losses (ECL) model to the following :
⢠financial assets measured at amortised cost
⢠financial assets measured at fair value through other comprehensive income Expected credit loss are measured through a loss allowance at an amount equal to :
⢠the twelve month expected credit losses (expected credit losses that result from those default events on the financial instruments that are possible within twelve months after the reporting date); or
⢠full life time expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115, the Company always measures the loss allowance at an amount equal to life time expected credit losses.
As a practical expedient, the Company uses a provision matrix to determine impairment loss on portfolio of its trade receivable. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward-looking estimates. At regular intervals, the historically observed default rates are updated and changes in forward-looking estimates are analysed. In addition to the historical pattern of credit loss, the Company has considered the likelihood of increased credit risk and consequential default by customers including revisions in the credit period provided to the customers. In making this assessment, the Company has considered current and anticipated future economic conditions relating to industries/business verticals that the company deals with and the countries where it operates. In addition the Company has also considered credit reports and other credit information for its customers to estimate the probability of default in future. The Company believes that the carrying amount of allowance for expected credit loss with respect to trade receivables, unbilled revenue and other financial assets is adequate.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial instruments (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 profit or loss. Subsequently, financial instruments are measured according to the category in which they are classified.
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components and for which discrete financial information is available. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. All operting segments'' operating results are reviewed regularly by the Company''s Chief Executive Officer [CEO], who is the Chief Operating Decision Maker [CODM], to make decisions about resources to be allocated to the segments and assess their performance. Information reported to the CODM for the purpose of resource allocation and assessment of segment performance focuses on the type of goods or services delivered or provided. The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Company. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Income / costs which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under unallocated income / costs. Interest income and expenses are not allocated to respective segments. Inter segment pricing is determined on arm''s length basis. The Company has three reportable segments viz., Electricals, Plastics and Wind Power generation. Geographic information is based on business sources from respective geographic regions.
8 Employee Benefits Short term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees'' services upto the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the Balance Sheet.
Other long term employee benefit
The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of the expected future payments to be made in respect of services provided by employee upto the end of reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Measurements as a result of experience adjustments and changes in actuarial assumptions are recognized in Statement of Profit and Loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the period-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The Company presents the leave as a current liability in the balance sheet to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date. Where Company has the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as non-current liability.
Post-employment obligation
The Company operates the following post-employment schemes:
a) Defined benefit plans such as gratuity for its eligible employees, and
b) Defined contribution plans such as provident fund.
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme and pension scheme as expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
Voluntary Retirement Scheme : A liability for termination benefits like expenditure on Voluntary Retirement Scheme is recognised at the earlier of when the Company can no longer withdraw the offer of termination benefit or when the Company recognises any related restructuring costs.
Defined benefit plan:
The Company has a gratuity defined benefit plans for its employees. The costs of providing benefits under these plans are determined on the basis of actuarial valuation at each year end. Separate actuarial valuation is carried out for each plan using the projected unit credit method. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and the balance sheet. The Company has funded this with Life Insurance Corporation of India (''LIC''). The contributions made to the LIC are treated as plan assets. The defined benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as reduced by the fair value of plan assets.
Bonus plans
The Company recognizes a liability and an expense for bonus. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
G OTHER ACCOUNTING POLICIES1 Foreign Currencies
Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates (''the functional currency''). The financial statements are presented in Indian rupee, which is the Company''s functional and presentation currency.
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e. translation differences on items whose fair value gain or loss is recognised in Other Comprehensive Income or Statement of Profit and Loss are also recognised in Other Comprehensive Income or Statement of Profit and Loss, respectively)"
Income tax expense represents the sum of the tax currently payable and deferred tax.
The income tax expenses or credit is based on taxable profit for the year determined in accordance with the provisions of Income Tax Act, 1961. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted.
Deferred tax is provided in full, using the balance sheet approach, on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences and incurred tax losses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the income taxes are also recognised in other comprehensive income or directly in equity respectively.
Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured in accordance with Ind AS 16''s requirements for cost model. The cost of Investment property includes the cost of replacing parts and borrowing costs if the recognition criteria are met. When significant parts of the investment property are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. All other repair and maintenance costs are recognised in Statement of Profit and Loss as incurred.
The Company''s Investment property consists of Land and Buildings in India. Depreciation on Buildings has been provided on Straight Line Method as per useful life prescribed in Schedule II to Companies Act, 2013. Fair values are determined based on evaluation performed by accredited external independent valuers. An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property is included in Statement of Profit and Loss in the period in which the property is derecognised.
An intangible asset is an identifiable non-monetary asset without physical substance Internally generated intangible assets
Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following have been demonstrated:
- 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.
The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally generated intangible asset can be recognised, development expenditure is recognised in profit and loss in the period in which it is incurred. Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
Amortization of Intangible assets
An intangible asset with finite useful life that are acquired separately and where the useful life is 2 years or more is capitalised and carried at cost less accumulated amortization. Amortization is recognised on a straight line basis over the useful life of the asset.
Internally generated intangible assets are amortized over the period for which the company expects to derive the economic benefits from such assets.
Estimated useful life of intangible assets are as follows which is based on technical evaluation of the useful lives of the assets:
|
Particulars |
Useful Life in years (Nos) |
|
Technical know fees |
6 |
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from 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 derecognised.
Intangible assets are stated at cost of acquisition or construction less accumulated depreciation less accumulated impairment, if any.
5 Provisions and contingencies
Provisions: Provisions are recognised when there is a present obligation or constructive obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are determined by discounting the expected future cash flows at a pre tax rate that reflects current market assessment of the time value of money and the risks specific to the liability.
Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
Contingent asset: Contingent Assets is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. Contingent assets are disclosed in the Financial Statements by way of notes to accounts when an inflow of economic benefits is probable.
All purchases or sales of financial assets are recognized and de-recognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the market place.
All recognized financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
The Company classifies its financial assets in the following measurement categories:
⢠those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
â¢those measured at amortised cost.
The classification depends on the Company''s business model for managing the financial assets and the contractual terms of the cash flows.
A financial asset that meets the following two conditions is measured at amortised cost unless the asset is designated at fair value through profit or loss under the fair value option:
⢠Business model test : the objective of the Company''s business model is to hold the financial asset to collect the contractual cash flows.
⢠Cash flow characteristic test : the contractual term of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A financial asset that meets the following two conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option:
⢠Business model test : the financial asset is held within a business model whose objective is achieved by both collecting cash flows and selling financial assets.
⢠Cash flow characteristic test : the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All other financial assets are measured at fair value through profit or loss.
Financial assets at fair value through profit or loss (FVTPL)
Investment in equity instrument are classified at fair value through profit or loss, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.
Financial assets that do not meet the amortised cost criteria or fair value through other comprehensive income criteria are measured at fair value through profit or loss. A financial asset that meets the amortised cost criteria or fair value through other comprehensive income criteria may be designated as at fair value through profit or loss upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets and liabilities or recognising the gains or losses on them on different bases.
Investments in debt based mutual funds are measured at fair value through profit or loss.
Financial assets which are fair valued through profit or loss are measured at fair value at the end of each reporting period, with any gains or losses arising on re-measurement recognized in profit or loss.
Trade receivables are recognised initially at fair value unless they do not carry a significant financing component, in which case they are recognized at the transaction price.
The Company generally determines the allowance for expected credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company considered current and anticipated future economic conditions relating to industries the company deals with and the countries where it operates. In calculating expected credit loss, the Company has also considered credit reports and other related credit information for its customers to estimate the probability of default in future.
Cash and cash equivalents
In the cash flow statement, cash and cash equivalents includes cash in hand, cheques and drafts in hand, balances with bank and deposits held at call with financial institutions, short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet and forms part of financing activities in the cash flow statement. (Bank overdraft are shown within other financial liabilities in the balance sheet and forms part of financing activities in the cash flow statement.)
Income recognition
Interest income: Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset of that asset''s net carrying amount on initial recognition.
All financial liabilities are subsequently measured at amortised cost using the effective interest rate method or at fair value through profit or loss.
Trade and other payables
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.
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest rate method.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Foreign exchange gains or losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in profit or loss.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the exchange rate at the end of the reporting period. For financial liabilities that are measured as at fair value through profit or loss, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss.
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are incurred.
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
Basic earnings per share have been computed by dividing the net income by the weighted average number of shares outstanding during the year. Diluted earnings per share has been computed using the weighted average number of shares and diluted potential shares, except where the result would be anti-dilutive
Final dividends on shares are recorded on the date of approval by the shareholders of the Company.
In cases of finance leases, the Company, at the inception of a contract, assessess whether the contract is a lease or not lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a time in exchange for a consideration.
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Company''s incremental borrowing rate. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company''s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with these leases as an expense over the lease term.
In the comparative period, leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments and receipts under operating leases are recognised as an expense and income respectively, on a straight line basis in the statement of profit and loss over the lease term except where the lease payments are structured to increase in line with expected general inflation.
Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental Income arising there from is accounted for on a straight line basis over the lease terms.
Cash flows are reported using the indirect method, whereby profit / (loss) before exceptional items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. Cash and cash equivalents include cash on hand, cash with banks in current and deposit accounts with necessary disclosure of cash and cash equivalent balances that are not available for use by the company.
Mar 31, 2018
1. Significant Accounting Policies
1.1 Statement of Compliance
The financial statements have been prepared as a going concern in accordance with Indian Accounting Standards (Ind AS) notified under the Section 133 of the Companies Act, 2013 ("the Act") read with the Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act.
Upto the year ended 31st March, 2017, the Company prepared financial statements in accordance with the requirements of previous GAAP, which includes standards notified under the Companies (Accounting Standards) Rules, 2006 and other relevant provisions of the Act.
These are Company''s first Ind AS based financial statements. The date of transition to Ind AS is 1st'' April, 2016. Company has opted certain exemptions while first-time adoption of Ind AS based Financial statement (refer note 45 of Financial Statement)
2.2 Basis of Preparation and Presentation
The financial statements have been prepared on the historical cost convention on accrual basis except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained in the accounting policies mentioned below. Historical cost is generally based on the fair value of the consideration given in exchange of goods or services.
The principal accounting policies are set out below:
All assets and liabilities have been classified as current or noncurrent according to the Company''s operating cycle and other criteria set out in the Act. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
2.3 Going Concern
The Board of Directors have considered the financial position of the Company at 31st March, 2018 and projected cash flows and financial performance of the Company for at least twelve months from the date of approval of these financial statements as well as planned cost and cash improvement actions, and believe that the plan for sustained profitability remains on course.
The Board of Directors have taken actions to ensure that appropriate long-term cash resources are in place at the date of signing the accounts to fund the Company''s operations.
2.4 Use of Estimates and Judgements
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these financial statements and the reported amount of revenues and expenses for the years presented. Actual results may differ from the estimates.
Estimates and underlying assumptions are reviewed at each Balance Sheet date. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods affected.
2.5 Revenue Recognition
The Company recognizes revenue when the amount of revenue and its related cost can be reliably measured and it is probable that future economic benefits will flow to the entity and specific criteria in relation to significant risk.
2.5.1 Sale of goods
Revenue from sale of products is recognised when the products are delivered to the dealer / customer or when delivered to the carrier, when risks and rewards of ownership pass to the dealer / customer, as per terms of contract.
Revenue is measured at the fair value of the consideration received or receivable and net of returns, trade allowances and rebates. It includes excise duty but excludes Value Added Taxes.
2.5.2 Income from service
Income from services is accounted over the period of rendering of services.
2.6. Foreign Currencies
2.6.1 Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates (''the functional currency''). The financial statements are presented in Indian Rupee, which is the Company''s functional and presentation currency.
2.6.2 Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss.
2.7. Employee Benefits
2.7.1 Short term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees'' services upto the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the Balance Sheet.
2.7.2 Other long term employee benefit
The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of the expected future payments to be made in respect of services provided by employee upto the end of reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Measurements as a result of experience adjustments and changes in actuarial assumptions are recognized in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the period-end. Actuarial gains/losses are immediately taken to the Statement of Profit and Loss and are not deferred. The Company presents the leave as a current liability in the Balance Sheet to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date. Where Company has the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as non-current liability.
2.7.3 Post-employment obligation
The Company operates the following post-employment schemes:
a) Defined benefit plans such as gratuity for its eligible employees, and
b) Defined contribution plans such as provident fund.
Defined contribution plan:
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme and pension scheme as expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
Defined benefit plan:
The Company has a gratuity defined benefit plans for its employees. The costs of providing benefits under these plans are determined on the basis of actuarial valuation at each year end. Separate actuarial valuation is carried out for each plan using the projected unit credit method. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and the balance sheet. The Company has funded this with Life Insurance Corporation of India (''LIC''). The contributions made to the LIC are treated as plan assets. The defined benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as reduced by the fair value of plan assets.
2.7.4 Bonus plans
The Company recognizes a liability and an expense for bonus. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
2.8. Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
2.8.1 Current tax
The income tax expenses or credit is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted.
2.8.2 Deferred tax
Deferred tax is provided in full, using the Balance Sheet approach, on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences and incurred tax losses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
2.8.3 Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the income taxes are also recognised in other comprehensive income or directly in equity respectively.
2.9. Property, plant and equipment
Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation less accumulated impairment, if any.
Such assets are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. The other repairs and maintenance of revenue nature are charged to profit or loss during the reporting period in which they are incurred.
Transition to Ind AS
On transition to Ind AS, the Company has elected to continue with the carrying value of its property, plant and equipment recognised as at 1st April, 2016, measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
Depreciation methods, estimated useful lives and residual value :
Depreciation is calculated using the straight-line method on a pro-rata basis from the month in which each asset is put to use to allocate their cost, net of their residual values, over their estimated useful lives.
The assets'' residual values, estimated useful lives and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Gains and losses on disposal are determined by comparing proceeds with carrying amount and are credited / debited to profit or loss.
2.10. Intangible assets
Intangible assets are stated at cost of acquisition or construction less accumulated depreciation less accumulated impairment, if any.
2.10.1 Deemed cost on transition to Ind AS
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognised as of 1st April, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
2.11. Impairment of tangible and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
2.12. Inventories
Inventories are valued at the lower of cost and net realizable value after providing for obsolescence and other losses where considered necessary.
Cost is determined on weighted average basis. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and appropriate proportion of variable and fixed overhead expenditure and also other costs incurred in bringing the inventories to their present location and condition. Overhead expenditures are being allocated on the basis of normal operating capacity. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
Non-production inventory (other than those supplied along with main plant and machinery, which are capitalised and depreciated accordingly) are charged to profit or loss on consumption.
2.13. Provisions and contingencies
Provisions: Provisions are recognised when there is a present obligation or constructive obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are determined by discounting the expected future cash flows at a pre tax rate that reflects current market assessment of the time value of money and the risks specific to the liability.
Contingent Iiabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
2.14. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial instruments (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 profit or loss. Subsequently, financial instruments are measured according to the category in which they are classified.
2.15. Financial assets
All purchases or sales of financial assets are recognized and de-recognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
2.15.1 Classification of financial assets
Classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
- those measured at amortised cost.
The classification depends on the Company''s business model for managing the financial assets and the contractual terms of the cash flows.
A financial asset that meets the following two conditions is measured at amortised cost unless the asset is designated at fair value through profit or loss under the fair value option:
- Business model test : the objective of the Company''s business model is to hold the financial asset to collect the contractual cash flows.
- Cash flow characteristic test : the contractual term of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A financial asset that meets the following two conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option:
- Business model test : the financial asset is held within a business model whose objective is achieved by both collecting cash flows and selling financial assets.
- Cash flow characteristic test : the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All other financial assets are measured at fair value through profit or loss.
2.15.2 Financial assets at fair value through profit or loss (FVTPL)
Investment in equity instrument are classified at fair value through profit or loss, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.
Financial assets that do not meet the amortised cost criteria or fair value through other comprehensive income criteria are measured at fair value through profit or loss. A financial asset that meets the amortised cost criteria or fair value through other comprehensive income criteria may be designated as at fair value through profit or loss upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets and liabilities or recognising the gains or losses on them on different bases.
Investments in debt based mutual funds are measured at fair value through profit or loss.
Financial assets which are fair valued through profit or loss are measured at fair value at the end of each reporting period, with any gains or losses arising on re-measurement recognized in profit or loss.
2.15.3 Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost less provision for impairment.
2.15.4 Cash and cash equivalents
In the cash flow statement, cash and cash equivalents includes cash in hand, cheques and drafts in hand, balances with bank and deposits held at call with financial institutions, short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet and forms part of financing activities in the cash flow statement. Book overdraft are shown within other financial liabilities in the balance sheet and forms part of operating activities in the cash flow statement.
2.15.5 Impairment of financial assets
The Company assesses impairment based on Expected Credit Losses (ECL) model to the following:
- financial assets measured at amortised cost
- financial assets measured at fair value through other comprehensive income Expected credit loss are measured through a loss allowance at an amount equal to :
- the twelve month expected credit losses (expected credit losses that result from those default events on the financial instruments that are possible within twelve months after the reporting date); or
- full life time expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
2.15.6 Income recognition
Interest Income: Interest income from debt instruments is recognised using the effective interest rate method.
2.16. Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest rate method or at fair value through profit or loss.
2.16.1 Trade and other payables
Trade and other payables represent liabilities for goods or services provided to the Company prior to the end of financial year which are unpaid.
2.16.2 Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest rate method.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
2.16.3 Foreign exchange gains or losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in profit or loss.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the exchange rate at the end of the reporting period. For financial liabilities that are measured as at fair value through profit or loss, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss.
2.17. Segment reporting
An operating segment is a component of the company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components and for which discrete financial information is available. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
All operating segments'' operating results are reviewed regularly by the Company''s Chief Executive Officer [CEO], who is the Chief Operating Decision Maker [CODM], to make decisions about resources to be allocated to the segments and assess their performance. Information reported to the CODM for the purpose of resource allocation and assessment of segment performance focuses on the type of goods or services delivered or provided. The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Company. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Income / costs which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under unallocated income / costs. Interest income and expenses are not allocated to respective segments. Inter segment pricing is determined on arm''s length basis. The Company has three reportable segments viz., Electricals, Plastics and Wind Power generation. Geographic information is based on business sources from respective geographic regions.
2.18. Leases
Leases of property, plant and equipment where the Company, as a lessee has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the lease''s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases.
2.19. Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are incurred.
2.20. Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
2.21. Earning Per Share
Basic earnings per share have been computed by dividing the net income by the weighted average number of shares outstanding during the year. Diluted earnings per share has been computed using the weighted average number of shares and diluted potential shares, except where the result would be anti-dilutive.
2.22. Dividends
Final dividends on shares are recorded on the date of approval by the shareholders of the Company.
2.23. New Amendments issued yet not effective:
2.23.1 Ind AS 115, Revenue from contracts with customers
a) It deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity''s contracts with customers. The standard replaces Ind AS 18 Revenue and Ind AS 11 Construction contracts and related appendices. The new standard is mandatory for financial years commencing on or after 1st April, 2018 and early application is not permitted. The standard permits either a full retrospective or a modified retrospective approach for the adoption.
b) The Company is in the process of evaluating the impact of the standard.
2.23.2 Amendments to Ind AS 40 Investment property - Transfers of investment property
a) The amendments clarify that transfers to, or from, investment property can only be made if there has been a change in use that is supported by evidence. A change in use occurs when the property meets, or ceases to meet, the definition of investment property.
b) The Company has assessed the impact of the above the notification and concluded there is no impact on the above.
2.23.3 Amendments to Ind AS 12 Income taxes regarding recognition of deferred tax assets on unrealised losses
a) The amendments clarify the accounting for deferred taxes where an asset is measured at fair value and that fair value is below the asset''s tax base.
b) The Company is in the process of evaluating the impact of the standard.
2.23.4 Notification of Appendix B to Ind AS 21 Foreign currency transactions and advance consideration
a) The MCA has notified Appendix B to Ind AS 21, Foreign currency transactions and advance consideration. The appendix clarifies how to determine the date of transaction for the exchange rate to be used on initial recognition of a related asset, expense or income where an entity pays or receives consideration in advance for foreign currency-denominated contracts.
b) The Company has assessed the impact of the above the notification and concluded there is no impact on the above.
Mar 31, 2017
1. Method of Accounting:
The financial statements are prepared on the historical cost convention basis on accrual concept and in accordance with the accounting principles generally accepted in India (Indian GAAP) and comply with the mandatory accounting standards notified by the Central Government of India under the Companies (Accounting Standards) Rules, 2006 (as amended) and the guidelines issued by the Securities and Exchange Board of India (SEBI) and the relevant provisions of the Companies Act,2013 to the extent applicable.
2. Fixed Assets [Property, Plant and Equipment]:
Property, Plant and Equipment include all expenditure of capital nature and are stated at aggregate cost of acquisition, installation and commissioning less Cenvat Credit, VAT credit wherever applicable. Property, Plant and Equipment values are stated at historical cost. Interest, if any, on borrowing attributable to acquisition of assets are capitalized and included in the cost of asset, as appropriate.
3. Depreciation:
a) Depreciation on Fixed Assets [Property, Plant and Equipment] has been provided on the basis of useful lives of the Fixed Assets [Property, Plant and Equipment] in accordance with Schedule II of the Companies Act, 2013.
b) For additions during the year, Prorata depreciation has been provided from the date of addition.
4. Investments:
Investments being long term are stated at cost inclusive of all expenses incidental to acquisition. Provision for diminution in their market value is made only if such decline is other than temporary.
5. Employee benefits:
Short term employee benefits (other than termination benefits) which are payable within 12 months after the end of the period in which the employees rendered service are accounted on accrual basis.
Defined Contribution Plans
Companyâs contributions paid/payable during the year to Provident Fund and Superannuation Fund and ESIC are recognized in the profit and loss statement.
Defined Benefit Plans
Companyâs liabilities towards gratuity is determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognized on a straight line basis over the average period until the amended benefits becomes vested. Actuarial gains or losses are recognized immediately in the profit and loss statement as income or expenses. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the balance sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligations. The expected return on plan assets is based on market expectations at the beginning of the period for returns over the entire life of the related obligations.
The cost of termination benefits, namely voluntary retirement payments are expensed in the year of payment.
Provision is made in the accounts for Unpaid Leave Encashment based on actuarial certificate obtained in terms of AS 15 (Revised 2005).
6. Taxation:
Provision for taxation is made as per estimated total income after considering various reliefs admissible under the provisions of the Income Tax Act, 1961.
In terms of Accounting Standard 22, the deferred tax liability for timing difference between the book and tax profits for the year is accounted for, using the tax rates and laws that have been enacted on the Balance Sheet date.
7. 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 to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
8. Foreign Currency Transactions:
Foreign currency transactions are recorded at the prevailing exchange rates at the time of initial recognition. Exchange differences arising on final settlement are adjusted and recognized as income or expense in the Statement of Profit and Loss. Outstanding balances of monetary items denominated in foreign currency are restated at closing exchange rates and the difference is adjusted as income or expense in the Statement of profit and loss.
The premium or discount arising at the inception of forward exchange contracts is accounted as income or expense over the life of the contract. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense in the period in which they arise.
9. Recognition of Income and Expenditure :
Income and expenditure are recognized and accounted on accrual basis. Revenue from sale transaction is recognized as and when the goods are sold to the buyer for a definite consideration and the legal title is passed on to the buyer. Revenue from service transaction and other sources is recognized on the completion of the contract. Dividend from Investments and Export incentives are recognized when the right to receive payment/credit is established and no significant uncertainty as to measurability or collectability exists.
10. Excise Duty and Customs Duty :
Excise duty in respect of goods manufactured by the Company is accounted at the time of removal of goods from the factory for sale or captive consumption. Cenvat credit in respect of capital goods is deducted in the respective capital goods and in respect of revenue items deducted from respective revenue items and consumption arrived at on that basis. Excise duty on closing stock of inventory of finished goods is included in the inventory value in terms of the relevant Accounting Standard AS 2.
11. Research & Development:
Research & Development costs are charged to revenue in the period in which they are incurred.
12. Impairment of Assets:
An asset is treated as impaired when the carrying amount of the asset exceeds its estimated recoverable value. Carrying amounts of fixed assets [Property, Plant and Equipment] are reviewed at each balance sheet date to determine indications of impairment, if any, of those assets. If any such indication exists, the recoverable amount of the asset is estimated and an impairment loss equal to the excess of the carrying amount over its recoverable value is recognized as an impairment loss. The impairment loss, if any, recognized in prior accounting period is reversed if there is a change in estimate of recoverable amount.
13. Earning per share:
Basic Earnings per share is calculated by dividing the Net Profit after tax attributable to the equity shareholders by the weighted average number of Equity Shares outstanding during the year.
14. Borrowing costs:
Borrowing costs, if any, attributable to acquisition/ construction of qualifying assets are capitalized and included in the cost of the asset, as appropriate.
15. Cash Flow Statement and Cash and cash equivalents:
Cash Flows are reported using the Indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of income or expense associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated. Cash and cash equivalents include cash on hand and balances with banks in current and deposit accounts with necessary disclosure of cash and cash equivalent balances that are not available for use by the company.
Mar 31, 2016
1. Method of Accounting:
The financial statements are prepared on the historical cost convention basis on accrual concept and in accordance with the accounting principles generally accepted in India (Indian GAAP) and comply with the mandatory accounting standards notified by the Central Government of India under the Companies (Accounting Standards) Rules, 2006 (as amended) and the guidelines issued by the Securities and Exchange Board of India (SEBI) and the relevant provisions of the Companies Act,2013 to the extent applicable.
2. Fixed Assets:
Fixed Assets include all expenditure of capital nature and are stated at aggregate cost of acquisition, installation and commissioning less Canvas Credit, VAT credit wherever applicable. Fixed assets values are stated at historical cost. Interest, if any, on borrowing attributable to acquisition of assets are capitalized and included in the cost of asset, as appropriate.
3. Depreciation :
a) Depreciation on Fixed Assets has been provided on the basis of useful lives of the Fixed Assets in accordance with Schedule II of the Companies Act, 2013.
b) For additions during the year, Prorata depreciation has been provided from the date of addition.
c) For all the assets costing below Rs.5,000/- each, depreciation is provided @ 100% retaining Re.1/- as residual value in the year of addition, irrespective of date of addition.
4. Investments:
Investments being long term are stated at cost inclusive of all expenses incidental to acquisition. Provision for diminution in their market value is made only if such decline is other than temporary.
5. a) The Gratuity liability is covered by contributions to Life Insurance Corporation of Indiaâs Employees
(Cash Accumulation) Assurance Scheme and the contribution paid relating to the year is charged to the Statement of Profit & Loss of the year.
b) Provision is made in the accounts for Unpaid Leave Encashment based on actuarial certificate obtained in terms of AS 15 (Revised 2005).
6. Taxation:
Provision for taxation is made as per estimated total income after considering various reliefs admissible under the provisions of the Income Tax Act, 1961.
In terms of Accounting Standard 22, the deferred tax liability for timing difference between the book and tax profits for the year is accounted for, using the tax rates and laws that have been enacted on the Balance Sheet date.
7. 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 to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
8. Foreign Currency Transactions:
Foreign currency transactions are recorded at the prevailing exchange rates at the time of initial recognition. Exchange differences arising on final settlement are adjusted and recognized as income or expense in the Statement of Profit and Loss. Outstanding balances of monetary items denominated in foreign currency are restated at closing exchange rates and the difference is adjusted as income or expense in the Statement of profit and loss .
The premium or discount arising at the inception of forward exchange contracts is accounted as income or expense over the life of the contract. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense in the period in which they arise.
9. Recognition of Income and Expenditure :
Income and expenditure are recognized and accounted on accrual basis. Revenue from sale transaction is recognized as and when the goods are sold to the buyer for a definite consideration and the legal title is passed on to the buyer. Revenue from service transaction and other sources is recognized on the completion of the contract.
10. Excise Duty and Customs Duty :
Excise duty in respect of goods manufactured by the Company is accounted at the time of removal of goods from the factory for sale or captive consumption. Cenvat credit in respect of capital goods is deducted in the respective capital goods and in respect of revenue items deducted from respective revenue items and consumption arrived at on that basis. Excise duty on closing stock of inventory of finished goods is included in the inventory value in terms of the relevant Accounting Standard AS2.
11. Research & Development :
Research & Development costs are charged to revenue in the period in which they are incurred.
12. Impairment of Assets:
An asset is treated as impaired when the carrying amount of the asset exceeds its estimated recoverable value. Carrying amounts of fixed assets are reviewed at each balance sheet date to determine indications of impairment, if any, of those assets. If any such indication exists, the recoverable amount of the asset is estimated and an impairment loss equal to the excess of the carrying amount over its recoverable value is recognized as an impairment loss. The impairment loss, if any, recognized in prior accounting period is reversed if there is a change in estimate of recoverable amount.
II. Notes forming part of Accounts:
1. Consumption of Raw Materials & Components:
2. As defined under Micro, Small and Medium Enterprises Development Act 2006, the disclosure in respect of the amount payable to such enterprises as at 31.03.2016 has been made in the financial statements based on information received and available with the company.
Note: The salary escalation considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. Gratuity is applicable to all permanent and full time employees of the Company. âGratuity payment is based on last drawn basic salary and dearness allowance at the time of termination or retirement. The Scheme takes into account each completed year of service or part thereof in excess of six months. The entire contribution is borne by the Companyâ. Leave encashment benefits are provided as per the Rules of the Company.
13. Some of the Debtors / Creditors accounts whose balances show a variance as compared to the Books of Accounts of the Company are in the process of reconciliation. This however will not have any material impact on the profits for the year.
14. Figures have been rounded off to the nearest rupee.
15. The previous yearâs figures have been regrouped and reclassified wherever necessary to suit this yearâs presentation.
Mar 31, 2014
1. Method of Accounting :
The financial statements are prepared on the historical cost convention
basis on accrual concept and in accordance with the applicable
Accounting Standards referred to in Sub Section 3C of Section 211 of
the Companies Act, 1956 and normally accepted accounting principles.
The accounting is on the basis of going concern concept.
2. Fixed Assets:
Fixed Assets include all expenditure of capital nature and are stated
at aggregate of cost of acquisition, installation and commissioning
less Cenvat Credit, VAT credit wherever applicable. Fixed assets values
are stated at historical cost. Interest, if any, on borrowing
attributable to acquisition of assets are capitalised and included in
the cost of asset, as appropriate.
3. Depreciation :
a) Depreciation on Fixed Assets has been provided on Written Down Value
Method in accordance with Schedule XIV of the Companies Act, 1956,
except for Moulds and Dies added after 1st April 1994 for which
depreciation is provided @ 33.33% on straight line method.
b) For additions during the year, Prorata depreciation has been
provided from the date of addition.
c) For all the assets costing below Rs.5,000/- each, depreciation is
provided @ 100% retaining Re.1/- as residual value in the year of
addition, irrespective of date of addition.
4. Investments:
Investments being long term are stated at cost inclusive of all
expenses incidental to acquisition. Provision for diminution in their
market value is made only if such decline is other than temporary.
5.a) The Gratuity liability is covered by contributions to Life
Insurance Corporation of India''s Employees (Cash Accumulation)
Assurance Scheme and the contribution paid relating to the year is
charged to the Statement of Profit & Loss of the year.
b) Provision is made in the accounts for Unpaid Leave Encashment based
on actuarial certificate obtained in terms of AS 15 (Revised 2005).
6. Taxation :
Provision for taxation is made as per estimated total income after
considering various reliefs admissible under the provisions of the
Income Tax Act, 1961.
In terms of Accounting Standard 22, the deferred tax liability for
timing difference between the book and tax profits for the year is
accounted for, using the tax rates and laws that have been enacted on
the Balance Sheet date.
7. 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 to financial statements. Contingent assets are neither recognized
nor disclosed in the financial statements. Provisions, contingent
liabilities and contingent assets are reviewed at each balance sheet
date and adjusted to reflect the current best estimate.
8. Foreign Currency Transactions :
Foreign currency transactions are recorded at the prevailing exchange
rates at the time of initial recognition. Exchange differences arising
on final settlement are adjusted and recognized as income or expense in
the Statement of Profit & Loss. Outstanding balances of monetary items
denominated in foreign currency are restated at closing exchange rates
and the difference is adjusted as income or expense in the Statement of
profit and loss .
The premium or discount arising at the inception of forward exchange
contracts is accounted as income or expense over the life of the
contract. Any profit or loss arising on cancellation or renewal of
forward exchange contract is
recognized as income or as expense in the period in which they arise.
9. Recognition of Income and Expenditure :
Income and expenditure are recognised and accounted on accrual basis.
Revenue from sale transaction is recognised as and when the goods are
sold to the buyer for a definite consideration and the legal title is
passed on to the buyer. Revenue from service transaction and other
sources is recognised on the completion of the contract.
10. Excise Duty and Customs Duty :
Excise duty in respect of goods manufactured by the Company is
accounted at the time of removal of goods from the factory for sale or
captive consumption. Cenvat credit in respect of capital goods is
deducted in the respective capital goods and in respect of revenue
items deducted from respective revenue items and consumption arrived at
on that basis. Excise duty on closing stock of inventory of finished
goods is included in the inventory value in terms of the relevant
Accounting Standard AS2.
11. Research & Development :
Research & Development costs are charged to revenue in the period in
which they are incurred.
12. Impairment of Assets:
An asset is treated as impaired when the carrying amount of the asset
exceeds its estimated recoverable value. Carrying amounts of fixed
assets are reviewed at each balance sheet date to determine indications
of impairment, if any, of those assets. If any such indication exists,
the recoverable amount of the asset is estimated and an impairment loss
equal to the excess of the carrying amount over its recoverable value
is recognized as an impairment loss. The impairment loss, if any,
recognized in prior accounting period is reversed if there is a change
in estimate of recoverable amount.
Mar 31, 2013
1. Method of Accounting :
The financial statements are prepared on the historical cost convention
basis on accrual concept and in accordance with the applicable
Accounting Standards referred to in Sub Section 3C of Section 211 of
the Companies Act, 1956 and normally accepted accounting principles.
The accounting is on the basis of going concern concept.
2. Fixed Assets:
Fixed Assets include all expenditure of capital nature and are stated
at aggregate of cost of acquisition, installation and commissioning
less Cenvat Credit, VAT credit wherever applicable. Fixed assets values
are stated at historical cost. Interest, if any, on borrowing
attributable to acquisition of assets are capitalised and included in
the cost of asset, as appropriate.
3. Depreciation :
a) Depreciation on Fixed Assets has been provided on Written Down Value
Method in accordance with Schedule XIV of the Companies Act, 1956,
except for Moulds and Dies added after 1st April 1994 for which
depreciation is provided @ 33.33% on straight line method.
b) For additions during the year, Prorata depreciation has been
provided from the date of addition.
c) For all the assets costing below Rs.5,000/- each, depreciation is
provided @ 100% retaining Rs.1/- as residual value in the year of
addition, irrespective of date of addition.
4. Investments:
Investments being long term are stated at cost inclusive of all
expenses incidental to acquisition. Provision for diminution in their
market value is made only if such decline is other than temporary.
5.a) The Gratuity liability is covered by contributions to Life
Insurance Corporation of India''s Employees (Cash Accumulation)
Assurance Scheme and the contribution paid relating to the year is
charged to the Statement of Profit & Loss of the year.
b) Provision is made in the accounts for Unpaid Leave Encashment based
on actuarial certificate obtained in terms of AS 15 (Revised 2005).
6. Taxation :
Provision for taxation is made as per estimated total income after
considering various reliefs admissible under the provisions of the
Income Tax Act, 1961.
In terms of Accounting Standard 22, the deferred tax liability for
timing difference between the book and tax profits for the year is
accounted for, using the tax rates and laws that have been enacted on
the Balance Sheet date.
7. 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 to financial statements. Contingent assets are neither recognized
nor disclosed in the financial statements. Provisions, contingent
liabilities and contingent assets are reviewed at each balance sheet
date and adjusted to reflect the current best estimate.
8. Foreign Currency Transactions :
Foreign currency transactions are recorded at the prevailing exchange
rates at the time of initial recognition. Exchange differences arising
on final settlement are adjusted and recognized as income or expense in
the Statement of Profit & Loss. Outstanding balances of monetary items
denominated in foreign currency are restated at closing exchange rates
and the difference is adjusted as income or expense in the Statement of
profit and loss .
The premium or discount arising at the inception of forward exchange
contracts is accounted as income or expense over the life of the
contract. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense in the
period in which they arise.
9. Recognition of Income and Expenditure :
Income and expenditure are recognised and accounted on accrual basis.
Revenue from sale transaction is recognised as and when the goods are
sold to the buyer for a definite consideration and the legal title is
passed on to the buyer. Revenue from service transaction and other
sources is recognised on the completion of the contract.
10. Excise Duty and Customs Duty :
Excise duty in respect of goods manufactured by the Company is
accounted at the time of removal of goods from the factory for sale or
captive consumption. Cenvat credit in respect of capital goods is
deducted in the respective capital goods and in respect of revenue
items deducted from respective revenue items and consumption arrived at
on that basis. Excise duty on closing stock of inventory of finished
goods is included in the inventory value in terms of the relevant
Accounting Standards AS2.
11. Research & Development :
Research & Development costs are charged to revenue in the period in
which they are incurred.
12. Impairment of Assets:
An asset is treated as impaired when the carrying amount of the asset
exceeds its estimated recoverable value. Carrying amounts of fixed
assets are reviewed at each balance sheet date to determine indications
of impairment, if any, of those assets. If any such indication exists,
the recoverable amount of the asset is estimated and an impairment loss
equal to the excess of the carrying amount over its recoverable value
is recognized as an impairment loss. The impairment loss, if any,
recognized in prior accounting period is reversed if there is a change
in estimate of recoverable amount.
Mar 31, 2012
1. Method of Accounting :
The financial statements are prepared on the historical cost convention
basis on accrual concept and in accordance with the applicable
Accounting Standards referred to in Sub Section 3C of Section 211 of
the Companies Act, 1956 and normally accepted accounting principles.
The accounting is on the basis of going concern concept.
2. Fixed Assets :
Fixed Assets include all expenditure of capital nature and are stated
at aggregate of cost of acquisition, installation and commissioning
less Cenvat Credit, VAT credit wherever applicable. Fixed assets
values are stated at historical cost. Interest, if any, on borrowing
attributable to acquisition of assets are capitalised and included in
the cost of asset, as appropriate.
3. Depreciation :
a) Depreciation on Fixed Assets has been provided on Written Down Value
Method in accordance with Schedule XIV of the Companies Act, 1956,
except for Moulds and Dies added after 1st' April 1994 for which
depreciation is provided @ 33.33% on straight line method.
b) For additions during the year, Prorata depreciation has been
provided from the date of addition.
c) For all the assets costing below Rs. 5,000/- each, depreciation is
provided @ 100% retaining Re.1/- as residual value in the year of
addition, irrespective of date of addition.
4. Investments :
Investments being long term are stated at cost inclusive of all
expenses incidental to acquisition. Provision for diminution in their
market value is made only if such decline is other than temporary.
5. a) The Gratuity liability is covered by contributions to Life
Insurance Corporation of India's Employees (Cash Accumulation)
Assurance Scheme and the contribution paid relating to the year is
charged to the Profit & Loss Account of the year.
b) Provision is made in the accounts for Unpaid Leave Encashment based
on actuarial certificate obtained in terms of AS 15 (Revised 2005).
6. Taxation:
Provision for taxation is made as per estimated total income after
considering various reliefs admissible under the provisions of the
Income Tax Act, 1961.
In terms of Accounting Standard 22, the deferred tax liability for
timing difference between the book and tax profits for the year is
accounted for, using the tax rates and laws that have been enacted on
the Balance Sheet date.
7. 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 to financial statements. Contingent assets are neither recognized
nor disclosed in the financial statements. Provisions, contingent
liabilities and contingent assets are reviewed at each balance sheet
date and adjusted to reflect the current best estimate.
8. Foreign Currency Transactions:
Foreign currency transactions are recorded at the prevailing exchange
rates at the time of initial recognition. Exchange differences arising
on final settlement are adjusted and recognized as income or expense in
the profit and loss account. Outstanding balances of monetary items
denominated in foreign currency are restated at closing exchange rates
and the difference is adjusted as income or expense in the profit and
loss account.
The premium or discount arising at the inception of forward exchange
contracts is accounted ' as income or expense over the life of the
contract. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense in the
period in which they arise.
9. Recognition of Income and Expenditure:
Income and expenditure are recognised and accounted on accrual basis.
Revenue from sale transaction is recognised as and when the goods are
sold to the buyer for a definite consideration and the legal title is
passed on to the buyer. Revenue from service transaction and other
sources is recognised on the completion of the contract.
10. Excise Duty and Customs Duty:
Excise duty in respect of goods manufactured by the Company is
accounted at the time of removal of goods from the factory for sale or
captive consumption. Cenvat credit in respect of capital goods is
deducted in the respective capital goods and in respect of revenue
items deducted from respective revenue items and consumption arrived at
on that basis. Excise duty on closing stock of inventory of finished
goods is included in the inventory value in terms of the relevant
Accounting Standards AS2.
11. Research & Development:
Research & Development costs are charged to revenue in the period in
which they are incurred.
12. Impairment of Assets:
An asset is treated as impaired when the carrying amount of the asset
exceeds its estimated recoverable value. Carrying amounts of fixed
assets are reviewed at each balance sheet date to determine indications
of impairment, if any, of those assets. If any such indication exists,
the recoverable amount of the asset is estimated and an impairment loss
equal to the excess of the carrying amount over its recoverable value
is recognized as an impairment loss. The impairment loss, if any,
recognized in prior accounting period is reversed if there is a change
in estimate of recoverable amount.
Mar 31, 2011
1. Method of accounting :
The financial statements are prepared on the historical cost convention
basis on accrual concept and in accordance with the applicable
Accounting Standards referred to in Sub Section 3C of Section 211 of
the Companies Act, 1956 and normally accepted accounting principles.
The accounting is on the basis of going concern concept.
2. Fixed Assets :
Fixed Assets include all expenditure of capital nature and are stated
at aggregate of cost of acquisition, installation and commissioning
less Cenvat Credit, VAT credit wherever applicable. Fixed assets
values are stated at historical cost. Interest, if any, on borrowing
attributable to acquisition of assets are capitalised and included in
the cost of asset, as appropriate.
3. Depreciation :
a) Depreciation on Fixed Assets has been provided on Written Down Value
Method in accordance with Schedule XIV of the Companies Act, 1956,
except for Moulds and Dies added after 1st April 1994 for which
depreciation is provided @ 33.33% on straight line method.
b) For additions during the year, Prorata depreciation has been
provided from the date of addition.
c) For all the assets costing below Rs.5,000/- each, depreciation is
provided @ 100% retaining Re.1/- as residual value in the year of
addition, irrespective of date of addition.
4. Investments :
Investments being long term are stated at cost inclusive of all
expenses incidental to acquisition. Provision for diminution in their
market value is made only if such decline is other than temporary.
5. Inventory valuation :
a) Stores ,Spares & Building Materials at cost.
b) Raw Materials at cost (Weighted average price).
c) Components at cost (Weighted average price).
d) Work-in-progress at estimated cost.
e) Finished goods at cost or Net realisable value whichever is lower.
The finished goods are valued inclusive of Excise Duty.
f) Scrap at net realisable value.
6. a) The Gratuity liability is covered by contributions to Life
Insurance Corporation of India's Employees (Cash Accumulation)
Assurance Scheme and the contribution paid relating to the year is
charged to the Profit & Loss Account of the year.
b) Provision is made in the accounts for Unpaid Leave Encashment based
on actuarial certificate obtained in terms of AS 15 (Revised 2005).
7. Taxation:
Provision for taxation is made as per estimated total income after
considering various reliefs admissible under the provisions of the
Income Tax Act, 1961.
In terms of Accounting Standard 22, the deferred tax liability for
timing difference between the book and tax profits for the year is
accounted for, using the tax rates and laws that have been enacted on
the Balance Sheet date.
8. 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 to financial statements. Contingent assets are neither recognized
nor disclosed in the financial statements. Provisions, contingent
liabilities and contingent assets are reviewed at each balance sheet
date and adjusted to reflect the current best estimate.
9. Transaction of Foreign Currency Transactions:
Foreign currency transactions are recorded at the prevailing exchange
rates at the time of initial recognition. Exchange differences arising
on final settlement are adjusted and recognized as income or expense in
the profit and loss account. Outstanding balances of monetary items
denominated in foreign currency are restated at closing exchange rates
and the difference is adjusted as income or expense in the profit and
loss account.
The premium or discount arising at the inception of forward exchange
contracts is accounted as income or expense over the life of the
contract. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense in the
period in which they arise.
10. Recognition of Income and Expenditure:
Income and expenditure are recognised and accounted on accrual basis.
Revenue from sale transaction is recognised as and when the goods are
sold to the buyer for a definite consideration and the legal title is
passed on to the buyer. Revenue from service transaction and other
sources is recognised on the completion of the contract.
11. Excise duty and Customs duty:
Excise duty in respect of goods manufactured by the Company is
accounted at the time of removal of goods from the factory for sale or
captive consumption. Cenvat credit in respect of capital goods is
deducted in the respective capital goods and in respect of revenue
items deducted from respective revenue items and consumption arrived at
on that basis. Excise duty on closing stock of inventory of finished
goods is included in the inventory value in terms of the relevant
Accounting Standards AS2.
12. Research & Development:
Research & Development costs are charged to revenue in the period in
which they are incurred.
13. Impairment of assets:
An asset is treated as impaired when the carrying amount of the asset
exceeds its estimated recoverable value. Carrying amounts of fixed
assets are reviewed at each balance sheet date to determine indications
of impairment, if any, of those assets. If any such indication exists,
the recoverable amount of the asset is estimated and an impairment loss
equal to the excess of the carrying amount over its recoverable value
is recognized as an impairment loss. The impairment loss, if any,
recognized in prior accounting period is reversed if there is a change
in estimate of recoverable amount.
1. Secured Loans
a. Term Loan from Indian Bank availed by the Company have been secured
by Equitable Mortgage of the Land and Buildings and Movable Machinery
including Wind Mills. During the year the entire outstanding of Term
Loans were paid and the balance outstanding was Rs.Nil as on
31.03.2011.
b. Working Capital loans from Indian Bank and Bank of Baroda have been
secured by the hypothecation of Raw Materials, Components,
Work-in-progress, Finished Goods, Book Debts and all other movable
current assets of the Company.
Note: The salary escalation considered in actuarial valuation, takes
account of inflation, seniority, promotion and other relevant factors
such as supply and demand in the employment market.
Gratuity is applicable to all permanent and full time employees of the
Company.
Gratuity payment is based on last drawn basic salary and dearness
allowance at the time of termination or retirement. The Scheme takes
into account each completed year of service or part thereof in excess
of six months.The entire contribution is borne by the Company.
Leave encashment benefits are provided as per the Rules of the Company.
13. Contingent Liabilities and claims against the company not
acknowledged as debts.
Mar 31, 2010
1. Method of accounting :
The financial statements are prepared on the historical cost convention
basis on accrual concept and in accordance with the applicable
Accounting Standards referred to in Sub Section 3C of Section 211 of
the Companies Act, 1956 and normally accepted accounting principles.
The accounting is on the basis of going concern concept.
2. Fixed Assets :
Fixed Assets include all expenditure of capital nature and are stated
at aggregate of cost of acquisition, installation and commissioning
less Cenvat Credit, VAT credit wherever applicable. Fixed assets
values are stated at historical cost. Interest, if any, on borrowing
attributable to acquisition of assets are capitalised and included in
the cost of asset, as appropriate.
3. Depreciation:
a) Depreciation on Fixed Assets has been provided on Written Down Value
Method in accordance with Schedule XIV of the Companies Act, 1956,
except for Moulds and Dies added after 1st April 1994 for which
depreciation is provided @ 33.33% on straight line method.
b) For additions during the year, Prorata depreciation has been
provided from the date of addition
c) For all the assets costing below Rs.5,000/- each, depreciation is
provided @ 100% retaining Re.1/- as residual value in the year of
addition, irrespective of date of addition.
4. Investments :
Investments being long term are stated at cost inclusive of all
expenses incidental to acquisition. Provision for diminution in their
market value is made only if such decline is other than temporary.
5. Inventory valuation :
a) Stores, spares & Building Materials at cost
b) Raw Materials at cost (Weighted average price)
c) Components at cost (Weighted average price)
d) Work-in-progress at estimated cost
e) Finished goods at cost or Net realisable value whichever is lower.
The finished goods are valued inclusive of Excise Duty.
f) Scrap at net realisable value
6. a) The Gratuity liability is covered by contributions to Life
Insurance Corporation of Indias Employees (Cash Accumulation)
Assurance Scheme and the contribution paid relating to the year is
charged to the Profit & Loss Account of the year.
b) Provision is made in the accounts for Unpaid Leave Encashment based
on actuarial certificate obtained in terms of AS 15 (Revised 2005).
7. Taxation:
Provision for taxation is made as per estimated total income after
considering various reliefs admissible under the provisions of the
Income Tax Act, 1961.
In terms of Accounting Standard 22, the deferred tax liability for
timing difference between the book and tax profits for the year is
accounted for, using the tax rates and laws that have been enacted on
the Balance Sheet date.
8. 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 to financial statements. Contingent assets are neither recognized
nor disclosed in the financial statements. Provisions, contingent
liabilities and contingent assets are reviewed at each balance sheet
date and adjusted to reflect the current best estimate.
9. Transaction of Foreign Currency Transactions:
Foreign currency transactions are recorded at the prevailing exchange
rates at the time of initial recognition. Exchange differences arising
on final settlement are adjusted to cost of fixed assets if it relates
to Fixed Assets and recognized as income or expense in the profit and
loss account in other cases. Outstanding balances of monetary items
denominated in foreign currency are restated at closing exchange rates
and the difference adjusted to cost of fixed assets if related to fixed
assets and as income or expense in the profit and loss account in other
cases.
The premium or discount arising at the inception of forward exchange
contracts is accounted as income or expense over the life of the
contract. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense in the
period in which they arise.
10. Recognition of Income and Expenditure:
Income and expenditure are recognised and accounted on accrual basis.
Revenue from sale transaction is recognised as and when the goods are
sold to the buyer for a definite consideration and the legal title is
passed on to the buyer. Revenue from service transaction and other
sources is recognised on the completion of the contract.
11. Excise duty and Customs duty:
Excise duty in respect of goods manufactured by the Company is
accounted at the time of removal of goods from the factory for sale or
captive consumption. Cenvat credit in respect of capital goods is
deducted in the respective capital goods and in respect of revenue
items deducted from respective revenue items and consumption arrived at
on that basis. Excise duty on closing stock of inventory of finished
goods is included in the inventory value in terms of the relevant
Accounting Standard AS2.
12. Research & Development:
Research & Development costs are charged to revenue in the period in
which they are incurred.
13. Impairment of assets:
An asset is treated as impaired when the carrying amount of the asset
exceeds its estimated recoverable value. Carrying amounts of fixed
assets are reviewed at each balance sheet date to determine indications
of impairment, if any, of those assets. If any such indication exists,
the recoverable amount of the asset is estimated and an impairment loss
equal to the excess of the carrying amount over its recoverable value
is recognized as an impairment loss. The impairment loss, if any,
recognized in prior accounting period is reversed if there is a change
in estimate of recoverable amount.
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