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Accounting Policies of Raj Oil Mills Ltd. Company
Mar 31, 2024
Note 1: Background and Company Overview
Raj Oil Mills Ltd (the ''Company'' or'' ROML'') is a public limited company incorporated and domiciled in India with its register ed office at 224-230, Bellasis Road, Mumbai- 400 008, Maharashtra, India. The Company is listed on National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The Company is engaged in the business of buying, selling, manufacturing, and processing of edible oils, edible oil seeds and other related products.
Note 2: Summary of significant accounting policies and other explanatory information to the financial statements
This note provides a list of the significant accounting policies adopted by the Company in preparation of these financial statements. These policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
i) Basis of preparationa) Compliance with Ind AS:
The financial statements of the Company have been prepared to comply in all material respects with the Indian Accounting Standards (''Ind AS'') as prescribed under Section 133 of the Companies Act, 2013 (''the Act'') read with Companies (Indian Accounting Standards) Rules as amended from time to time notified under the Companies (Accounting Standards) Rules, 2015.
The financial statements have been prepared under the historical cost convention with the exception of certain financial assets and liabilities and share based payments which have been prepared to comply with the Indian Accounting standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013, (as amended from time to time) and Presentation and disclosure requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS Compliant Schedule III) as amended from time to time.
The Company''s financial statements are reported in Indian Rupees, which is also the Company''s functional currency, and all values are presented in INR in Lakhs (INR 00,000), except when otherwise indicated.
The accounting policies have been applied consistently except where a newly issued Ind AS is initially adopted or a revision to an existing Ind AS requires a change in accounting policy hitherto in use.
The Financial Statements have been prepared on a historical cost convention on accrual basis except for the following:
a) Certain financial instruments-that are required to be carried at fair values by Ind AS;
b) Defined benefit plans: plan assets measured at fair value;
The preparation of the financial statements, in conformity with the recognition and measurement principles of Ind AS, requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operation during the reported period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates which are recognised in the period in which they are determined.
iv) Key accounting estimates and assumptions
Preparation of the financial statements require use of accounting estimates which, by definition, will seldom equal the actual results. This Note provides an overview of the areas that involved a higher degree of judgements or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. The Company based its assumptions and estimates on parameters available when the financial statements were prepared.
Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements
Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. The areas involving critical estimates or judgements are:
a) Estimation of useful life of tangible assets: (Refer Note 2(g))
The Company has estimated the useful life if each class of assets based on the nature of assets, the estimated usage of the asset, the operating condition of the asset, past history of replacement, anticipated technological changes, etc. The Company reviews the estimated useful lives and residual values of the assets at each reporting period. This reassessment may result in change in depreciation and amortization expense in the future periods.
b) Estimation of defined benefit obligation: (Refer Note 33)
In accounting for post-retirement benefits, several statistical and other factors that attempt to anticipate future events are used to calculate plan expenses and liabilities. These factors include expected discount rate assumptions and rate of future compensation increases. To estimate these factors, actuarial consultants also use estimates such as withdrawal, turnover, and mortality rates which require significant judgment. The actuarial assumptions used by the Company may differ materially from actual results in future periods due to changing market and economic conditions, regulatory events, judicial rulings, higher or lower withdrawal rates, or longer or shorter participant life spans.
The tax jurisdictions for the Company is India. Significant judgments are involved in determining the provision for income taxes including judgment on whether tax positions are probable of being sustained in tax assessments. A tax assessment can involve complex issues, which can only be resolved over extended time periods. The recognition of taxes that are subject to certain legal or economic limits or uncertainties is assessed individually by the Management based on the specific facts and circumstances.
d) Provisions and contingencies: (Refer Note 38)
Contingent Liability may arise from the ordinary course of business in relation to claims against the Company. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgments and the use of estimates regarding the outcome of future events.
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
An impairment loss is recognised for the amount by which an asset''s or cash-generating unit''s carrying amount exceeds its recoverable amount to determine the recoverable amount, management estimates expected future cash flows from each asset or cash generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows, management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary and may cause significant adjustments to the Company''s assets. In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.
v) Fair value measurements: (Refer Note 35)
The Company measures financial instruments, at fair value at each balance sheet date. 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either
In the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset; or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. At each reporting date, the Management analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Company''s accounting policies.
For this analysis, the Management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents. The Management also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.
vi) Property Plant and Equipment (Tangible assets):
An item of property, plant and equipment is recognised as an asset if it is probable that the future economic benefits associated with the item will flow to the Company and its cost can be measured reliably.
Freehold land is carried at cost. All other items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the carrying amount of asset or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance expenses are charged to the Statement of Profit and Loss during the period in which they are incurred. Gains or losses arising on retirement or disposal of assets are recognised in the Statement of Profit and Loss.
Capital work-in-progress representing expenditure incurred in respect of assets under development and not ready for their intended use, are carried at cost. Cost includes related acquisition expenses, construction cost, related borrowing cost and other direct expenditure.
viii) Goodwill and Other Intangible Assets:
Goodwill represents the cost of acquired business as established at the date of acquisition of the business in excess of the acquirer''s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities less accumulated impairment losses, if any. Goodwill is tested for impairment annually or when events or circumstances indicate that the implied fair value of goodwill is less than its carrying amount.
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any amortization and accumulated impairment losses, if any.
Amortization is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives, and is recognised in Statement of profit or loss. Trademarks with indefinite useful lives are subjected to testing on an annual basis and are impaired based on the value-in-use concept on the basis of relevant cash- generating units.
Other Intangible assets mainly comprise implementation cost for software and other application software acquired and brand acquired through a business combination
Gains or losses arising from the derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property. Investment property is measured at its cost, including related transaction costs and where applicable borrowing costs less depreciation and impairment if any.
x) Depreciation methods, useful life and residual value:
Depreciation is provided on the straight-line method to allocate the cost of assets, net of their residual values, over their estimated useful lives. Depreciation is calculated on a pro-rata basis from the date of acquisition | installation till the date the assets are sold or disposed of:
|
Asset category |
Estimated Useful life |
Basis of determination of Useful Life |
|
Factory building |
30 years |
Assessed to be in line with Schedule II to the Act |
|
Non-Factory building |
60 years |
Assessed to be in line with Schedule II to the Act |
|
Plant and machinery |
15 years |
Assessed to be in line with Schedule II to the Act |
|
Vehicles |
8-10 years |
Assessed to be in line with Schedule II to the Act |
|
Office equipment & Fitting |
5-10 years |
Assessed to be in line with Schedule II to the Act |
|
Furniture and fixtures |
10 years |
Assessed to be in line with Schedule II to the Act |
|
Factory Equipment |
8-10 years |
Assessed to be in line with Schedule II to the Act |
|
Laboratory Equipment |
10 years |
Assessed to be in line with Schedule II to the Act |
|
Computer |
3 years |
Assessed to be in line with Schedule II to the Act |
The residual values are not more than 5% of the original cost of the asset. The residual values, useful lives and method of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains and losses on disposals are determined by comparing proceeds with the carrying amounts. These are accounted in Statement of profit and loss within Other income/ Other expenses.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. However, when there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives.
Amortisation of Intangible Assets
Intangible assets are amortised on straight-line basis, from the date are available for use, over their useful lives that is a period of three to ten years.
|
Asset category |
Estimated Useful life |
Basis of determination of Useful Life |
|
Trademark |
Infinite |
Assessed to be in line with the Schedule II to the Act |
|
Computer software |
3 years |
Assessed to be in line with the Schedule II to the Act |
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
(i) Classification:
The Company classifies its financial assets in the following measurement categories:
- Those to be measured subsequently at fair value (either through Other Comprehensive Income, or through profit or loss)
- Those measured at amortized cost
The classification depends on business model of the Company for managing financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or Other Comprehensive Income.
For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through Other Comprehensive Income.
(ii) Initial recognition and measurement:
In the case of financial assets, not recorded at fair value through profit or loss (FVPL), financial assets are recognised initially at fair value plus transaction costs that are directly attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
(iii) Subsequent measurement:
For purposes of subsequent measurement, financial assets are classified in following categories:
Financial Assets at Amortised Cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Interest income from these financial assets is included in finance income using the effective interest rate ("EIR") method. Impairment gains or losses arising on these assets are recognised in the Statement of Profit and Loss.
Financial Assets Measured at Fair Value
Financial assets are measured at fair value through Other Comprehensive Income (''OCI'') if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in the Statement of Profit and Loss.
All equity investments in scope of Ind AS 109 are measured at fair value. The Company has made an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by instrument basis. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to statement of profit or loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss. The equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognize changes in fair value through OCI rather than profit or loss as these are strategic investments and the Company considered this to be more relevant.
Subsequent measurement of debt instruments depends on the business model of the Company for managing the asset and the cash flow characteristics of the asset. There are 3 measurement categories into which the Company classifies its debt instruments:
Measured at amortized cost: Financial assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows that are solely payments of principal and interest, are subsequently measured at amortized cost using the EIR method less impairment, if any, the amortization of EIR and loss arising from impairment, if any is recognized in the Statement of Profit and Loss.
Measured at fair value through Other Comprehensive Income (OCI): Financial assets that are held within a business model whose objective is achieved by both, selling financial assets and collecting contractual cash flows that are solely payments of principal and interest, are subsequently measured at fair value through OCI. Fair value movements are recognized in the OCI. Interest income measured using the EIR method and impairment losses, if any are recognized in the Statement of Profit and Loss. On derecognition, cumulative gain | (loss) previously recognized in OCI is reclassified from the equity to other income in the Statement of Profit and Loss.
Measured at fair value through profit or loss: A financial asset not classified as either amortized cost or FVOCI, is classified as FVPL. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognized as other income in the Statement of Profit and Loss.
vi) Impairment of financial assets:
The Company assesses on a forward-looking basis the expected credit losses associated with its financial assets carried at amortized cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For Tand lease receivable only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of such receivables
A financial asset is derecognised only when the Company has transferred the rights to receive cash flows from the financial asset, the asset expire or retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients. Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised through Statement of Profit and Loss or Other Comprehensive Income as applicable.
Where the Company has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised. Where the Company has neither transferred a financial asset nor retained substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
b) Equity Instruments and Financials Liabilities
Classification as debt or equity - Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments which are issued for cash are recorded at the proceeds received, net of direct issue cost. Equity instruments which are issued for a consideration other than cash are recorded at fair value of the equity instrument.
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at FVPL, loans and borrowings and payables as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs
Subsequent measurement
Financial liabilities are subsequently measured at amortized cost using the effective interest rate method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.
⢠Derecognition of Financials Liabilities
Financial liabilities are de-recognised when the obligation specified in the contract is discharged, cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as de-recognition of the original liability and recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
c) Offsetting financial instruments:
Financial assets and financial liabilities are offset and the net amount is reported in the Standalone Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in the Statement of Profit and Loss over the period of the borrowings using the effective interest method.
Borrowings are derecognised from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in Statement of profit and loss as other gains/(losses). Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
Borrowing cost consists of interest and other costs incurred in connection with the borrowing of funds and also include exchange differences to the extent regarded as an adjustment to the same. Borrowing costs directly attributable to the acquisition and/ or construction of a qualifying asset are capitalized during the period of time that is necessary to complete and prepare the asset for its intended use or sale. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Standalone Statement of Profit and Loss as incurred.
xiv) Employee benefits:a) Defined Contribution Plan:
Contributions to defined contribution schemes such as contribution to Provident Fund, Superannuation Fund, Employees'' State Insurance Corporation, National Pension Scheme and Labours Welfare Fund are charged as an expense to the Statement of Profit and Loss based on the amount of contribution required to be made as and when services are rendered by the employees. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions.
Gratuity -
Gratuity liability is a defined benefit obligation and is computed on the basis of an actuarial valuation by an actuary appointed for the purpose as per ''Projected Unit Credit Method'' at the end of each financial year. The Company has created a trust and has taken group gratuity policy with Life Insurance Corporation of India for future payments of retiring gratuities.
The liability or asset recognised in the Balance Sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows with reference to market yields at the end of the reporting period on Government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate at the beginning of the period to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur directly in Other Comprehensive Income. They are included in retained earnings in the Statement of changes in equity and in the Balance Sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.
c) Short-term employee benefits:
All employee benefits payable within 12 months of service such as salaries, wages, bonus, ex-gratia, medical benefits etc. are recognised in the year in which the employees render the related service and are presented as current employee benefit
obligations. Termination benefits are recognised as an expense as and when incurred. Short-term employee benefits are provided at undiscounted amount during the accounting period based on service rendered by employees. Compensation payable under Voluntary Retirement Scheme is being charged to the Statement of Profit and Loss in the year of settlement.
d) Other long-term employee benefits:
The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period us ing the ''Projected Unit Credit Method''. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss. The obligations are presented as current liabilities in the Balance Sheet if the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected to occur.
Inventories are stated at cost or net realizable value, whichever is lower. Cost is determined on moving weighted average basis. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
Costs of purchased inventory are determined after deducting rebates and discounts. The cost is determined as follows:
(i) Raw Materials, Traded goods, Packing Materials and Consumables, chemicals, stores and spares are valued using the weighted average method.
(ii) Finished goods and work-in-progress / semi-finished goods are valued at the cost of raw materials along with fixed production overheads being allocated on the basis of normal capacity of production facilities.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
xvi) Cash and Cash equivalents:
Cash and Cash equivalents includes cash on hand, demand deposits with the bank and other short term, highly liquid investments with original maturities of three months or less from the date of acquisition that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents as defined above is net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.
xvii) Foreign currency transactions:⢠Functional and presentation currency:
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (functional currency). The financial statements of the Company are presented in Indian currency (INR), which is also the functional and presentation currency of the Company.
⢠Transactions and balances:
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gain | (loss) resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in the Statement of Profit and Loss except that they are deferred in equity if they relate to qualifying cash flow hedges. Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of Profit and Loss, within finance costs. All other foreign exchange gain | (loss) are presented in the Statement of Profit and Loss on a net basis within other income | (expense).
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in Other Comprehensive Income or Statement of Profit and Loss are also recognised in Other Comprehensive Income or Statement of Profit and Loss, respectively).
xviii) Revenue Recognition:Timing of recognition:
On March 28, 2018, the MCA notified the Ind AS 115. The core principle of the new standard is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers of the Company.
a) Sale of goods -
Revenue from sale of goods is recognised when control of goods are transferred to the customer which is generally on delivery for domestic sales and on dispatch/ delivery for export sales in accordance with the terms of the contract. The Company recognizes revenues on the sale of products, net of returns, discounts (sales incentives/rebates), and taxes and duties collected on behalf of government which are levied on sales (such as goods and services tax) and payments or other consideration given to the customer that has impacted the pricing of the transaction.
Revenue is recognised only to the extent that it is highly probable that a significant reversal will not occur. No element of financing is deemed present as the sales are made with normal credit days consistent with market practice. A liability is recognised where payments are received from customers before transferring control of the goods being sold.
b) Rendering of services -
Revenue from services (including those embedded in contract for sale of goods namely freight and insurance services mainly in case of export sales), is recognised upon completion of services.
c) Interest income -
Interest income from debt instruments, is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options), but does not consider the expected credit losses.
d) Dividend -
Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established; it is probable that the dividend will flow to the Company and the amount of the dividend can be measured reliably.
e) Other income -
⢠Eligible export incentives are recognised in the year in which the conditions precedents are met and there is no significant uncertainty about the collectability.
⢠Lease rental income is recognised on accrual basis.
⢠Earnest money forfeited from customer is accounted for in the year of forfeiture.
Revenue is measured at the fair value of the consideration received or receivable, after the deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the Government which are levied on sales such as goods and services tax, value added tax, etc.
Discounts given include rebates, price reductions and other incentives given to customers. Accumulated experience is used to estimate and provide for the discounts and returns. The volume discounts are assessed based on anticipated annual purchases.
The Company recognizes provision for sales return, based on the historical results, measured on net basis of the margin of the sale. Therefore, a refund liability, included in other current liabilities, is recognized for the products expected to be returned.
A receivable is classified as a ''trade receivable'' if it is in respect of the amount due on account of goods sold or services rendered in the normal course of business. Trade receivable are recognised initially at fair value and subsequently measured at amortised cost using the EIR method, less provision for impairment. Trade receivables ageing has been presented based on the date of transaction. Further, in respect of trade receivable from Government Corporation, payment are received on pump-sum basis instead by an invoice-by-invoice settlement. Accordingly, the collection/realization from corporation trade receivable are accounted against the earliest outstanding invoice.
A payable is classified as a ''trade payable'' if it is in respect of the amount due on account of goods purchased or servic es received in the normal course of business. These amounts represent liabilities for goods and services provided of the Company prior to the end of the of the financial year which are unpaid. These amounts are unsecured and are usually settled as per the payment terms stated in the contracts. Trade and other payables are presented as current liabilities unless payment is not within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using EIR method. Trade payables ageing has been presented based on the date of transaction.
The income tax expense or credit for the period is the tax payable on the taxable income of the current period based on the applicable income tax rates adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and unused tax losses.
Current tax comprises the expected tax payable or recoverable on the taxable profit or loss for the year and any adjustment to the tax payable or recoverable in respect of previous years. It is measured using tax rates enacted or substantively enacted by the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretations and establishes provisions where appropriate.
Current tax assets are offset against current tax liabilities if, and only if, a legally enforceable right exists to set off the recognised amounts and there is an intention either to settle on a net basis, or to realise the asset and settle the liability simultaneously
Deferred income tax is recognised in respect of temporary difference between the carrying amount of assets and liabilities for financial reporting purpose and the amount considered for tax purpose.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized such reductions are reversed when it becomes probable that sufficient taxable profits will be available.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority on the same taxable entity.
At the inception it is assessed, whether a contract is a lease or contains a lease. A contract is a lease or contains a lease if it conveys the right to control the use of an identified asset, for a period of time, in exchange for consideration
To assess whether a contract conveys the right to control the use of an identified asset, company assesses whether the contract involves the use of an identified asset. Use may be specified explicitly or implicitly.
i) Use should be physically distinct or represent substantially all of the capacity of a physically distinct asset.
ii) If the supplier has a substantive substitution right, then the asset is not identified.
iii) Company has the right to obtain substantially all of the economic bene ts from use of the asset throughout the period of use
iv) Company has the right to direct the use of the asset
v) In cases where the usage of the asset is predetermined the right to direct the use of the asset is determined when the company has the right to use the asset or the company designed the asset in a way that predetermines how and for what purpose it will be used.
At the commencement or modification of a contract, that contains a lease component, company allocates the consideration in the contract, to each lease component, on the basis of its relative standalone prices. For leases of property, it is elected not to separate non lease components and account for the lease and non-lease components as a single lease component.
As a lessee:
Company recognizes a right-of-use asset and a lease liability at the lease commencement date.
At the date of the commencement of the lease, the Company recognizes a right-of-use asset representing its right to use the underlying asset for the lease term and a corresponding lease liability for all the lease arrangements in which it is a lease, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the period of the lease.
The right-of-use asset is initially measured at cost. Cost comprises of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, any initial direct costs incurred by the lessee, an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located less any lease incentives received.
After the commencement date, a lessee shall measure the right-of-use asset applying cost model, which is Cost less any accumulated depreciation and any accumulated impairment losses and also adjusted for certain re-measurements of the lease liability. Right-of-use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Carrying amount of right-of-use asset is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.
Right-of-use asset is depreciated using straight line method from the commencement date to the end of the lease term. If the lease transfers the ownership of the underlying asset to the company at the end of the lease term or the cost of the right-of-use asset reflects company will exercise the purchase option, ROU will be depreciated over the useful life of the underlying asset, which is determined based on the same basis as property, plant and equipment.
Lease liability is initially measured at the present value of lease payments that are not paid at the commencement date. Discounting is done using the implicit interest rate in the lease, if that rate cannot be readily determined, then using comp any''s incremental borrowing rate. Incremental borrowing rate is determined based on entity''s borrowing rate adjusted for terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprises of fixed payments (including in substance fixed payments), variable lease payments that depends on an index or a rate, initially measured using the index or rate at the commencement date, amount expected to be payable under a residual value guarantee, the exercise price under a purchase option that the company is reasonably certain to exercise, lease payments in an optional renewal period if the company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the company is reasonably certain not to terminate early.
Lease liability is measured at amortised cost using the effective interest method. Lease liability is re-measured when there is a change in the lease term, a change in its assessment of whether it will exercise a purchase, extension or termination option or a revised in-substance fixed lease payment, a change in the amounts expected to be payable under a residual value guarantee and a change in future lease payments arising from change in an index or rate.
When the lease liability is re-measured corresponding adjustment is made to the carrying amount of the right of-use asset. If the carrying amount of the right-of-use asset has been reduced to zero it will be recorded in statement of profit and loss.
Right-of-use asset is presented as a separate category under "Non-current assets" and lease liabilities are presented under "Financial liabilities" in the balance sheet.
Company has elected not to recognize right-of-use assets and lease liabilities for short term leases. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.
.As a lessor:
At the commencement or modification of a contract, that contains a lease component, company allocates the consideration in the contract, to each lease component, on the basis of its relative standalone prices.
At the inception of the lease, it is determined whether it is a finance lease or an operating lease. If the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset, then it is a financial lease, otherwise it is an operating lease.
If the lease arrangement contains lease and non-lease components, then the consideration in the contract is allocated using the principles of IND AS 115. The company tests for the impairment losses at the year end. Payment received under operating lease is recognised as income on straight line basis, over the lease term.
xxiv) Impairment of Non-Financial assets:
At each reporting date, the Company assesses whether there is any indication based on internal / external factors, that an asset may be impaired. If any such indication exists, the recoverable amount of the asset or the cash generating unit (CGU) is estimated. If such recoverable amount of the asset or CGU to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognized in the Standalone Statement of Profit and Loss.
If, at the reporting date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed in the Standalone Statement of Profit and Loss. An asset is deemed impairable when recoverable value is less than its carrying cost and the difference between the two represents provisioning exigency.
xxv) Provisions and contingent liabilities:
Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. These are reviewed at each year end to reflect the best current estimate. Provisions are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.
Contingent liability is disclosed for:
- Possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or
- Present obligations arising from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Contingent assets are not recognized till the realization of the income is virtually certain. However, the same are disclosed in the financial statements where inflow of economic benefits is probable.
xxvi) Earnings per share:Basic earnings per share
Basic earnings per share is calculated by dividing:
- the profit attributable to owners of the Company
- by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
xxvii) Non-Current assets held for sale:
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and contractual rights under insurance contracts, which are specifically exempt from this requirement. Non-current assets are not depreciated or amortised while they are classified as held for sale.
2.1 Recent accounting pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Ac
Mar 31, 2023
Note 2: Summary of significant accounting policies and other explanatory information to the financial statements
This note provides a list of the significant accounting policies adopted by the Company in preparation of these financial statements. These policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
i) Basis of preparation
a) Compliance with Ind AS:
The financial statements of the Company have been prepared to comply in all material respects with the Indian Accounting Standards (''Ind AS'') as prescribed under Section 133 of the Companies Act, 2013 (''the Act'') read with Companies (Indian Accounting Standards) Rules as amended from time to time notified under the Companies (Accounting Standards) Rules, 2015.
The financial statements have been prepared under the historical cost convention with the exception of certain financial assets and liabilities and share based payments which have been prepared to comply with the Indian Accounting standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013, (as amended from time to time) and Presentation and disclosure requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS Compliant Schedule III) as amended from time to time.
The Company''s financial statements are reported in Indian Rupees, which is also the Company''s functional currency, and all values are presented in INR in Lakhs (INR 00,000), except when otherwise indicated.
The accounting policies have been applied consistently except where a newly issued Ind AS is initially adopted or a revision to an existing Ind AS requires a change in accounting policy hitherto in use.
ii) Basis of Measurement:
The Financial Statements have been prepared on a historical cost convention on accrual basis except for the following:
a) Certain financial instruments that are required to be carried at fair values by Ind AS;
b) Defined benefit plans: plan assets measured at fair value;
iii) Accounting estimates:
The preparation of the financial statements, in conformity with the recognition and measurement principles of Ind AS, requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operation during the reported period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates which are recognised in the period in which they are determined.
Preparation of the financial statements require use of accounting estimates which, by definition, will seldom equal the actual results. This Note provides an overview of the areas that involved a higher degree of judgements or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. The Company based its assumptions and estimates on parameters available when the financial statements were prepared.
Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements
Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. The areas involving critical estimates or judgements are:
a) Estimation of useful life of tangible assets: (Refer Note 2(g))
The Company has estimated the useful life if each class of assets based on the nature of assets, the estimated usage of the asset, the operating condition of the asset, past history of replacement, anticipated technological changes, etc. The Company reviews the estimated useful lives and residual values of the assets at each reporting period. This reassessment may result in change in depreciation and amortization expense in the future periods.
b) Estimation of defined benefit obligation: (Refer Note 33)
In accounting for post-retirement benefits, several statistical and other factors that attempt to anticipate future events are used to calculate plan expenses and liabilities. These factors include expected discount rate assumptions and rate of future compensation increases. To estimate these factors, actuarial consultants also use estimates such as withdrawal, turnover, and mortality rates which require significant judgment. The actuarial assumptions used by the Company may differ materially from actual results in future periods due to changing market and economic conditions, regulatory events, judicial rulings, higher or lower withdrawal rates, or longer or shorter participant life spans.
c) Current Income Taxes
The tax jurisdictions for the Company is India. Significant judgments are involved in determining the provision for income taxes including judgment on whether tax positions are probable of being sustained in tax assessments. A tax assessment can involve complex issues, which can only be resolved over extended time periods. The recognition of taxes that are subject to certain legal or economic limits or uncertainties is assessed individually by the Management based on the specific facts and circumstances.
d) Provisions and contingencies: (Refer Note 38)
Contingent Liability may arise from the ordinary course of business in relation to claims against the Company. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgments and the use of estimates regarding the outcome of future events.
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
An impairment loss is recognised for the amount by which an asset''s or cash-generating unit''s carrying amount exceeds its recoverable amount to determine the recoverable amount, management estimates expected future cash flows from each asset or cash generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows, management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary and may cause significant adjustments to the Company''s assets. In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.
v) Fair value measurements: (Refer Note 35)
The Company measures financial instruments, at fair value at each balance sheet date. 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either
In the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset; or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. At each reporting date, the Management analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Company''s accounting policies.
For this analysis, the Management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents. The Management also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.
vi) Property Plant and Equipment (Tangible assets):
An item of property, plant and equipment is recognised as an asset if it is probable that the future economic benefits associated with the item will flow to the Company and its cost can be measured reliably.
⢠initial Recognition
Freehold land is carried at cost. All other items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
⢠Subsequent Measurement
Subsequent costs are included in the carrying amount of asset or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance expenses are charged to the Statement of Profit and Loss during the period in which they are incurred. Gains or losses arising on retirement or disposal of assets are recognised in the Statement of Profit and Loss.
vii) Capital work-in-progress
Capital work-in-progress representing expenditure incurred in respect of assets under development and not ready for their intended use, are carried at cost. Cost includes related acquisition expenses, construction cost, related borrowing cost and other direct expenditure.
viii) Goodwill and Other Intangible Assets:
Goodwill represents the cost of acquired business as established at the date of acquisition of the business in excess of the acquirer''s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities less accumulated impairment losses, if any. Goodwill is tested for impairment annually or when events or circumstances indicate that the implied fair value of goodwill is less than its carrying amount.
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any amortization and accumulated impairment losses, if any.
Amortization is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives, and is recognised in Statement of profit or loss. Trademarks with indefinite useful lives are subjected to testing on an annual basis and are impaired based on the value-in-use concept on the basis of relevant cash- generating units.
Other Intangible assets mainly comprise implementation cost for software and other application software acquired and brand acquired through a business combination Gains or losses arising from the derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
ix) Investment properties:
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property. Investment property is measured at its cost, including related transaction costs and where applicable borrowing costs less depreciation and impairment if any.
x) Depreciation methods, useful life and residual value:
Depreciation is provided on the straight-line method to allocate the cost of assets, net of their residual values, over their estimated useful lives. Depreciation is calculated on a pro-rata basis from the date of acquisition | installation till the date the assets are sold or disposed of:
The residual values are not more than 5% of the original cost of the asset. The residual values, useful lives and method of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains and losses on disposals are determined by comparing proceeds with the carrying amounts. These are accounted in Statement of profit and loss within Other income/ Other expenses.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. However, when there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives.
Amortisation of Intangible Assets
Intangible assets are amortised on straight-line basis, from the date are available for use, over their useful lives that is a period of three to ten years.
xi) Financials Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
a. Financials Assets
(i) Classification:
The Company classifies its financial assets in the following measurement categories:
- Those to be measured subsequently at fair value (either through Other Comprehensive Income, or through profit or loss)
- Those measured at amortized cost
The classification depends on business model of the Company for managing financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or Other Comprehensive Income.
For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through Other Comprehensive Income.
(ii) Initial recognition and measurement:
In the case of financial assets, not recorded at fair value through profit or loss (FVPL), financial assets are recognised initially at fair value plus transaction costs that are directly attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
(iii) Subsequent measurement:
For purposes of subsequent measurement, financial assets are classified in following categories:
Financial Assets at Amortised Cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Interest income from these financial assets is included in finance income using the effective interest rate (âEIRâ) method. Impairment gains or losses arising on these assets are recognised in the Statement of Profit and Loss.
Financial Assets Measured at Fair Value
Financial assets are measured at fair value through Other Comprehensive Income (''OCI'') if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in the Statement of Profit and Loss.
iv) Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. The Company has made an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by instrument basis. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to statement of profit or loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss. The equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognize changes in fair value through OCI rather than profit or loss as these are strategic investments and the Company considered this to be more relevant.
v) Debt instruments:
Subsequent measurement of debt instruments depends on the business model of the Company for managing the asset and the cash flow characteristics of the asset. There are 3 measurement categories into which the C ompany classifies its debt instruments:
Measured at amortized cost: Financial assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows that are solely payments of principal and interest, are subsequently measured at amortized cost using the EIR method less impairment, if any, the amortization of EIR and loss arising from impairment, if any is recognized in the Statement of Profit and Loss.
Measured at fair value through Other Comprehensive Income (OCI): Financial assets that are held within a business model whose objective is achieved by both, selling financial assets and collecting contractual cash flows that are solely payments of principal and interest, are subsequently measured at fair value through OCI. Fair value movements are recognized in the OCI. Interest income measured using the EIR method and impairment losses, if any are recognized in the Statement of Profit and Loss. On derecognition, cumulative gain | (loss) previously recognized in OCI is reclassified from the equity to other income in the Statement of Profit and Loss.
Measured at fair value through profit or loss: A financial asset not classified as either amortized cost or FVOCI, is classified as FVPL. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognized as other income in the Statement of Profit and Loss.
vi) Impairment of financial assets:
The Company assesses on a forward-looking basis the expected credit losses associated with its financial assets carried at amortized cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For Tand lease receivable only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of such receivables
vii) Derecognition:
A financial asset is derecognised only when the Company has transferred the rights to receive cash flows from the financial asset, the asset expire or retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients. Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised through Statement of Profit and Loss or Other Comprehensive Income as applicable.
Where the Company has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised. Where the Company has neither transferred a financial asset nor retained substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
b) Equity Instruments and Financials Liabilities
Classification as debt or equity - Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments which are issued for cash are recorded at the proceeds received, net of direct issue cost. Equity instruments which are issued for a consideration other than cash are recorded at fair value of the equity instrument.
Financial liabilities:
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at FVPL, loans and borrowings and payables as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs Subsequent measurement
Financial liabilities are subsequently measured at amortized cost using the effective interest rate method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.
⢠Derecognition of Financials Liabilities
Financial liabilities are de-recognised when the obligation specified in the contract is discharged, cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as de-recognition of the original liability and recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
c) Offsetting financial instruments:
Financial assets and financial liabilities are offset and the net amount is reported in the Standalone Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
xii) Borrowings:
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in the Statement of Profit and Loss over the period of the borrowings using the effective interest method.
Borrowings are derecognised from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in Statement of profit and loss as other gains/(losses). Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
xiii) Borrowing costs:
Borrowing cost consists of interest and other costs incurred in connection with the borrowing of funds and also include exchange differences to the extent regarded as an adjustment to the same. Borrowing costs directly attributable to the acquisition and/ or construction of a qualifying asset are capitalized during the period of time that is necessary to complete and prepare the asset for its intended use or sale. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Standalone Statement of Profit and Loss as incurred.
xiv) Employee benefits:
a) Defined Contribution Plan:
Contributions to defined contribution schemes such as contribution to Provident Fund, Superannuation Fund, Employees'' State Insurance Corporation, National Pension Scheme and Labours Welfare Fund are charged as an expense to
the Statement of Profit and Loss based on the amount of contribution required to be made as and when services are rendered by the employees. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions.
b) Defined Benefit Plan:
Gratuity -
Gratuity liability is a defined benefit obligation and is computed on the basis of an actuarial valuation by an actuary appointed for the purpose as per ''Projected Unit Credit Method'' at the end of each financial year. The Company has created a trust and has taken group gratuity policy with Life Insurance Corporation of India for future payments of retiring gratuities.
The liability or asset recognised in the Balance Sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows with reference to market yields at the end of the reporting period on Government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate at the beginning of the period to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur directly in Other Comprehensive Income. They are included in retained earnings in the Statement of changes in equity and in the Balance Sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.
c) Short-term employee benefits:
All employee benefits payable within 12 months of service such as salaries, wages, bonus, ex-gratia, medical benefits etc. are recognised in the year in which the employees render the related service and are presented as current employee benefit obligations. Termination benefits are recognised as an expense as and when incurred. Short-term employee benefits are provided at undiscounted amount during the accounting period based on service rendered by employees. Compensation payable under Voluntary Retirement Scheme is being charged to the Statement of Profit and Loss in the year of settlement.
d) Other long-term employee benefits:
The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the ''Projected Unit Credit Method''. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss. The obligations are presented as current liabilities in the Balance Sheet if the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected to occur.
xv) Inventories:
Inventories are stated at cost or net realizable value, whichever is lower. Cost is determined on moving weighted average basis. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
Costs of purchased inventory are determined after deducting rebates and discounts. The cost is determined as follows:
(i) Raw Materials, Traded goods, Packing Materials and Consumables, chemicals, stores and spares are valued using the weighted average method.
(ii) Finished goods and work-in-progress / semi-finished goods are valued at the cost of raw materials along with fixed production overheads being allocated on the basis of normal capacity of production facilities.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
xvi) Cash and Cash equivalents:
Cash and Cash equivalents includes cash on hand, demand deposits with the bank and other short term, highly liquid investments with original maturities of three months or less from the date of acquisition that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents as defined above is net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.
xvii) Foreign currency transactions:
⢠Functional and presentation currency:
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (functional currency). The financial statements of the Company are presented in Indian currency (INR), which is also the functional and presentation currency of the Company.
⢠Transactions and balances:
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gain | (loss) resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in the Statement of Profit and Loss except that they are deferred in equity if they relate to qualifying cash flow hedges. Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of Profit and Loss, within finance costs. All other foreign exchange gain | (loss) are presented in the Statement of Profit and Loss on a net basis within other income | (expense).
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in Other Comprehensive Income or Statement of Profit and Loss are also recognised in Other Comprehensive Income or Statement of Profit and Loss, respectively).
xviii) Revenue Recognition:
Timing of recognition:
On March 28, 2018, the MCA notified the Ind AS 115. The core principle of the new standard is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers of the Company.
a) Sale of goods -
Revenue from sale of goods is recognised when control of goods are transferred to the customer which is generally on delivery for domestic sales and on dispatch/ delivery for export sales in accordance with the terms of the contract. The Company recognizes revenues on the sale of products, net of returns, discounts (sales incentives/rebates), and taxes and duties collected on behalf of government which are levied on sales (such as goods and services tax) and payments or other consideration given to the customer that has impacted the pricing of the transaction.
Revenue is recognised only to the extent that it is highly probable that a significant reversal will not occur. No element of financing is deemed present as the sales are made with normal credit days consistent with market practice. A liability is recognised where payments are received from customers before transferring control of the goods being sold.
b) Rendering of services -
Revenue from services (including those embedded in contract for sale of goods namely freight and insurance services mainly in case of export sales), is recognised upon completion of services.
c) Interest income -
Interest income from debt instruments, is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options), but does not consider the expected credit losses.
d) Dividend -
Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established; it is probable that the dividend will flow to the Company and the amount of the dividend can be measured reliably.
e) Other income -
⢠Eligible export incentives are recognised in the year in which the conditions precedents are met and there is no significant uncertainty about the collectability.
⢠Lease rental income is recognised on accrual basis.
⢠Earnest money forfeited from customer is accounted for in the year of forfeiture.
xix) Measurement of Revenue:
Revenue is measured at the fair value of the consideration received or receivable, after the deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the Government which are levied on sales such as goods and services tax, value added tax, etc.
Discounts given include rebates, price reductions and other incentives given to customers. Accumulated experience is used to estimate and provide for the discounts and returns. The volume discounts are assessed based on anticipated annual purchases.
The Company recognizes provision for sales return, based on the historical results, measured on net basis of the margin of the sale. Therefore, a refund liability, included in other current liabilities, is recognized for the products expected to be returned.
xx) Trade Receivable:
A receivable is classified as a ''trade receivable'' if it is in respect of the amount due on account of goods sold or services rendered in the normal course of business. Trade receivable are recognised initially at fair value and subsequently measured at amortised cost using the EIR method, less provision for impairment. Trade receivables ageing has been presented based on the date of transaction. Further, in respect of trade receivable from Government Corporation, payment are received on pump-sum basis instead by an invoice-by-invoice settlement. Accordingly, the collection/realization from corporation trade receivable are accounted against the earliest outstanding invoice.
xxi) Trade Payables:
A payable is classified as a ''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 of the Company prior to the end of the of the financial year which are unpaid. These amounts are unsecured and are usually settled as per the payment terms stated in the contracts. Trade and other payables are presented as current liabilities unless payment is not within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using EIR method. Trade payables ageing has been presented based on the date of transaction.
xxii) Taxes on Income
The income tax expense or credit for the period is the tax payable on the taxable income of the current period based on the applicable income tax rates adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and unused tax losses.
a) Current Income Tax
Current tax comprises the expected tax payable or recoverable on the taxable profit or loss for the year and any adjustment to the tax payable or recoverable in respect of previous years. It is measured using tax rates enacted or substantively enacted by the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretations and establishes provisions where appropriate.
Current tax assets are offset against current tax liabilities if, and only if, a legally enforceable right exists to set off the recognised amounts and there is an intention either to settle on a net basis, or to realise the asset and settle the liability simultaneously
b) Deferred Income Tax
Deferred income tax is recognised in respect of temporary difference between the carrying amount of assets and liabilities for financial reporting purpose and the amount considered for tax purpose.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized such reductions are reversed when it becomes probable that sufficient taxable profits will be available.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority on the same taxable entity.
xxiii) Leases:
At the inception it is assessed, whether a contract is a lease or contains a lease. A contract is a lease or contains a lease if it conveys the right to control the use of an identified asset, for a period of time, in exchange for consideration
To assess whether a contract conveys the right to control the use of an identified asset, company assesses whether the contract involves the use of an identified asset. Use may be specified explicitly or implicitly.
i) Use should be physically distinct or represent substantially all of the capacity of a physically distinct asset.
ii) If the supplier has a substantive substitution right, then the asset is not identified.
iii) Company has the right to obtain substantially all of the economic bene ts from use of the asset throughout the period of use
iv) Company has the right to direct the use of the asset
v) In cases where the usage of the asset is predetermined the right to direct the use of the asset is determined when the company has the right to use the asset or the company designed the asset in a way that predetermines how and for what purpose it will be used.
At the commencement or modification of a contract, that contains a lease component, company allocates the consideration in the contract, to each lease component, on the basis of its relative standalone prices. For leases of property, it is elected not to separate non lease components and account for the lease and non-lease components as a single lease component.
As a lessee:
Company recognizes a right-of-use asset and a lease liability at the lease commencement date.
Right-of-use asset (ROU):
At the date of the commencement of the lease, the Company recognizes a right-of-use asset representing its right to use the underlying asset for the lease term and a corresponding lease liability for all the lease arrangements in which it is a lease, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the period of the lease.
The right-of-use asset is initially measured at cost. Cost comprises of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, any initial direct costs incurred by the lessee, an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located less any lease incentives received.
After the commencement date, a lessee shall measure the right-of-use asset applying cost model, which is Cost less any accumulated depreciation and any accumulated impairment losses and also adjusted for certain re-measurements of the lease liability. Right-of-use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Carrying amount of right-of-use asset is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.
Right-of-use asset is depreciated using straight line method from the commencement date to the end of the lease term. If the lease transfers the ownership of the underlying asset to the company at the end of the lease term or the cost of the right-of-use asset reflects company will exercise the purchase option, ROU will be depreciated over the useful life of the underlying asset, which is determined based on the same basis as property, plant and equipment.
Lease Liability:
Lease liability is initially measured at the present value of lease payments that are not paid at the commencement date. Discounting is done using the implicit interest rate in the lease, if that rate cannot be readily determined, then using company''s incremental borrowing rate. Incremental borrowing rate is determined based on entity''s borrowing rate adjusted for terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprises of fixed payments (including in substance fixed payments), variable lease payments that depends on an index or a rate, initially measured using the index or rate at the commencement date, amount expected to be payable under a residual value guarantee, the exercise price under a purchase option that the company is reasonably certain to exercise, lease payments in an optional renewal period if the company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the company is reasonably certain not to terminate early.
Lease liability is measured at amortised cost using the effective interest method. Lease liability is re-measured when there is a change in the lease term, a change in its assessment of whether it will exercise a purchase, extension or termination option or a revised in-substance fixed lease payment, a change in the amounts expected to be payable under a residual value guarantee and a change in future lease payments arising from change in an index or rate.
When the lease liability is re-measured corresponding adjustment is made to the carrying amount of the right of-use asset. If the carrying amount of the right-of-use asset has been reduced to zero it will be recorded in statement of profit and loss.
Right-of-use asset is presented as a separate category under âNon-current assetsâ and lease liabilities are presented under âFinancial liabilitiesâ in the balance sheet.
Company has elected not to recognize right-of-use assets and lease liabilities for short term leases. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.
As a lessor:
At the commencement or modification of a contract, that contains a lease component, company allocates the consideration in the contract, to each lease component, on the basis of its relative standalone prices.
At the inception of the lease, it is determined whether it is a finance lease or an operating lease. If the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset, then it is a financial lease, otherwise it is an operating lease.
If the lease arrangement contains lease and non-lease components, then the consideration in the contract is allocated using the principles of IND AS 115. The company tests for the impairment losses at the year end. Payment received under operating lease is recognised as income on straight line basis, over the lease term.
xxiv) Impairment of Non-Financial assets:
At each reporting date, the Company assesses whether there is any indication based on internal / external factors, that an asset may be impaired. If any such indication exists, the recoverable amount of the asset or the cash generating unit (CGU) is estimated. If such recoverable amount of the asset or CGU to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognized in the Standalone Statement of Profit and Loss.
If, at the reporting date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed in the Standalone Statement of Profit and Loss. An asset is deemed impairable when recoverable value is less than its carrying cost and the difference between the two represents provisioning exigency.
Mar 31, 2015
A. Use of Estimates:-
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognized in the periods in which
the results are known / materialize.
B. Own Fixed Assets:-
Fixed Assets are stated at historical cost including any attributable
cost including taxes & other duties, freight, installation & other
direct or allocable expenses and related borrowing cost for bringing
the respective assets to its working condition for its intended use,
less accumulated depreciation. All Costs, till commencement of
commercial production is capitalized.
All the direct costs, expenditure during the project construction
period (net of income) are specifically attributable to
construction/acquisition of fixed assets and advances against capital
expenditure are shown as Capital Work in progress until the relevant
assets are ready for its intended use.
C. Depredation-
Depreciation on Fixed Assets has been provided as per the Straight Line
Method of depreciation at the rates and manner prescribed under
Schedule II to the Companies Act, 2013 amended. The depreciation has
been provided on pro-rata basis for the assets purchased during the
year including capital expenditure on land & building taken on lease/
Leave & License basis but excluding for Computer Software. In case of
Computer Software, depreciation is provided as per straight-line method
at the rates provided in schedule II of the Companies Act, 2013 amended
in respect of Computers. Disclouse usefull life of c.y and impact of
the change due to change in depre. Policy.
D. Revenue Recognition:- Sale of Goods:
Sales are recognized net of returns and trade discounts, on transfer of
significant risks and rewards of ownership to the buyer, which
generally coincides with the delivery of goods to customers, sales
exclude sales tax and value added tax.
Other Income:
Interest income is recognized on time proportion basis taking into
account the amount outstanding and rate applicable. Dividend income is
recognized when the right to receive the payment is established by the
balance sheet date.
E. Inventories :
Inventories are valued at the lower of cost (on FIFO basis) and the net
realizable value after providing for obsolescence and other losses,
where considered necessary except for by-product, which is valued at
estimated realizable value . Cost includes all charges in bringing the
goods to the point of sale, including octroi and other levies, transit
insurance, and receiving charges. Work-in-progress and finished goods
include material cost, appropriate proportion of overheads and, where
applicable, excise duty.
F. Foreign Currency Transactions:
Transactions denominated in foreign currencies are normally recorded at
the exchange rate prevailing on the date of the transaction or that
approximates the actual rate at the date of the transaction.
Monetary items denominated in foreign currencies remaining unsettled at
the year end are restated at the exchange rate prevailing at end of the
year.
G. Investment:
Long-term investments are carried at cost less provision for
diminution, other than temporary in the opinion of the management, in
the value of such investments.
H. Impairment of Assets :
Pursuant to Accounting Standard 28 "Impairment of Assets", The Company
has a system to review the carrying values of assets / cash generating
units at each Balance Sheet date. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognized, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognized for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognized in the Statement of Profit and Loss,
except in case of revalued assets.
I. Employees Benefit:
a) The Company''s contribution in respect of Provident Fund is charged
to Profit & Loss account every year.
b) The Company has created a trust and has taken Group Gratuity Policy
with the Life Insurance Corporation of India for the future payments of
retiring gratuities. The liability for the defined benefit plan of
Gratuity is determined on the basis of an actuarial valuation by an
independent actuary at the yearend which is calculated using Projected
''Unit Credit Method''. Actuarial gain and loses which comprise
experience adjustment and the effect of changes in actuarial
assumptions are recognized in the Profit and Loss Account.
J. Borrowing cost:
Borrowing Cost that is directly attributable to the acquisition or
construction of qualifying assets is capitalized as part of the cost of
such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. Other
borrowing cost is recognized as expenses in the period in which they
are incurred.
K. Taxation:
Taxation expenses comprise current tax and deferred tax charge or
credit. Provision for income tax is made on the basis of the assessable
income at the tax rate applicable to the relevant assessment year.
Deferred tax resulting from "timing difference" between taxable and
accounting income is accounted for using the tax rates and laws that
are enacted or substantively enacted as on the balance sheet date.
Deferred Tax assets are recognized only to the extent that there is
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be adjusted.
L. Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are recognized and disclosed in the notes.
Contingent Assets are neither recognized nor disclosed in the financial
statements.
M. Liquidated Damages:
Liquidated damages/Penalties, if any are provided whenever there is a
claim from party and when the same is accepted by the company.
N. Deferred Revenue Expenditure :
Deferred Revenue Expenditure on Brand Promotion has been written off
over the period of five years.
O. Public Deposit :
Company has accepted Public Deposits according to the directives issued
by the Reserve Bank of India and the Provision of section 73 to 76 or
any other relevant provision of the Act and the rules framed there under
to the extent applicable.
P. Insurance Claims :
Insurance and other claims to the extent considered recoverable are
accounted for in the year on the basis of claims based on the amount
assessed by the surveyor. However, claims and refunds whose recovery
cannot be ascertained with reasonable certainty are accounted for on
acceptance/actual receipts basis.
R. Earnings per Share.
The earning considered in ascertaining the company''s EPS comprises the
net profit for the period after tax attributed to equity shareholders.
The number of shares used in computing basis EPS is the weighted average
number of shares outstanding during the year.
Q. Extraordinary Items:
The Extraordinary items are Income or Expenses that arise from events of
transactions that are clearly distinct from the ordinary activities of
enterprises and therefore, are not expected to recur frequently or
regularly. The nature and amount of each extra ordinary item is
identified and disclosed in the Statement of Profit and Loss in a manner
that its impact on current profit or loss can be perceived. (II).
Mar 31, 2014
A. Use of Estimates:-
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognized in the periods in which
the results are known / materialize.
B. Own Fixed Assets:-
Fixed Assets are stated at historical cost including any attributable
cost including taxes & other duties, freight, installation & other
direct or allocable expenses and related borrowing cost for bringing
the respective assets to its working condition for its intended use,
less accumulated depreciation. All Costs, till commencement of
commercial production is capitalized under Manor Refinery Plant.
All the direct costs, expenditure during the project construction
period (net of income) are specifically attributable to
construction/acquisition of fixed assets and advances against capital
expenditure are shown as Capital Work in progress until the relevant
assets are ready for its intended use.
C. Depreciation:-
Depreciation on Fixed Assets has been provided as per the Straight Line
Method of depreciation at the rates and manner prescribed under
Schedule XIV to the Companies Act, 1956 amended. The depreciation has
been provided on pro-rata basis for the assets purchased during the
year including capital expenditure on land & building taken on
lease/Leave & License basis but excluding for
Computer Software. In case of Computer Software, depreciation is
provided as per straight-line method at the rates provided in schedule
XIV of the Companies Act, 1956 amended in respect of Computers.
D. Revenue Recognition:- Sale of Goods:
Sales are recognized net of returns and trade discounts, on transfer of
significant risks and rewards of ownership to the buyer, which
generally coincides with the delivery of goods to customers, sales
exclude sales tax and value added tax.
Other Income:
Interest income is recognized on time proportion basis taking into
account the amount outstanding and rate applicable. Dividend income is
recognized when the right to receive the payment is established by the
balance sheet date.
E. Inventories :
Inventories are valued at the lower of cost (on FIFO basis) and the net
realizable value after providing for obsolescence and other losses,
where considered necessary except for by-product, which is valued at
estimated realizable value . Cost includes all charges in bringing the
goods to the point of sale, including octroi and other levies, transit
insurance, and receiving charges. Work-in-progress and finished goods
include material cost, appropriate proportion of overheads and, where
applicable, excise duty.
F. Foreign Currency Transactions:
Transactions denominated in foreign currencies are normally recorded at
the exchange rate prevailing on the date of the transaction or that
approximates the actual rate at the date of the transaction.
Monetary items denominated in foreign currencies remaining unsettled at
the year- end are restated at the exchange rate prevailing at end of
the year.
G. Investment:
Long-term investments are carried at cost less provision for
diminution, other than temporary in the opinion of the management, in
the value of such investments.
H. Impairment of Assets :
Pursuant to Accounting Standard 28 "Impairment of Assets", The Company
has a system to review the carrying values of assets / cash generating
units at each Balance Sheet date. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognized, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognized for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognized in the Statement of Profit and Loss,
except in case of revalued assets.
I. Employees Benefit:
a) The Company''s contribution in respect of Provident Fund is charged
to Profit & Loss account every year.
b) The Company has created a trust and has taken group
gratuity policy with the Life Insurance Corporation of India for the
future payments of retiring gratuities. The liability for the defined
benefit plan of Gratuity is determined on the basis of an actuarial
valuation by an independent actuary at the yearend which is calculated
using Projected ''Unit Credit Method''. Actuarial gain and loses which
comprise experience adjustment and the effect of changes in actuarial
assumptions are recognized in the Profit and Loss Account.
J. Borrowing cost:
Borrowing Cost that is directly attributable to the acquisition or
construction of qualifying assets is capitalized as part of the cost of
such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. Other
borrowing cost is recognized as expenses in the period in which they
are incurred.
K. Taxation:
Taxation expenses comprise current tax and deferred tax charge or
credit. Provision for income tax is made on the basis of the assessable
income at the tax rate applicable to the relevant assessment year.
Deferred tax resulting from "timing difference" between taxable and
accounting income is accounted for using the tax rates and laws that
are enacted or substantively enacted as on the balance sheet date
.Deferred Tax assets
are recognized only to the extent that there is reasonable certainty
that sufficient future taxable income will be available against which
such deferred tax assets can be adjusted.
L. Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are recognized and disclosed in the notes.
Contingent Assets are neither recognized nor disclosed in the financial
statements.
M. Liquidated Damages:
Liquidated damages/Penalties, if any are provided whenever there is a
claim from party and when the same is accepted by the company.
N. Deferred Revenue Expenditure :
Deferred Revenue Expenditure on Brand Promotion has been written off
over the period of five years.
O. Public Deposit :
Company has accepted Public Deposits according to the directives issued
by the Reserve Bank of India and the Provision of section 58A, 58AA or
any other relevant provision of the Act and the rules framed there
under to the extent applicable.
P. Insurance Claims :
Insurance and other claims to the extent considered recoverable are
accounted for in the year on the basis of claims based on the amount
assessed by the surveyor. However, claims and refunds whose recovery
cannot be ascertained with reasonable certainty are accounted for on
acceptance/actual receipts basis.
R. Earnings per Share.
The earning considered in ascertaining the company''s EPS comprises the
net profit for the period after tax attributed to equity shareholders.
The number of shares used in computing basis EPS is the weighted
average number of shares outstanding during the year.
Q. Extraordinary Items:
The Extraordinary items are Income or Expenses that arise from events
of transactions that are clearly distinct from the ordinary activities
of enterprises and therefore, are not expected to recur frequently or
regularly. The nature and amount of each extra ordinary item is
identified and disclosed in the Statement of Profit and Loss in a
manner that its impact on current profit or loss can be perceived.
Mar 31, 2013
A. Basis of Preparation of Financial Statements:- The financial
statements are prepared under the historical cost convention and comply
in all material aspects with the applicable accounting principles in
India and accounting standards notified under sub-section (3C) of
section 211 of the Companies Act, 1956 and the relevant provisions of
the Companies Act, 1956, as adopted consistently by the Company.
B. Use of Estimates:- The preparation of the financial statements in
conformity with Indian GAAP requires the Management to make estimates
and assumptions considered in the reported amounts of assets and
liabilities (including contingent liabilities) and the reported income
and expenses during the year. The Management believes that the
estimates used in preparation of the financial statements are prudent
and reasonable. Future results could differ due to these estimates and
the differences between the actual results and the estimates are
recognised in the periods in which the results are known / materialize.
C. Own Fixed Assets:- Fixed Assets are stated at historical cost
including any attributable cost including taxes & other duties,
freight, installation & other direct or allocable expenses and related
borrowing cost for bringing the respective assets to its working
condition for its intended use, less accumulated depreciation. All
Costs, till commencement of commercial production is capitalized under
Manor Refinery Plant.
All the direct costs, expenditure during the project construction
period (net of income) are specifically attributable to
construction/acquisition of fixed assets and advances against capital
expenditure are shown as Capital Work in progress until the relevant
assets are ready for its intended use.
D. Depreciation:- Depreciation on Fixed Assets has been provided as
per the Straight Line Method of depreciation at the rates and manner
prescribed under Schedule XIV to the Companies Act, 1956 amended. The
depreciation has been provided on pro-rata basis for the assets
purchased during the year including capital expenditure on land &
building taken on lease/Leave & License basis but excluding for
Computer Software. In case of Computer Software, depreciation is
provided as per straight-line method at the rates provided in schedule
XIV of the Companies Act, 1956 amended in respect of Computers.
E. Revenue Recognition:- Sale of Goods :
Sales are recognized net of returns and trade discounts, on transfer of
significant risks and rewards of ownership to the buyer, which
generally coincides with the delivery of goods to customers, sales
exclude sales tax and value added tax.
Other Income:
Interest income is recognized on time proportion basis taking into
account the amount outstanding and rate applicable. Dividend income is
recognized when the right to receive the payment is established by the
balance sheet date.
F. Inventories :
Inventories are valued at the lower of cost (on FIFO basis) and the net
realizable value after providing for obsolescence and other losses,
where considered necessary except for by-product, which is valued at
estimated realizable value . Cost includes all charges in bringing the
goods to the point of sale, including octroi and other levies, transit
insurance, and receiving charges. Work-in-progress and finished goods
include material cost, appropriate proportion of overheads and, where
applicable, excise duty.
G. Foreign Currency Transactions:
Transactions denominated in foreign currencies are normally recorded at
the exchange rate prevailing on the date of the transaction or that
approximates the actual rate at the date of the transaction.
Monetary items denominated in foreign currencies remaining unsettled at
the year- end are restated at the exchange rate prevailing at end of
the year.
H. Investment:
Long-term investments are carried at cost less provision for
diminution, other than temporary in the opinion of the management, in
the value of such investments.
I. Impairment of Assets :
Pursuant to Accounting Standard 28 ÂImpairment of AssetsÂ, The Company
has a system to review the carrying values of assets / cash generating
units at each Balance Sheet date. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognized, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognized for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognized in the Statement of Profit and Loss,
except in case of revalued assets.
J. Employees Benefit:
a) The CompanyÂs contribution in respect of Provident Fund is charged
to Profit & Loss account every year.
b) The Company has created a trust and has taken group gratuity policy
with the Life Insurance Corporation of India for the future payments of
retiring gratuities.
The liability for the defined benefit plan of Gratuity is determined on
the basis of an actuarial valuation by an independent actuary at the
year end which is calculated using Projected ÂUnit Credit MethodÂ.
Actuarial gain and loses which comprise experience adjustment and the
effect of changes in actuarial assumptions are recognized in the Profit
and Loss Account.
K. Borrowing cost:
Borrowing Cost that is directly attributable to the acquisition or
construction of qualifying assets is capitalized as part of the cost of
such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. Other
borrowing cost is recognized as expenses in the period in which they
are incurred.
L. Taxation:
Taxation expenses comprise current tax and deferred tax charge or
credit. Provision for income tax is made on the basis of the assessable
income at the tax rate applicable to the relevant assessment year.
Deferred tax resulting from Âtiming difference between taxable and
accounting income isaccounted for using the tax rates and laws that are
enacted or substantively enacted as on the balance sheet date .Deferred
Tax assets are recognized only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be adjusted.
M. Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
N. Liquidated Damages:
Liquidated damages/Penalties, If any are provided whenever there is a
claim from party and when the same is accepted by the company.
O. Deferred Revenue Expenditure :
Deferred Revenue Expenditure on Brand Promotion has been written off
over the period of five years.
P. Public Deposit :
Company has accepted Public Deposits according to the directives issued
by the Reserve Bank of India and the Provision of section 58A, 58AA or
any other relevant provision of the Act and the rules framed there
under to the extent applicable.
Q. Insurance Claims :
Insurance and other claims to the extent considered recoverable are
accounted for in the year on the basis of claims based on the amount
assessed by the surveyor. However, claims and refunds whose recovery
cannot be ascertained with reasonable certainty are accounted for on
acceptance/actual receipts basis.
R. Earning Per Share.
The earning considered in ascertaining the companyÂs EPS comprises the
net profit for the period after tax attributed to equity shareholders.
The number of shares used in computing basis EPS is the Weighted
average number of shares outstanding during the year.
Mar 31, 2012
A. Basis of Preparation of Financial Statements:
The financial statements are prepared under the historical cost convention and comply in all material aspects with the applicable accounting principles in India and accounting standards notified under sub-section (3C) of section 211 of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956, as adopted consistently by the Company.
B. Use of Estimates:
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialize.
C. Own Fixed Assets:
Fixed Assets are stated at historical cost including any attributable cost including taxes & other duties, freight, installation & other direct or allocable expenses and related borrowing cost for bringing the respective assets to its working condition for its intended use, less accumulated depreciation. All Costs, till commencement of commercial production is capitalized under Manor Refinery Plant.
All the direct costs, expenditure during the project construction period (net of income) are specifically attributable to construction/acquisition of fixed assets and advances against capital expenditure are shown as Capital Work in progress until the relevant assets are ready for its intended use.
D. Depreciation:
Depreciation on Fixed Assets has been provided as per the Straight Line Method of depreciation at the rates and manner prescribed under Schedule XIV to the Companies Act, 1956 amended. The depreciation has been provided on pro-rata basis for the assets purchased during the year including capital expenditure on land & building taken on lease/Leave & License basis but excluding for Computer Software. In case of Computer Software, depreciation is provided as per straight-line method at the rates provided in schedule XIV of the Companies Act, 1956 amended in respect of Computers.
E. Revenue Recognition:
Sale of Goods:
Sales are recognized net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers, sales exclude sales tax and value added tax.
Other Income:
Interest income is 'acognized on time proportion basis taking into account the amount outstanding and rate pplicable. Dividend income is recognized when the right to receive the payment is established by the balance sheet date.
F. Inventories:
Inventories are valued at the lower of cost (on FIFO basis) and the net realizable value after providing for obsolescence and other losses, where considered necessary except for by-product, which is valued at estimated realizable value. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance, and receiving charges. Work-in-progress and finished goods include material cost, appropriate proportion of overheads and, where applicable, excise duty.
G. Foreign Currency Transactions:
Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.
Monetary items denominated in foreign currencies remaining unsettled at the year- end are restated at the exchange rate prevailing at end of the year.
H. Investment:
Long-term investments are carried at cost less provision for diminution, other than temporary in the opinion of the management, in the value of such investments.
I. Impairment of Assets:
Pursuant to Accounting Standard 28 "Impairment of Assets", The Company has a system to review the carrying values of assets / cash generating units at each Balance Sheet date. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, except in case of revalued assets.
J. Employees Benefit:
a) The Company's contribution in respect of Provident Fund is charged to Profit & Loss account every year.
b) The Company has created a trust and has taken group gratuity policy with the Life Insurance Corporation of India for the future payments of retiring gratuities. The liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valuation by an independent actuary at the year end which is calculated using Projected 'Unit Credit Method'. Actuarial gain and loses which comprise experience adjustment and the effect of changes in actuarial assumptions are recognized in the Profit and Loss Account.
K. Borrowing cost:
Borrowing Cost that is directly attributable to the acquisition or construction of qualifying assets is capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Other borrowing cost is recognized as expenses in the period in which they are incurred.
L. Taxation:
Taxation expenses comprise current tax and deferred tax charge or credit. Provision for income tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year.
Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred Tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be adjusted.
M. Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not'recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.
N. Liquidated Damages:
Liquidated damages/Penalties, of any are provided whenever there is a claim from party and when the same is accepted by the company.
O. Deferred Revenue Expenditure:
Deferred Revenue Expenditure on Brand Promotion has been written off Over the period of five years.
P. Public Deposit:
Company has accepted Public Deposits according to the directives issued by the Reserve Bank of India and the Provision of section 58A, 58AA or any other relevant provision of the Act and the rules framed there under to the extent applicable.
Q. Insurance Claims:
Insurance and other claims to the extent considered recoverable are accounted for in the year on the basis of claims based on the amount assessed by the surveyor. However, claims and refunds whose recovery cannot be ascertained with reasonable certainty are accounted for on acceptance/actual receipts basis.
R. Earning Per Share:
The earning considered in ascertaining the company's EPS comprises the net profit for the period after tax attributed to equity shareholders. The number of shares used in computing basis EPS is the Weighted average number of shares outstanding during the year.
Mar 31, 2011
1 Basis of Preparation of financial statements
The financial statements are prepared as per historical cost convention and in accordance with Generally Accepted Accounting Principles in India and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
2 Use Of Estimates
In preparing Company's financial statements in conformity with accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Manangement belives that the estimates used in prepration of financial statement are present and reasonable. Further results could differ from the estimates.
3 Fixed Assets & Depreciation / Amortisation / Capital work in Progress
a) Fixed assets are stated at historical cost including any attributable cost including taxes & other duties, freight, installation & other direct or allocable expenses and related borrowing cost for bringing the respective asset to its working condition for its intended use, less accumulated depreciation. All costs, till commencement of commercial production is capitalised under Manor Refinery Plant.
b) Depreciation is provided as per the straight-line method at the rates provided in schedule XIV of the Companies Act, 1956 on pro-rata basis on all assets including capital expenditure on land & building taken on lease/Leave & License basis but excluding for Computer Software. In case of Computer Software, depreciation is provided as per straight-line method at the rates provided in schedule XIV of the Companies Act, 1956 in respect of Computers.
c) Pursuant to Accounting Standard 28 " Impairment of Assets" . The Company has a system to review the carrying cost of all the assets vis-Â -vis recoverable value and impairment loss, if any is charged to Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in estimate of recoverable amount.
d) All the direct costs, expenditure during construction period (net of income) specifically attributable to construction / acquisition of fixed assets and advances against capital expenditure are shown as Capital work in progress until the relevant assets are ready for its intended use.
4 Investments
a) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long-term investments is made only if such decline is other than temporary in the opinion of the management.
b) Dividends income is recongnised when right to receive is establised.
5 Inventories
a) Inventories are valued at cost or net realizable values whichever is lower, except by- products, which is valued at estimated realizable value.
b) In determining the cost of raw material stores spares and other materials, cost is ascertained on FIFO method. Work in progress and finished products includes material cost, labour factory overheads and excise duty if applicable
6 Revenue recognition
Revenue form sale of goods is recognised when significant risk & rewards of ownership of the goods have passed to the Buyer. Dividend income is recognised when right to receive the payment is established by the balance sheet date. Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable.
7 Employee Benefits
a) The Company's contribution in respect of Provident Fund is charged to Profit & Loss Account every year.
b) The Company has created a trust and has taken group gratuity policy with the Life Insurance Corporation of India for the future payments of retiring gratuities. The liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valution by an independent actuary at the year end which is calculated using Projected Unit Credit Method. Actuarial gain and loses which comprise experience adjustment and the effect of changes in actuarial assumptions are recongnised in the Profit and Loss Account
8 Borrowing Costs
Borrowing cost that are attribuable to the acquision or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to Revenue.
9 Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes, Contingent assets are neither recognised nor disclosed in the financial statements.
10 Liquidated Damages
Liquidated damages / Penalties, if any are provided whenever there is a claim from party and when the same is accepted by the company.
11 Taxation
Taxation expense comprise current tax and deferred tax charge or credit. Provision for income tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year.
12 Defered Taxation
Deferred tax resulting from timing differences between book and tax profit is accounted for under the liability method at the current rate of Income tax to the extent that the timing differences are expected to crystalize as deferred tax charge/ benefit in the profit and loss account and as deferred tax Assets/Liability in the Balance-Sheet.
13 Insurance Claim
Insurance and other claims to the extent considered recoverable are accounted for in the year of claim based on the amount assessed by the surveyor. However, claims and refund whose recovery cannot be ascertained with reasonable certainty, are accounted for on acceptance/actual receipts basis.
14 Deferred Revenue Expenditure
During the financial year company has incurred expenditure on Brand Promotion, which has been capitalised under Deferred Revenue Expenditure and to be written off over the period of five years.
15 Earning per Share
The earning considered in ascertaining the company's EPS comprises the net profit for the period after tax attributed to equity shareholders. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.
16 Related Party Transaction
Parties are considered to be related if at any time during the year, one party has the ability to control the other party or to exercise significant influence over the other party in making financial and / or operating decision.
17 Cash Flow Statement
Cash Flow Statement are prepared in accordance with " Indirect Methods" as explained in the Accounting Standard (AS)- 3 on Cash Flow Statement
18 Foreign Currency Transactions
Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of transactions. Monetary items denominated in foreign currency remaining unsettled at the year-end are restated at the exchange rate prevailing at end of the year.
19 Public Deposit
Company has accepted Public Deposits accroding to the directives issued by the Reserve Bank of India and the Provision of section 58A, 58AA or any other relevent provisions of the Act and the rules framed there under to the extent applicable.
Mar 31, 2010
1. Basis of Preparation of financial statements
The financial statements are prepared as per historical cost convention and in accordance with Generally Accepted Accounting Principles in india and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
2. Use Of Estimates
In preparing Companys financial statements in conformity with accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Manangement belives that the estimates used in prepration of financial statement are present and reasonable. Further results could differ from the estimates.
3. Fixed Assets & Depreciation / Amortisation
a) Fixed assets are stated at historical cost including any attributable cost including taxes & other duties, freight, installation & other direct or allocable expenses and related borrowing cost for bringing the respective asset to its working condition for its intended use, less accumulated depreciation. All costs, till commencement of commercial production is capitalised under Jaipur Plant.
b) Depreciation is provided as per the straight-line method at the rates provided in schedule XIV of the Companies Act, 1956 on pro-rata basis on all assets including capital expenditure on land & building taken on lease/Leave & License basis but excluding for Computer Software. In case of Computer Software, depreciation is provided as per straight-line method at the rates provided in schedule XIV of the Companies Act, 1956 in respect of Computers.
c) Pursuant to Accounting Standard 28 " Impairment of Assets" . The Company has a system to review the carrying cost of all the assets vis-a-vis recoverable value and impairment loss, if any is charged to Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in estimate of recoverable amount.
4. Investments
a) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long-term investments is made only if such decline is other than temporary in the opinion of the management.
b) Dividends income is recongnised when right to receive is establised.
5. Inventories
a) Inventories are valued at cost or net realizable values whichever is lower, except by- products, which is valued at estimated realizable value.
b) In determining the cost of raw material stores spares and other materials, cost is ascertained on FIFO method. Work in progress and finished products includes material cost, labour and factory overheads and excise duty if applicable
6. Revenue recognition
Revenue form sale of goods is rcognised when significant risk & rewards of owership of the goods have passed to the Buyer. Dividend income is recognised when right to receive the payment is established by the balance sheet date. Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable.
7. Employee Benefits
a) The Companys contribution in respect of Provident Fund is charged to Profit & Loss Account every year.
b) The Company has created a trust and has taken group gratuity policy with the Life Insurance Corporation of India for the future payments of retiring gratuities. The liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valution by an independent actuary at the year end which is calculated using Projected Unit Credit Method. Actuarial gain and loses which comprise experience adjustment and the effect of changes in actuarial assumptions are recongnised in the Profit and Loss Account
Discloser as required by Accounting Standard 15 is not given as the report from Actuary is awaited.
8. Borrowing Costs
Borrowing cost that are attribuable to the acquision or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to Revenue.
9. Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes, Contingent assets are neither recognised nor disclosed in the financial statements.
10. Liquidated Damages
Liquidated damages / Penalties, if any are provided whenever there is a claim from party and when the same is accepted by the company.
11. Taxation
Taxation expense comprise current tax and deferred tax charge or credit. Provision for income tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year.
12. Defered Taxation
Deferred tax resulting from timing differences between book and tax profit is accounted for under the liability method at the current rate of Income tax to the extent that the timing differences are expected to crystallize as deferred tax charge/ benefit in the profit and loss account and as deferred tax Assets/Liability in the Balance-Sheet.
13. Insurance Claim
Insurance and other claims to the extent considered recoverable are accounted for in the year of claim based on the amount assessed by the surveyor. However, claims and refund whose recovery cannot be ascertained with reasonable certainly, are accounted for on acceptance/actual receipts basis.
14. Share Issue Expenses :
Share Issue expenses are adjusted against Security Premium Account.
15. Earning per Share
The earning considered in ascertaining the companys EPS comprises the net profit for the period after tax attributed to equity shareholders. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.
16. Related Party Transaction
Parties are considered to be related if at any time during the year, one party has the ability to control the other party or to exercise significant influence over the other party in making financial and / or operating decision.
17. Cash Flow Statement
Cash Flow Statement are prepared in accordance with " Indirect Methods" as explained in the Accounting Standard (AS)-3 on Cash Flow Statement
Dec 31, 2008
1 Basis of Preparation of financial statements
a) The accompanying financial statements have been prepared under the historical cost convention in accordance with Generally Accepted Accounting Principles (GAAPs) and the provisions of the Companies Act, 1956 as adopted consistently by the company.
b) Accounting Policies not specifically referred to otherwise are consistent and in consonance with the Generally Accepted Accounting Principles followed by the company.
2 Fixed Assets & Depreciation / Amortisation
a) Fixed assets are stated at historical cost including any attributable cost including taxes & other duties, freight, installation & other direct or allocable expenses and related borrowing cost for bringing the respective asset to its working condition for its intended use, less accumulated depreciation.
b) Major renovation/construction expenditure of capital nature on building taken on Lease/Leave & License basis is capitalized and is stated at cost less accumulated depreciation. The same will be however, written off if the Company vacate the said building.
c) Depreciation is provided as per the straight-line method at the rates provided in schedule XIV of the Companies Act, 1956 on pro-rata basis on all assets including capital expenditure on land & building taken on lease/Leave & License basis but excluding for Computer Software. In case of Computer Software, depreciation is provided as per straight-line method at the rates provided in schedule XIV of the Companies Act, 1956 in respect of Computers.
d) Pursuant to accounting standard 28 " Impairment of Assets" issued by the¯ICAI, The Company has a system to review the carrying cost of all the assets vis-a-vis recoverable value and impairment loss, if any is charged to Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in estimate of recoverable amount.
3 Investments
a) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long-term investments is made only if such decline is other than temporary in the opinion of the management.
b) Dividends are accounted for as and when received.
4 Inventories
a) Inventories are valued at cost or net realizable values whichever is lower, except by- products, which is valued at estimated realizable value.
b) In determining the cost of raw material stores spares and other materials, cost is ascertained on FIFO method. Work in progress and finished products includes material cost, labour and factory overheads and excise duty if applicable.
5 Employee Retirement Benefits
a) The Companys contribution in respect of Provident Fund is charged to Profit & Loss Account every year.
b) Provision of gratuity as on the balance sheet date is accounted on Actuarial basis by an independent actuary and Companys contribution to the Group Gratuity Scheme of Life Insurance Corporation of India are charged against the revenue every year.
c) Liability for leave outstanding as on the balance sheet date and other benefits are accounted on accrual basis.
6 Liquidated Damages
Liquidated damages / Penalties, if any are provided whenever there is a claim from party and when the same is accepted by the company.
7. Taxation
Provision for income tax is made on the basis of estimated taxable income. Advance tax and tax deducted at source are shown in the balance sheet under the head Loans and Advances.
8 Preliminary Expenses
Preliminary expenses are written off over a period of five years.
9 Pre-operative Expenditure
Pre-operative expenditure incurred prior to commencement of business operations of any division is written off over a period of five years.
10 Deferred Revenue Expenditure
a) Advertisement & Product launching Expenditure where benefit is expected to be derived in the future is treated as deferred revenue expenditure up-to accounting year 31st December 2003, and written-off to the profit and loss account over a period of Five years.
b) Finance, Legal and Documentation charges incurred in respect of secured loans is treated as deferred revenue expenditure up-to accounting year 31st December 2003, and written off to the profit and loss account over the period of loan.
11 Accounting for taxes on Income
Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. The same is accounted for, using the tax rates as on balance sheet date. Deferred Tax assets are recognized only when there is virtual certainty of their realization as per as AS 22 issued by the Institute of Chartered Accountant of India.
12 Insurance Claim
Insurance and other claims to the extent considered recoverable are accounted for in the year of claim based on the amount assessed by the surveyor. However, claims and refund whose recovery cannot be ascertained with reasonable certainly, are accounted for on acceptance/actual receipts basis.
13 Earning per Share
a) Basic Earning per Equity Share is calculated by using weighted average numBer of Equity Shares outstanding during the period.
b) Diluted Earning per share comprises the weighted average number of Equity Shares considered for deriving Basic Earnings per Equity Share and weighted average number of Equity Shares that could have been issued on the conversion of all dilutive potential Equity Shares at last issue price of each share. Dilutive potential shares are deemed converted as of the beginning of the period, unless they have been issued at a later date.
c) In case of any Bonus issue or any other corporate action during the year affecting number of outstanding shares, the number of equity shares outstanding before the event is adjusted for the proportionate change in the number of equity shares outstanding as if the event had occurred at the beginning of the earliest period reported.
14 Revenue recognition
a) In case of direct sales, revenue on sales of products is recognized when the products are dispatched to customers. Sales are stated inclusive of sales tax and excise duties but net of returns, primary trade schemes and trade discounts.
b) In case of Consignment Sales and Sales by Clearing & Forwarding Agents, revenue is recognized on actual sales of goods by Consignee/Agents at his location and on receipt of statement of account from the agent.
c) All expenses are accounted for on accrual basis unless otherwise specified.
15. Foreign Currency Transactions
a) All foreign Currency Transactions were initially recognized at the exchange rates on the date of transactions.
b) Exchange difference arising on the settlement of monetary items was recognised as income / expenses.
c) Monetary items and contingent liabilities as on the date of Balance Sheet are stated at the closing rate /realistic rate.
16 Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes, Contingent assets are neither recognised nor disclosed in the financial statements.
17 Borrowing Costs
a) Borrowing costs that are directly attributable to the long-term project management and development activities are capitalised as part of project cost. Other borrowing costs are recognised as an expense in the period in which they are incurred.
b) BoiTowing costs are capitalised as part of project cost when the activities that are necessary to prepare the assets for its intended use or sale are in progress. Borrowing costs are suspended from capitalisation on the project when the development work on the project is interrupted for extended periods.
18 Related Party Transaction
Parties are considered to be related if at any time during the year, one party has the ability to control the other party or to exercise significant influence over the other party in making financial and/or operating decision.
19 Use Of Estimates
In preparing Companys financial statements in conformity with accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period:; actual results could differ from those estimates.
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Stocks To Buy Today, Dec 16: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
India Stock Market Weekly Review: Nifty and Sensex Fall as Caution Spreads -
Stocks To Buy Today, Dec 15: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday
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Stocks To Buy Today, Dec 12: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Market Outlook 2026: Kotak Securities Sees Nifty 50 at 30,000; THESE 4 Sectors Lead Rally, Gold To Stay Strong -
Stocks To Buy Today, Dec 10: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
D-Street Bleeds For 2nd Day! Sensex Slumps 678 Pts; Nifty Cracks 25,800; Why Stock Market Is Falling Today? -
Stocks To Buy Today, Dec 9: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
Stocks To Buy Today, Dec 8: Top 4 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stock Market Alert! Major Pre-Open Session Change From Dec 8: Full Timings, Rules & All You Need To Know -
Bank Nifty Surges: RBI’s 25 bps Rate Cut Triggers Strong Upside in Major Banking Stocks -
Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each -
Stocks To Buy Today, Dec 4: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday
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