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Accounting Policies of Rishi Laser Ltd. Company
Mar 31, 2025
3. MATERIAL ACCOUNTING POLICIES
A. PROPERTY, PLANT AND EQUIPMENT
All items of property, plant and equipment held
for use in the production or supply of goods
or services or for administration purpose are
stated at acquisition cost net of accumulated
depreciation and accumulated impairment
losses, if any except, freehold land which is
valued at Fair Value. 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.
Spare parts, stand-by equipment and servicing
equipment are recognised as property, plant
and equipment if they are held for use in the
production or supply of goods or services, for
rental to others, or for administrative purposes
and are expected to be used during more than
one period.
Property, plant and equipment which are not
ready for intended use as on the reporting date
are disclosed as ''Capital work-in-progress''.
Depreciation is not recorded on capital work-
in-progress until construction and installation is
complete and the asset is ready for its intended
use.
Capital work-in-progress
Property, Plant and Equipment (PPE) in the
course of construction for production, supply
or administrative purposes are carried at cost,
less any recognised impairment loss. The cost
of an asset comprises its purchase price or its
construction cost (net of applicable tax credits)
and any cost directly attributable to bring the
asset into the location and condition necessary
for it to be capable of operating in the manner
intended by the Management. It includes
professional fees and, for qualifying assets,
borrowing costs capitalised in accordance
with the Company''s accounting policy. Such
properties are classified to the appropriate
categories of property, plant and equipment
when completed and ready for intended use.
Parts of an item of PPE having different useful
lives and material value and subsequent
expenditure on PPE arising on account of
capital improvement or other factors are
accounted for as separate components.
Advances paid towards the acquisition of PPE
outstanding at each Balance Sheet date are
classified as capital advances under âOther
Non-current Assetsâ and the cost of assets not
put to use up to the year-end is disclosed under
''Capital work-in-progress''.
DEPRECIATION / AMORTIZATION ON
PROPERTY, PLANT AND EQUIPMENT
Depreciation on property, plant and equipment
is provided on the straight-line method over
the useful lives of assets as prescribed under
para-C of Schedule II of the Companies Act,
2013.Depreciation is calculated on a pro-rata
basis from the date of acquisition/installation till
the date, the assets are sold or disposed of.
Any gain/loss arising at the time of disposal
or retirement of an item of property, plant and
equipment is determined as the difference
between the sales proceeds and the carrying
amount of the assets and is recognized in profit
or loss.
B. INTANGIBLE ASSETS
Intangible assets are stated at cost of acquisition
net of recoverable taxes less accumulated
amortization or depletion. All costs, including
finance cost till commencement of commercial
production, net charges on foreign exchange
contracts and adjustments arising from
exchange rate variations attributable to the
intangible assets are capitalized.
The useful life is assessed as either finite
or indefinite. Intangible with finite lives are
amortised on straight line basis over the useful
lives of the assets and assessed for impairment.
The amortization expense on intangible assets
with finite lives is recognized in the statement
of profit and loss.
Intangible assets with infinite lives are
amortized on a straight-line basis over the
estimated useful economic life. All intangible
assets are assessed for impairment whenever
there is an indication that the intangible asset
may be impaired. The amortization expense on
intangible assets is recognized in the statement
of profit and loss. Research costs, if any, are
expensed as incurred.
C. IMPAIRMENT OF PROPERTY, PLANT AND
EQUIPMENT/INTANGIBLE ASSETS
Property, plant and equipment and intangible
assets with finite life are evaluated for
recoverability whenever there is any indication
that their carrying amounts may not be
recoverable. If any such indication exists, the
recoverable amount (i.e. higher of the fair
value less cost to sell and the value-in-use) is
determined on an individual asset basis unless
the asset does not generate cash flows that
are largely independent of those from other
assets. In such cases, the recoverable amount
is determined for the Cash Generating Unit
(CGU) to which the asset belongs.
If the recoverable amount of an asset (or
CGU) is estimated to be less than it''s carrying
amount, the carrying amount of the asset (or
CGU) is reduced to its recoverable amount. An
impairment loss is recognized in the statement
of profit and loss.
After impairment, depreciation is provided
on the revised carrying amount of the asset
over its remaining useful life. The impairment
loss recognized in prior accounting periods is
reversed by crediting the statement of profit
and loss if there has been a change in the
estimate of recoverable amount.
DE-RECOGNITION OF PROPERTY, PLANT
AND EQUIPMENT / INTANGIBLE ASSETS
The carrying amount of an item of property, plant
and equipment/intangibles is derecognized on
disposal or when no future economic benefits
are expected from its use or disposal.
The gain or loss arising from the derecognition
of an item of property, plant and equipment/
intangibles is measured as the difference
between the net disposal in proceeds and the
carrying amount of the item and is recognised
in the statement of profit and loss when the
item is derecognized.
D. LEASES
The company assesses at contract inception
whether a contract is, or contains, a lease. That
is, if the contract conveys the right to control
the use of an identified asset for a period of
time in exchange for consideration.
The Company applies a single recognition and
measurement approach for all leases, except
for short-term leases and leases of low-
value assets. The Company recognises lease
liabilities to make lease payments and rightâ
of-use assets representing the right to use the
underlying assets.
Right-of-use assets
The Company recognizes rightâofâuse assets
at the commencement date of the lease (i.e.,
the date the underlying asset is available for
use). Rightâofâuse assets are measured
at cost, less any accumulated depreciation
and impairment losses, and adjusted for any
remeasurement of lease liabilities.
The cost of rightâofâuse assets includes the
amount of lease liabilities recognized, initial
direct costs incurred, and lease payments
made at or before the commencement date
less any lease incentives received. Rightâofâ
use assets are depreciated on a straightâline
basis over the shorter of the lease term and the
estimated useful lives of the assets.
If ownership of the leased asset transfers to the
Company at the end of the lease term or the
cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated
useful life of the asset.
Lease Liabilities
At the commencement date of the lease, the
Company recognizes lease liabilities measured
at the present value of lease payments to
be made over the lease term. The lease
payments include fixed payments (including
in substance fixed payments) less any lease
incentives receivable, variable lease payments
that depend on an index or a rate, and
amounts expected to be paid under residual
value guarantees. The lease payments also
include the exercise price of a purchase
option reasonably certain to be exercised
by the Company and payments of penalties
for terminating the lease, if the lease term
reflects the Company exercising the option to
terminate. Variable lease payments that do not
depend on an index or a rate are recognised as
expenses (unless they are incurred to produce
inventories) in the period in which the event or
condition that triggers the payment occurs.
In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the
lease is not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion
of interest and reduced for the lease payments
made. In addition, the carrying amount of
lease liabilities is remeasured if there is a
modification, a change in the lease term, a
change in the lease payments (e.g., changes
to future payments resulting from a change in
an index or rate used to determine such lease
payments) or a change in the assessment of
an option to purchase the underlying asset.
Short-term leases and leases of low- value
assets
The Company applies the short-term lease
recognition exemption to its short-term leases
of machinery and equipment (i.e., those leases
that have a lease term of 12 months or less from
the commencement date and do not contain a
purchase option). It also applies the lease of
low-value assets recognition exemption to
leases of office equipment that are considered
to be low value. Lease payments on short¬
term leases and leases of low-value assets
are recognised as expense on a straight-line
basis over the lease term.
E. BORROWING COSTS
General and specific borrowing costs that
are directly attributable to the acquisition,
construction or production of a qualifying
asset are capitalised during the period that is
required to complete and prepare the asset
for its intended use or sale. Qualifying assets
are assets that necessarily take a substantial
period to get ready for their intended use
or sale. Investment income earned on the
temporary investment of specific borrowings
pending their expenditure on qualifying assets
is deducted from the borrowing costs eligible
for capitalisation. Other borrowing costs are
expensed in the period in which they are
incurred.
F. FINANCIAL INSTRUMENTS:
FINANCIAL ASSETS
CLASSIFICATION
The Company classifies its financial assets in
the following measurement categories:
i. Those to be measured subsequently at fair
value (either through Other Comprehensive
Income, or through profit or loss).
ii. Those measured at amortised cost.
The classification depends on the business
model of the entity 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 Other
Comprehensive Income or profit or loss.
For investments in debt instruments, this will
depend on the business model in which the
investment is held.
For investments in equity instruments, method
of recognition 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 or otherwise.
RECOGNITION AND MEASUREMENT
INITIAL RECOGNITION
Financial assets are recognised when the
Company becomes a party to the contractual
provisions of the instrument. Financial assets
are recognised initially at fair value plus, in the
case of financial assets not recorded at fair
value through profit or loss, transaction costs
that are attributable to the acquisition of the
financial asset. Transaction costs of financial
assets carried at fair value through profit or
loss are charged into the Statement of Profit
and Loss.
SUBSEQUENT MEASUREMENT
Financial assets are classified into the following
specified categories:
i. Financial assets carried at amortized cost
ii. Financial assets at fair value through other
comprehensive income
iii. Financial assets at fair value through profit
and loss;
DEBT INSTRUMENTS
MEASURED AT AMORTISED COST
Financial Assets that are held for collection
of contractual cash flow where those cash
flows represent solely payment of principal
and interest are measured at amortised cost.
Interest income from these financial assets is
included in interest income using the Effective
Interest Rate (EIR) method. The amortisation
of EIR and loss arising from impairment, if any
is recognised 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 air
value through Other Comprehensive Income
(FVTOCI).
Fair value movements are recognised in the
OCI. Interest income measured using the
EIR method and impairment losses, if any are
recognised in the Statement of Profit and Loss.
On de-recognition, cumulative gain | (loss)
previously recognised 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
amortised cost or FVOCI, is classified as Fair
Value through profit or loss (FVTPL). Such
financial assets are measured at fair value
with all changes in fair value, including interest
income and dividend income if any, recognised
as other income in the Statement of Profit and
Loss.
IMPAIRMENT OF FINANCIAL ASSET
The company assesses on a forward-looking
basis the expected credit losses (ECL)
associated with its financial assets carried at
amortised cost and FVTOCI. The impairment
methodology applied depends on whether
there has been a significant increase in credit
risk.
For trade and 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.
Lifetime ECL are the expected credit losses
resulting from all possible default events over
the expected life of a financial instrument.
ECL is the difference between all contractual
cash flows that are due to the Company in
accordance with the contract and all the cash
flows that the entity expects to receive (i.e.,
all cash shortfalls), discounted at the original
EIR. When estimating the cash flows, an entity
is required to consider all contractual terms of
the financial instrument (including prepayment,
extension, call and similar options) over the
expected life of the financial instrument.
DE-RECOGNITION OF FINANCIAL ASSETS
A financial asset is de-recognised only when
the Company,
i) has transferred the rights to receive cash
flows from the financial asset or
ii) 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 entity 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.
Where the entity has not transferred
substantially all risks and rewards of ownership
of the financial asset, the financial asset is not
de-recognised.
Where the entity has neither transferred a
financial asset nor retains 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.
FINANCIAL LIABILITIES:
The Company''s financial liabilities include trade
and other payables, loans and borrowings. All
financial liabilities are recognised initially at fair
value and in the case of loans, borrowings and
payables recognised net of directly attributable
transaction costs.
SUBSEQUENT MEASUREMENT
The measurement of financial liabilities
depends on their classification, as described
below:
FINANCIAL LIABILITIES AT FVTPL
Financial liabilities are classified as at FVTPL
when the financial liability is held for trading
or are designated upon initial recognition as
FVTPL. Gains or losses on financial liabilities
held for trading are recognised in the Statement
of Profit and Loss.
OTHER FINANCIAL LIABILITIES
i. 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.
ii. Initial recognition and measurement:
Financial liabilities are recognised when
the Company becomes a party to the
contractual provisions of the instrument.
Financial liabilities are initially measured at
the fair value.
iii. Subsequent measurement:
Financial liabilities are subsequently
measured at amortised 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 recognized in the
Statement of Profit and Loss.
iv. De-recognition:
A financial liability is derecognised when
the obligation specified in the contract is
discharged, cancelled or expires.
OFF-SETTING FINANCIAL INSTRUMENTS
Financial assets and liabilities are offset and
the net amount is reported in the Balance
Sheet where there is a legally enforceable right
to offset the recognised amounts and there is
an intention to settle on a net basis or realise
the asset and settle the liability simultaneously.
The legally enforceable right must not be
contingent on future events and must be
enforceable in the normal course of business.
EQUITY INSTRUMENTS
The Company subsequently measures all
investments in equity instruments other
than subsidiary company at fair value. The
Management of the Company has elected to
present fair value gains and losses on such
equity investments in Other Comprehensive
Income, and there is no subsequent
reclassification of these fair value gains and
losses to the Statement of Profit and Loss.
Dividends from such investments continue
to be recognised in profit or loss as other
income when the right to receive payment is
established.
Impairment losses (and reversal of impairment
losses) on equity investments measured at
FVOCI are not reported separately from other
changes in fair value.
FAIR VALUE MEASUREMENT:
The Company classifies the fair value of its
financial instruments in the following hierarchy,
based on the inputs used in their valuation:
Level 1 - The fair value of financial instruments
quoted in active markets is based on their
quoted closing price at the balance sheet date.
Level 2 - The fair value of financial instruments
that are not traded in an active market is
determined by using valuation techniques
using observable market data. Such valuation
techniques include discounted cash flows,
standard valuation models based on market
parameters for interest rates, yield curves
or foreign exchange rates, dealer quotes for
similar instruments and use of comparable
arm''s length transactions.
Level 3 - The fair value of financial instruments
that are measured on the basis of entity specific
valuations using inputs that are not based on
observable market data (unobservable inputs).
G. CASH AND CASH EQUIVALENTS
Cash and cash equivalents in the balance
sheet comprise cash at bank and in hand and
short-term deposit with original maturity upto
three months, which are subject to insignificant
risk of changes in value.
For the purpose of presentation in the
statement of cash flows, cash and cash
equivalents consists of cash and short-term
deposit, as defined above, net of outstanding
bank overdraft as they are considered as an
integral part of Company''s cash management.
H. INVENTORIES
Raw materials, packing materials,
purchased finished goods, work-in-progress,
manufactured finished goods, fuel, stores
and spares other than specific spares for
machinery are valued at cost and net realizable
value whichever is lower. Net realizable value
is the estimated selling price in the ordinary
course of business, less estimated costs of
completion and estimated costs necessary to
make the sale. Scrap materials are valued at
Net Realizable value.
Cost is arrived at on weighted average basis.
Cost comprises all costs of purchase, costs
of conversion and other costs incurred in
bringing the inventory to the present location
and condition. Due allowances are made for
slow moving and obsolete inventories based
on estimates made by the Company. Cost has
been determined as under:
I. REVENUE RECOGNITION
The Company earns revenue from
manufacturing and selling Metal Sheet
Component and Machines. Also, companies
do Job Work ancillary to the metal sheet
fabrication work.
Revenue from contracts with customers is
recognised to the extent that it is probable that
the economic benefits will flow to the Company
and the revenue can be reliably measured,
regardless of when the payment is being made.
When a performance obligation is satisfied, the
revenue is measured at the transaction price
which is consideration received or receivable,
net of returns and allowances, trade discounts
and volume rebates after taking into account
contractually defined terms of payment and
excluding taxes or duties collected on behalf of
the government.
Sale of Goods and Services
The Company recognises revenue for supply
of goods to customers against orders received.
The majority of contracts that company enters
into relate to sales orders containing single
performance obligations for the delivery of its
products as per Ind AS 115.
Revenue is recognised when the customer
obtains control of the goods. The customer
obtains control of goods at different points in time
based on the delivery terms. Accordingly, the
company satisfies its performance obligation at
the time of dispatch of goods from the factory/
stockyard/storage area/port as the case may
be and accordingly revenue is recognised.
Revenue from the sale of goods is measured
at the fair value of the consideration received
or receivable, net of returns and allowances,
trade discounts and volume rebates.
The determination of transaction price, its
allocation to promised goods and allocation of
discount or variable compensation (if any) is
done based on the contract with the customers.
Interest Income
Interest income from debt instruments is
recognised using the effective interest rate
method and shown under interest income in
the statement of profit and loss. 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.
Dividend Income
Dividend income from investment is recognised
when the right to receive payment is established,
which is generally when shareholders approve
the dividend.
J. FOREIGN CURRENCY TRANSACTIONS
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 Translation:
Foreign currency transactions are translated
into the functional currency using the exchange
rates at the dates of the transactions. Monetary
items denominated in foreign currencies at
the year-end are restated at closing rates.
Translation differences on assets and liabilities
carried at fair value are reported as part of the
fair value gain/ (loss).
Nonmonetary items which are carried in terms
of historical cost denominated in a foreign
currency are reported using the exchange rate
at the date of the transaction and non-monetary
items which are carried at fair value or other
similar valuation denominated in a foreign
currency are reported using the exchange rates
that existed when the values were determined.
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 recognized in
profit or loss.
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).
K. GOVERNMENT GRANTS
Government grants and subsidies are
recognized when there is reasonable
assurance that the Company will comply
with the conditions attached to them and the
grants / subsidy will be received. Government
grants whose primary condition is that the
Company should purchase, construct or
otherwise acquire capital assets are presented
by deducting them from the carrying value of
the assets. The grant is recognized as income
over the life of a depreciable asset by way of a
reduced depreciation charge.
Export benefits are accounted for in the year of
exports based on eligibility and when there is
no uncertainty in receiving the same.
Government grants in the nature of promoters''
contribution like investment subsidy, where no
repayment is ordinarily expected in respect
thereof, are treated as capital reserve.
Government grants in the form of non¬
monetary assets, given at a concessional rate,
are recorded on the basis of their acquisition
cost. In case the non-monetary asset is given
free of cost, the grant is recorded at a nominal
value.
Other government grants and subsidies
are recognised as income over the periods
necessary to match them with the costs for
which they are intended to compensate, on a
systematic basis.
L. SEGMENT REPORTING
Operating segments are reported in a manner
consistent with the internal reporting provided
to the decision-making authority. The Board of
directors monitors the operating results of all
product segments separately for the purpose
of making decisions about resource allocation
and performance assessment.
The operating segments have been identified
on the basis of the nature of products/services.
Further:
1. Segment revenue includes sales and other
income directly identifiable with / allocable
to the segment including inter - segment
revenue.
2. Expenses that are directly identifiable with
/ allocable to segments are considered for
determining the segment result. Expenses
which relate to the Company as a whole
and not allocable to segments are included
under unallocable expenditure.
3. Income which relates to the Company as
a whole and not allocable to segments is
included in unallocable income.
4. Segment assets and liabilities include
those directly identifiable with the
respective segments. Unallocable assets
and liabilities represent the assets and
liabilities that relate to the Company as a
whole and not allocable to any segment.
M. EMPLOYEE BENEFITS
Employee benefits include short term
employee benefits, contribution to defined
benefit contribution schemes, contribution to
defined benefit plan.
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 within the Balance
Sheet. Termination benefits are recognised as
an expense as and when incurred.
Short-term leave encashment is provided at
undiscounted amount during the accounting
period based on service rendered by
employees. Compensation payable under
Voluntary Retirement Scheme is being charged
to Statement of Profit and Loss in the year of
settlement.
Long Term Employee Benefit:
Defined contribution plans
The Company''s contribution to provident fund
and superannuation fund are considered as
defined contribution plans and are charged
as an expense as they fall due based on the
amount of contribution required to be made.
Defined benefit plans
Gratuity liability is a defined benefit obligation
and is computed on the basis present value
of amount payable determined using actuarial
valuation techniques as per projected unit credit
method at the end of each financial year. It is
recognized as an expense in the statement of
profit & loss for the year in which the employee
has rendered services.
Re-measurement cost of net defined benefit
liability, which comprises of actuarial gain
and losses, return on plan assets(excluding
interest), and the effect of the asset ceiling(if
any, excluding interest) are recognized in other
comprehensive income in the period in which
they occur.
N. INCOME TAX
Tax expense comprises of current and deferred
tax.
Current tax:
Current tax is the amount of income taxes
payable in respect of taxable profit for a period.
Current tax for current and prior periods is
recognized at the amount expected to be
paid to or recovered from the tax authorities,
using the tax rates and tax laws that have
been enacted or substantively enacted at the
balance sheet date. Management periodically
evaluates positions taken in the tax returns
with respect to situations in which applicable
tax regulations are subject to interpretation
and establishes provisions where appropriate.
Current tax is recognized in the statement of
profit and loss except to the extent that the tax
relates to items recognized directly in other
comprehensive income or directly in equity.
Deferred tax:
Deferred tax assets and liabilities are
recognized using the balance sheet approach
for all temporary differences arising between
the tax bases of assets and liabilities and their
carrying amounts in the financial statements
except when the deferred tax arises from the
initial recognition of an asset or liability that
effects neither accounting nor taxable profit or
loss at the time of transition.
Deferred tax assets are reviewed at each
reporting date and are reduced to the extent
that it is no longer probable that the related tax
benefit will be realized.
Deferred tax assets and liabilities are
measured using tax rates and tax laws that
have been enacted or substantively enacted
at the balance sheet date and are expected to
apply to taxable income in the year in which
those temporary differences are expected to be
recovered or settled.
Deferred tax assets are recognised for all
deductible temporary differences, the carry
forward of unused tax credits and any unused
tax losses. Deferred tax assets are recognised
to the extent that it is probable hat taxable profit
will be available against which the deductible
temporary differences, and the carry forward of
unused tax credits and unused tax losses can
be utilized.
Unrecognized deferred tax assets are re¬
assessed at each reporting date and are
recognised to the extent that it has become
probable that future taxable profits will allow
the deferred tax asset to be recovered.
Deferred Tax Asset has not been recognized
on Brought Forward Losses and Fair Value
Loss on Equity Instrument carried through
Other Comprehensive Income (FVTOCI) as
there is no reasonable certainty of Income
against which such Deferred Tax Asset can be
recognised.
Deferred tax relating to items recognised
outside profit or loss is recognised outside
profit or loss (either in other comprehensive
income or in equity). Deferred tax items are
recognised in correlation to the underlying
transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities
are offset if a legally enforceable right exists
to set off current tax assets against current
tax liabilities and the deferred taxes relate to
the same taxable entity and the same taxation
authority.
Minimum Alternate Tax
MAT paid in a year is charged to the Statement
of profit and loss as current tax. MAT credit
entitlement is recognised as an asset only
when and to the extent there is convincing
evidence that the Company will pay normal
income tax during the specified period, which
is the period for which MAT credit is allowed
to be carried forward. Such asset is reviewed
at each balance sheet date and the carrying
amount of the MAT credit asset is written down
to the extent there is no longer a convincing
evidence to the effect that the Company will
pay normal income tax during the specified
period.
Mar 31, 2024
1. CORPORATE INFORMATION
Rishi Laser Limited (''the Company'') is a public company domiciled in India and is incorporated under the Provisions of the Companies act 1956. Its shares are listed on the recognised stock exchanges, namely BSE Limited, in India. The registered office of the Company is located at Rishi Laser Limited., 612, V.K.Industrial Estate, 10-14, Pais Street, Byculla (West), Mumbai 400011.
The Company is engaged in manufacturing of Fabrication of sheet Metal components and machines.
The Company offers parts for excavating machines and manufactures steel fabrications and assemblies for a range of engineering industries. It is engaged in four verticals: construction equipment, automotive, rail transportation and power (transmission and distribution). Its services include contract manufacturing, design and development, punching, sheet steel fabrication, bending, laser cutting, welding and surface treatment. It serves various industries, including textile and general engineering, telecommunications and instrumentations, and earthmoving machinery.
The financial statements are approved for issue by the Company''s Board of Directors on May 27, 2024.
This note provides a list of the significant accounting policies adopted in the presentation of this financial statement.
This Financial Statements comply in all material respects with Indian Accounting Standard (''Ind AS'') as notified by the Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (Act) read with Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
As the year-end figures are taken from the source and rounded to the nearest digits, the figures reported for the previous quarters might not always add up to the year-end figures reported in this statement.
i. Historical cost convention:
The Financial Statements have been prepared on a historical cost basis, except for the following:
a) Certain financial assets and liabilities (including derivative instruments) that are measured at fair value.
b) Defined benefit plans: plan assets measured at fair value.
ii. Rounding of Amounts:
The financial statements are presented in INR and all values are rounded to the nearest lakhs, except when otherwise indicated.
B. SIGNIFICANT ESTIMATES, JUDGEMENTS AND ASSUMPTIONS
The preparation of financial statements in conformity with Ind AS requires the management to make estimates, assumptions and exercise judgment in applying the accounting policies that affect the reported amount of assets, liabilities and disclosure of contingent liabilities at the end of the financial statements and reported amounts of income and expense during the year.
The management believes that these estimates are prudent and reasonable and are based on management''s best knowledge of current events and actions. Actual results could differ from these estimates and difference between actual results and estimates are recognised in the period in which results are known or materialised.
The Company uses the following critical accounting estimates in preparation of its financial statements.
Management reviews the inventory age listing on a periodic basis. This review involves comparison of the carrying value of the
aged inventory items with the respective net realizable value. The purpose is to ascertain whether an allowance is required to be made in the financial statements for any obsolete and slow moving items. Management is satisfied that adequate allowance for obsolete and slow-moving inventories has been made in the financial statements.
Liability for sales return
In making judgment for liability for sales return, the management considered the detailed criteria for the recognition of revenue from the sale of goods set out in Ind AS 115 and in particular, whether the Company had transferred to the buyer the significant risk and rewards of ownership of the goods. Following the detailed quantification of the Company''s liability towards sales return, the management is satisfied that significant risk and rewards have been transferred and that recognition of the revenue in the current year is appropriate, in conjunction with the recognition of an appropriate liability for sales return. Accruals for estimated product returns, which are based on historical experience of actual sales returns and adjustment on account of current market scenario is considered by Company to be reliable estimate of future sales returns.
Impairment of financial assets
The impairment provision for financial assets are based on assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Defined benefit plans
The cost and present obligation of Defined Benefit Gratuity Plan and Compensated Absences are determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are assumed at each reporting date.
The Company''s contracts with customers could include promises to transfer multiple products and/or services to a customer. The Company assesses the products / services promised in a contract and identify distinct performance obligations in the contract. Identification of distinct performance obligation involves judgement to determine the deliverables and the ability of the customer to benefit independently from such deliverables.
For determining the transaction price for the contract and to ascribe the transaction price to each distinct performance obligation, judgment is required. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as volume discounts, service level credits, performance bonuses, price concessions and incentives. The transaction price is also adjusted to the transaction price unless it is a payment for a distinct product or service from the customer. The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed at the end of each reporting period.
The Company exercises judgement in determining whether the performance obligation is satisfied at a point in time or over a period of time. The Company considers indicators such as how customer consumes benefits as services are rendered or who controls the asset as it is being created or existence of enforceable right to payment for performance to date and alternate use of such product or service, transfer of significant risks and rewards to the customer, acceptance of delivery by the customer.
Revenue for fixed-price contract is recognised using percentage-of-completion method. The Company uses judgement to estimate the future cost-to-completion of the contracts which is used to determine the degree of completion of the performance obligation.
Useful life of Property, Plant and Equipment
The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
Provision for income tax and deferred tax assets
The Company uses estimates and judgements based on the relevant rulings in the areas of allocation of revenue, costs, allowances and disallowances which is exercised while determining the provision for income tax. A deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised. Accordingly, the Company exercises its judgement to reassess the carrying amount of deferred tax assets at the end of each reporting period.
Provisions and contingent liabilities
The Company estimates the provisions that have present obligations as a result of past events and it is probable that outflow of resources will be required to settle the obligations. These provisions are reviewed at the end of each reporting period and are adjusted to reflect the current best estimates.
The Company uses significant judgements to disclose contingent liabilities. Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. Contingent assets are neither recognised nor disclosed in the financial statements.
Allowances for Credit Losses on the Receivables
The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company considered current and anticipated future economic conditions relating to industries the company deals with and the countries where it operates. In calculating expected credit loss, the Company has also considered possible effects on the future recoverability of the receivables due to Covid-19.
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.
The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease.
The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases with similar characteristics which is best and reasonable as per management''s estimate.
C. CURRENT & NON-CURRENT CLASSIFICATION
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle (twelve months) and other criteria set out in the Schedule III to the Act.
3. MATERIAL ACCOUNTING POLICIESA. PROPERTY, PLANT AND EQUIPMENT
All items of property, plant and equipment held for use in the production or supply of goods or services or for administration purpose are stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any except, freehold land which is valued at Fair Value. 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.
Spare parts, stand-by equipment and servicing equipment are recognised as property, plant and equipment if they are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and are expected to be used during more than one period.
Property, plant and equipment which are not ready for intended use as on the reporting date are disclosed as ''Capital work-in-progress''. Depreciation is not recorded on capital work-in-progress until construction and installation is complete and the asset is ready for its intended use.
Capital work-in-progress
Property, Plant and Equipment (PPE) in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. The cost of an asset comprises its purchase price or its construction cost (net of applicable tax credits) and any cost directly attributable to bring the asset into the location and condition necessary for it to be capable of operating in the manner intended by the Management. It includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Company''s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Parts of an item of PPE having different useful lives and material value and subsequent expenditure on PPE arising on account of capital improvement or other factors are accounted for as separate components.
Advances paid towards the acquisition of PPE outstanding at each Balance Sheet date are classified as capital advances under âOther Non-current Assetsâ and the cost of assets not put to use up to the year-end is disclosed under ''Capital work-in-progress''.
DEPRECIATION / AMORTIZATION ON PROPERTY, PLANT AND EQUIPMENT
Depreciation on property, plant and equipment is provided on the straight-line method over the useful lives of assets as prescribed under para-C of Schedule II of the Companies Act, 2013.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 and useful lives of property, plant and equipment are reviewed at each financial year end and adjusted if appropriate. Estimated useful lives of the assets are as follows:
Any gain/loss arising at the time of disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the assets and is recognized in profit or loss.
B. INTANGIBLE ASSETS
Intangible assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization or depletion. All costs, including finance cost till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets are capitalized.
The useful life is assessed as either finite or indefinite. Intangible with finite lives are amortised on straight line basis over the useful lives of the assets and assessed for impairment. The amortization expense on intangible assets with finite lives is recognized in the statement of profit and loss.
|
Sr. No. |
Particulars |
Useful lives (in years) |
|
1. |
Buildings |
30-60 |
|
2. |
Roads and Culverts |
3 |
|
3. |
Plant and Machinery |
15 |
|
4. |
Office equipment |
5 |
|
5. |
Computer and Server |
3-6 |
|
6. |
Furniture and fixtures |
10 |
|
7. |
Vehicles |
8-10 |
|
8. |
Electrification |
10 |
|
9. |
Laboratory Equipment |
10 |
Intangible assets with infinite lives are amortized on a straight-line basis over the estimated useful economic life. All intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization expense on intangible assets is recognized in the statement of profit and loss. Research costs, if any, are expensed as incurred.
C. IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT/INTANGIBLE ASSETS
Property, plant and equipment and intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
If the recoverable amount of an asset (or CGU) is estimated to be less than it''s carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognized in the statement of profit and loss.
After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. The impairment loss recognized in prior accounting periods is reversed by crediting the statement of profit and loss if there has been a change in the estimate of recoverable amount.
DE-RECOGNITION OF PROPERTY, PLANT AND EQUIPMENT / INTANGIBLE ASSETS
The carrying amount of an item of property, plant and equipment/intangibles is derecognized on disposal or when no future economic benefits are expected from its use or disposal.
The gain or loss arising from the derecognition of an item of property, plant and equipment/ intangibles is measured as the difference between the net disposal in proceeds and the carrying amount of the item and is recognised in the statement of profit and loss when the item is derecognized.
The company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and rightâ of-use assets representing the right to use the underlying assets.
Right-of-use assets
The Company recognizes rightâofâuse assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Rightâofâuse assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities.
The cost of rightâofâuse assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Rightâofâ use assets are depreciated on a straightâline basis over the shorter of the lease term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to
terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
Short-term leases and leases of low- value assets
The Company applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on shortterm leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred.
FINANCIAL ASSETS CLASSIFICATION
The Company classifies its financial assets in the following measurement categories:
i. Those to be measured subsequently at fair value (either through Other Comprehensive Income, or through profit or loss).
ii. Those measured at amortised cost.
The classification depends on the business model of the entity 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 Other Comprehensive Income or profit or loss. For investments in debt instruments, this will depend on the business model in which the investment is held.
For investments in equity instruments, method of recognition 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 or otherwise.
RECOGNITION AND MEASUREMENTINITIAL RECOGNITION
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are charged into the Statement of Profit and Loss.
Financial assets are classified into the following specified categories:
i. Financial assets carried at amortized cost
ii. Financial assets at fair value through other comprehensive income
iii. Financial assets at fair value through profit and loss;
Financial Assets that are held for collection of contractual cash flow where those cash flows represent solely payment of principal and interest are measured at amortised cost. Interest income from these financial assets is included in interest income using the Effective Interest Rate (EIR) method. The amortisation of EIR and loss arising from impairment, if any is recognised 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 air value through Other Comprehensive Income (FVTOCI).
Fair value movements are recognised in the OCI. Interest income measured using the EIR method and impairment losses, if any are recognised in the Statement of Profit and Loss.
On de-recognition, cumulative gain | (loss) previously recognised 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 amortised cost or FVOCI, is classified as Fair Value through profit or loss (FVTPL). Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognised as other income in the Statement of Profit and Loss.
The company assesses on a forward-looking basis the expected credit losses (ECL) associated with its financial assets carried at amortised cost and FVTOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade and 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.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider all contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument.
DE-RECOGNITION OF FINANCIAL ASSETS
A financial asset is de-recognised only when the Company,
i) has transferred the rights to receive cash flows from the financial asset or
ii) 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 entity 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.
Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not de-recognised.
Where the entity has neither transferred a financial asset nor retains 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.
The Company''s financial liabilities include trade and other payables, loans and borrowings. All financial liabilities are recognised initially at fair value and in the case of loans, borrowings and payables recognised net of directly attributable transaction costs.
The measurement of financial liabilities depends on their classification, as described below:
FINANCIAL LIABILITIES AT FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated upon initial recognition as FVTPL. Gains or losses on financial liabilities held for trading are recognised in the Statement of Profit and Loss.
i. 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.
ii. Initial recognition and measurement:
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the fair value.
iii. Subsequent measurement:
Financial liabilities are subsequently measured at amortised 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 recognized in the Statement of Profit and Loss.
iv. De-recognition:
A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled or expires.
OFF-SETTING FINANCIAL INSTRUMENTS
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
The Company subsequently measures all investments in equity instruments other than subsidiary company at fair value. The Management of the Company has elected to present fair value gains and losses on such equity investments in Other Comprehensive Income, and there is no subsequent reclassification of these fair value gains and losses to the Statement of Profit and Loss.
Dividends from such investments continue to be recognised in profit or loss as other income when the right to receive payment is established.
Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.
The Company classifies the fair value of its financial instruments in the following hierarchy, based on the inputs used in their valuation:
Level 1 - The fair value of financial instruments quoted in active markets is based on their quoted closing price at the balance sheet date.
Level 2 - The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques using observable market data. Such valuation techniques include discounted cash flows, standard valuation models based on market parameters for interest rates, yield curves or foreign exchange rates, dealer quotes for similar instruments and use of comparable arm''s length transactions.
Level 3 - The fair value of financial instruments that are measured on the basis of entity specific valuations using inputs that are not based on observable market data (unobservable inputs).
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposit with original maturity upto three months, which are subject to insignificant risk of changes in value.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents consists of cash and short-term deposit, as defined above, net of outstanding bank overdraft as they are considered as an integral part of Company''s cash management.
Raw materials, packing materials, purchased finished goods, work-in-progress, manufactured finished goods, fuel, stores and spares other than specific spares for machinery are valued at cost and net realizable value whichever is lower. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. Scrap materials are valued at Net Realizable value.
Cost is arrived at on weighted average basis. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventory to the present location and condition. Due allowances are made for slow moving and obsolete inventories based on estimates made by the Company. Cost has been determined as under:
|
Raw material & Packing Material |
On weighted average cost basis. |
|
Finished products |
At Raw material and Conversion cost which includes labour, proportion of manufacturing overheads based on normal operating capacity, duties and taxes where credit is not available. |
|
Stock-in process |
Lower of cost and net realizable value. Cost includes direct materials, labour and a proportion of manufacturing overheads based on normal operating capacity |
|
Stores and spares (other than those capitalised as property, plant and equipment) and other trading goods |
Lower of cost and NRV basis. |
|
Scrap Material |
At Net Realisable Value |
The company could not take physical inventory of the stocks lying at various places including factories and godowns; however, basis the
perpetual inventory system and accounting software, the company could ascertain finished stocks, work in progress, raw material and other items. The company believes that it will be able to continue to realise the prices currently charged [which are based on MRP]; accordingly, the company has continued to follow the practice of valuing the inventory of Finished Goods at cost or net realisable value whichever is lower. The other items of the inventory are valued on the same basis.
The Company earns revenue from manufacturing and selling Metal Sheet Component and Machines. Also, companies do Job Work ancillary to the metal sheet fabrication work.
Effective April 1,2018, the Company has applied Ind AS 115 which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts. The Company has adopted Ind AS 115 using the cumulative catch up transition method. The effect of initially applying this standard is recognised at the date of initial application (i.e. April 1, 2018). The standard is applied retrospectively only to contracts that are not completed as at the date of initial application and the comparative information in the statement of profit and loss is not restated - i.e. the comparative information continues to be reported under Ind AS 18 and Ind AS 11. The effect on adoption of Ind AS 115 was not significant.
Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those products or services.
The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, it does not adjust any of the transaction prices for the time value of money.
The Company satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met otherwise Revenue is recognized in time basis.
1. The customer simultaneously receives and consumes the benefits provided by the Company''s performance as the Company performs; or
2. The Company''s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
3. The Company''s performance does not create an asset with an alternative use to the Company and an entity has an enforceable right to payment for performance completed to date.
Revenue is measured based on a Transaction Price, which is the consideration, adjusted to price concessions if any specified in the contract with the customer. Revenue excludes taxes collected from the customers. Revenue in excess of invoicing are classified as contract asset while invoicing in excess of revenues are classified as contract liabilities.
Revenue is recognised when the customer obtains control of the goods. The customer obtains control of goods at different points in time based on the delivery terms. Accordingly, the company satisfies its performance obligation at the time of dispatch of goods from the factory/ stockyard/storage area/port as the case may be and accordingly revenue is recognised. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.
The determination of transaction price, its allocation to promised goods and allocation of discount or variable compensation (if any) is done based on the contract with the customers.
Interest income from debt instruments is recognised using the effective interest rate method and shown under interest income in the statement of profit and loss. 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.
Dividend income from investment is recognised when the right to receive payment is established, which is generally when shareholders approve the dividend.
J. FOREIGN CURRENCY TRANSACTIONS
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.
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Monetary items denominated in foreign currencies at the year-end are restated at closing rates. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain/ (loss).
Nonmonetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
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 recognized in profit or loss.
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).
Government grants and subsidies are recognized when there is reasonable assurance that the Company will comply with the conditions attached to them and the grants / subsidy will be received. Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire capital assets are presented by deducting them from the carrying value of the assets. The grant is recognized as income over the life of a depreciable asset by way of a reduced depreciation charge.
Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.
Government grants in the nature of promoters'' contribution like investment subsidy, where no repayment is ordinarily expected in respect thereof, are treated as capital reserve. Government grants in the form of nonmonetary assets, given at a concessional rate, are recorded on the basis of their acquisition cost. In case the non-monetary asset is given free of cost, the grant is recorded at a nominal value.
Other government grants and subsidies are recognised as income over the periods necessary to match them with the costs for which they are intended to compensate, on a systematic basis.
Operating segments are reported in a manner consistent with the internal reporting provided to the decision-making authority. The Board of directors monitors the operating results of all product segments separately for the purpose of making decisions about resource allocation and performance assessment.
The operating segments have been identified on the basis of the nature of products/services. Further:
1. Segment revenue includes sales and other income directly identifiable with / allocable to the segment including inter - segment revenue.
2. Expenses that are directly identifiable with / allocable to segments are considered for determining the segment result. Expenses which relate to the Company as a whole and not allocable to segments are included under unallocable expenditure.
3. Income which relates to the Company as a whole and not allocable to segments is included in unallocable income.
4. Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable assets and liabilities represent the assets and liabilities that relate to the Company as a whole and not allocable to any segment.
Employee benefits include short term employee benefits, contribution to defined benefit contribution schemes, contribution to defined benefit plan.
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 within the Balance Sheet. Termination benefits are recognised as an expense as and when incurred.
Short-term leave encashment is provided at undiscounted amount during the accounting period based on service rendered by employees. Compensation payable under Voluntary Retirement Scheme is being charged to Statement of Profit and Loss in the year of settlement.
Long Term Employee Benefit:
Defined contribution plans
The Company''s contribution to provident fund and superannuation fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.
Defined benefit plans
Gratuity liability is a defined benefit obligation and is computed on the basis present value of amount payable determined using actuarial valuation techniques as per projected unit credit method at the end of each financial year. It is recognized as an expense in the statement of profit & loss for the year in which the employee has rendered services.
Re-measurement cost of net defined benefit liability, which comprises of actuarial gain and losses, return on plan assets(excluding interest), and the effect of the asset ceiling(if any, excluding interest) are recognized in other comprehensive income in the period in which they occur.
Tax expense comprises of current and deferred tax.
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Current tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Current tax is recognized in the statement of profit and loss except to the extent that the tax relates to items recognized directly in other comprehensive income or directly in equity.
Deferred tax assets and liabilities are recognized using the balance sheet approach for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred tax arises from the initial recognition of an asset or liability that effects neither accounting nor taxable profit or loss at the time of transition.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date and are expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable hat taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.
Unrecognized deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred Tax Asset has not been recognized on Brought Forward Losses and Fair Value Loss on Equity Instrument carried through Other Comprehensive Income (FVTOCI) as there is no reasonable certainty of Income against which such Deferred Tax Asset can be recognised.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
MAT paid in a year is charged to the Statement of profit and loss as current tax. MAT credit entitlement is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period, which is the period for which MAT credit is allowed to be carried forward. Such asset is reviewed at each balance sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.
O. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will
not require an outflow of resources embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Contingent assets are not recognised in the financial statement; however, they are disclosed where the inflow of economic benefits is probable. When the realization of income is virtually certain, then the related asset is no longer a contingent asset and is recognised as an asset.
Provisions and contingencies are reviewed at each balance sheet date and adjusted to reflect the correct management estimates.
Earnings per share (EPS) is calculated by dividing the net profit or loss (excluding other comprehensive income) for the period attributable to Equity Shareholders by the weighted average number of Equity shares outstanding during the period. Earnings considered in ascertaining the EPS is the net profit for the period and any attributable tax thereto for the period. The company did not have any potentially dilutive securities in any of the years presented here in financial statement.
Q. CURRENT & NON-CURRENT CLASSIFICATION
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle (twelve months) and other criteria set out in Schedule III of the companies act 2013.
Mar 31, 2015
A. Use of Estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amount of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management's best knowledge of current events and actions,
uncertainties about these assumptions and estimates could result in the
outcomes requiring a material adjustment to the carrying amounts of
assets or liabilities in future period.
b. Tangible Fixed Assets
Fixed Assets are stated at cost of acquisition (net of recoverable
taxes & Government grants wherever availed) or construction or other
amounts substituted for historical costs on revaluation less
accumulated depreciation. Expenses capitalized also include applicable
borrowing cost.
c. Depreciation on Tangible Fixed Assets
i. Depreciation on fixed assets is provided on the Straight Line Method
at the rates and in the manner prescribed under Schedule XIV to the
Companies Act,1956.
ii. All individual items of fixed assets, where the actual cost does
not exceed Rs.5,000 each have been written off entirely in the year of
acquisition.
d. Intangible Assets
Intangible assets are stated at cost of acquisition net of recoverable
taxes less accumulated amortization/depletion. All costs, including
finance cost till commence- ment of commercial production, net charges
on foreign exchange contracts and adjustments arising from exchange
rate variations attributable to the intangible assets are capitalized.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life. All intangible assets are assessed for
impairment whenever there is an indication that the intangible asset
may be impaired.
e. Borrowing Cost
Borrowing costs include interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost. Borrowing costs
directly attributable to the acquisition, construction or production of
an asset that necessary takes a substantial period of time to get ready
for its intended use or sale are capitalized as part of the cost of the
respective asset. All other borrowing costs are expensed in the period
they occur.
f. Impairment of Assets
An asset is treated as impaired when carrying cost of asset exceed its
recoverable value. An impairment loss is charged to the profit and loss
account in the year in which an asset is identified as impaired. The
impairment loss is recognized in prior accounting period is reversed if
there has been change in estimate of recoverable amount.
g. Investments
Long term investments are stated at cost, less any provision for
permanent diminution in value. Current investments are stated at lower
of cost and fair value.
h. Inventories
i. Raw Material, Stores and Spares are valued at cost on Weighted
Average.
ii. Work in Progress is Valued at Cost representing materials, Labour
and apportioned overheads.
iii. Scrap is Valued at Net Realizable Value.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated cost of completion and estimated
costs necessary to make the sale.
i. Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific criteria must also be met
before revenue is recognized:
Sale of Goods
Revenue from sale of goods is recognized when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
usually on the dispatch of goods.
Interest Income
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the
statement of profit and loss.
Dividend Income
Dividend income is recognized when the Company's right to receive
dividend is estimated by the reporting date.
j. Employee Benefits
i. Short term employee benefits are recognized as an expense in the
profit and loss account of the year in which the related service is
rendered.
ii. Post employment and other long term employee benefits are
recognized as an expense in the profit and loss account for the year in
which the employee has rendered services. The expense is recognized at
the present value of amounts payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long term benefits are charged to the profit and
loss account.
k. Foreign Currency Transactions
Transactions in foreign currencies are recorded at the exchange rates
prevailing on the date of the transaction. Foreign currency monetary
assets & liabilities are restated at year end exchange rates. Exchange
differences arising on the settlement of foreign currency monetary
items or on reporting Company's foreign currency monetary items at
rates different from those at which they were initially recorded during
the year or reported in the previous financial statements, are
recognized as income or expense in the year in which they arise.
l. Retirement and Other Employee Benefits
The Company has booked gratuity and leave encashment as per actuarial
valuation as on 31.03.2015 as per AS 15 (Revised).
m. Income Tax
Provision for tax for the year comprises current income tax determined
to be payable in respect of taxable income and deferred tax, being the
tax effect of timing difference, representing the difference between
taxable income and accounting income that originate in one period and
are capable of reversal in one or more subsequent period(s). The rates
and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date.
Deffered tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
difference 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 realized.
n. Earning Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
o. Provision, Contingent Assets and Contingent Liabilities
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 outflow of resources.
Contingent liabilities are not recognized but disclosed in notes to
accounts. Contingent assets are neither recognized nor disclosed in the
financial statements.
p. Cash and Cash Equivalents
cash and cash equivalent for the purpose of cash flow statement
comprise cash at bank and in hand.
Mar 31, 2014
A. Use of Estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amount of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions,
uncertainties about these assumptions and estimates could result in the
outcomes requiring a material adjustment to the carrying amounts of
assets or liabilities in future period.
b. Tangible Fixed Assets
Fixed Assets are stated at cost of acquisition (net of recoverable
taxes & Government grants wherever availed) or construction or other
amounts substituted for historical costs on revaluation less
accumulated depreciation. Expenses capitalized also include applicable
borrowing cost.
c. Depreciation on Tangible Fixed Assets
a) Depreciation on fixed assets is provided on the Straight Line Method
at the rates and in the manner prescribed under Schedule XIV to the
Companies Act,1956.
b) All individual items of fixed assets, where the actual cost does not
exceed Rs.5,000 each have been written off entirely in the year of
acquisition.
d. Intangible Assets
Intangible assets are stated at cost of acquisition net of recoverable
taxes less accumulated amortization/depletion. All costs, including
finance cost till commencement of commercial production, net charges on
foreign exchange contracts and adjustments arising from exchange rate
variations attributable to the intangible assets are capitalized.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life. All intangible assets are assessed for
impairment whenever there is an indication that the intangible asset
may be impaired.
e. Borrowing Cost
Borrowing costs include interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost. Borrowing costs
directly attributable to the acquisition, construction or production of
an asset that necessary takes a substantial period of time to get ready
for its intended use or sale are capitalized as part of the cost of the
respective asset. All other borrowing costs are expensed in the period
they occur.
f. Impairment of Assets
An asset is treated as impaired when carrying cost of asset exceed its
recoverable value. An impairment loss is charged to the profit and loss
account in the year in which an asset is identified as impaired. The
impairment loss is recognized in prior accounting period is reversed if
there has been change in estimate of recoverable amount.
g. Investments
Long term investments are stated at cost, less any provision for
permanent diminution in value. Current investments are stated at lower
of cost and fair value.
h. Inventories
1. Raw Material, Stores and Spares are valued at cost on Weighted
Average.
2. Work in Progress is Valued at Cost representing materials, Labour
and apportioned overheads.
3. Scrap is Valued at Net Realizable Value.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated cost of completion and estimated
costs necessary to make the sale.
i. Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific criteria must also be met
before revenue is recognized:
Sale of Goods
Revenue from sale of goods is recognized when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
usually on the dispatch of goods.
Interest Income
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the
statement of profit and loss.
Dividend Income
Dividend income is recognized when the Company''s right to receive
dividend is estimated by the reporting date.
j. Employee Benefits
i) Short term employee benefits are recognized as an expense in the
profit and loss account of the year in which the related service is
rendered.
ii) Post employment and other long term employee benefits are
recognized as an expense in the profit and loss account for the year in
which the employee has rendered services. The expense is recognized at
the present value of amounts payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long term benefits are charged to the profit and
loss account.
k. Foreign Currency Transactions
Transactions in foreign currencies are recorded at the exchange rates
prevailing on the date of the transaction. Foreign currency monetary
assets & liabilities are restated at year end exchange rates. Exchange
differences arising on the settlement of foreign currency monetary
items or on reporting Company''s foreign currency monetary items at
rates different from those at which they were initially recorded during
the year or reported in the previous financial statements, are
recognized as income or expense in the year in which they arise.
l. Retirement and Other Employee Benefits
The Company has booked gratuity and leave encashment as per actuarial
valuation as on 31.03.2014 as per AS 15 (Revised).
m. Income Tax
Provision for tax for the year comprises current income tax determined
to be payable in respect of taxable income and deferred tax, being the
tax effect of timing difference, representing the difference between
taxable income and accounting income that originate in one period and
are capable of reversal in one or more subsequent period(s). The rates
and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date.
Deffered tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
difference 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 realized.
n. Earning Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
o. Provision, Contingent Assets and Contingent Liabilities
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 outflow of resources.
Contingent liabilities are not recognized but disclosed in notes to
accounts. Contingent assets are neither recognized nor disclosed in the
financial statements.
p. Cash and Cash Equivalents
Cash and cash equivalent for the purpose of cash flow statement
comprise cash at bank and in hand.
q. Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act, 1956, the company has elected to present earning before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss account. The
Company measures EBITDA on the basis of profit/(loss) from continuing
operations. In its measurement the Company does not include
depreciation and amortization expense, finance cost, and tax expenses.
b. Terms/rights attached to equity shares:
The Company has only one class of Equity Shares having par value of
Rs.10/- per share. Each holder of equity shares is entitled to one vote
per share. The dividend proposed by the Board of Directors is subject
to the approval of the shareholders in the ensuing Annual General
Meeting.
In the event of liquidation of Company, the holders of equity shares
will be entitled to receive remaining assets of the Company, after
distribution of all preferential amounts. The distribution will be in
proportion to the number of equity shares held by the shareholders.
d. Shares reserved for issuance under Stock Option Plans of the
Company:
The company has reserved issuance of 12,51,000 (P.Y. 14,51,000) equity
shares of Rs.10 each for offering to eligible employees of the Company
under ESOP. During the year the Company has granted 2,00,000 (P.Y.
NIL) Options to the eligible employees.
Mar 31, 2013
A. Use of Estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amount of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions,
uncertainties about these assumptions and estimates could result in the
outcomes requiring a material adjustment to the carrying amounts of
assets or liabilities in future period.
b. Tangible Fixed Assets
Fixed Assets are stated at cost of acquisition (net of recoverable
taxes & Government grants wherever availed) or construction or other
amounts substituted for historical costs on revaluation less
accumulated depreciation. Expenses capitalized also include applicable
borrowing cost.
c. Depreciation on Tangible Fixed Assets
i) Depreciation on fixed assets is provided on the Straight Line Method
at the rates and in the manner prescribed under Schedule XIV to the
Companies Act,1956.
ii) All individual items of fixed assets, where the actual cost does
not exceed Rs.5,000 each have been written off entirely in the year of
acquisition.
d. Intangible Assets
Intangible assets are stated at cost of acquisition net of recoverable
taxes less accumulated amortization / depletion. All costs, including
finance cost till commencement of commercial production, net charges on
foreign exchange contracts and adjustments arising from exchange rate
variations attributable to the intangible assets are capitalized.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life. All intangible assets are assessed for
impairment whenever there is an indication that the intangible asset
may be impaired.
e. Borrowing Cost
Borrowing costs include interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost. Borrowing costs
directly attributable to the acquisition, construction or production of
an asset that necessary takes a substantial period of time to get ready
for its intended use or sale are capitalized as part of the cost of the
respective asset. All other borrowing costs are expensed in the period
they occur.
f. Impairment of Assets
An asset is treated as impaired when carrying cost of asset exceed its
recoverable value. An impairment loss is charged to the Statement of
Profit & Loss in the year in which an asset is identified as impaired.
The impairment loss recognized in prior accounting period is reversed
if there has been change in estimate of recoverable amount.
g. Investments
Long term investments are stated at cost, less any provision for
permanent diminution in value. Current investments are stated at lower
of cost and fair value.
h. Inventories
1. Raw Material, Stores and Spares are valued at cost on Weighted
Average.
2. Work in Progress is Valued at Cost representing materials, labour
and apportioned overheads.
3. Scrap is Valued at Net Realizable Value.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated cost of completion and estimated
costs necessary to make the sale.
i. Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific criteria must also be met
before revenue is recognized:
Sale of Goods
Revenue from sale of goods is recognized when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
usually on the dispatch of goods.
Interest Income
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the
Statement of Profit & Loss.
Dividend Income
Dividend income is recognized when the company''s right to receive
dividend is estimated by the reporting date.
j. Employee Benefits
i) Short term employee benefits are recognized as an expense in the
Statement of Profit & Loss for the year in which the related service is
rendered.
ii) Post employment and other long term employee benefits are
recognized as an expense in the Statement of Profit & Loss for the year
in which the employee has rendered services. The expense is recognized
at the present value of amounts payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long term benefits are charged to the Statement of
Profit & Loss.
k. Foreign Currency Transactions
Transactions in foreign currencies are recorded at the exchange rates
prevailing on the date of the transaction. Foreign currency monetary
assets & liabilities are restated at year end exchange rates. Exchange
differences arising on the settlement of foreign currency monetary
items or on reporting Company''s foreign currency monetary items at
rates different from those at which they were initially recorded during
the year or reported in the previous financial statements, are
recognized as income or expense in the year in which they arise.
l. Retirement and Other Employee Benefits
The company has booked gratuity and leave encashment as per actuarial
valuation as on 31.03.2013 as per AS15 (Revised).
m. Income Tax
Provision for tax for the year comprises current income tax determined
to be payable in respect of taxable income and deferred tax, being the
tax effect of timing difference, representing the difference between
taxable income and accounting income that originate in one period and
are capable of reversal in one or more subsequent period(s). The rates
and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
difference 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 realized.
n. Earning Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
o. Provision, Contingent Assets and Contingent Liabilities
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 outflow of resources.
Contingent liabilities are not recognized but disclosed in notes to
accounts. Contingent assets are neither recognized nor disclosed in the
financial statements.
p. Cash and Cash Equivalents
Cash and cash equivalent for the purpose of cash flow statement
comprise cash at bank and in hand.
q. Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act, 1956, the Company has elected to present earning before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the Statement of Profit and Loss. The Company
measures EBITDA on the basis of profit/(loss) from continuing
operations. In its measurement the Company does not include
depreciation and amortization expense, finance cost, and tax expenses.
Mar 31, 2012
A) Change in accounting policies
Presentation and disclosure of financial statements
During the year ended 31st March, 2012 the revised schedule Vi notified
under the Companies Act, 1956, has become applicable to the Company,
for preparation and presentation of its financial statements. The
Company has reclassified the previous year's figures in accordance with
the requirements applicable in the current year.
b) Use of estimates
The preparation of financial statements in conformity with indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amount of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management's best knowledge of current events and actions,
uncertainties about these assumptions and estimates could result in the
outcomes requiring a material adjustment to the carrying amounts of
assets or liabilities in future period.
c) Tangible Fixed Assets
Fixed Assets are stated at cost of acquisition (net of recoverable
taxes and Government grants wherever availed) or construction or other
amounts substituted for historical costs on revaluation less
accumulated depreciation. Expenses capitalized also include applicable
borrowing cost.
d) Depreciation on tangible fixed assets
a. Depreciation on fixed assets is provided on the straight Line
Method at the rates and in the manner prescribed under schedule XiV to
the Companies Act, 1956.
b. All individual items of fixed assets, where the actual cost does
not exceed Rs. 5,000 each have been written off entirely in the year of
acquisition.
e) Intangible assets
intangible assets are stated at cost of acqusition (net of recoverable
taxes) less accumulated amortization/depletion. All costs, including
finance cost till commencement of commercial production, net charges on
foreign exchange contracts and adjustments arising from exchange rate
variations attributable to the intangible assets are capitalized.
intangible assets are amortized on a straight line basis over the
estimated useful economic life. All intangible assets are assessed for
impairment whenever there is an indication that the intangible asset
may be impaired.
f) Borrowing cost
Borrowing costs include interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost. Borrowing costs
directly attributable to the acquisition, construction or production of
an asset that necessary takes a substantial period of time to get ready
for its intended use or sale are capitalized as part of the cost of the
respective asset. All other borrowing costs are expensed in the period
they occur.
g) Impairment of assets
An asset is treated as impaired when carrying cost of asset exceed its
recoverable value. An impairment loss is charged to the statement of
Profit and Loss in the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting period is
reversed if there has been change in estimate of recoverable amount.
h) Investments
Long-term investments are stated at cost, less any provision for
permanent diminution in value. Current investments are stated at lower
of cost and fair value.
i) Inventories
1. Raw Material, stores and spares are valued at cost on Weighted
Average.
2. Work-in-Progress is Valued at Cost representing materials, Labour
and apportioned overheads.
3. scrap is Valued at Net Realizable Value.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated cost of completion and estimated
costs necessary to make the sale.
j) Revenue recognition
Revenue is recognized to the extent it is probable that the economic
benefits will flow to the Company and the revenue can be reliably
measured. The following specific criteria must also be met before
revenue is recognized:
Sale of goods
Revenue from sale of goods is recognized when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
usually on the dispatch of goods.
Interest Income
interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
interest income is included under the head "other income" in the
statement of Profit and Loss.
Dividend income
Dividend income is recognized when the Company's right to receive
dividend is estimated by the reporting date.
k) Employee benefits
(i) short-term employee benefits are recognized as an expense in the
statement of Profit and Loss for the year in which the related service
is rendered.
(ii) Post employment and other long-term employee benefits are
recognized as an expense in the statement of Profit and Loss for the
year in which the employee has rendered services. The expense is
recognized at the present value of amount payable determined using
actuarial valuation techniques. Actuarial gains and losses in respect
of post employment and other long-term benefits are charged to the
statement of Profit and Loss.
l) Foreign currency transactions
Transactions in foreign currencies are recorded at the exchange rates
prevailing on the date of the transaction. Foreign currency monetary
assets & liabilities are restated at year end exchange rates. Exchange
differences arising on the settlement of foreign currency monetary
items or on reporting Company's foreign currency monetary items at
rates different from those at which they were initially recorded during
the year or reported in the previous financial statements, are
recognized as income or expense in the year in which they arise.
m) Retirement and other employee benefits
The Company has booked gratuity and leave encashment as per actuarial
valuation as on 31st March, 2012 as per As 15(Revised).
n) Income tax
Provision for tax for the year comprises current income tax determined
to be payable in respect of taxable income and deferred tax, being the
tax effect of timing difference, representing the difference between
taxable income and accounting income that originates in one period and
are capable of reversal in one or more subsequent period(s). The rates
and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
difference 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 realized.
o) Earning per share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
p) Provision, Contingent Assets and Contingent liabilities
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 outflow of resources.
Contingent liabilities are not recognized but disclosed in notes to
accounts. Contingent assets are neither recognized nor disclosed in the
financial statements.
q) Cash and cash equivalents
Cash and cash equivalent for the purpose of cash flow statement
comprise cash at bank and in hand.
r) Measurement of EBITDA
As permitted by the Guidance Note on the Revised schedule Vi to the
companies Act, 1956, the Company has elected to present earning before
interest, tax, depreciation and amortization (EBiTDA) as a separate
line item on the face of the statement of Profit and Loss. The Company
measures EBiTDA on the basis of profit/(loss) from continuing
operations. in its measurement the Company does not include
depreciation and amortization expense, finance cost and tax expenses.
Mar 31, 2011
(i) Basis of Accounting
The financial statements are prepared under the historical cost
convention in accordance with the applicable mandatory accounting
standards and relevant provisions of the Companies Act, 1956.
(ii) Fixed Assets
Fixed Assets are stated at cost of acquisition (net of recoverable
taxes and Government grants wherever availed) or construction or other
amounts substituted for historical costs on revaluation less
accumulated depreciation. Expenses Capitalised also include applicable
borrowing Cost.
(iii) Depreciation
a) Depreciation on fixed assets is provided on the Straight Line Method
at the rates and in the manner prescribed under Schedule XIV to the
Companies Act, 1956.
b) All individual items of fixed assets, where the actual cost does not
exceed Rs. 5,000 each have been written off entirely in the year of
acquisition.
(iv) Inventories
1. Raw Material, Stores and Spares are valued at cost on Weighted
Average.
2. Work-in-Progress is Valued at Cost representing materials, Labour
and apportioned overheads.
3. Scrap is Valued at Net Realisable Value.
(v) Foreign Exchange Transactions
Transactions in foreign currencies are recorded at the exchange rates
prevailing on the date of the transaction. Foreign currency monetary
assets and liabilities are restated at year end exchange rates.
Exchange differences arising on the settlement of foreign currency
monetary items or on reporting Company's foreign currency monetary
items at rates different from those at which they were initially
recorded during the year or reported in the previous financial
statements, are recognised as income or expense in the year in which
they arise.
(vi) Retirement Benefits
Company has booked gratuity and leave encashment as per actuarial
valuation as per Accounting Standard 15 (Revised).
(vii) Investments
Long-term investments are stated at cost, less any provision for
permanent diminution in value. Current investments are stated at lower
of cost and fair value.
(viii) Revenue Recognition
The Company recognises sales at the point of dispatch of goods to the
customers.
(ix) Income Tax
Provision for tax for the year comprises current income tax determined
to be payable in respect of taxable income and deferred tax, being the
tax effect of timing difference, representing the difference between
taxable income and accounting income that originate in one period and
are capable of reversal in one or more subsequent period(s).
Mar 31, 2010
(i) Basis of Accounting
The financial statements are prepared under the historical cost
convention in accordance with the applicable mandatory accounting
standards and relevant provisions of the companies Act, 1956.
(ii) Fixed Assets
Fixed Assets are stated at cost of acquisition (net of recoverable
taxes & Government grants wherever availed) or construction or other
amounts substituted for historical costs on revaluation less
accumulated depreciation. Expenses Capitalised also include applicable
borrowing Cost.
(iii) Depreciation
a. Depreciation on fixed assets is provided on the Straight Line
Method at the rates and in the manner prescribed under Schedule XTV to
the Companies Act, 1956.
b. All individual items of fixed assets, where the actual cost does
not exceed ?5,000 each have been written off entirely in the year of
acquisition.
(iv) Inventories
1. Raw Material ,Stores and Spares are valued at cost on Weighted
Average.
2. Work in Progress is Valued at Cost representing materials , Labour
and apportioned overheads.
3. Scrap is Valued at Net Realisable Value. (v) Foreign Exchange
Transactions
Transactions in foreign currencies are recorded at the exchange rates
prevailing on the date of the transaction. Foreign currency monetary
assets & liabilities are restated at year end exchange rates. Exchange
differences arising on the settlement of foreign currency monetary
items or on reporting Companys foreign currency monetary items at
rates different from those at which they were initially recorded during
the year or reported in the previous financial statements, are
recognised as income or expense in the year in which they arise.
(vi) Retirement Benefits
Company has booked gratuity and leave encashment as per actuarial
valuation as per accounting standard 15.
(vii) Investments
Long term investments are stated at cost, less any provision for
permanent diminution in value. Current investments are stated at lower
of cost and fair value.
(viii) Revenue Recognition
The Company recognises sales at the point of dispatch of goods to the
customers.
(ix) Income Tax
Provision for tax for the year comprises current income tax determined
to be payable in respect of taxable income and deferred tax, being the
tax effect of timing difference, representing the difference between
taxable income and accounting income that originate in one period and
are capable of reversal in one or more subsequent period(s).
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