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Accounting Policies of Polyspin Exports Ltd. Company
Mar 31, 2025
1. General Information:
M/s. Polyspin Exports Limited, CIN No.
L51909TN1985PLC011683, (PEL or the Company) is a Public
Limited Company incorporated in India. The Company shares
are listed in BSE Limited and the Scrip Code is 539354. The
address of the Registered Office is 351, P.A.C.R. Salai,
Rajapalayam - 626 117, Tamilnadu.
The Company was incorporated in the year 1985 and the
commenced commercial production during the year 1990. The
Company is engaged in Manufacture of FIBC Bags, Fabric, PP
Yarn, Multifilament Yarn, etc., with an installed capacity of
10,800 MTS per annum. The Company''s FIBC bags are
primarily exported to U.S.A, Europe and African Countries.
The company, during the month of June of Financial year
2023-24 had permanently closed the operations of Textile
division. The sale process of the plant and machineries has
been completed in the month of September 2024. Necessary
disclosures for the details of Assets and sale proceeds as per
the Accounting standards are made by the company.
These financial statements were approved for issue by the
board of directors of the Company on 29th May, 2025.
2.1 Statement of Compliance:
These financial statements have been prepared in
accordance with the Indian Accounting Standards (âIND ASâ)
prescribed under section 133 of the Companies Act, 2013
("the Act") read with Rule 3 of the Companies (Indian
Accounting Standards) Rules, 2015 as amended from time
to time.
2.2: Basis of Preparation:-
These financial statements have been prepared on the
historical cost basis except for certain financial instruments
and defined benefit plans that are measured at fair values at
the end of each reporting period, as explained in the
accounting policies below. Historical cost is generally based on
the fair value of consideration given in exchange for goods and
services.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of
whether that price is directly observable or estimated using
another valuation technique. In measuring fair value of an
asset or liability, the Company takes into account those
characteristics of the asset or liability that market participants
would take into account when pricing the asset or liability at the
measurement date.
In addition, for financial reporting purposes 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 measurement in its entirety, which are described as
follows:¬
- Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity can
access at the measurement date.
- Level 2 inputs, other than quoted prices included within
Level 1 that observable for the asset or liability, either
directly or indirectly: and
- Level 3 inputs are unobservable inputs for the asset or
liability.
Functional and presentational currency:
These financial statements are presented in Indian Rupee
(INR) which is also the functional Currency.
Rounting off amounts:
All amounts disclosed in the financial statements have been
rounded off to the nearest rupees in lakhs as per the
requirements of schedule III of the Act, unless otherwise
stated.
Use of Estimates and Judgements:-
The preparation of Financial Statements in conformity with
IND AS requires the management to make judgements,
estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from
these estimates. Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimates
are revised and in any future period affected. Information about
critical judgements in applying accounting policies that have
the most significant effect on the amounts recognized in the
financial statements is included in the accounting policies and /
or the notes to the financial statements.
2.3 Current versus Non-Current Classification:-
The Company presents assets and liabilities in the Balance
Sheet based on Current / Non-Current classification. An asset
is treated as current when it is:¬
- Expected to be realized or intended to be sold or
consumed in the normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realized within twelve months after the
reporting period; or
- Cost or cost equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as Non-Current
A Liability is current when:
- It is expected to be settled in the normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the
reporting period; or
- There is no unconditional right to defer the settlement of
the liability for at least twelve months after the reporting
period.
All other liabilities are classified as Non-Current
The Company has deemed its operating cycle as twelve
months for the purpose of Current / Non-Current classification.
The financial statements are presented in Indian Rupees,
which is functional currency, rounded to the nearest Lakhs
with two decimals. The amount below the round off norm
adopted by the company is denoted as Rs. 0.00 Lakhs.
2.4 Revenue Recognition
Revenue is measured at the fair value of consideration
received or receivable.
a. Sale of Goods
Revenue from sale of goods is recognized when the Company
has transferred to the buyer the significant risks and rewards
of ownership of the goods, it no longer retains control over the
goods sold, the amount of revenue can be measured reliably, it
is probable that the economic benefits associated with the
transaction will flow to the Company and the cost incurred or to
be incurred in respect of the transaction can be measured
reliably. Sale of goods is recognized but net of other taxes
collected on behalf of third parties.
b. Power generated from Windmill
Power generated from windmill that are covered under
wheeling and Banking arrangement with TANGEDCO and the
same were consumed at factories. The monetary values of
such power generated that are captively consumed are not
recognized as revenue for the Company.
c. Power generated from solar power Plant
Power generated from the solar power plant are transferred
directly to the grid and such transferred power is adjusted by
TANGEDCO in the monthly power Bill. The monetary values of
such power generated that are adjusted by TANGEDCO are
not recognized as the revenue.
d. Scrap Sale
Scrap sale is recognized at the fair value of consideration
received or receivables upon transfer of significant risk and
rewards. It comprises of invoice value of goods excluding
applicable taxes on sale.
e. Dividend Income
Dividend Income from investment in shares of corporate
bodies is accounted when the Company''s right to receive
the dividend is established.
f. Interest Income
Interest income from a financial asset is recognized when
it is probable that the economic benefits will flow to the
Company and the amount of income can be measured
reliably. Interest income is accrued on a time proposition
basis, by reference to the principal outstanding and the effect
interest rate applicable, which is the rate exactly discounts
estimated future cash receipts through the expected life of
financial assets to that assets net carrying amount on initial
recognition.
2.5 Property, Plant and Equipment
Property, Plant and Equipment are stated at cost less
accumulated depreciation / amortization and impairment
losses if any, except freehold land which is carried at cost. Cost
comprises of purchase price, import duties, levies and any
attributable cost of bringing the assets on its working condition
for the intended use.
For transition to IND AS, the Company has elected to continue
the carrying value of all of its property, plant and equipment
recognized as at 1st April, 2016 (IND AS transition date)
measured as per the previously applicable Indian GAAP and
used that carrying value as its deemed cost as at the IND AS
transition date.
When each major expenses on fixed assets, day to day
repair and maintenance expenditure and cost of replacing
parts that does not meet the capitalization criteria in
accordance with IND AS 16 are charged to statement of
Profit and Loss for the period during which such expenses
are incurred.
The Company identifies the significant parts of plant and
equipment separately (which are required to be replaced at
intervals) based on their specific useful lives. The cost of
replacement of significant parts are capitalized and the
carrying amount of replaced parts are derecognized.
PPEs eliminated from the financial statements on disposal or
when no further benefit is expected from its use and disposal.
Gains or losses arising from disposal, measured as the
difference between the net disposal proceeds and the
carrying amount of such assets are recognized in the
statement of Profit and Loss. Amount received towards
PPE that are impaired and derecognized in the financial
statements are recognized in statement of Profit and Loss,
when the recognition criteria are met.
Depreciation is recognized so as to write off the cost of assets
(other than freehold land and property under construction)
less their residual value, over their useful lives. The estimated
useful lives, residual value and depreciation method are
reviewed at the end of each reporting period, with the effect of
any changes in estimate accounted for on a prospective
basis.
Depreciation for PPE on additions is calculated on pro rata
basis from the date of such additions. For deletion / disposals,
the depreciation is calculated on pro rata basis up to the date
on which such assets have been discarded / sold.
Capital work in progress includes cost of property, plant and
equipment under installation, under development including
related expenses and attributable interest as at the reporting
date.
2.6 Investment Property
The Company does not have any investment property as on
the Balance Sheet date. Hence there is no disclosure as
per the requirements of IND AS 16.
2.7 Intangible Assets
Intangible Assets are recognized when the asset is identifiable
is within the control of the Company, it is probable that the
future economic benefits that are attributable to the asset will
flow to the Company and cost of the asset can be reliably
measured.
Intangible assets are amortized over their estimated useful
life on straight line method. The estimated useful lives of
intangible assets are assessed by the internal technical team.
It''s accounting classification is given below:-
1. Nature of intangible assets - Computer Software
2. Estimated Useful life - 3 Years
3. Amoritization of intangible Assests - Computer Software
4. Accounting Classification - Depreciation & Amotization
For transition to IND AS, the Company has elected to
continue with the carrying value of all its intangible assets
recognized as at IND AS transition date measured as per
the previously applicable Indian GAAP and use that carrying
value as its deemed cost as at the IND AS transition date.
2.8 Inventories
Inventories are valued at the lower of cost and net realizable
value.
Cost of Raw materials, Stores and Spares, Fuel, Packing
Materials, etc., are valued at cost, computed on moving
weighted average basis including the cost incurred in bringing
the inventories to their present location or net realizable
value whichever is lower.
Process Stock and Finished Goods are valued at moving
weighted average cost including the cost of conversion
and other costs incurred in bringing the inventories to the
present location and condition.
Net realizable value is the estimated selling price in the
ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the
sale.
2.9 Cash Flow Statement
Cash Flows are presented using indirect method, whereby
profit / (Loss) before tax is adjusted for the effects of
transaction of non-cash nature and accruals of post or future
cash transaction. Cash comprise cash on hand and demand
deposits with banks. Cash equivalents are short term balance
with original maturity of less than 3 months, highly liquid
investments that are readily convertible into cash
2.10 Borrowing Costs
Borrowing Costs include interest expense calculated using
the effective interest rate method, other costs incurred in
connection with borrowing of funds and exchange
differences to the extent regarded as an adjustment to the
interest costs.
Borrowing Costs that are directly attributable to the
acquisition, construction or production of a qualifying assets
(net of income earned on temporary deployment of funds)
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 recognized as an expense in
the period in which they are incurred.
A qualifying asset is an asset that necessarily takes a
substantial period of time to get ready for its intended use or
sale.
2.11 Financial Assets
Financial Assets comprises of Investments in Equity, Trade
Receivables, Cash and Cash Equivalents and Other Financial
Assets.
Classification
The Company classifies Financial Assets as subsequently
measured at Amortized Cost, Fair Value through Other
Comprehensive Income (FVTOCI) or Fair Value through Profit
or Loss (FVTPL) on the basis of its business model for
managing the Financial Assets and the contractual cash
flows characteristics of the financial assets.
Initial Recognition and Measurement
All financial assets are recognized initially at fair value plus,
in the case of financial assets not recognized at the fair
value through profit or loss, transaction costs that are
attributable to the acquisition of the financial asset.
Subsequent measurements of financial assets are dependent
on initial categorization. For impairment purposes, significant
financial assets are tested on an individual basis and other
financial assets are assessed collectively in groups that share
similar credit risk characteristics.
Financial Assets are measured at amortized cost when
asset is held within a business model, whose adjective is to
hold assets for collecting contractual cash flows and
contractual terms of the assets give rise, on specified dates, to
cash flows that are solely payments of principal and interest.
Such financial assets are subsequently measured at
amortized cost using the effective interest rate method. The
losses arising from impairment are recognized in the
statement of Profit and Loss. This category generally applies
to trade and other receivables.
a. Financial assets measured at fair value through
other comprehensive income (FVTOCI)
Financial assets under this category are measured initially as
well as at each reporting date at fair value. Fair value
movements are recognized in the other comprehensive
income.
b. Financial assets measured at fair value through
profit or loss (FVTPL)
Financial assets under this category are measured initially as
well as at each reporting date at fair value with all changes
recognized in profit or loss. Company''s Current Investments in
equity shares are measured at FVTPL.
c. 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 with a maturity within three months or less from
the date of purchase, to be cash equivalents. Cash and cash
equivalents consist of balances with banks which are
unrestricted for withdrawal and usage.
De-recognition of Financial Assets
A Financial Asset is primarily derecognized when the rights
to receive cash flows from the asset have expired or the
company has transferred its rights to receive cash flows from
the asset.
2.12 Financial Liabilities
Financial Liabilities comprises of Borrowings from banks,
Trade Payables, Derivative Financial Instruments, Financial
Guarantee Obligation and Other Financial Liabilities.
Classification
The Company classifies all financial liabilities as subsequently
measured at amortized cost, except for financial liabilities
at fair value through profit or loss. Such financial liabilities
including derivatives that are liabilities, shall be subsequently
measured at fair value.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include
financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through
profit or loss. Financial liabilities are classified as held for
trading, if they are incurred for the purpose of repurchasing in
the near term. This category also includes derivative
financial instruments that are not designated as hedging
instruments in hedge relationships as defined by IND AS
109 - âFinancial Instrumentsâ. Separated embedded
derivatives are also classified as held for trading unless
they are designated as effective hedging instruments.
Financial liabilities measured at amortised cost
After initial recognition, interest bearing loans and borrowings
are subsequently measured at amortised cost using the
EIR method except for those designated in an effective
hedging relationship.
Amortized Cost is calculated by taking into account any
discount or premium and fees or costs that are an integral part
of the EIR. The EIR amortization is included in finance costs in
the statement of profit and loss. Any difference between the
proceeds (Net of transactions costs) and the redemption
amount is recognized in Profit or Loss over the period of the
borrowings using the EIR method.
Fees paid on the establishment of loan facilities are
recognized as transaction costs of the loan to the extent
that it is probable that same or all of the facility will be drawn
down.
Trade and Other Payables
A payable is classified as ''Trade Payable'' if it is in respect of
the amount due on account of goods purchased or services
received in the normal course of business. These amounts
represent liabilities for goods and services provided to the
Company prior to the end of financial year, which are unpaid.
They are recognized initially at their fair value and
subsequently measured at amortized cost using the EIR
method.
De-recognition of Financial Liabilities
A Financial Liability is derecognized when the obligation under
the liability is discharged or cancelled or expires. The
difference between the carrying amount of a financial liability
that has been extinguished or transferred to another party
and the consideration paid, including any non-cash assets
transferred or liabilities assumed is recognized in profit or loss
as other income or finance assets.
2.13 Impairment
i. Financial Assets
The Company recognizes loss allowances if only, using
the expected credit loss (ECL) model for the financial assets
which are not fair valued. Loss allowance for trade receivables
with no significant financing component is measured at an
amount equal to life time ECL. For all other financial assets,
ECL is 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 life
time 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 the statement of
profit and loss.
ii. Non - Financial Liabilities
The carrying values of assets include property, plant and
equipment, cash generating units and intangible assets are
reviewed for impairment at each Balance Sheet date, if there is
any indication of impairment based on internal and external
factors.
Non-financial assets are treated as impaired when the carrying
amount of such asset exceeds its recoverable value. After
recognition of impairment loss, the depreciation for the said
assets is provided for remaining useful life based on the
revised carrying amount, less its residual value if any, on
straight line basis.
An impairment loss is charged to the statement of Profit and
Loss in the year in which an asset is identified as impaired.
An impairment loss is reversed when there is an indication
that the impairment loss may no longer exist or may have
decreased.
2.14 Foreign Currency Transaction and Translation
Transactions in foreign currencies are translated to the
functional currency of the Company (i.e. INR) at exchange
R
rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the reporting
date, except for those derivative balances that are within
the scope of IND AS - 109. âFinancial instrumentsâ are
translated to the functional currency at the exchange rate at
that date and the related foreign currency gain or loss are
reported in the statement of Profit and Loss.
Foreign Exchange differences regarded as an adjustment to
interest costs are recognized in the Statement of Profit and
Loss. Realized or unrealized gain in respect of the settlement
or translation of borrowing is recognized as an adjustment to
interest cost to the extent of the loss previously recognized as
an adjustments to the interest cost.
2.15 Employee Benefits
Employee Benefits in the form of Provident Fund & Employee
State Insurance are defined contribution plans. The Company
recognizes contribution payable to a defined contribution
plan as an expense, when an employee renders the related
services.
The Company contributes monthly at 12% of employees''
basic salary to Employees Provident Fund & Employees
Pension Fund administered by the Employees Provident Fund
Organization, Government of India. The Company has no
further obligations.
Gratuity Liability and Leave Encashment Liability are defined
benefit plans. The cost of providing benefit under the defined
benefit plans is determined using the projected unit credit
method, with actuarial valuations being carried out at the end of
each annual reporting period. The Company has its own
approved Gratuity Fund with LIC Group Gratuity cash
accumulations scheme and the contribution to that fund are
being made to LIC.
The Leave Encashment entitlement is computed on
calendar year basis and payment made to the Employees
accordingly in the succeeding January of every year.
Hence, there is no outstanding liability towards Leave
Encashment.
Re-measurements of the net defined benefit liability / asset
comprise:-
1. Actuarial Gains and Losses;
2. The return on plan assets, excluding amounts included
in net interest on the net defined benefit liability / asset;
and
3. Any change in the effect of the asset ceiling, excluding
amounts included in net interest on the net defined
benefit liability / asset.
Reimbursements of net defined benefit liability / asset are
charged or credited to Other Comprehensive Income.
Investment in Associate
An Associate is an entity over which the Company has
significant influence. Significant influence is the power to
participate in the financial and operating policy decisions
of the investee but is not control or joint control over those
polices.
Investments in Associate are carried at cost. The cost
comprises price paid to acquire investment and directly
attributable cost.
For transition to IND AS, the Company had elected to
continue with the carrying value of its investment in Associate
recognized as the transition date, measured as per the
previously applicable Indian GAAP and used that carrying
value as its deemed cost as at the transition date.
Mar 31, 2024
1. General Information:
M/s. Polyspin Exports Limited, CIN No. L51909TN1985PLC011683, (PEL or the Company) is a Public Limited Company incorporated in India. The Company shares are listed in BSE Limited and the Scrip Code is 539354. The address of the Registered Office is 351, P.A.C.R. Salai, Rajapalayam - 626 117, Tamilnadu.
The Company was incorporated in the year 1985 and the commenced commercial production during the year 1990. The Company is engaged in Manufacture of FIBC Bags, Fabric, PP Yarn, Multifilament Yarn, etc., with an installed capacity of 10,800 MTS per annum. The Company''s FIBC bags are primarily exported to U.S.A, Europe and African Countries.
The Company has permanently closed the operations at Textiles Division (OE Yarn) - 1760 Rotors with effect from June 16, 2023. The Company has taken necessary steps to sell the entire textile machineries in a phased manner. These financial statements were approved for issue by the board of directors of the Company on 27th May, 2024.
2.1 Statement of Compliance:
These financial statements have been prepared in accordance with the Indian Accounting Standards (âIND ASâ) prescribed under section 133 of the Companies Act, 2013 ("the Act") read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.
2.2: Basis of Preparation:-
These financial statements have been prepared on the historical cost basis except for certain financial instruments and defined benefit plans that are measured at fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In measuring fair value of an asset or liability, the Company takes into account those characteristics of the asset or liability that market participants would take into account when pricing the asset or liability at the measurement date.
In addition, for financial reporting purposes 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 measurement in its entirety, which are described as follows:- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
- Level 2 inputs, other than quoted prices included within
Level 1 that observable for the asset or liability, either directly or indirectly: and
- Level 3 inputs are unobservable inputs for the asset or liability.
Functional and presentational currency:
These financial statements are presented in Indian Rupee (INR) which is also the functional Currency.
Rounting off amounts:
All amounts disclosed in the financial statements have been rounded off to the nearest rupees in lakhs as per the requirements of schedule III of the Act, unless otherwise stated.
Use of Estimates and Judgements:-
The preparation of Financial Statements in conformity with IND AS requires the management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future period affected. Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the accounting policies and / or the notes to the financial statements.
2.3 Current versus Non-Current Classification:-The Company presents assets and liabilities in the Balance Sheet based on Current / Non-Current classification. An asset is treated as current when it is:- Expected to be realized or intended to be sold or consumed in the normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realized within twelve months after the reporting period; or
- Cost or cost equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as Non-Current A Liability is current when:
- It is expected to be settled in the normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period; or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as Non-Current
The Company has deemed its operating cycle as twelve months for the purpose of Current / Non-Current classification.
The financial statements are presented in Indian Rupees, which is functional currency, rounded to the nearest Lakhs with two decimals. The amount below the round off norm adopted by the company is denoted as Rs. 0.00 Lakhs.
2.4 Revenue Recognition
Revenue is measured at the fair value of consideration received or receivable.
a. Sale of Goods
Revenue from sale of goods is recognized when the Company has transferred to the buyer the significant risks and rewards of ownership of the goods, it no longer retains control over the goods sold, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the Company and the cost incurred or to be incurred in respect of the transaction can be measured reliably. Sale of goods is recognized but net of other taxes collected on behalf of third parties.
b. Power generated from Windmill
Power generated from windmill that are covered under wheeling and Banking arrangement with TANGEDCO and the same were consumed at factories. The monetary values of such power generated that are captively consumed are not recognized as revenue for the Company.
c. Scrap Sale
Scrap sale is recognized at the fair value of consideration received or receivables upon transfer of significant risk and rewards. It comprises of invoice value of goods excluding applicable taxes on sale.
d. Dividend Income
Dividend Income from investment in shares of corporate bodies is accounted when the Company''s right to receive the dividend is established.
e. Interest Income
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time proposition basis, by reference to the principal outstanding and the effect interest rate applicable, which is the rate exactly discounts estimated future cash receipts through the expected life of financial assets to that assets net carrying amount on initial recognition.
2.5 Property, Plant and Equipment
Property, Plant and Equipment are stated at cost less accumulated depreciation / amortization and impairment losses if any, except freehold land which is carried at cost. Cost comprises of purchase price, import duties, levies and any attributable cost of bringing the assets on its working condition for the intended use.
For transition to IND AS, the Company has elected to continue the carrying value of all of its property, plant and equipment
recognized as at 1st April, 2016 (IND AS transition date) measured as per the previously applicable Indian GAAP and used that carrying value as its deemed cost as at the IND AS transition date.
When each major expenses on fixed assets, day to day repair and maintenance expenditure and cost of replacing parts that does not meet the capitalization criteria in accordance with IND AS 16 are charged to statement of Profit and Loss for the period during which such expenses are incurred.
The Company identifies the significant parts of plant and equipment separately (which are required to be replaced at intervals) based on their specific useful lives. The cost of replacement of significant parts are capitalized and the carrying amount of replaced parts are derecognized.
PPEs eliminated from the financial statements on disposal or when no further benefit is expected from its use and disposal. Gains or losses arising from disposal, measured as the difference between the net disposal proceeds and the carrying amount of such assets are recognized in the statement of Profit and Loss. Amount received towards PPE that are impaired and derecognized in the financial statements are recognized in statement of Profit and Loss, when the recognition criteria are met.
Depreciation is recognized so as to write off the cost of assets (other than freehold land and property under construction) less their residual value, over their useful lives. The estimated useful lives, residual value and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Depreciation for PPE on additions is calculated on pro rata basis from the date of such additions. For deletion / disposals, the depreciation is calculated on pro rata basis up to the date on which such assets have been discarded / sold.
Capital work in progress includes cost of property, plant and equipment under installation, under development including related expenses and attributable interest as at the reporting date.
2.6 Investment Property
The Company does not have any investment property as on the Balance Sheet date. Hence there is no disclosure as per the requirements of IND AS 16
2.7 Intangible Assets
Intangible Assets are recognized when the asset is identifiable is within the control of the Company, it is probable that the future economic benefits that are attributable to the asset will flow to the Company and cost of the asset can be reliably measured.
Intangible assets are amortized over their estimated useful life on straight line method. The estimated useful lives of intangible assets are assessed by the internal technical team.
It''s accounting classification is given below:-
1. Nature of intangible assets - Computer Software
2. Estimated Useful life - 3 Years
3. Amoritization of intangible Assests - Computer Software
4. Accounting Classification - Depreciation & Amotization
For transition to IND AS, the Company has elected to continue with the carrying value of all its intangible assets recognized as at IND AS transition date measured as per the previously applicable Indian GAAP and use that carrying value as its deemed cost as at the IND AS transition date.
2.8 Inventories
Inventories are valued at the lower of cost and net realizable value.
Cost of Raw materials, Stores and Spares, Fuel, Packing Materials, etc., are valued at cost, computed on moving weighted average basis including the cost incurred in bringing the inventories to their present location or net realizable value whichever is lower.
Process Stock and Finished Goods are valued at moving weighted average cost including the cost of conversion and other costs incurred in bringing the inventories to the present location and condition.
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
2.9 Cash Flow Statement
Cash Flows are presented using indirect method, whereby profit / (Loss) before tax is adjusted for the effects of transaction of non-cash nature and accruals of post or future cash transaction. Cash comprise cash on hand and demand deposits with banks. Cash equivalents are short term balance with original maturity of less than 3 months, highly liquid investments that are readily convertible into cash
2.10 Borrowing Costs
Borrowing Costs include interest expense calculated using the effective interest rate method, other costs incurred in connection with borrowing of funds and exchange differences to the extent regarded as an adjustment to the interest costs.
Borrowing Costs that are directly attributable to the acquisition, construction or production of a qualifying assets (net of income earned on temporary deployment of funds) 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 recognized as an expense in the period in which they are incurred.
A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.
2.11 Financial Assets
Financial Assets comprises of Investments in Equity, Trade Receivables, Cash and Cash Equivalents and Other Financial Assets.
Classification
The Company classifies Financial Assets as subsequently measured at Amortized Cost, Fair Value through Other Comprehensive Income (FVTOCI) or Fair Value through Profit or Loss (FVTPL) on the basis of its business model for managing the Financial Assets and the contractual cash flows characteristics of the financial assets.
Initial Recognition and Measurement All financial assets are recognized initially at fair value plus, in the case of financial assets not recognized at the fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Subsequent measurements of financial assets are dependent on initial categorization. For impairment purposes, significant financial assets are tested on an individual basis and other financial assets are assessed collectively in groups that share similar credit risk characteristics.
Financial Assets are measured at amortized cost when asset is held within a business model, whose adjective is to hold assets for collecting contractual cash flows and contractual terms of the assets give rise, on specified dates, to cash flows that are solely payments of principal and interest. Such financial assets are subsequently measured at amortized cost using the effective interest rate method. The losses arising from impairment are recognized in the statement of Profit and Loss. This category generally applies to trade and other receivables.
a. Financial assets measured at fair value through other comprehensive income (FVTOCI)
Financial assets under this category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income.
b. Financial assets measured at fair value through profit or loss (FVTPL)
Financial assets under this category are measured initially as well as at each reporting date at fair value with all changes recognized in profit or loss. Company''s Current Investments in equity shares are measured at FVTPL.
c. 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 with a maturity within three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
De-recognition of Financial Assets
A Financial Asset is primarily derecognized when the rights to receive cash flows from the asset have expired or the company has transferred its rights to receive cash flows from the asset.
2.12 Financial Liabilities
Financial Liabilities comprises of Borrowings from banks, Trade Payables, Derivative Financial Instruments, Financial Guarantee Obligation and Other Financial Liabilities. Classification
The Company classifies all financial liabilities as subsequently measured at amortized cost, except for financial liabilities at fair value through profit or loss. Such financial liabilities including derivatives that are liabilities, shall be subsequently measured at fair value.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading, if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments that are not designated as hedging instruments in hedge relationships as defined by IND AS 109 - âFinancial Instrumentsâ. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Financial liabilities measured at amortised cost
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the EIR method except for those designated in an effective hedging relationship.
Amortized Cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the statement of profit and loss. Any difference between the proceeds (Net of transactions costs) and the redemption amount is recognized in Profit or Loss over the period of the borrowings using the EIR method.
Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that same or all of the facility will be drawn down.
Trade and Other Payables
A payable is classified as ''Trade Payable'' if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year, which are unpaid. They are recognized initially at their fair value and subsequently measured at amortized cost using the EIR method.
De-recognition of Financial Liabilities
A Financial Liability is derecognized when the obligation under the liability is discharged or cancelled or expires. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed is recognized in profit or loss as other income or finance assets.
2.13 Impairment
i. Financial Assets
The Company recognizes loss allowances if only, using the expected credit loss (ECL) model for the financial assets which are not fair valued. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to life time ECL. For all other financial assets, ECL is 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 life time 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 the statement of profit and loss.
ii. Non - Financial Liabilities
The carrying values of assets include property, plant and equipment, cash generating units and intangible assets are reviewed for impairment at each Balance Sheet date, if there is any indication of impairment based on internal and external factors.
Non-financial assets are treated as impaired when the carrying amount of such asset exceeds its recoverable value. After recognition of impairment loss, the depreciation for the said assets is provided for remaining useful life based on the revised carrying amount, less its residual value if any, on straight line basis.
An impairment loss is charged to the statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss is reversed when there is an indication that the impairment loss may no longer exist or may have decreased.
2.14 Foreign Currency Transaction and Translation
Transactions in foreign currencies are translated to the functional currency of the Company (i.e. INR) at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date, except for those derivative balances that are within the scope of IND AS - 109. âFinancial instrumentsâ are translated to the functional currency at the exchange rate at that date and the related foreign currency gain or loss are reported in the statement of Profit and Loss.
Foreign Exchange differences regarded as an adjustment to interest costs are recognized in the Statement of Profit and
Loss. Realized or unrealized gain in respect of the settlement or translation of borrowing is recognized as an adjustment to interest cost to the extent of the loss previously recognized as an adjustments to the interest cost.
2.15 Employee Benefits
Employee Benefits in the form of Provident Fund & Employee State Insurance are defined contribution plans. The Company recognizes contribution payable to a defined contribution plan as an expense, when an employee renders the related services.
The Company contributes monthly at 12% of employees'' basic salary to Employees Provident Fund & Employees Pension Fund administered by the Employees Provident Fund Organization, Government of India. The Company has no further obligations.
Gratuity Liability and Leave Encashment Liability are defined benefit plans. The cost of providing benefit under the defined benefit plans is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. The Company has its own approved Gratuity Fund with LIC Group Gratuity cash accumulations scheme and the contribution to that fund are being made to LIC.
The Leave Encashment entitlement is computed on calendar year basis and payment made to the Employees accordingly in the succeeding January of every year. Hence, there is no outstanding liability towards Leave Encashment.
Re-measurements of the net defined benefit liability / asset comprise:-
1. Actuarial Gains and Losses;
2. The return on plan assets, excluding amounts included in net interest on the net defined benefit liability / asset; and
3. Any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability / asset.
Reimbursements of net defined benefit liability / asset are charged or credited to Other Comprehensive Income. Investment in Associate
An Associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those polices.
Investments in Associate are carried at cost. The cost comprises price paid to acquire investment and directly attributable cost.
For transition to IND AS, the Company had elected to continue with the carrying value of its investment in Associate recognized as the transition date, measured as per the
previously applicable Indian GAAP and used that carrying value as its deemed cost as at the transition date.
2.16 Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources, embodying economic benefits in respect of which a reliable estimate can be made. Contingent Liability is a possible obligation that may arise from past events and its existence will be confirmed only by occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the same are not recognized but disclosed in the financial statements.
Insurance Claims are accounted on the basis of claims admitted or expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection. Contingent Assets are not recognized.
2.17 Taxes on Income
Income Tax expenses comprises of current tax and deferred tax. It is recognized in the statement of Profit and Loss, except to the extent that it relates to items recognized directly in Equity or Other Comprehensive Income. In such cases, the tax is also recognized directly in Equity or in Other Comprehensive Income.
Current Tax
Current Tax is the amount of tax payable on the taxable income for the year, determined in accordance with the provisions of the Income Tax Act, 1961.
Deferred Tax
Deferred Tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the balance sheet and their corresponding tax bases. Deferred tax liabilities are generally recognized for all taxable temporary differences.
Deferred Tax Assets are generally recognized for all deductible temporary differences and unused tax losses being carried forward, to the extent that it is probable that taxable profits will be available in future against which those deductible temporary differences and tax losses can be utilized. 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 profit will be available to allow all or part of the assets 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 assets realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Minimum Alternate Tax (MAT)
MAT Credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period (i.e.) the period for which MAT credit is allowed to be carried forward, in the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of Profit and Loss and shown as MAT credit entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.
2.18. Non-current assets (or disposal groups) classified as held for sale:
Non-current assets or disposal groups comprising of assets and liabilities are classified as ''held for sale'' when all the following criteria are met: (i) decision has been made to sell, (ii) the assets are available for immediate sale in its present condition, (iii) the assets are being actively marketed and (iv) sale has been agreed or is expected to be concluded within 12 months of the Balance Sheet date.
Subsequently, such non-current assets and disposal groups classified as ''held for sale'' are measured at the lower of its carrying value and fair value less costs of disposal. Noncurrent assets held for sale are not depreciated or amortised.
2.19. Earning Per Share
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
The Weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue, buy back of shares, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares).
2.20. Significant Estimates and Judgements
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures and the disclosure of contingent liabilities. Actual results could vary from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision effects only that period or in the period of the revision or future periods, if the revision affects both current and future years.
Accordingly, the management has applied the following estimates / assumptions / judgements in preparation and presentation of financial statements.
Property, Plant and Equipment, Intangible Assets:-The residual values estimated useful life of PPEs & Intangible Assets are assessed by technical team duly reviewed by the management at each reporting date. Wherever the management believes that the assigned useful life and residual value are appropriate, such recommendations are accepted and adopted for computation of depreciation / amortization.
Current Taxes:-
Calculations of Income Taxes for the current period are done based on applicable tax laws and managements judgement by evaluating positions taken in tax returns and interpretation of relevant provisions of law.
Deferred Tax Rate (Including MAT Credit Entitlement) Significant Management judgement is exercised by reviewing the deferred tax assets at each reporting date to determine the amount of deferred tax assets that can be retained /recognized, based upon the likely with future tax planning strategies.
Contingent Liabilities:-
Management''s judgement is exercised for estimating the possible outflow of resources, if any, in respect of Contingencies / Claims / Litigation against the Company as it is not possible to predict the outcome of pending matters with accuracy.
Impairment of Trade Receivables:-
The impairment for financial assets are done based on assumption about risk of default and expected loss rates. The assumptions, selection of inputs for calculation of impairment are based on management judgement considering the past history, market condition and forward booking estimates at the end of each reporting date.
Impairment of Non-Financial Asset (PPE / Intangible Assets)
The impairment of Non-Financial Assets is determined based on estimate of recoverable amount of such assets. The assumptions used in computing the recoverable amount are based on management judgement considering the timing of future cash flow, discount rates and risks specific to the asset.
Defined Benefit Plan and Other Long Term Benefits:-
The cost of the defined benefit plan and other long term benefits and the present value of such obligation are determined by the independent actuarial values. Management believes that the assumptions used by the actuary in
determination of discount rate, future salary increases, mortality rates and attrition rates are reasonable. Due to the complexities involved in the valuation and its long term nature, this obligation is highly sensitive to changes in these assumptions.
2.21 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 31st March, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
Mar 31, 2018
NOTES FORMING PART OF ACCOUNTS:
1. General Information:
Polyspin Exports Limited (PEL or the Company) is a Public Limited Company incorporated in India. PEL''s shares are listed on Bombay Stock Exchange and the Scrip Code is 539354. The address of the Registered office is 351, P.A.C.R. Salai, Rajapalayam - 626 117, Tamilnadu.
The company was incorporated in 1985 and commenced commercial production during 1990.
The company is engaged in manufacture of FIBC bags, PP Fabric, PP yarn, Paper bags, etc., with an installed capacity of 10800 MTS per annum and manufacturer of OE yarn with an installed capacity of 1312 Rotors. The company''s FIBC bags are primarily exported to U.S.A, Europe and African Countries.
The financial statements were approved for issue by the board of directors of the company on 29th May, 2018.
2. Significant Accounting Policies:-2.1: Statement of Compliance:-
These financial statements have been prepared in accordance with the Indian Accounting Standards (â IND ASâ) prescribed under section 133 of the companies Act, 2013 (the Act) read with Rule 3 of the companies (Indian Accounting Standards) Rules, 2015 and companies (Indian Accounting Standards) Amendment Rules, 2016.
For all periods up to and including the year ended 31st March, 2017, the company prepared its financial statements in accordance with the previously applicable Indian GAAP, under historical cost convention, on accrual basis, including the Accounting Standards notified under the relevant provisions of the companies Act, 2013.
The financial statements for the year ended 31st March, 2018 are PEL''s first IND AS compliant financial statements. The company adopted IND AS in accordance with IND AS 101 - âFirst Time Adoption of Indian Accounting Standardsâ. The date of transition to IND AS is 1st April, 2016. The transition was carried out from the previously applicable Indian GAAP as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
2.2: Basis of Preparation:-
These financial statements have been prepared on the historical cost basis except for certain financial instruments and defined benefit plans that are measured at fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In measuring fair value of an asset or liability, the company takes into account those characteristics of the asset or liability that market participants would take into account when pricing the asset or liability at the measurement date.
In addition, for financial reporting purposes fair value measurement 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 measurement in its entirety, which are described as follows:
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity 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.
Functional and presentational currency:
These financial statements are presented in Indian Rupee (INR) which is also the functional Currency. Unless otherwise stated, all amounts are rounded off to the nearest rupee.
Use of Estimates and Judgments:-
The preparation of Financial Statements in conformity with IND AS requires the management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognized in the period in which the estimates are revised and in any future period affected. Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the accounting policies and / or the notes to the financial statements.
2.3 Current versus Non-Current Classification:-
The company presents assets and liabilities in the balance sheet based on Current / Non-Current classification. An asset is treated as current when it is:
- Expected to be realized or intended to be sold or consumed in the normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realized within twelve months after the reporting period; or
- Cost or cost equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as Non-Current
A Liability is current when:
- It is expected to be settled in the normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period; or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other liabilities are classified as Non-Current
The company has deemed its operating cycle as twelve months for the purpose of Current / Non-Current classification.
2.4 Revenue recognition:-
Revenue is measured at the fair value of consideration received or receivable.
a. Sale of Goods:-
Revenue from sale of goods is recognized when the company has transferred to the buyer the significant risks and rewards of ownership of the goods, it no longer retains control over the goods sold, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the company and the cost incurred or to be incurred in respect of the transaction can be measured reliably. Sale of goods is recognized gross of excise duty but net of other taxes collected on behalf of third parties.
b. Power generated from windmill:-
Power generated from windmill that are covered under wheeling and Banking arrangement with TANGEDCO and the same were consumed at factories. The monetary values of such power generated that are actively consumed are not recognized as revenue for the company.
c. Scrap Sale:-
Scrap sale is recognized at the fair value of consideration received or receivables upon transfer of significant risk and rewards. It comprises of invoice value of goods including excise duty excluding applicable taxes on sale.
d. Dividend Income
Dividend Income from investment in shares of corporate bodies is accounted when the company''s right to receive the dividend is established.
e. Interest Income
Interest income from a financial assets is recognized when it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably. Interest income is accrued on a time proposition basis, by reference to the principal outstanding and the effect interest rate applicable, which is the rate exactly discounts estimated future cash receipts through the expected life of financial assets to that assets net carrying amount on initial recognition.
f. Export Incentive:-
Export Incentive on account of Merchandise exports from India Scheme (MEIS) are accrued in the year when the right to receive as per the terms of the scheme is established in respect of exports made and accounted to the extent, there is no uncertainty about its ultimate collection.
2.5 Property, Plant and Equipment:
Property, Plant and Equipment are stated at cost, less accumulated depreciation /amortization and impairment losses if any, except freehold land which is carried at cost. Cost comprises of purchase price, import duties, levies and any attributable cost of bringing the assets on its working condition for the intended use.
For transition to IND AS, the company has elected to continue the carrying value of all of its property, plant and equipment recognized as at 1st April, 2016 (transition date) measured as per the previously applicable Indian GAAP and use that carrying value as its deemed cost as at transition date.
When each major expenses on fixed assets, day to day repair and maintenance expenditure and cost of replacing parts that does not meet the capitalization criteria in accordance with IND AS 16 are charged to statement of Profit and Loss for the period during which such expenses are incurred.
The company identifies the significant parts of plant and equipment separately (which are required to be replaced at intervals) based on their specific useful lives. The cost of replacement of significant parts are capitalized and the carrying amount of replaced parts are derecognized.
PPEs eliminated from the financial statements on disposal or when no further benefit is expected from its use and disposal. Gains or losses arising from disposal, measured as the difference between the net disposal proceeds and the carrying amount of such assets, are recognized in the statement of Profit and Loss. Amount received towards PPE that are impaired and derecognized in the financial statements are recognized in statement of Profit and Loss, when the recognition criteria are met.
Depreciation is recognized so as to write off the cost of assets (other than freehold land and property under construction) less their residual value, over their useful lives. The estimated useful lives, residual value and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Depreciation for PPE on additions is calculated on pro rata basis from the date of such additions. For deletion / disposals, the depreciation is calculated on pro rata basis up to the date on which such assets have been discarded / sold.
Capital work in progress includes cost of property, plant and equipment under installation, under development including related expenses and attributable interest as at the reporting date.
2.6 Investment Property:-
The company does not have any investment property as on the Balance sheet date. Hence there is no disclosure as per the requirements of IND AS 16.
2.7 Intangible Assets:-
Intangible Assets are recognized when the asset is identifiable is within the control of the company, it is probable that the future economic benefits that are attributable to the asset will flow to the company and cost of the asset can be reliably measured.
Intangible assets are amortized over their estimated useful life on straight line method. The estimated useful lives of intangible assets are assessed by the internal technical team. It''s accounting classification is given below:-
1. Nature of intangible Assets - Computer Software
2. Estimated useful life - 3 Years
3. Amortization of intangible Assets - Computer Software
4. Accounting Classification - Depreciation & Amortization
For transition to IND AS, the company has elected to continue with the carrying value of all its intangible assets recognized at as 1st April, 2016 (Transition date) measured as per the previously applicable Indian GAAP and use that carrying value as its deemed cost as at transition date.
2. 8 Inventories:-
Inventories are valued at the lower of cost and net realizable value.
Cost of Raw materials, Stores and Spares, Fuel, Packing materials, etc., are valued at cost, computed on moving weighted average basis including the cost incurred in bringing the inventories to their present location or net realizable value whichever is lower.
Process stock and finished goods are valued at moving weighted average cost including the cost of conversion and other costs incurred in bringing the inventories to the present location and condition.
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
2.9 Borrowing Costs:-
Borrowing costs include interest expense calculated using the effective interest rate method (EIR), other costs incurred in connection with borrowing of funds and exchange differences to the extent regarded as an adjustment to the interest costs.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying assets (net of income earned on temporary deployment of funds) 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 recognized as an expense in the period in which they are incurred.
A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.
2.10 Financial Assets:-
Financial Assets comprises of investments in equity, trade receivables, cash and cash equivalents and other financial assets.
Classification:-
The company classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive income (FVTOCI) or fair value through Profit or Loss (FVTPL) on the basis of its business model for managing the financial assets and the contractual cash flows characteristics of the financial assets.
Initial Recognition and Measurement:-
All financial assets are recognized initially at fair value plus, in the case of financial assets not recognized at the fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurements of financial assets are dependent on initial categorization. For impairment purposes, significant financial assets are tested on an individual basis and other financial assets are assessed collectively in groups that share similar credit risk characteristics.
De-recognition of Financial Assets:-
A Financial Asset is primarily derecognized when the rights to receive cash flows from the asset have expired or the company has transferred its rights to receive cash flows from the asset.
2.11 Financial Liabilities:-
Financial Liabilities comprises of Borrowings from banks, Trade Payables, Derivative financial instruments, Financial Guarantee obligation and other financial liabilities.
Classification:-
The company classifies all financial liabilities as subsequently measured at amortized cost, except for financial liabilities at fair value through profit or loss (FVTPL). Such financial liabilities including derivative that are liabilities, shall be subsequently measured at fair value.
Amortized cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the statement of profit and loss. Any difference between the proceeds (Net of transactions costs) and the redemption amount is recognized in Profit or Loss over the period of the borrowings using the EIR method.
Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that same or all of the facility will be drawn down.
Trade and Other payables:-
A payable is classified as ''Trade Payable'' if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the company prior to the end of financial year, which are unpaid. They are recognized initially at their fair value and subsequently measured at amortized cost using the EIR method.
De-recognition of Financial Liabilities:-
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss as other income or finance costs.
2.12 Impairment of Non-financial Assets:-
The carrying values of assets include property, plant and equipment, cash generating units and intangible assets are reviewed for impairment at each Balance Sheet date, if there is any indication of impairment based on internal and external factors.
Non-financial assets are treated as impaired when the carrying amount of such asset exceeds its recoverable value. After recognition of impairment loss, the depreciation for the said assets is provided for remaining useful life based on the revised carrying amount, less its residual value if any, on straight line basis.
An impairment loss is charged to the statement of Profit and Loss in the year in which an asset is identified as impaired.
An impairment loss is reversed when there is an indication that the impairment loss may no longer exist or may have decreased.
2.13 Foreign Currency Transaction and Translation:-
Transactions in foreign currencies are translated to the functional currency of the company (i.e. INR) at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date, except for those derivative balances that are within the scope of IND AS - 109 âFinancial instrumentsâ are translated to the functional currency at the exchange rate at that date and the related foreign currency gain or loss are reported in the statement of Profit and Loss.
Foreign Exchange differences regarded as an adjustment to interest costs are recognized in the statement of Profit and Loss. Realized or unrealized gain in respect of the settlement or translation of borrowing is recognized as an adjustment to interest cost to the extent of the loss previously recognized as an adjustment to interest cost to the extent of the loss previously recognized as an adjustment to interest cost.
2.14 Employee Benefits:-
Employee benefits in the form of Provident Fund & Employee State Insurance are defined contribution plans. The company recognizes contribution payable to a defined contribution plan as an expense, when an employee renders the related services.
The company contributes monthly at 12% of employees'' basic salary to Employees Provident Fund & Employeesâ Pension Fund administered by the Employees provident fund organization, Government of India. The company has no further obligations.
Gratuity liability and leave encashment liability are defined benefit plans. The cost of providing benefit under the defined benefit plans is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. The company has its own approved Gratuity fund with LIC Group Gratuity cash accumulations scheme and the contribution to that fund are being made to LIC.
The leave encashment entitlement is computed on calendar year basis and payment made to the Employees accordingly in the succeeding January of every year. Hence, there is no outstanding liability towards leave encashment.
Re-measurements of the net defined benefit liability / asset comprise:-
1. actuarial Gains and Losses;
2. the return on plan assets, excluding amounts included in net interest on the net defined benefit liability / asset; and
3. any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability / asset.
Reimbursements of net defined benefit liability / asset are charged or credited to other Comprehensive Income.
2.15 Provision, Contingent Liabilities and Contingent Assets:-
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources, embodying economic benefits in respect of which a reliable estimate can be made.
Contingent liability is a possible obligation that may arise from past events and its existence will be confirmed only by occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the same are not recognized but disclosed in the financial statements.
Insurance claims are accounted on the basis of claims admitted or expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection. Contingent Assets are not recognized.
2.16 Taxes on Income:-
Income tax expenses comprises of current tax and deferred tax. It is recognized in the statement of Profit and Loss, except to the extent that it relates to items recognized directly in Equity or Other comprehensive income. In such cases, the tax is also recognized directly in Equity or in other comprehensive income.
Current Tax:-
Current tax is the amount of tax payable on the taxable income for the year, determined in accordance with the provisions of the Income Tax Act, 1961.
Deferred Tax:-
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the balance sheet and their corresponding tax bases. Deferred tax liabilities are generally recognized for all taxable temporary differences.
Deferred tax assets are generally recognized for all deductible temporary differences and unused tax losses being carried forward, to the extent that it is probable that taxable profits will be available in future against which those deductible temporary differences and tax losses can be utilized. 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 profit will be available to allow all or part of the assets 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 assets realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Minimum Alternate Tax (MAT)
MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period (i.e.) the period for which MAT credit is allowed to be carried forward, in the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of Profit and Loss and shown as MAT credit entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the company will pay normal income tax during the specified period.
16.1 Rupee Term Loan and Working capital finance from Bank is secured by a First charge, by way of equitable mortgage of specified assets under this loan.
16.2 Hire Purchase Loan is secured by hypothecation of Specified Vehicle purchased under the Scheme.
16.3 The Loans are additionally secured by Personal Guarantee of Promoter Director of the Company.
16.4 The Term Loan from Bank are repayable in equated monthly installments.
16.5 Repayment to Term Loan :
Facility 1 - Rs. 101.37 Lakhs Balance amount is repayable in 26 equated monthly installments starting from April-19 Facility 2 - Rs. 604.12 Lakhs Balance amount is repayable in 29 equated monthly installments starting from April-19 Facility 3 - Rs. 81.20 Lakhs Balance amount is repayable in 37 equated monthly installments starting from April-19 Facility 4 - Rs. 72.88 Lakhs Balance amount is repayable in 48 equated monthly installments starting from April-19
31. Financial Risk Management:-
The company''s principal financial liabilities comprise of borrowings, trade and other payables. The main purpose of these financial liabilities is to manage finances for the company''s operations. The company''s principal financial assets include loans and advances, trade receivables and cash and bank balances that arise directly from its operations.
The company also enters into derivative transaction to hedge foreign currency and not for speculative purposes. The company is exposed to Market risk, Credit risk and Liquidity risk and the company''s senior management oversees the management of these risks.
31.1. Market Risk
Market Risk is the risk that the fair value of future cash flows of a financial asset will fluctuate because of changes in market prices. The company''s activities expose it to a variety of financial risks, including the effect of changes in foreign currency exchange rates and interest rates.
31.2. Currency Risk
Foreign Currency risk is the risk that fair value of future cash flow of an exposure will fluctuate because of changes in foreign exchange rates.
The company''s exposure in USD and other foreign currency denominated transactions in connection with exports of finished goods, besides import of raw materials, capital goods and spares, etc., purchased in foreign currency, gives rise to exchange rate fluctuation risk. The company has following policies to mitigate this risk:
The company has entered into foreign currency forward contracts both for export and import, after taking into consideration of the anticipated foreign exchange inflows / outflows, timing of cash flows, tenure of the forward contract and prevailing foreign exchange market conditions.
31.3. Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in market interest rates. The company''s exposure to the risk of changes in market in interest rates related primarily to the company''s long term debt obligation with floating interest rates.
The company''s fixed rate borrowings are carried at amortized cost and therefore are not subject to interest rate risk as defined in IND AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of change in market interest rates.
31.4. Credit Risk
Credit risk is the risk that a counter party will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities, primarily trade receivables and from its financing activities, including deposits with banks and other financial instruments.
Trade Receivables
The company extends credit to customers in the normal course of business. Outstanding customer receivables are regularly monitored. The company has also taken advances from its customers, which mitigate the credit risks to an extent. An impairment analysis is performed at each reporting date on an individual basis for major customers.
In order to achieve this overall objective the company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest bearing loans and borrowings that define capital structure requirements.
The following monitors capital using a gearing ratio, which is net debt divided by total capital plus debt. (Rs in Lakhs)
Deposits with banks
Generally the company has maintained fixed deposits and balance with the banks with which the company has also availed borrowings. The company does not maintain significant cash balances other than those required for its day to day operations.
31.5. Liquidity Risk
Liquidity risk is the risk that the company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The company''s objective is to maintain a balance between continuity or funding and flexibility through the use of Packing credit loan, Letter of credit, Buyer''s credit and Working capital limits. The company ensures it has sufficient cash to meet its operational needs while maintaining sufficient margin on its undrawn borrowing facilities at all times.
The company has access to the following undrawn borrowing facilities at the end of the reporting period:-
31.6. Capital Management:-
For the purpose of the company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity share holders of the company. The primary objective of the company''s capital management is to safeguard continuity, maintain healthy capital ratios in order to support its business and maximize shareholder value. The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The funding requirement is met through capital, internal accruals, long term borrowings and short term borrowings.
During the year ended 31st March, 2018 and 31st March, 2017, there are no transfer between Level 1 and Level 2 fair value measurements and no transfer into and out of Level 3 fair value measurements, and there is no transaction / balance under Level 3.
There have been no breaches in the financial covenants of any interest bearing loans / borrowing.
The company has been consistently focusing on reduction in long term borrowings.
31.7. Fair value of Financial Assets and Liabilities:-
Comparison by class of the carrying amounts and fair value of the company''s financial instruments that are recognized in the financial statements:
Financial Instruments by category
Fair Valuation Technique:
The company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used to estimate certain fair values:-
1. Fair value of cash deposits, trade receivables, trade payables and other current financial assets and liabilities approximate their carrying amount largely due to the short term maturities of these instruments.
2. The fair value of derivatives are based on marked to market valuation statements received from banks with whom the company has entered into the relevant contracts.
Fair value hierarchy:
The following table provides the fair value measurement hierarchy of company''s assets and liabilities, grouped into level 1 to level 3 as described below:-
1. Quoted prices / Published NAV (unadjusted) in active markets for identical assets or liabilities (Level 1)
2. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability (i.e. as prices) or indirectly (i.e. derived from prices) Level 2. It includes fair value of the financial instruments that are not traded in an active market (for example, over the counter derivatives) and are determined by using valuation technique. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on the company specific estimates. If all significant inputs required to fair value an instrument are observable, then the instrument is included in level 2.
3. Inputs for the asset or liability that are not based on observable market date (i.e. unobservable inputs) Level
3. If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
32. Explanatory Notes on preparation and presentation of financial statements upon transition to IND AS
In preparing these financial statements, the Company''s Opening Balance Sheet was prepared as at 1-4-2016, which is the Company''s date of transition to IND AS. The following note explains the nature of adjustments made by the Company read with in restating its previous GAAP Financial Statements including its Balance Sheet as at 1-4-2016 and the financial statements as at and for the year ended 31-3-2017.
32.1. Depreciation and Amortization expense
Under previous GAAP, the carrying value of significant components of Property, Plant and Equipment which have
completed their useful life, have been charged off against opening balance of Retained Earnings for the financial year 2016-17 as permitted by Schedule II to the Companies Act, 2013. However, under IND AS, this has been taken through profit and loss for the year ended 31-3-2017 as it not a GAAP difference.
32.2. Investments
Under previous GAAP, long term equity instruments were measured at cost less provision for permanent diminution. At the date of transition to IND AS, the excess /deficit of fair value of equity instruments over the previous GAAP carrying amount is recognized as fair value gain/loss, in the FVTOCI reserve/Other Comprehensive Income for the year ended 31-3-2017
32.3. Classification of Financial Instruments
The company has evaluated the facts and circumstances on date of transition to IND AS for the purpose of classification and measurement of financial assets/financial liabilities. Accordingly, bifurcation of assets/liabilities as financial/Non-financial is identified and reclassified. However, this reclassification is not presented as transition adjustments.
32.4. Dividend
Under previous GAAP, dividends proposed by the Board of Directors are recognized as proposed dividend in the financial statements even though it is approved by the shareholders in the AGM. However, under IND AS, dividend has to be recognized upon approval by the shareholders in the Annual General Meeting. Accordingly, Proposed Dividend (including Dividend Distribution Tax) recognized as liability in the financial year 2015-16 as per previous GAAP has been reversed with corresponding credit to Equity as at the date of transition i.e. 1-4-2016 and recognized in the Equity during the year ended 31-3-2017 as declared and paid.
32.5. Transaction cost on Borrowings
Under previous GAAP, transaction costs (loan processing fees) incurred in connection with borrowings is charged to profit or loss upfront. Under IND AS, transaction cost is to be included in the initial recognition and charged to profit or loss using the effective interest method. Accordingly, transaction cost on borrowings is reversed to Equity, for the loans outstanding as at 1-4-2016 and additional interest expense is recognized in the Opening Equity for the period upto 1-4-2016, using Effective Interest Rate method (EIR). For the year ended 31-3-2017, the Company has reversed the transaction cost pertaining to the Borrowings availed during the year 2016-17 and the additional Interest impact computed using EIR method is recognized as Finance cost.
32.6. Deferred Tax
Deferred tax is accounted using income statement approach by computing the differences between taxable profits and accounting profits for the period under previous GAAP. As per IND AS 12, the deferred tax is to be computed using the balance sheet approach, which is based on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. Deferred tax adjustments are recognized either in retained earnings or a separate component of equity.
32.7. Defined Benefit Plan
Under previous GAAP, actuarial gains and losses are charged to profit or loss. Under IND AS re-measurements of net defined benefit asset/liability comprising of actuarial gains or losses are arising from experience adjustments and changes in actuarial assumption are charged/credited to other comprehensive income. There is no impact on the total equity as at 31-3-2017. However for the period upto the date of transition, the Company has transferred all re-measurement costs recognized in the past periods within accumulated profits or loss (a component of equity), in accordance with provisions of Para 122 of IND AS 19.
32.8. Excise Duty
Under previous GAAP, Sale of goods and scraps was presented as net of excise duty. However, under IND AS, sale of goods and scraps includes excise duty. Excise duty on sale of goods and scraps is separately shown as a line item in the Statement of Profit and Loss as part of expenses. However, there is no impact on the total equity and profit.
32.9. Other Comprehensive Income (OCI)
This is a new classification under IND AS. Any income or expense that are not required to be recognized in profit or loss are shown under a new category namely OCI in the Statement of Profit and Loss namely re-measurements of defined benefit plans, gains and losses from investments in equity instruments designated at fair value through other comprehensive income, gains and losses on financial assets measured at fair value through other comprehensive income, changes in revaluation surplus and gains and losses arising from translating the financial statements of a foreign operation.
32.10. Bank Overdraft
Under previous GAAP, bank overdrafts were considered as part of borrowings and movements in the same were shown as part of financing activities. Under IND AS, Bank overdrafts repayable on demand are to be treated as an integral part of the cash management process. Accordingly, Bank overdraft is included in Cash and Cash equivalents for the purpose of presentation of Statement of Cash Flows.
Defined Benefit Plan (Gratuity):
The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement / termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service.
The Employees Gratuity Fund Scheme, which is a defined benefit plan, is managed by a trust maintained with Life Insurance Corporation of India (LIC)
The present value of the obligation is determined based on actuarial valuation using Projected Units Credit Method, which recognizes each period of service as giving rise to additional units of employees benefit entitlement and measures each unit separately to build up the final obligation.
The following table sets out the details of amount recognized in the financial statements in respect of employee benefit schemes:
Mar 31, 2016
1. SIGNIFICANT ACCOUNTING POLICIES:
Basis of preparation of financial statements:
The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in India, and in compliance of the Accounting Standards notified under section 211(3C) of the Companies Act, 1956, which continues to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13-09-2013 of the Ministry of Corporate Affairs and the relevant provisions of the Companies Act, 1956 and Companies Act, 2013, as applicable, as adopted consistently by the Company. The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.
Use of Estimates:
The preparation of financial statements in accordance with the generally accepted accounting principles requires management to make judgments, estimates and assumption that affect the reported amounts of revenue, expenses, assets and liabilities at the end of the reporting period. Difference between the actual results and the estimated are recognized in the period in which the results are known / materialized.
Fixed Assets - Tangible & Intangible and Depreciation
Fixed Assets are stated at cost less depreciation. Cost comprises of purchase price (net of rebates and discounts), import duties, levies and any directly attributable cost of bringing the assets on its working condition for the intended use.
Cost of initial spares and tools is capitalized along with the respective assets. Expenditure directly related and incidental to construction / development and borrowing cost in para ''3'' are capitalized up to date the assets are ready for their intended use. Exchange differences are capitalized to the extent dealt with the respective assets.
Depreciation is provided on a pro rata basis from the month the assets put to use during the financial year. In respect of assets sold / disposed off during the year, depreciation is not provided for the same.
Borrowing Costs :
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. All other borrowing costs are charged to revenue.
Investments:
Investments are recorded as long term investments unless they are expected to be sold within one year. Investments in subsidiaries and associates are valued at cost less any provision for impairment. Investments are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable.
Inventories:
a) Inventories are valued at lower of cost or net realizable value except for scrap and by products which are valued at net realizable value.
b) Cost of inventories of finished goods and work - in -process includes material cost, cost of conversion and other cost.
c) Stores and spares is valued at weighted average cost. Foreign Currency Transaction:
a) Export sales are accounted at exchange rates prevailing on the date of negotiation of bills by the bankers.
b) Purchase of imported raw materials and components are accounted at amounts paid to discharge the related liabilities.
c) Foreign currency loans for acquisition of fixed assets are converted at the rate prevailing on the date of Balance Sheet. The gain or loss arising out of currency translation is adjusted in the cost of fixed assets.
d) Current Assets and Current Liabilities are translated at the rate prevailing on the date of Balance Sheet. The gain or loss if any, arising there from are recognized in the Profit and Loss Account.
Employee Benefits :
a) Employee benefit expenses include salary, wages, performance incentive and other perquisites. It also includes post - employment benefits such as Provident fund, Gratuity, Pensioner benefits, etc.,
b) Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.
c) Contribution payable by the Company under defined contribution schemes towards Provident Fund for the year are charged to Profit and Loss Account.
d) The Company has its own approved Gratuity Fund and the contributions to that fund are being made to LIC.
e) The Leave encashment entitlement is computed on Calendar year basis and payment made to the employees accordingly in the succeeding January of every year. Hence, there is no outstanding liability towards Leave encashment as per Accounting Standard 15.3
Revenue Recognition :
Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection.
a. Export Sales is stated at C & F / CIF / FOB basis.
b. Domestic Sales excludes Excise duty, Education cess, VAT and CST.
c. Dividend income is recognized when right to receive the payment is established by the Balance Sheet date.
d. Interest income is recognized on accrual basis.
e. Income from windmill:
The value of power generated at windmill is actively consumed by the company.
It is not treated as revenue but have been set off against cost of Power & Fuel.
Provision, Contingent liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.
Research and Development :
No such expenditure incurred during the current year.
Taxes on Income:
Tax expense comprises current tax and deferred tax.
Current income tax is measured at the amount expected to be paid to the tax authorities, computed in accordance with the applicable tax rate and tax laws.
The Company recognizes the deferred tax liability / asset based on the accumulated timing difference using the current tax rate.
Government SUBSIDY / GRANT :
Interest subvention under Pre and Post shipment advance is credited to the interest and finance charges.
Export incentives and incentives in the nature of subsidies / duty scrip / rebates given by the government are reckoned in revenue in the year of eligibility.
IMPAIRMENT OF ASSETS : AS-28
The company makes an assessment on the balance sheet date to determine whether there is any indication of impairment in the carrying amount of its fixed assets and on any such indication, the recoverable amounts are estimated and an impairment loss is recognized in the statement of Profit & Loss, whenever the carrying amount of an assets exceeds its recoverable amount.
Mar 31, 2015
1.1. Basis of preparation of financial statements:
The financial statements have been prepared under the historical cost
convention in accordance with the generally accepted accounting
principles in India, and in compliance of the Accounting Standards
notified under section 211(3C) of the Companies Act, 1956, which
continues to be applicable in respect of Section 133 of the Companies
Act, 2013 in terms of General Circular 15/2013 dated 13-09-2013 of the
Ministry of Corporate Affairs and the relevant provisions of the
Companies Act, 1956 and Companies Act, 2013, as applicable, as adopted
consistently by the Company. The Company generally follows mercantile
system of accounting and recognizes significant items of income and
expenditure on accrual basis.
1.2. Use of Estimates:
The preparation of financial statements in accordance with the
generally accepted accounting principles requires management to make
judgments, estimates and assumption that affect the reported amounts of
revenue, expenses, assets and liabilities at the end of the reporting
period. Difference between the actual results and the estimated are
recognized in the period in which the results are known/materialized.
2. Fixed Assets-Tangible & Intangible and Depreciation
2.1. Fixed Assets are stated at cost less depreciation. Cost
comprises of purchase price (net of rebates and discounts), import
duties, levies and any directly attributable cost of bringing the
assets on its working condition for the intended use.
2.2. Cost of initial spares and tools is capitalized along with the
respective assets. Expenditure directly related and incidental to
construction /development and borrowing cost in para '3' are
capitalized up to date the assets are ready for their intended use.
Exchange differences are capitalized to the extent dealt with the
respective assets.
2.3. Depreciation:
Assets are depreciated / amortized on straight line basis over their
estimated useful life as below:- Useful life of Tangible and Intangible
Assets:-
2.4. Depreciation is provided on a pro rata basis from the month the
assets put to use during the financial year. In respect of assets sold
/ disposed off during the year, depreciation is not provided for the
same.
3. Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets.
All other borrowing costs are charged to revenue.
4. Investments:
Investments are recorded as long term investments unless they are
expected to be sold within one year. Investments in subsidiaries and
associates are valued at cost less any provision for impairment.
Investments are reviewed for impairment if events or changes in
circumstances indicate that the carrying amount may not be recoverable.
5. Inventories:
5.1. Inventories are valued at lower of cost or net realizable value
except for scrap and by products which are valued at net realizable
value.
5.2. Cost of inventories of finished goods and work- in - process
includes material cost, cost of conversion and other cost.
5.3. Stores and spares is valued at weighted average cost.
6. Foreign Currency Transaction:
6.1. Export sales are accounted at exchange rates prevailing on the
date of negotiation of bills by the bankers.
6.2. Purchase of imported raw materials and components are accounted
at amounts paid to discharge the related liabilities.
6.3. Foreign currency loans for acquisition of fixed assets are
converted at the rate prevailing on the date of Balance Sheet. The gain
or loss arising out of currency translation is adjusted in the cost of
fixed assets.
6.4. Current Assets and Current Liabilities are translated at the rate
prevailing on the date of Balance Sheet. The gain or loss if any,
arising there from are recognized in the Profit and Loss Account.
7. Employee Benefits:
7.1. Employee benefit expenses include salary, wages, performance
incentive and other perquisites. It also includes post - employment
benefits such as provident fund, gratuity, pensionary benefits, etc.,
7.2. Short term employee benefits are charged off at the undiscounted
amount in the year in which the related service is rendered.
7.3. Contribution payable by the Company under defined contribution
schemes towards Provident Fund for the year are charged to Profit and
Loss Account.
7.4. The Company has its own approved Gratuity Fund and the
contributions to that fund are being made toLIC.
7.5. The Leave encashment entitlement is computed on Calendar year
basis and payment made to the Employees accordingly in the succeeding
January of every year. Hence, there is no outstanding liability towards
Leave encashment as per Accounting Standard 15.
8. Revenue Recognition:
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection.
8.1. Export Sales is stated at C&F/CIF/ FOB basis.
8.2. Domestic Sales excludes Excise duty, Education cess, VAT and CST.
8.3. Dividend income is recognized when right to receive the payment
is established by the Balance Sheet date.
8.4. Interest income is recognized on accrual basis.
8.5. Income from windmill:
The value of power generated at windmill is captively consumed by the
company.
It is not treated as revenue but have been set off against cost of
Power &Fuel.
9. Provision, Contingent liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
10. Research and Development:
No such expenditure incurred during the current year.
11. TAXES ON INCOME:
Tax expense comprises current tax and deferred tax.
11.1 Current income tax is measured at the amount expected to be paid
to the tax authorities, computed in accordance with the applicable tax
rate and tax laws.
11.2 The Company recognizes the deferred tax liability / asset based on
the accumulated timing difference using the current tax rate.
12. Government SUBSIDY /GRANT:
12.1 Interest subvention under Pre and Post shipment advance is
credited to the interest and finance charges
12.2 Export incentives and incentives in the nature of subsidies / duty
scrip / rebates given by the government are reckoned in revenue in the
year of eligibility.
13. IMPAIRMENT OF ASSETS :AS-28
In the Opinion of the Company, the recoverable amount of the fixed
assets of the Company will not be lower than the book value of the
fixed assets. Hence, no provision has made for impairment.
14. The Company has fulfilled export obligations, net foreign exchange
earnings and other conditions, as applicable till date, in terms of
schemes of Government of India, for 100% EOU.
Mar 31, 2014
A. Basis of preparation of financial statements:
The financial statements have been prepared under the historical cost
convention in accordance with the generally accepted accounting
principles in India, and in compliance of the Accounting Standards
notified under section 211(3C) of the Companies Act, 1956, which
continues to be applicable in respect of Section 133 of theCompanies
Act, 2013 in terms of General Circular 15/2013 dated 13-09-2013 of the
Ministry of Corporate Affairs and the relevant provisions of the
Companies Act, 1956 and Companies Act, 2013, as applicable, as adopted
consistently by the Company. The Company generally follows mercantile
system of accounting and recognizes significant items of income and
expenditure on accrual basis.
B. Use of Estimates:
The preparation of financial statements in accordance with the
generally accepted accounting principles requires management to make
judgments, estimates and assumption that affect the reported amounts of
revenue, expenses, assets and liabilities at the end of the reporting
period. Difference between the actual results and the estimated are
recognized in the period in which the results are known / materialized.
C. Borrowing Costs :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets.
All other borrowing costs are charged to revenue.
D. Fixed Assets :
Fixed Assets are stated at cost less depreciation. Cost comprises of
purchase price (net of rebates and discounts), import duties, levies
and any directly attributable cost of bringing the assets on its
working condition for the intended use.
E. Depreciation:
Depreciation is charged under Straight Line method.
Depreciation on Additions during the year is provided on prorata basis
from the date the assets have been installed and put to use on a
Straight Line method at rates and in the manner specified under
Schedule XIV of the Companies Act, 1956.
F. Investments:
Investments are recorded as long term investments unless they are
expected to be sold within one year. Investments in subsidiaries and
associates are valued at cost less any provision for impairment.
Investments are reviewed for impairment if events or changes in
circumstances indicate that the carrying amount may not be recoverable.
G. Inventories:
Inventories are valued at lower of cost or net realizable value except
for scrap and by products which are valued at net realizable value.
Cost of inventories of finished goods and work - in - process includes
material cost, cost of conversion and other cost.
Stores and spares is valued at weighted average cost.
H. Foreign Currency Transaction:
1. Export sales are accounted at exchange rates prevailing on the date
of negotiation of bills by the bankers
2. Purchase of imported raw materials and components are accounted at
amounts paid to discharge the related liabilities.
3. Foreign currency loans for acquisition of fixed assets are converted
at the rate prevailing on the date of Balance Sheet. The gain or loss
arising out of currency translation is adjusted in the cost of fixed
assets.
4. Current Assets and Current Liabilities are translated at the rate
prevailing on the date of Balance Sheet. The gain or loss if any,
arising therefrom are recognised in the Profit and Loss Account.
I. Employee Benefits:
1. Short term employee benefits are charged off at the undiscounted
amount in the year in which the related service is rendered.
2. Contribution payable by the Company under defined contribution
schemes towards Provident Fund for the year are charged to Profit and
Loss Account.
3. The Company has its own approved Gratuity Fund and the contributions
to that fund are being made to LIC.
4. The Leave encashment entitlement is computed on Calendar year basis
and payment made to the Employees accordingly in the succeeding January
of every year. Hence, there is no outstanding liability towards Leave
encashment as per Accounting Standard 15.
J. Revenue Recognition:
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection.
1. Export Sales is stated at C & F / CIF / FOB basis.
2. Domestic Sales excludes Excise duty, Education cess, VAT and CST.
3. Dividend income is recognized when right to receive the payment is
established by the Balance Sheet date.
4. Interest income is recognized on accrual basis.
5. Income from windmill:
The value of power generated at windmill is captively consumed by the
company.
It is not treated as revenue but have been set off against cost of
Power & Fuel.
K. Provision, Contingent liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
L. Research and Development :
No such expenditure incurred during the current year.
M. TAXES ON INCOME :
Tax expense comprises current tax and deferred tax.
1. Current income tax is measured at the amount expected to be paid to
the tax authorities, computed in accordance with the applicable tax
rate and tax laws.
2. The Company recognizes the deferred tax liability / asset based on
the accumulated timing difference using the current tax rate.
N. Government SUBSIDY / GRANT :
Interest subvention under Pre and Post shipment advance is credited to
the interest and finance charges
O. IMPAIRMENT OF ASSETS : AS-28
In the Opinion of the Company, the recoverable amount of the fixed
assets of the Company will not be lower than the book value of the
fixed assets. Hence, no provision has made for impairment.
Mar 31, 2013
A. Basis of preparation of financial statements:
The Accounts are prepared under the historical cost convention and they
materially comply with mandatory accounting standards issued by the
Institute of Chartered Accountants of India. The Company generally
follows mercantile system of accounting and recognizes significant
items of income and expenditure on accrual basis.
B. Use of Estimates:
The preparation of financial statements in accordance with the
generally accepted accounting principles requires management to make
judgments, estimates and assumption that affect the reported amounts of
revenue, expenses, assets and liabilities at the end of the reporting
period. Difference between the actual results and the estimated are
recognized in the period in which the results are known / materialized.
C. Borrowing Costs :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets.
All other borrowing costs are charged to revenue.
D. Fixed Assets :
Fixed Assets are stated at cost less depreciation. Cost comprises of
purchase price (net of rebates and discounts), import duties, levies
and any directly attributable cost of bringing the assets on its
working condition for the intended use.
E. Depreciation:
Depreciation is charged under Straight Line method.
Depreciation on Additions during the year is provided on prorate basis
from the date the assets have been installed and put to use on a
Straight Line method at rates and in the manner specified under
Schedule XIV of the Companies Act, 1956.
F. Investments:
Investments are recorded as long term investments unless they are
expected to be sold within one year. Investments in subsidiaries and
associates are valued at cost less any provision for impairment.
Investments are reviewed for impairment if events or changes in
circumstances indicate that the carrying amount may not be recoverable.
G. Inventories:
Inventories are valued at lower of cost or net realizable value except
for scrap and by products which are valued at net realizable value.
Cost of inventories of finished goods and work  in  process includes
material cost, cost of conversion and other cost.
Stores and spares is valued at weighted average cost.
H. Foreign Currency Transaction:
1. Export sales are accounted at exchange rates prevailing on the date
of negotiation of bills by the bankers
2. Purchase of imported raw materials and components are accounted at
amounts paid to discharge the related liabilities.
3. Foreign currency loans for acquisition of fixed assets are
converted at the rate prevailing on the date of Balance Sheet. The gain
or loss arising out of currency translation is adjusted in the cost of
fixed assets.
4. Current Assets and Current Liabilities are translated at the rate
prevailing on the date of Balance Sheet. The gain or loss if any,
arising there from are recognised in the Profit and Loss Account.
I. Employee Benefits:
1. Short term employee benefits are charged off at the undiscounted
amount in the year in which the related service is rendered.
2. Contribution payable by the Company under defined contribution
schemes towards Provident Fund for the year are charged to Profit and
Loss Account.
3. The Company has its own approved Gratuity Fund and the
contributions to that fund are being made to LIC.
4. The Leave encashment entitlement is computed on Calendar year basis
and payment made to the Employees accordingly in the succeeding January
of every year. Hence, there is no outstanding liability towards Leave
encashment as per Accounting Standard 15.
J. Revenue Recognition:
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection.
1. Export Sales is stated at C & F / CIF / FOB basis.
2. Domestic Sales excludes Excise duty, Education cess, VAT and CST.
3. Dividend income is recognized when right to receive the payment is
established by the Balance Sheet date.
4. Interest income is recognized on accrual basis.
5. Income from windmill:
The value of power generated at windmill is actively consumed by the
company. It is not treated as revenue but have been set off against
cost of Power & Fuel.
K. Provision, Contingent liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
L. Research and Development :
No such expenditure incurred during the current year.
M. TAXES ON INCOME :
Tax expense comprises current tax and deferred tax.
1. Current income tax is measured at the amount expected to be paid to
the tax authorities, computed in accordance with the applicable tax
rate and tax laws.
2. The Company recognizes the deferred tax liability / asset based on
the accumulated timing difference using the current tax rate.
N. Government SUBSIDY / GRANT :
Interest subvention under Pre and Post shipment advance is credited to
the interest and finance charges
O. IMPAIRMENT OF ASSETS : AS-28
In the Opinion of the Company, the recoverable amount of the fixed
assets of the Company will not be lower than the book value of the
fixed assets. Hence, no provision has made for impairment.
Mar 31, 2012
(a) The Accounts are prepared under the historical cost concept and
they materially comply with mandatory accounting standards issued by
the Institute of Chartered Accountants ol India.
(b) The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
i) SALES:
Export Sales is stated at C&F/CIF/FOB basis.
ii) Fixed Assets are stated at cost less depreciation. Cost comprises
of purchase price (net of rebates and discounts), import duties, levies
and any directly attributable cost of bringing the assets on its
working condition for the intended use.
iii) DEPRECIATION:
1) Depreciation is charged under Straight Line method.
2) Depreciation on Additions during the year is provided on a prorata
basis from the date the assets have been installed and put to use on a
Straight Line method at rates and in the manner specified under
Schedule XIV of the Companies Act, 1956.
iv) CURRENT ASSETS:
Inventories are certified by a Director and are valued as under:
1) Raw Materials & Stores : At cost
2) Semi finished goods : At cost
3) Finished goods : Lower of cost or market price
v) All accounts receivable are unsecured and are considered good other
than that have been classified as Doubtful and are subject to
confirmation.
vi) RECOGNITION OF INCOME & EXPENDITURE:
1) Income & Expenditure are recognised on accrual basis.
2) Bonus to Employees is accounted on cash basis.
vii) FOREIGN CURRENCY TRANSACTION :
1) Export sales are accounted at exchange rates prevailing on the date
of negotiation of bills by the bankers.
2) Purchase of imported raw materials and components are accounted at
amounts paid to discharge the related liabilities.
3) Foreign currency loans for acquisition of fixed assets are converted
at the rate prevailing on the date of Balance Sheet. The gain or loss
arising out of currency translation is adjusted in the cost of fixed
assets.
4) Current Assets and Current Liabilities are translated at the rate
prevailing on the date of Balance Sheet. The gain or loss if any,
arising therefrom are recognised in the Profit and Loss Account.
viii) RETIREMENT BENEFITS :
1) Short term employee benefits are charged off at the undiscounted
amount in the year in which the related service is rendered.
2) Contribution payable by the Company under defined contribution
schemes towards Provident Fund for the year are charged to Profit and
Loss Account.
3) The Company has its own approved Gratuity Fund and the contributions
to that fund are being made to LIC.
4) The Leave encashment entitlement is computed on Calendar year basis
and payment made to the Employees accordingly in the succeeding January
of every year. Hence, there is no outstanding liability towards Leave
encashment as per Accounting Standard 15.
IX. PROVISION, CONTINGENTLIABILITIES AND CONTINGENT ASSETS :
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
X. RESEARCH AND DEVELOPMENT:
No such expenditure incurred during the current year.
XI. BORROWING COSTS:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets.
All other borrowing costs are charged to revenue.
XII. TAXES ON INCOME:
Tax expenses comprises current tax and deferred tax.
a) Current income tax is measured at the amount expected to be paid to
the tax authorities, computed in accordance with the applicable tax
rate and tax laws.
b) The Company recognizes the deferred tax liability / asset based on
the accumulated timing difference using the current tax rate.
XIII.GOVERNMENTSUBSIDY/GRANT:
Interest subvention under Pre and Post shipment advance is credited to
the interest and finance charges.
XIV. IMPAIRMENT OF ASSETS : AS-28
In the Opinion of the Company, the recoverable amount of the fixed
assets of the Company will not be lower than the book value of the
fixed assets. Hence, no provision has made for impairment.
Mar 31, 2011
(a) The Accounts are prepared under the historical cost concept and
they materially comply with mandatory accounting standards issued by
the Institute of Chartered Accountants of India.
(b) The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
i) SALES:
Export Sales is stated at C&F/CIF/FOB basis.
ii) Fixed Assets are stated at cost less depreciation. Cost comprises
of purchase price (net of rebates and discounts), import duties, levies
and any directly attributable cost of bringing the assets on its
working condition for the intended use.
iii) DEPRECIATION:
1) Depreciation is charged under Straight Line method.
2) Depreciation on Additions during the year is provided on a prorata
basis from the date the assets have been installed and put to use on a
Straight Line method at rates and in the manner specified under
Schedule XIV of the Companies Act, 1956.
iv) CURRENTASSETS:
Inventories are certified by a Director and are valued as under:
1) Raw Materials & Stores At cost
2) Semi finished goods At cost
3) Finished goods Lower of cost or market price
v) All accounts receivable are unsecured and are considered good other
than that have been classified as Doubtful and are subject to
confirmation.
vi) RECOGNITION OF INCOME & EXPENDITURE:
1) Income & Expenditure are recognised on accrual basis.
2) Bonus to Employees is accounted on accrual basis. Provision of
Rs.20,91,952/- have been made towards Bonus Payable for the year ended
31st March 2011.
vii) FOREIGN CURRENCY TRANSACTION:
1) Export sales are accounted at exchange rates prevailing on the date
of negotiation of bills by the bankers.
2) Purchase of imported raw materials and components are accounted at
amounts paid to discharge the related liabilities.
3) Foreign currency loans for acquisition of fixed assets are converted
at the rate prevailing on the date of Balance Sheet. The gain or loss
arising out of currency translation is adjusted in the cost of fixed
assets.
4) Current Assets and Current Liabilities are translated at the rate
prevailing on the date of Balance Sheet. The gain or loss if any,
arising there from are recognised in the Profit and Loss Account.
viii) RETIREMENT BENEFITS :
1) Short term employee benefits are charged off at the undiscounted
amount in the year in which the related service is rendered.
2) Contribution payable by the Company under defined contribution
schemes towards Provident Fund for the year are charged to Profit and
Loss Account.
3) The Company has its own approved Gratuity Fund and the contributions
to that fund are being made to LIC. The Company has made a provision
towards Gratuity for a sum of Rs. 9,85,957/- in this year on the basis
of Actuarial valuation furnished by LIC.
4) The Leave encashment entitlement is computed on Calendar year basis
and payment made to the Employees accordingly in the succeeding January
of every year. Hence, there is no outstanding liability towards Leave
encashment as per Accounting Standard 15.
IX. PROVISION, CONTINGENT LIABILITIES ANDCONTINGENTASSETS:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
X. RESEARCH AND DEVELOPMENT:
No such expenditure incurred during the current year.
XI. BORROWING COSTS:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets.
All other borrowing costs are charged to revenue.
XII. TAXES ON INCOME:
Tax expenses comprises current tax and deferred tax.
a) Current income tax is measured at the amount expected to be paid to
the tax authorities, computed in accordance with the applicable tax
rate and tax laws.
b) The Company recognizes the deferred tax liability / asset based on
the accumulated timing difference using the current tax rate.
XIII.GOVERNMENTSUBSIDY/GRANT:
Interest subvention under Pre and Post shipment advance is credited to
the interest and finance charges.
XIV. IMPAIRMENT OF ASSETS : AS-28
In the Opinion of the Company, the recoverable amount of the fixed
assets of the Company will not be lower than the book value of the
fixed assets. Hence, no provision has made for impairment.
Mar 31, 2000
The Accounts are prepared under the historical cost concept and they
materially comply with mandatory accounting standards issued by the
Institute of Chartered Accountants of India.
i) SALES:
Export sales is stated at C & F or FOB basis.
ii) DEPRECIATION :
Depreciation is provided on a prorata basis from the date of the assets
have been installed and put to use on a Straight Line method at rates
and in the manner specified under Schedule XIV of the Companies Act,
1956.
iii) CURRENT ASSETS :
Inventories are certified by a Director and are valued as under :
1) Raw materials & stores : At cost
2) Semi finished goods : At cost
3) Finished goods , : Lower of cost or market price
iv) All accounts receivable are unsecured and are considered good.
v) Fixed assets are stated at cost less depreciation. Cost comprises of
purchase price ( net of rebates and discounts ) import duties, levies
and any directly attributable cost of bringing the assets in its
working condition for the intended use.
vi) RECOGNITION OF INCOME & EXPENDITURE :
1) Income & Expenditure are recognised on accrual basis.
2) Bonus : Payment of Bonus is accounted on cash basis from the year
1999-2000 had it been accounted on accrual basis, the profits for the
year would be lower by Rs. 5.78 Lakhs.
vii) FOREIGN CURRENCY TRANSACTION :
1) Export sales are accounted at exchange rates prevailing on the date
of negotiation of bills by customers bankers.
2) Purchase of imported raw materials and components are accounted at
amounts paid to discharge the related liabilities.
3) Foreign currency liabilities incurred for the retirement of Rupee
term loan debts have been restated in rupee terms at the exchange rates
prevailing at the year end and any loss or gain due to exchange
differences arised out of such translation are charged off to profit
and loss account.
viii) RETIREMENT BENEFITS:
1) The liability in respect of Gratuity is paid to LIC Group Gratuity
Cash Accumulation Scheme and the contributions demanded from the LIC
are accounted to expenditure.
2) Liability in respect of leave encashment will be provided as and
when it is paid.
3) The Company deposits the Provident fund contribution under the
Employees Provident Fund Scheme run by the Government.
ix) Preliminary and Shares Issues Expenses are written off over a
period of Ten years.
x) Contingent liabilities are generally not provided for in the
accounts and are shown separately in notes on accounts.
6. There are no parties in excess of Rs. 1.00 Lac is dues to small
scale units for more than 30 days as on 31.03.2000.
7. The Company has generated power out of Wind Mill installed at
Pazhavoor Taluk, Tirunelveli District, and the generated power was
captively consumed by the Company by drawing the power from TNEB Grid.
The Power and Fuel consumed is net of Rs. 18.22 Lacs being the credit
given by TNEB for the transfer of power to the Grid.
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