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Accounting Policies of Modi Rubber Ltd. Company
Mar 31, 2024
1. 1.1 CORPORATE INFORMATION
Modi Rubber Ltd. ("the Company") is a company domiciled in India, with its registered office situated at Modi Bhawan, Modinagar-201204, District Ghaziabad, Uttar Pradesh. The Company has been incorporated under the provisions of Indian Companies Act and its equity shares are listed on the BSE & NSE in India.
1.2 BASIS OF PREPARATION OF FINANCIAL STATEMENT
These financial statements have been prepared on accrual basis of accounting and comply in all material aspects with the Indian Accounting Standards (Ind AS) that are prescribed under section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2023 and relevant amendment rules issued thereafter.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
1.3 RECENT ACCOUNTING PRONOUNCEMENTS
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
2. MATERIAL ACCOUNTING POLICY INFORMATION Functional and Presentation Currency
The financial statements have been prepared and presented in Indian Rupees (?), which is also the Company''s functional currency.
The Ind AS financial statements has been prepared on historical cost basis, except certain class of non-financial assets (refer accounting policy on property, plant and equipment), certain financial assets, and liabilities that is measured at fair value.
All amounts in the financial statement and accompanying notes are presented in INR Lakhs and have been rounded-off to two decimal places unless stated otherwise.
The preparation of the Ind AS financial statements requires management to make estimates, judgements and assumptions that affect the reported balances of assets and liabilities, disclosure of contingent liabilities as on the date of Ind AS financial statements and reported amounts of income and expenses during the period. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Estimates, judgements and assumptions are based upon management''s evolution of the relevant fact and circumstances as on the date of financial statement. Existing circumstances and assumptions
about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
All the Assets and liabilities have been classified as current and non-current based on the company''s normal operating cycle of 12 months and other criteria set out in Schedule III of the Companies Act, 2013.
The Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities. This is based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents.
Inventories comprising of consumable and spares are valued at lower of cost and net realizable value after providing for obsolescence.
Costs comprise all cost of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.
b) Property, Plant and equipment
i) Items of property, plant & equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing cost if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. When significant part of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Subsequent costs are included in the assets carrying amount or recognised as a separate assets, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost can be measured reliably. All other repair and maintenance cost are recognised in the statement of profit and loss as incurred.
Capital Work-in-progress comprises of the cost of property, plant & equipment that are not yet ready for their intended use at the reporting date. Capital Work-in-Progress is carried at cost, comprising direct cost, related incidental expenses and interest on borrowing to the extent attributed to them.
Any gain or losses arising from retirement or disposal of property, plant and equipment are determined as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss on the date of retirement or disposal.
Leasehold land, building on leasehold land as well as building on freehold land that are neither held to earn rentals nor for capital appreciation do not qualify as investment property.
During the year ending on March 31, 2022, the Company has changed its accounting policy with respect to measurement of freehold land. According to the revised policy, freehold land (other than land under dispute) will be required to be revalued and measured at fair value, based on periodic valuation done by external valuers using market approach. Any revaluation surplus will be recorded in Other Comprehensive Income and credited to Land revaluation reserve in other equity. This revaluation surplus is not available for distribution to shareholders.
ii) Intangible assets acquired separately are measured on initial recognition at cost. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized
Subsequent measurement (Impairment, depreciation & amortisation and useful lives)
At each balance sheet date, items of property, plant and equipment are reviewed to determine whether there is any indication of impairment. If any impairment indicator exists, estimate of the recoverable amount of the property, plant and equipment is made. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount.
The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount rate.
Reversal of impairment losses recognised in earlier years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised for that asset in earlier years.
c) Depreciation and Amortization
i) Depreciation on Plant & Machinery is provided on Straight Line method and other assets on the written down value method over the useful estimated lives of assets as mentioned in Schedule II of the Companies Act, 2013. The estimated useful lives of the assets are as follows:
|
Assets |
Useful Life |
|
Building |
30-60 years |
|
Plant & Machinery |
15 years |
|
Furniture & Fixtures |
10 years |
|
Electrical Installation |
10 years |
|
Vehicles |
8 years |
|
Office Equipment |
5 years |
|
Computers |
3 years |
ii) Intangible assets are amortized on a straight line basis over the estimated useful economic life
iii) The company considers purchase of Mobile phones as revenue expenditures, hence they are charged to statement of profit & loss in the year of its purchase.
iv) Depreciation on Investment property is provided on the written down value method over the useful estimated lives of assets as mentioned in Schedule II of the Companies Act, 2013. Useful lives and residual values of all the fixed assets are reviewed annually.
d) Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
Revenue from Operations
Revenue is measured in accordance with IND AS 115. Revenue comprises of sale of rooms, foods & beverages and allied services relating to guest house operations. Revenue is recognised upon rendering of services, provided persuasive evidence of an arrangement exists, tariff/rates are fixed or are determinable and collectability is reasonably certain. Revenue from sales of goods or rendering of services is net of indirect taxes, returns or discounts.
Rental income from operating leases is recognized on a straight-line basis over the lease term.
Interest income from a financial asset is recognised 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.
Dividend income is recognized when the company''s right to receive dividend is established by the reporting date. Other Incomes are recognized on accrual basis.
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profits 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 or substantively enacted by the end of the reporting period.
Deferred tax is recognised on temporary differences between the carrying amount of assets and liabilities in the financial statements and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences 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 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 current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
Minimum alternate tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the Statement of Profit and Loss and shown as "MAT Credit
Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Company''s earning per share is the net profit for the period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares that could have been issued upon conversion.
The Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease component and the aggregate standalone price of the non-lease components. The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss. The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. For leases with reasonably similar characteristics, the Company, on a lease by lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole. The lease payments shall include fixed payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The company recognises the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in statement of profit and loss.
The Company has elected not to apply the requirements of Ind AS 116 Leases to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.
At the inception of the lease the Company classifies each of its leases as either an operating lease or a finance lease. The Company recognises lease payments received under operating leases as income on a straight-line basis over the lease term. In case of a finance lease, finance income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor''s net investment in the lease. When the Company is an intermediate lessor it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.
h) Foreign Exchange Transactions
The functional currency of the Company is the Indian rupee. These financial statements are presented in Indian rupees.
In preparing the financial statements, transactions in currencies other than the Company''s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences on monetary items are recognised in profit or loss in the period in which they arise.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in the statement of profit and loss in the period in which they are incurred.
Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds.
j) Employee BenefitsShort term employee benefits
All employee benefits payable wholly within twelve months of rendering services are classified as short term employee benefits. Benefits such as salaries, wages, expected cost of bonus, ex-gratia, leave travel allowance, medical reimbursement, etc. are recognised in the period in which the employee renders the related services.
Compensated absences: As per the Company''s leave policy, employees have to utilise their leave entitlement during the financial year and cannot carry forward their outstanding leave balance. Consequently, the Company does not make any provision for leave encashment/compensated absences as at the year end
Defined Contribution Plan - Contributions towards Employees'' PF Linked Pension Scheme is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis.
Provident Fund: Contribution towards provident fund are made to Employees'' Provident Fund Organisation, India.
Gratuity: The Company provides for gratuity, a defined benefit plan (the "Gratuity Plan") covering employees on actual duty. The Company''s liability is actuarially determined (using the Projected Unit Credit Method) at the end of each year. Actuarial losses/gains are recognised in the Other Comprehensive Income in the year in which they arise.
k) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
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 the obligation or a reliable estimate of the amount cannot be made.
A contingent assets, where an inflow of economic benefits is probable, an entity shall disclose a brief description of the nature of the contingent assets at the end of the reporting period, and, where practicable, an estimate of their financial effect, measured using the principles set out for provisions in Ind AS 37. Contingent assets are not recognised in the financial statements.
Cash flows are reported using the indirect method, whereby profit for the period 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 item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
Financial assets and financial liabilities are recognized when an entity 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 assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. Regular way purchase and sale of financial assets are accounted for at trade date.
Subsequent measurementa) Non-derivative financial instruments
i) Cash and Cash equivalents
The company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consists of balances with banks which are unrestricted for withdrawal and usage.
ii) Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms 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.
iii) Equity investments at fair value through other comprehensive income (FVTOCI)
These include financial assets that are equity instruments and are irrevocably designated as such upon initial recognition. Subsequently, these are measured at fair value and changes therein are recognized directly in other comprehensive income, net of applicable income taxes.
Dividends from these equity investments are recognized in the Statement of Profit and Loss when the right to receive payment has been established. When the equity investment is derecognized, the cumulative gain or loss in equity is transferred to retained earnings.
iv) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
b) Share Capital Ordinary Shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are recognized as a deduction from equity.
c) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
n) Corporate Social Responsibility (CSR)
Minimum two percent of average profit (before tax) of three immediately preceding financial years is required to be spent on CSR as per the provisions of Section 135 of The Companies Act, 2013 read with Schedule VII thereof.
o) Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include available quoted market prices. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized. The fair values of investments in mutual fund units is based on the net asset value ("NAV") as stated by the issuers of these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the investors.
The fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability
p) Impairment of Financial Assets
The Company recognizes loss allowances using the Expected Credit Loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in profit or loss.
Mar 31, 2023
1. 1.1 CORPORATE INFORMATION
Modi Rubber Ltd. (âthe Companyâ) is a company domiciled in India, with its registered office situated at Modi Bhawan, Modinagar-201204, District Ghaziabad, Uttar Pradesh. The Company has been incorporated under the provisions of Indian Companies Act and its equity shares are listed on the BSE & NSE in India.
1.2 BASIS OF PREPARATION OF FINANCIAL STATEMENT
These financial statements have been prepared on accrual basis of accounting and comply in all material aspects with the Indian Accounting Standards (Ind AS) that are prescribed under section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued there after.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
1.3 RECENT ACCOUNTING PRONOUNCEMENTS
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, as below.
Ind AS 16 - Property Plant and equipment
The amendment clarifies that excess of net sale proceeds of items produced over the cost of testing, if any, shall not be recognised in the profit or loss but deducted from the directly attributable costs considered as part of cost of an item of property, plant, and equipment. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2022. The Company has evaluated the amendment and there is no impact on its financial statements.
Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets
The amendment specifies that the âcost of fulfillingâ a contract comprises the âcosts that relate directly to the contractâ. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract). The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2022, although early adoption is permitted. The Company has evaluated the amendment and the impact is not expected to be material.
2. SIGNIFICANT ACCOUNTING POLICIES Functional and Presentation Currency
The financial statements have been prepared and presented in Indian Rupees (''), which is also the Companyâs functional currency.
The Ind AS financial statements has been prepared on historical cost basis, except certain class of nonfinancial assets (refer accounting policy on property, plant and equipment), certain financial assets, and liabilities that is measured at fair value.
All amounts in the financial statement and accompanying notes are presented in '' Lakhs and have been rounded-off to two decimal places unless stated otherwise.
The preparation of the Ind AS financial statements requires management to make estimates, judgements and assumptions that affect the reported balances of assets and liabilities, disclosure of contingent liabilities as on the date of Ind AS financial statements and reported amounts of income and expenses during the period. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Estimates, judgements and assumptions are based upon managementâs evolution of the relevant fact and circumstances as on the date of financial statement. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
All the Assets and liabilities have been classified as current and non-current based on the companyâs normal operating cycle of 12 months and other criteria set out in Schedule III of the Companies Act, 2013.
The Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities. This is based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents.
Inventories comprising of consumable and spares are valued at lower of cost and net realizable value after providing for obsolescence.
Costs comprise all cost of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.
b) Property, Plant and equipment
i) Items of property, plant & equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing cost if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. When significant part of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Subsequent costs are included in the assets carrying amount or recognised as a separate assets, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the
company and the cost can be measured reliably. All other repair and maintenance cost are recognised in the statement of profit and loss as incurred.
Capital Work-in-progress comprises of the cost of property, plant & equipment that are not yet ready for their intended use at the reporting date. Capital Work-in-Progress is carried at cost, comprising direct cost, related incidental expenses and interest on borrowing to the extent attributed to them.
Any gain or losses arising from retirement or disposal of property, plant and equipment are determined as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss on the date of retirement or disposal.
Leasehold land, building on leasehold land as well as building on freehold land that are neither held to earn rentals nor for capital appreciation do not qualify as investment property.
During the year ending on March 31, 2022, the Company has changed its accounting policy with respect to measurement of freehold land. According to the revised policy, freehold land (other than land under dispute) will be required to be revalued and measured at fair value, based on periodic valuation done by external valuers using market approach. Any revaluation surplus will be recorded in Other Comprehensive Income and credited to Land revaluation reserve in other equity. This revaluation surplus is not available for distribution to shareholders.
ii) Intangible assets acquired separately are measured on initial recognition at cost. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized
Subsequent measurement (Impairment, depreciation & amortisation and useful lives)
At each balance sheet date, items of property, plant and equipment are reviewed to determine whether there is any indication of impairment. If any impairment indicator exists, estimate of the recoverable amount of the property, plant and equipment is made. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount rate.
Reversal of impairment losses recognised in earlier years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised for that asset in earlier years.
c) Depreciation and Amortization
i) Depreciation on Plant & Machinery is provided on Straight Line method and other assets on the written down value method over the useful estimated lives of assets as mentioned in Schedule II of the Companies Act, 2013. The estimated useful lives of the assets are as follows:
|
Assets |
Useful Life |
|
Building |
30-60 years |
|
Plant & Machinery |
15 years |
|
Furniture & Fixtures |
10 years |
|
Electrical Installation |
10 years |
|
Vehicles |
8 years |
|
Office Equipment |
5 years |
|
Computers |
3 years |
ii) Intangible assets are amortized on a straight line basis over the estimated useful economic life
iii) The company considers purchase of Mobile phones as revenue expenditures, hence they are charged to statement of profit & loss in the year of its purchase.
iv) Depreciation on Investment property is provided on the written down value method over the useful estimated lives of assets as mentioned in Schedule II of the Companies Act, 2013. Useful lives and residual values of all the fixed assets are reviewed annually.
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
Revenue is measured in accordance with IND AS 115. Revenue comprises of sale of rooms, foods & beverages and allied services relating to guest house operations. Revenue is recognised upon rendering of services, provided persuasive evidence of an arrangement exists, tariff/rates are fixed or are determinable and collectability is reasonably certain. Revenue from sales of goods or rendering of services is net of indirect taxes, returns or discounts.
Rental income from operating leases is recognized on a straight-line basis over the lease term.
Interest income from a financial asset is recognised 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.
Dividend income is recognized when the companyâs right to receive dividend is established by the reporting date.
Other Incomes are recognized on accrual basis.
e) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profits for the year. Taxable profit differs from âprofit before taxâ 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 companyâs current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is recognised on temporary differences between the carrying amount of assets and liabilities in the financial statements and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences 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 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 current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
Minimum alternate tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the Statement of Profit and Loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Companyâs earning per share is the net profit for the period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares that could have been issued upon conversion.
g) Leases
The Company accounts for each lease component within the contract as a lease separately from nonlease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease component and the aggregate standalone price of the non-lease components. The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss. The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. For leases with reasonably similar characteristics, the Company, on a lease by lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole. The lease payments shall include fixed payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The company recognises the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in statement of profit and loss.
The Company has elected not to apply the requirements of Ind AS 116 Leases to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.
Company as a lessor
At the inception of the lease the Company classifies each of its leases as either an operating lease or a finance lease. The Company recognises lease payments received under operating leases as income on a straight-line basis over the lease term. In case of a finance lease, finance income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the lessorâs net investment in the lease. When the Company is an intermediate lessor it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.
h) Foreign Exchange Transactions
The functional currency of the Company is the Indian rupee. These financial statements are presented in Indian rupees.
In preparing the financial statements, transactions in currencies other than the Company''s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences on monetary items are recognised in profit or loss in the period in which they arise.
i) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in the statement of profit and loss in the period in which they are incurred.
Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds.
j) Employee BenefitsShort term employee benefits
All employee benefits payable wholly within twelve months of rendering services are classified as short term employee benefits. Benefits such as salaries, wages, expected cost of bonus, ex-gratia, leave travel allowance, medical reimbursement, etc. are recognised in the period in which the employee renders the related services.
Compensated absences: As per the Company''s leave policy, employees have to utilise their leave entitlement during the financial year and cannot carry forward their outstanding leave balance. Consequently, the Company does not make any provision for leave encashment/compensated absences as at the year end
Post employment benefit plans
Defined Contribution Plan - Contributions towards Employees'' PF Linked Pension Scheme is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis.
Provident Fund: Contribution towards provident fund are made to Employeesâ Provident Fund Organisation, India.
Gratuity: The Company provides for gratuity, a defined benefit plan (the "Gratuity Plan") covering employees on actual duty. The Company''s liability is actuarially determined (using the Projected Unit Credit Method) at the end of each year. Actuarial losses/gains are recognised in the Other Comprehensive Income in the year in which they arise.
k) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
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 the obligation or a reliable estimate of the amount cannot be made.
A contingent assets, where an inflow of economic benefits is probable, an entity shall disclose a brief description of the nature of the contingent assets at the end of the reporting period, and, where practicable, an estimate of their financial effect, measured using the principles set out for provisions in Ind AS 37. Contingent assets are not recognised in the financial statements.
l) Cash flow statement
Cash flows are reported using the indirect method, whereby profit for the period 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 item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
m) Financial instruments
Financial assets and financial liabilities are recognized when an entity becomes a party to the contractual provisions of the instruments.
Initial recognition
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. Regular way purchase and sale of financial assets are accounted for at trade date.
Subsequent measurementa) Non-derivative financial instruments
i) Cash and Cash equivalents
The company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consists of balances with banks which are unrestricted for withdrawal and usage.
ii) Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms 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.
iii) Equity investments at fair value through other comprehensive income (FVTOCI)
These include financial assets that are equity instruments and are irrevocably designated as such upon initial recognition. Subsequently, these are measured at fair value and changes therein are recognized directly in other comprehensive income, net of applicable income taxes.
Dividends from these equity investments are recognized in the Statement of Profit and Loss when the right to receive payment has been established. When the equity investment is derecognized, the cumulative gain or loss in equity is transferred to retained earnings.
iv) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
b) Share Capital Ordinary Shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are recognized as a deduction from equity.
c) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Companyâs Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
n) Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include available quoted market prices. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized. The fair values of investments in mutual fund units is based on the net asset value (âNAVâ) as stated by the issuers of these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the investors.
The fair value measurements are categorized into Level 1,2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability
o) Impairment of Financial Assets
The Company recognizes loss allowances using the Expected Credit Loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in profit or loss.
Mar 31, 2021
1. CORPORATE INFORMATION
Modi Rubber Ltd. (âthe Companyâ) is a company domiciled in India, with its registered office situated at Modi Bhawan, Modinagar-201204, District Ghaziabad, Uttar Pradesh. The Company has been incorporated under the provisions of Indian Companies Act and its equity shares are listed on the BSE & NSE in India.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting and Preparation of Financial Statements
These Financial Statements are prepared on accrual basis of accounting and all principal accounting policies applied in the preparation of these Financial Statements are set out below. These policies have been consistently applied to all the financial years presented except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard required a change in the accounting policy hitherto in use.
b) Basis of Preparation and Presentation
The financial statements have been prepared on accrual basis under the historical cost convention except for certain financial instruments that are measured at fair values at the end of each reporting period and in case of certain items of Income/Expenditure where recovery/payment is uncertain.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Functional and Presentation Currency
The financial statements have been prepared and presented in Indian Rupees (''), which is also the Companyâs functional currency.
All amounts in the financial statement and accompanying notes are presented in '' Lakhs and have been rounded-off to two decimal place unless stated otherwise.
Current and Non-current Classification
The Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities. This is based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents.
Inventories comprising of consumable and spares are valued at lower of cost and net realizable value after providing for obsolescence.
Costs comprise all cost of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.
d) Property, Plant and equipment
i) Items of property, plant & equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost is inclusive of freight, duties, taxes or levies (net of
recoverable taxes) and any directly attributable cost of bringing the assets to their working condition for intended use.
Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as "Capital work-in-progress".
Profit or loss on disposal/ scrapping/ write off/ retirement from active use of an item of property, plant and equipment is recognised in the statement of profit and loss.
Leasehold land, building on leasehold land as well as building on freehold land that are neither held to earn rentals nor for capital appreciation do not qualify as investment property.
ii) Intangible assets acquired separately are measured on initial recognition at cost. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized
Impairment of Property, Plant and Equipment
At each balance sheet date, items of property, plant and equipment are reviewed to determine whether there is any indication of impairment. If any impairment indicator exists, estimate of the recoverable amount of the property, plant and equipment is made. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount rate.
Reversal of impairment losses recognised in earlier years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised for that asset in earlier years.
e) Depreciation and Amortization
i) Depreciation on Machinery is provided on Straight Line method and other assets on the written down value method over the useful estimated lives of assets as mentioned in Schedule II of the Companies Act, 2013. The estimated useful lives of the assets are as follows:
|
Assets |
Useful Life |
|
Building |
30-60 years |
|
Plant & Machinery |
15 years |
|
Furniture & Fixtures |
10 years |
|
Electrical Installation |
10 years |
|
Vehicles |
8 years |
|
Office Equipment |
5 years |
|
Computers |
3 years |
ii) Intangible assets are amortized on a straight line basis over the estimated useful economic life
iii) The company considers purchase of Mobile phones as revenue expenditures, hence they are charged to profit & loss a/c in the year of its purchase.
iv) Depreciation on Investment property is provided on the written down value method over the useful estimated lives of assets as mentioned in Schedule II of the Companies Act, 2013. Useful lives and residual values of all the fixed assets are reviewed annually.
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
Revenue is measured in accordance with IND AS 115. Revenue comprises of sale of rooms, foods & beverage and allied services relating to guest house operations. Revenue is recognised upon rendering of services, provided persuasive evidence of an arrangement exists, tariff/rates are fixed or are determinable and collectability is reasonably certain. Revenue from sales of goods or rendering of services is net of indirect taxes, returns or discounts.
Rental income from operating leases is recognized on a straight-line basis over the lease term Interest
Interest income from a financial asset is recognised 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.
Dividend income is recognized when the companyâs right to receive dividend is established by the reporting date.
Other Incomes are recognized on accrual basis.
g) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profits for the year. Taxable profit differs from âprofit before taxâ 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 companyâs current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is recognised on temporary differences between the carrying amount of assets and liabilities in the financial statements and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences 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 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 current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
Minimum alternate tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the Statement of Profit and Loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Companyâs earning per share is the net profit for the period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares that could have been issued upon conversion.
The Company accounts for each lease component within the contract as a lease separately from nonlease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease component and the aggregate standalone price of the non-lease components. The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss. The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. For leases with reasonably similar characteristics, the Company, on a lease by lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole. The lease payments shall include fixed payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The company recognises the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in statement of profit and loss.
The Company has elected not to apply the requirements of Ind AS 116 Leases to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.
At the inception of the lease the Company classifies each of its leases as either an operating lease or a finance lease. The Company recognises lease payments received under operating leases as income on a straight-line basis over the lease term. In case of a finance lease, finance income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the lessorâs net investment in the lease. When the Company is an intermediate lessor it accounts for its interests in the head lease
and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.
j) Foreign Exchange Transactions
The functional currency of the Company is the Indian rupee. These financial statements are presented in Indian rupees.
In preparing the financial statements, transactions in currencies other than the Company''s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences on monetary items are recognised in profit or loss in the period in which they arise.
k) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in the statement of profit and loss in the period in which they are incurred.
Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds.
l) Employee BenefitsShort term employee benefits
All employee benefits payable wholly within twelve months of rendering services are classified as short term employee benefits. Benefits such as salaries, wages, expected cost of bonus, ex-gratia, leave travel allowance, medical reimbursement, etc. are recognised in the period in which the employee renders the related services.
Compensated absences: As per the Company''s leave policy, employees have to utilise their leave entitlement during the financial year and cannot carry forward their outstanding leave balance. Consequently, the Company does not make any provision for leave encashment/compensated absences as at the year end
Post employment benefit plans
Defined Contribution Plan - Contributions towards Employees'' PF Linked Pension Scheme is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis.
Provident Fund: Contribution towards provident fund are made to Employeesâ Provident Fund Organisation, India.
Gratuity: The Company provides for gratuity, a defined benefit plan (the "Gratuity Plan") covering employees on actual duty. The Company''s liability is actuarially determined (using the Projected Unit Credit Method) at the end of each year. Actuarial losses/gains are recognised in the Other Comprehensive Income in the year in which they arise.
m) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
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 the obligation or a reliable estimate of the amount cannot be made.
A contingent assets, where an inflow of economic benefits is probable, an entity shall disclose a brief description of the nature of the contingent assets at the end of the reporting period, and, where practicable, an estimate of their financial effect, measured using the principles set out for provisions in Ind AS 37.Contingent assets are not recognised in the financial statements.
Cash flows are reported using the indirect method, whereby profit for the period 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 item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
Financial assets and financial liabilities are recognized when an entity 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 assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. Regular way purchase and sale of financial assets are accounted for at trade date.
Subsequent measurementa) Non-derivative financial instruments
i) Cash and Cash equivalents
The company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consists of balances with banks which are unrestricted for withdrawal and usage.
ii) Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms 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.
iii) Equity investments at fair value through other comprehensive income (FVTOCI)
These include financial assets that are equity instruments and are irrevocably designated as such upon initial recognition. Subsequently, these are measured at fair value and changes therein are recognized directly in other comprehensive income, net of applicable income taxes.
Dividends from these equity investments are recognized in the Statement of Profit and Loss when the right to receive payment has been established. When the equity investment is derecognized, the cumulative gain or loss in equity is transferred to retained earnings.
iv) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
b) Share Capital Ordinary Shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are recognized as a deduction from equity.
c) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Companyâs Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
p) Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include available quoted market prices. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized. The fair values of investments in mutual fund units is based on the net asset value (âNAVâ) as stated by the issuers of these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the investors.
The fair value measurements are categorized into Level 1,2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability
q) Impairment of Financial Assets
The Company recognizes loss allowances using the Expected Credit Loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in profit or loss.
r) RECENT INDIAN ACCOUNTING STANDARDS
On March 24, 2021, the Ministry of Corporate Affairs (âMCAâ) through a notification, amended Schedule III of the Companies Act, 2013. The amendments revise Division I, II and III of Schedule III and are applicable from April 1, 2021. Key amendments relating to Division II which relate to companies whose financial statements are required to comply with Companies (Indian Accounting Standards) Rules 2015 are:
Balance Sheet:
⢠Lease liabilities should be separately disclosed under the head âfinancial liabilitiesâ, duly distinguished as current or non-current.
⢠Certain additional disclosures in the statement of changes in equity such as changes in equity share capital due to prior period errors and restated balances at the beginning of the current reporting period.
⢠Specified format for disclosure of shareholding of promoters.
⢠Specified format for ageing schedule of trade receivables, trade payables, capital work-in-progress and intangible asset under development.
⢠If a company has not used funds for the specific purpose for which it was borrowed from banks and financial institutions, then disclosure of details of where it has been used.
⢠Specific disclosure under âadditional regulatory requirementâ such as compliance with approved schemes of arrangements, compliance with number of layers of companies, title deeds of immovable property not held in name of company, loans and advances to promoters, directors, key managerial personnel (KMP) and related parties, details of benami property held etc.
⢠Additional disclosures relating to Corporate Social Responsibility (CSR), undisclosed income and crypto or virtual currency specified under the head âadditional informationâ in the notes forming part of consolidated financial statements.
The amendments are extensive and the company will evaluate the same to give effect to them as required by law.
Mar 31, 2018
1.1 SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting and Preparation of Financial Statements
a) Statement of Compliance
The financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) as notified under the Companies (Indian Accounting Standards) Rules, 2015. The financial statements have been prepared in accordance with Ind AS prescribed under Section 133 of the Companies Act, 2013 and other recognized accounting practices and policies to the extent applicable.
Upto the year ended March 31, 2017, the Company prepared its financial statements in accordance with the requirements of the Standards notified under the Companies (Accounting Standards) Rules, 2014 and guidelines issued by the Securities and Exchange Board of India (SEBI) as amended from time to time. These are the Companyâs first Ind AS financial statements. The date of transition to Ind AS is April 1, 2016. Details of first-time adoption exemptions availed by the Company is given in Note 32. In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standard, the Company has presented a reconciliation from the presentation of financial statements under Accounting Standards notified under the Companies (Accounting Standards) Rules, 2014 (âPrevious GAAPâ) to Ind AS of Shareholdersâ equity as at March 31, 2017 and April 1, 2016 and of the comprehensive net income for the year ended March 31, 2017.
b) Basis of Preparation and Presentation
The financial statements have been prepared on accrual basis under the historical cost convention except for certain financial instruments that are measured at fair values at the end of each reporting period and in case of certain items of Income/Expenditure where recovery/payment is uncertain.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Functional and Presentation Currency
The financial statements have been prepared and presented in Indian Rupees (â), which is also the Companyâs functional currency.
Rounding off
All amounts in the financial statement and accompanying notes are presented in â Lakhs and have been rounded-off to two decimal place unless stated otherwise.
Current and Non-current Classification
The Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities. This is based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents.
c) Inventories
Inventories are stated at the lower of cost and net realisable value after providing for obsolescence. Costs of inventories are determined on weighted average basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition.
i) Raw Materials Lower of cost or net realizable value
ii) Goods-in-process Lower of cost or net realizable value
iii) Finished Goods Lower of cost or net realizable value
iv) Stores, Spares Parts and Loose Tools At weighted average cost
v) Scrap and Wastage At estimated selling price
d) Property, Plant and equipment
i) Items of property, plant & equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost is inclusive of freight, duties, taxes or levies (net of recoverable taxes) and any directly attributable cost of bringing the assets to their working condition for intended use.
Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as âCapital work-in-progressâ.
Profit or loss on disposal/ scrapping/ write off/ retirement from active use of an item of property, plant and equipment is recognised in the statement of profit and loss.
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
Leasehold land, building on leasehold land as well as building on freehold land that are neither held to earn rentals nor for capital appreciation do not qualify as investment property.
ii) Intangible assets acquired separately are measured on initial recognition at cost. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized
Impairment of Property, Plant and Equipment
At each balance sheet date, items of property, plant and equipment are reviewed to determine whether there is any indication of impairment. If any impairment indicator exists, estimate of the recoverable amount of the property, plant and equipment is made. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount rate.
Reversal of impairment losses recognised in earlier years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised for that asset in earlier years.
e) Depreciation and Amortization
i) Depreciation on Machinery is provided on Straight Line method and other assets on the written down value method over the useful estimated lives of assets as mentioned in Schedule II of the Companies Act, 2013. The estimated useful lives of the assets are as follows:
ii) Intangible assets are amortized on a straight line basis over the estimated useful economic life.
iii) Depreciation on Investment property is provided on the written down value method over the useful estimated lives of assets as mentioned in Schedule II of the Companies Act, 2013. Useful lives and residual values of all the fixed assets are reviewed annually.
f) Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
Sale of goods
Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed on to the buyer, usually on delivery of goods. The company collects Service Tax, value added taxes (VAT) and Goods & Service Tax (GST) on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue. GST/Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.
Interest
Interest income from a financial asset is recognised 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.
Dividend
Dividend income is recognized when the companyâs right to receive dividend is established by the reporting date. Other Incomes are recognized on accrual basis.
g) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current Tax
The tax currently payable is based on taxable profits for the year. Taxable profit differs from âprofit before taxâ 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 companyâs current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amount of assets and liabilities in the financial statements and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences 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 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 current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
Minimum Alternate Tax
Minimum alternate tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the Statement of Profit and Loss and shown as âMAT Credit Entitlement.â The Company reviews the âMAT credit entitlementâ asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
h) Earning per share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Companyâs earning per share is the net profit for the period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares that could have been issued upon conversion.
i) Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset/s and the arrangement conveys a right to use the asset/s, even if that right is not explicitly specified in an arrangement.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the asset to the lessee. All other leases are classified as operating leases.
Payments made under operating leases are recognised as an expense in the statement of profit and loss on a straight-line basis over the term of the lease unless such payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases, in which case the same is recognised as an expense in line with the contractual term.
j) Foreign Exchange Transactions
The functional currency of the Company is the Indian rupee. These financial statements are presented in Indian rupees.
In preparing the financial statements, transactions in currencies other than the Companyâs functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences on monetary items are recognised in profit or loss in the period in which they arise.
k) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in the statement of profit and loss in the period in which they are incurred.
Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds.
l) Employee Benefits
Short term employee benefits
All employee benefits payable wholly within twelve months of rendering services are classified as short term employee benefits. Benefits such as salaries, wages, expected cost of bonus, ex-gratia, leave travel allowance, medical reimbursement, etc. are recognised in the period in which the employee renders the related services.
Compensated absences: As per the Companyâs leave policy, employees have to utilise their leave entitlement during the financial year and cannot carry forward their outstanding leave balance. Consequently, the Company does not make any provision for leave encashment/compensated absences as at the year end.
Post employment benefit plans
Defined Contribution Plan - Contributions towards Employeesâ PF Linked Pension Scheme is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis.
Defined Benefit Plan
Provident Fund: Contribution towards provident fund are made to Employeesâ Provident Fund Organisation, India.
Gratuity: The Company provides for gratuity, a defined benefit plan (the âGratuity Planâ) covering employees on actual duty. The Companyâs liability is actuarially determined (using the Projected Unit Credit Method) at the end of each year. Actuarial losses/gains are recognised in the Other Comprehensive Income in the year in which they arise.
m) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
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 the obligation or a reliable estimate of the amount cannot be made.
Contingent assets are not recognised in the financial statements.
n) Cash flow statement
Cash flows are reported using the indirect method, whereby profit for the period 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 item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
o) Financial instruments
Financial assets and financial liabilities are recognized when an entity becomes a party to the contractual provisions of the instruments.
Initial recognition
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. Regular way purchase and sale of financial assets are accounted for at trade date.
Subsequent measurement
a) Non-derivative financial instruments
i) Cash and Cash equivalents
The company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consists of balances with banks which are unrestricted for withdrawal and usage.
ii) Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms 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.
iii) Equity investments at fair value through other comprehensive income (FVTOCI)
These include financial assets that are equity instruments and are irrevocably designated as such upon initial recognition. Subsequently, these are measured at fair value and changes therein are recognized directly in other comprehensive income, net of applicable income taxes.
Dividends from these equity investments are recognized in the Statement of Profit and Loss when the right to receive payment has been established. When the equity investment is derecognized, the cumulative gain or loss in equity is transferred to retained earnings.
iv) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
v) Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
b) Share Capital Ordinary Shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are recognized as a deduction from equity.
c) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Companyâs Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
p) Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include available quoted market prices. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized. The fair values of investments in mutual fund units is based on the net asset value (âNAVâ) as stated by the issuers of these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the investors.
The fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability
q) Impairment of Financial Assets
The Company recognizes loss allowances using the Expected Credit Loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in profit or loss.
r) First-time adoption-mandatory exceptions and optional exemptions
Overall Principle
The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required under Ind AS, not recognising items of assets and liabilities which are not permitted under Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to the certain exception and certain optional exemptions availed by the Company as detailed below.
Deemed cost for property, plant and equipment
The company has elected to continue with the carrying value of all of its property, plant and equipment recognized as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
s) Critical estimates in applying accounting policies
The preparation of financial statements in conformity with Ind AS requires management to make certain judgements and estimates that may affect the application of accounting policies, reported amounts and related disclosures.
These judgements and estimates may have an impact on the assets and liabilities, disclosure of contingent liabilities at the date of the financial statements, and income and expense items for the period under review. Actual results may differ from these judgments and estimates.
All assumptions, expectations and forecasts that are used as a basis for judgements and estimates in the financial statements represent as accurately an outlook as possible for the group. These judgements and estimates only represent our interpretation as of the dates on which they were prepared. Important judgements and estimates relate largely to provisions, pensions, tangible and intangible assets (lives, residual values and impairment), deferred tax assets and liabilities and valuation of financial instruments.
t) RECENT ACCOUNTING PRONOUNCEMENTS
Impact of implementation of Goods and Services Tax (GST) on the financial statements
Consequent to the introduction of Goods and Services Tax (GST) with effect from 1 July 2017, VAT, Service Tax etc. have been subsumed into GST. With the change in structure of indirect taxes, expenses are also being reported net of taxes. Accordingly, Financial statements for the year ended 31 March 2018 and in particular absolute expenses etc. are not comparable with the figures of the previous year.
Mar 31, 2016
A. SIGNIFICANT ACCOUNTING POLICIES
1. Basis of Preparation of
Financial Statements The financial statements of the company have been prepared in accordance with the generally
accepted accounting principles in India (Indian GAAP) under the historical cost convention on accrual basis, except in case of certain items of Income/Expenditure where recovery/payment is uncertain. The company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and Companies (Accounting Standards) Amendment Rules, 2016. and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The Management evaluates all recently issued or revised accounting standards on an on-going basis.
2. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and results of operations during the reported period end. Examples of such estimates includes provision for diminution in value of investments, provision for doubtful debts, future obligations under defined benefit obligations under employee retirement benefit plans, provision for income taxes and the useful lives of fixed and intangible assets. Although these estimates are based upon managementâs best knowledge of current events and actions, actual result could differ from these estimates. Accordingly, estimated benefits against exports remaining to be utilised / liability for duty free raw materials excess utilised as at the end of the year has been accounted for in arriving at the consumption of raw materials.
3. Inventory Valuation
(a) Raw Materials At weighted average cost
(b) Goods-in-process Lower of Cost or net realisable value.
(c) Finished Goods Lower of Cost or net realisable value.
(d) Stores, Spares Parts and At weighted average cost.
Loose Tools
e) Scrap and Wastage At estimated selling price.
In respect of Finished goods and Goods in process, the cost is determined by considering material, related labour & overheads and duty thereon.
4. Fixed Assets All Fixed Assets are stated at cost less depreciation. Interest on borrowed funds attributable to acquisition of Fixed Assets and revenue expenses incurred prior to installation are capitalised as part of assets cost. Own manufactured assets are capitalised at cost including estimated overheads.
5. Depreciation Depreciation on Plant and Machinery is provided on Straight Line method and other assets on the written down value method over the useful estimated lives of assets as mentioned in Schedule II of the Companies Act, 2013.
Residual value of all the fixed assets is considered as 5% of gross value.
6. Investments a) Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.
b) Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.
7. Revenue recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
Sale of goods
Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The company collects sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue.
Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.
Interest
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head âother incomeâ in the statement of profit and loss.
Dividend
Dividend income is recognized when the companyâs right to receive dividend is established by the reporting date.
Other Incomes are recognized on accrual basis.
8. Earnings per share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares that could have been issued upon conversion.
9. Research & Development Revenue expenditure on research and development is charged as expense in the year in which it is incurred. Capital expenditure on research and development is shown as an addition to fixed assets.
10. Foreign Exchange Transactions Foreign currency transactions are accounted at exchange rates prevailing on the date of transaction.
Current Assets and Liabilities denominated in foreign currency as at the Balance Sheet date are reconverted at rates prevailing at the year-end and the resultant net gains or losses are adjusted in the Account.
11. Retirement Benefits Retirement benefits are dealt with in the following manner:
a) Contributions to Provident Fund are accounted on accrual basis with corresponding contribution to recognised funds for staff on actual duty.
b) Provision for Gratuity liability is made on the basis of actuarial valuation, with corresponding contribution to recognised fund for staff on actual duty
12. Provisions, Contingent Liabilities and Contingent Assets A provision is recognized when an enterprise has a present obligation as a result of past event;
it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liability is disclosed in the case of:
i) a present obligation from the past event when it is not probable that an outflow of resources will be required to settle the obligation;
ii) a possible obligation, unless the probability of outflow is remote;
Contingent assets are not recognised in the financial statements
Mar 31, 2014
1. Basis of Preparation of The financial statements are prepared
Financial Statements in accordance with Indian Generally
Accepted Accounting Principles ("GAAP")
under the historical cost convention on
accrual basis, except in case of certain
items of Income/Expenditure where
recovery/payment is uncertain. GAAP
comprises mandatory accounting standards
as specified in the Companies.
(Accounting Standards) Rules, 2006, the
provisions of the Companies Act, 2013
(to the extent notified), the Companies
Act, 1956 (to the extent applicable),
and guidelines issued by the Securities
and Exchange Board of India (SEBI).
Accounting policies have been consis-
tently applied except where a newly
issued accounting standard is initially
adopted or a revision to an existing
accounting standard requires a change
in the accounting policy hitherto in
use. The Management evaluates all
recently issued or revised accounting
standards on an on-going basis.
2. Use of estimates The preparation of financial statements
in conformity with generally accepted
accounting principles requires managem-
ent to make estimates and assumptions
that affect the reported amounts of
assets and liabilities and disclosures
of contingent liabilities at the date
of the financial statements and results
of operations during the reported peri-
od end. Examples of such estimates
includes provision for diminution in
value of investments, provision for
doubtful debts, future obligations
under defined benefit obligations under
employee retirement benefit plans,
provision for income tax and the
useful lives of fixed and intangible
assets. Although these estimates are
based upon management''s best knowledge
of current events and actions, actual
result could differ from these estimates
Accordingly, estimated benefits against
exports remaining to be utilised /
liability for duty free raw materials
excess utilised as at the end of the
year has been accounted for in arriving
at the consumption of raw materials.
3. Inventory Valuation
(a) Raw Materials At weighted average cost
(b) Goods-in-process Lower of Cost or net realisable value.
(c) Finished Goods Lower of Cost or net realisable value.
(d) Stores, Spares Parts At weighted average cost.
and Loose Tools
(e) Scrap and Wastage At estimated selling price.
In respect of Finished goods and Goods
in process, the cost is determined by
considering material, related labour &
overheads and duty thereon.
4. Depreciation Plant and Machinery on straight-line
method and other Fixed Assets on red-
ucing balance method at the rates spe-
cified in Schedule XIV of the Compa-
nies Act, 1956. Plant and Machinery are
depreciated to the extent of 95% of its
gross value considering the shelf life
of 18 years.
5. Sales/Other Incomes Sales comprise sale of goods,
net of trade discount and include ex-
cise duty but exclude goods despatched
pending for retirement where the titles
of the goods remain with the company
till retirement of documents.
Other Incomes are recognized on
accrual basis.
6. Earnings per share Basic earnings per share are calculated
by dividing the net profit or loss for
the period attributable to equity share-
holders (after deducting preference
dividends and attributable taxes) by the
weighted average number of equity shares
outstanding during the Period. The
weighted average number of equity shares
outstanding during the period is
adjusted for events of bonus issue.
For the purpose of calculating diluted
earnings per share, the net profit or
loss for the period attributable to
equity shareholders and the weighted
average number of shares outstanding
during the period are adjusted for the
effects of all dilutive potential equ-
ity shares that could have been issued
upon conversion.
7. Fixed Assets All Fixed Assets are stated at cost less
depreciation. Interest on borrowed funds
attributable to acquisition of Fixed As-
sets and revenue expenses incurred prior
to installation are capitalised as part
of assets cost. Own manufactured assets
are capitalised at cost including est-
imated overheads.
8. Research & Development Revenue expenditure on research and
development is charged as expense in
the year in which it is incurred.
Capital expenditure on research and
development is shown as an addition
to fixed assets.
9. Investments a) Investments are stated at Cost
(FIFO basis).
b) In respect of investment of a long-
term nature (including in subsidi-
aries), provision is made for any
diminution in the value wherever it
is permanent in nature.
10. Foreign Exchange Transactions Foreign currency transa-
ctions are accounted at exchange rates
prevailing on the date of transaction.
Current Assets and Liabilities denom-
inated in foreign currency as at the
Balance Sheet date are reconverted at
rates prevailing at the year-end and
the resultant net gains or losses are
adjusted in the Account.
11. Retirement Benefits Retirement benefits are dealt with in
the following manner:
a) Contributions to Provident Fund are
accounted on accrual basis with co-
rresponding contribution to recog-
nised funds for staff on actual duty.
b) Provision for Gratuity liability is
made on the basis of actuarial val-
uation, with corresponding contrib-
ution to recognised fund for staff
on actual duty.
12. Provisions, Contingent A provision is recognized when an ente-
Liabilities rprise has a present obligation as a
result of past event; and Contingent
Assets it is probable that an outflow
of resources will be required to settle
the obligation, in respect ofwhich a
reliable estimate can be made. Provi-
sions are not discounted to its present
value and are determined based on best
estimate required to settle the oblig-
ation at the balance sheet date.
These are reviewed at each balance sheet
date and adjusted to reflect the current
best estimates.Contingent liability is
disclosed in the case of:
i) a present obligation from the past
event when it is not probable that
an outflow of resources will be
required to settle the obligation;
ii) a possible obligation, unless the
probability of outflow is remote;
Contingent assets are not recognised
in the financial statements.
Mar 31, 2013
1. Basis of Preparation of Financial Statements
The fnancial statements are prepared in accordance with Indian
Generally Accepted Accounting Principles ("GAAP") under the historical
cost convention on accrual basis, except in case of certain items of
Income/Expenditure where recovery/payment is uncertain. GAAP comprises
mandatory accounting standards as specifed in the Companies (Accounting
Standards) Rules, 2006 and the provisions of the Companies Act, 1956.
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use. The Management evaluates all recently issued or
revised accounting standards on an on-going basis.
2. Use of estimates The preparation of fnancial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent
liabilities at the date of the fnancial statements and results of
operations during the reported period end. Examples of such estimates
includes provision for diminution in value of investments, provision
for doubtful debts, future obligations under defned beneft obligations
under employee retirement beneft plans, provision for income taxes and
the useful lives of fxed and intangible assets. Although these
estimates are based upon management''s best knowledge of current events
and actions, actual result could differ from these estimates.
Accordingly, estimated benefts against exports remaining to be utilised
/ liability for duty free raw materials excess utilised as at the end
of the year has been accounted for in arriving at the consumption of
raw materials.
3. Inventory Valuation (a) Raw Materials
(b) Goods-in-process (c) Finished Goods
At weighted average cost
Lower of Cost or net realisable value.
Lower of Cost or net realisable value.
(d) Stores, Spares Parts and Loose Tools
At weighted average cost.
(e) Scrap and Wastage At estimated selling price.
In respect of Finished goods and Goods in process, the cost is
determined by considering material, related labour & overheads and duty
thereon.
4. Depreciation Plant and Machinery on straight-line method and other
Fixed Assets on reducing balance method at the rates specifed in
Schedule XIV of the Companies Act, 1956. Plant and Machinery are
depreciated to the extent of 95% of its gross value considering the
shelf life of 18 years.
5. Sales/Other Incomes Sales comprise sale of goods, net of trade
discount and include excise duty but exclude goods despatched pending
for retirement where the titles of the goods remain with the company
till retirement of documents.
Other Incomes are recognized on accrual basis.
6. Earnings per share Basic earnings per share are calculated by
dividing the net proft or loss for the period attributable to equity
shareholders (after deducting preference dividends and attributable
taxes) by the weighted average number of equity shares outstanding
during the Period. The weighted average number of equity shares
outstanding during the period is adjusted for events of bonus issue.
For the purpose of calculating diluted earnings per share, the net
proft or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares that
could have been issued upon conversion.
7. Fixed Assets All Fixed Assets are stated at cost less depreciation.
Interest on borrowed funds attributable to acquisition of Fixed Assets
and revenue expenses incurred prior to installation are capitalised as
part of assets cost. Own manufactured assets are capitalised at cost
including estimated overheads.
8. Research & Development Revenue expenditure on research and
development is charged as expense in the year in which it is incurred.
Capital expenditure on research and development is shown as an addition
to fxed assets.
9. Investments Investments are stated at Cost (FIFO basis). In
respect of investment of a long-term nature (including in
subsidiaries), provision is made for any diminution in the value
wherever it is permanent in nature.
10. Foreign Exchange Transactions Foreign currency transactions are
accounted at exchange rates prevailing on the date of transaction.
Current Assets and Liabilities denominated in foreign currency as at
the Balance Sheet date are reconverted at rates prevailing at the
year-end and the resultant net gains or losses are adjusted in the
Account.
11. Retirement Benefts Retirement benefts are dealt with in the
following manner:
a) Contributions to Provident Fund are accounted on accrual basis with
corresponding contribution to recognised funds for staff on actual
duty.
b) Provision for Gratuity liability is made on the basis of actuarial
valuation, with corresponding contribution to recognised fund for staff
on actual duty.
12. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when an enterprise has a present obligation
as a result of past event; it is probable that an outfow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to refect the current best
estimates. Contingent liability is disclosed in the case of: i) a
present obligation from the past event when it is not probable that an
outfow of resources will be required to settle the obligation;
ii) a possible obligation, unless the probability of outfow is remote;
Sep 30, 2011
1. Method of Accounting
Company generally maintains its accounts on accrual basis, except in
case of certain items of Income/Expenditure where recovery/payment is
uncertain. Accordingly, estimated benefits against exports remaining to
be utilised / liability for duty free raw materials excess utilised as
at the end of the year has been accounted for in arriving at the
consumption of raw materials.
2. Inventory Valuation
(a) Stores, Spares Parts and Loose Tools At weighted average cost.
(b) Raw Materials At weighted average cost.
(c) Finished Goods Lower of Cost or net realisable value.
(d) Goods-in-process Lower of Cost or net realisable value.
(e) Scrap and Wastage At estimated selling price.
In respect of Finished goods and Goods in process, the cost is
determined by considering ' material, related labour & overheads and
duty thereon.
3. Depreciation
Plant and Machinery on straight-line method and other Fixed Assets on
reducing balance method at the rates specified in Schedule XIV of the
Companies Act, 1956. Plant and Machinery are depreciated to the extent
of 95% of its gross value considering the shelf life of 18 years.
4. Sales
Sales comprise sale of goods, net of trade discount and include excise
duty but exclude goods dispatched pending for retirement where the
titles of the goods remain with the company till retirement of
documents.
5. Fixed Assets
All Fixed Assets are stated at cost less depreciation. Interest on
borrowed funds attributable to acquisition of Fixed Assets and revenue
expenses incurred prior to installation are capitalised as part of
assets cost. Own manufactured assets are capitalised at cost including
estimated overheads.
6. Research & Development
Revenue expenditure on research and development is charged as expense
in the year in ' which it is incurred. Capital expenditure on
research and development is shown as an addition to fixed assets.
7. Investments
Investments are stated at Cost. In respect of investment of a long-term
nature (including in subsidiaries), provision is made for any
diminution in the value wherever it is permanent in nature.
8. Foreign Exchange Transactions
Foreign currency transactions are accounted at exchange rates
prevailing on the date of transaction. Current Assets and Liabilities
denominated in foreign currency as at the Balance Sheet date are
reconverted at rates prevailing at the year-end and the resultant net
gains or losses are adjusted in the Account.
9. Retirement Benefits
Retirement benefits are dealt with in the following manner:
a) Contributions to Provident Fund are accounted on accrual basis with
corresponding contribution to recognised funds for staff on actual
duty.
b) Provision for Gratuity liability is made on the basis of actuarial
valuation, with corresponding contribution to recognised fund for staff
on actual duty.
Mar 31, 2010
1. Method of Accounting
Company generally maintains its accounts on accrual basis, except in
case of certain items of Income/ Expenditure where recovery/payment is
uncertain. Accordingly, estimated benefits against exports remaining to
be utilised / liability for duty free raw materials excess utilised as
at the end of the year has been accounted for in arriving at the
consumption of raw materials.
2. Inventory Valuation
(a) Stores, Spares Parts and At weighted average cost.
Loose Tools
(b) Raw Materials At weighted average cost
(c) Finished Goods Lower of Cost or net realisable
value.
(d) Goods-in-process Lower of Cost or net realisable
value.
(e) Scrap and Wastage At estimated selling price.
In respect of Finished goods and
Goods in process, the cost is
determined by considering material,
related labour & overheads and
duty thereon.
3. Depreciation
Plant and Machinery on straight-line method and other Fixed Assets on
reducing balance method at the rates specified in Schedule XIV of the
Companies Act, 1956. Plant and Machinery are depreciated to the extent
of 95% of its gross value considering the shelf life of 18 years.
4. Sales
Sales comprise sale of goods, net of trade discount and include excise
duty but exclude goods despatched pending for retirement where the
titles of the goods remain with the company till retirement of
documents.
5. Fixed Assets
All Fixed Assets are stated at cost less depreciation. Interest on
borrowed funds attributable to acquisition of Fixed Assets and revenue
expenses incurred prior to installation are capitalised as part of
assets cost. Own manufactured assets are capitalised at cost including
estimated overheads.
6. Research & Development
Revenue expenditure on research and development is charged as expense
in the year in which it is incurred. Capital expenditure on research
and development is shown as an addition to fixed assets.
7. Investments
Investments are stated at Cost. In respect of investment of a
long-term nature (including in subsidiaries), provision is made for any
diminution in the value wherever it is permanent in nature.
8. Foreign Exchange Transactions
Foreign currency transactions are accounted at exchange rates
prevailing on the date of transaction. Current Assets and Liabilities
denominated rn foreign currency as at the Balance Sheet date are
reconverted at rates prevailing at the year-end and the resultant net
gains or losses are adjusted in the Account.
9. Retirement Benefits
Retirement benefits are dealt with in the following manner:
a) Contributions to Provident Fund are accounted on accrual basis with
corresponding contribution to recognised funds for staff on actual
duty.
b) Provision for Gratuity liability is made on the basis of actuarial
valuation, with corresponding contribution to recognised fund. (No
contribution from 1.10.2000).
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Modi Rubber Ltd. Company Details
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Modi Rubber Ltd. Key Financial Ratios
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Modi Rubber Ltd. Results
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Modi Rubber Ltd. Financial Data
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Modi Rubber Ltd. Reports
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Modi Rubber Ltd. Corporate Announcements
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