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Accounting Policies of Royal Cushion Vinyl Products Ltd. Company
Mar 31, 2024
1. CORPORATE INFORMATION
Royal Cushion Vinyl Products Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956 (CIN:L24110MH1983PLC031395). Its shares are listed on the BSE Ltd. The Company is engaged in manufacturing of Vinyl Flooring ,PVC Sheeting and Artificial Leather cloth for commercial, residential, Transport and contract range as per the industries need and under the brand name "Royal House."
Standalone financial statements for the year ended March 31, 2024 are prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 together with comparative period data as at and for the year ended March 31, 2023.
The financial statements have been prepared on accrual basis and under the historical cost convention except for certain financial instruments which are measured at fair value. Historical cost is generally based on the fair value of consideration given in exchange of goods and services. The accounting policies are consistently applied by the Company during the period and are consistent with those used in the previous year except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS 34) as prescribed by Section 133 of the Companies Act 2013 ("the Act") read with the Companies (Indian Accounting Standards) Rules, 2015 and guidelines issued by the Securities and Exchange Board of India (SEBI). These financial statements do not include all the information required for a complete set of financial statements under the applicable financial reporting framework. The financial statements are presented in Indian ^ lakh (functional currency of the Company) unless otherwise stated.
3. MATERIAL ACCOUNTING POLICIES
(a) . Revenue recognition
Revenue 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. Revenue is measured at the fair value of the consideration received or receivable, considering contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
The specific recognition criteria described below must also be met before revenue is recognised.
Revenue from sale of goods and services
Revenue is recognized when it is probable that economic benefits associated with a transaction flow to the Company in the ordinary course of its activities and the amount of revenue can be measured reliably.
Revenue includes only the gross inflows of economic benefits, received and receivable by the Company, on its own account. Amounts collected on behalf of third parties such as goods and service tax are excluded from revenue.
Revenue from sale of goods and services is recognized when the following conditions are satisfied:
i. The Company has transferred the significant risks and rewards of ownership of the goods to the buyer.
ii. The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over goods/services sold.
iii. The amount of revenue can be measured reliably.
iv. It is probable that the economic benefits associated with the transaction will flow to the Company.
v. The costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue is recognized 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.
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The Company determines the tax as per the provisions of Income Tax Act 1961 and other rules specified thereunder.
Current income tax relating to items recognized outside the statement of profit and loss is recognized in other comprehensive income. Current tax items are recognized in correlation to the underlying transaction in OCI. 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.
Deferred tax is measured using the balance sheet approach on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences. 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 that 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 utilised, except:
When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised 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 assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised, or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside the statement of profit and loss is recognised in other comprehensive income. Deferred tax items are recognised in correlation to the underlying transaction in OCI.
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 tax authority.
(c). Property, plant & equipment
Property, plant & equipment represent a significant proportion of the asset base of the company. The charge in respect of depreciation is derived after determining an estimate of the asset''s expected useful life and estimated residual value at the end of its life. The useful lives and residual value of the company''s assets are estimated by the management at the time the asset is acquired and reviewed periodically. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.
Property, plant and equipment is stated at cost less accumulated depreciation and where applicable accumulated impairment losses. Property, plant and equipment and capital work in progress cost include expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials, direct labor and any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Interest on Funds borrowed for acquisition of property, plant and equipment up to the period such property, plant and equipment is ready for use is capitalized and added to the cost of such items. Property, plant and equipment, if revalued, the valuation suggested by independent valuer has been taken as value of the Property.
Gains and losses on disposal are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognized net within "other income/other expensesâ in the statement of profit and loss.
Depreciation in accounts is charged on Straight Line Method based on the management''s estimate of useful life of each class of assets and considering the useful life prescribed by Schedule II of the Companies Act, 2013 on the cost, as reduced by the amount of Excise Cenvat, GST and VAT setoff claimed.
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognized in the statement of profit and loss.
Depreciation is provided on Straight Line Method (SLM) basis, based on the estimated useful life of the assets.
|
Asset Class |
Estimated useful life (number of years) |
Estimated life as per Companies Act |
|
Plant and Machinery |
15 |
15 |
|
Electrical Installation |
15 |
15 |
|
Laboratory Equipment |
15 |
15 |
|
Buildings |
30 |
30 |
|
Furniture and Fixtures |
10 |
10 |
|
Vehicles |
8 |
8 |
|
Office Equipment |
5 |
5 |
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Amortization is provided on Straight Line Method (SLM) basis, based on the estimated useful life of the assets. Intangible assets
Intangible assets acquired by the Company and having finite useful lives, are measured at cost less accumulated amortization and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the intangible asset.
All revenue expenses pertaining to research are charged to the profit and loss account in the year in which they are incurred. Expenditure of capital nature is capitalized as property, plant and equipment and depreciated as per the company''s policy.
Amortization is provided on Straight Line Method (SLM) basis, based on the estimated useful life of the assets.
|
Asset Class |
Estimated useful life (number of years) |
|
Computer Software |
3.00 |
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, are recognized in profit or loss as incurred.
Amortization of intangible assets with finite useful lives:
Amortization is recognized in profit and loss on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use.
The Company estimates the net realisable value (NRV) of its inventories by taking into account estimated selling price, estimated cost of completion, estimated costs necessary to make the sale, obsolescence considering the past trend. Inventories are written down to NRV where such NRV is lower than their cost.
Stock of raw materials, consumable stores and fuel and oil are valued at lower of cost or market value, on FIFO basis. Finished goods and work in progress are valued at cost of production or market value whichever is lower.
(e) . Transactions and balances
Transactions in foreign currency are translated into Indian rupees at the exchange rates at the date of the transaction.
Monetary assets and liabilities denominated in foreign currency are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognized in the statement of profit or loss.
Non-monetary items that are measured in terms of historical cost in foreign currency are translated using the exchange rates at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation difference on items whose fair value gain or loss is recognized in the statement of Other Comprehensive Income (OCI) or the statement of profit or loss is also recognized in the statement of OCI or the statement of profit or loss, respectively).
Application of accounting policies that require critical accounting estimates and the assumptions having the most significant effect on the amounts recognized in the standalone financial statements are:
Valuation of financial instruments Useful life of property, plant and equipment Useful life of intangible assets Provisions
(f). Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:
i. Expected to be realized or intended to be sold or consumed in normal operating cycle
ii. Held primarily for trading
iii. Expected to be realized within twelve months after the reporting period, or
iv. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when
i. It is expected to be settled in normal operating cycle
ii. It is held primarily for trading
iii. It is due to be settled within twelve months after the reporting period, or
iv. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified two months as its operating cycle.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, if market participants act in their economic best interest.
A fair value measurement of a non-financial asset considers a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 -Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in standalone financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
The Company''s Management determines the policies and procedures for both; recurring fair value measurement, such as derivative instruments and unquoted financial assets measured at fair value, and for non-recurring measurement, such as assets held for distribution in discontinued operations.
At each reporting date, the Management analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Company''s accounting policies. For this analysis, the Management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.
The Management also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable. For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
This note summarises accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.
Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.
Borrowing costs include interest, amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing cost directly attributable to the cost of acquisition or construction of the fixed assets is capitalized as part of the cost of the assets, upto the date the asset is put to use. Other borrowing costs are charged to the Statement of Profit and Loss in the year in which they are incurred, Costs in connection with the borrowing of funds are charged to statement of profit and loss.
(j) . Provisions and contingent liabilities
The company estimates the provisions that have present obligation 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 assess contingent liabilities.
The Company recognizes a provision when there is a present legal or constructive obligation as a result of a past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Long term provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.
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. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
The preparation of standalone financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, the disclosures of contingent assets and contingent liabilities at the date of financial statements, and the income and expenses during the reporting period. The application of accounting policies that require critical accounting estimates involving complex and subjective judgements and use of assumptions in these standalone financial statements have been disclosed appropriately. Accounting estimates could change from period to period. Actual results may differ from these estimates. Appropriate changes in estimates are made as the management becomes aware of changes in circumstances surrounding the estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods which are affected.
(l) . Cash and cash equivalents
For presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts and cash credits are shown within borrowings in current liabilities in the balance sheet.
Cash flows are reported using the indirect method, whereby profit / (loss) after extraordinary items and tax is adjusted for the effects of transactions of noncash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
The cost of the defined plans, compensated absences and the present value of the defined benefit obligation are based on actuarial valuation using the projected unit credit method. 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 the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes on those assumptions. All assumptions are reviewed at each reporting date.
Defined contribution plans (Provident Fund)
In accordance with Indian Law, eligible employees receive benefits from Provident Fund, which is defined contribution plan. Both the employee and employer make monthly contributions to the plan, which is administrated by the Government authorities, each equal to the specific percentage of employee''s basic salary. The Company has no further obligation under the plan beyond its monthly contributions. Obligation for contributions to the plan is recognized as an employee benefit expense in the Statement of Profit and Loss when incurred.
Defined benefit plans (Gratuity)
In accordance with applicable Indian Law, the Company provides for gratuity, a defined benefit retirement plan (the Gratuity Plan) covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, and amount based on respective last drawn salary and the years of employment with the Company. The Company''s net obligation in respect of the Gratuity Plan is calculated by estimating the amount of future benefits that the employees have earned in return of their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognized past service cost and the fair value of plan assets are deducted. The discount rate is the yield at reporting date on risk free government bonds that have maturity dates approximating the terms of the Company''s obligation. The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Company, the recognized asset is limited to the total of any unrecognized past service cost and the present value of the economic benefits available in the form of any future refunds from the plan or reduction in future contribution to the plan. The Company recognizes all re-measurements of net defined benefit liability/asset directly in other comprehensive income.
The employees of the Company are entitled to compensated absences. The employees can carry forward a portion of the unutilized accrued absence and utilize it in future periods or receive cash compensation at retirement or termination of employment for the unutilized accrued compensated absence. The Company recognizes an obligation for compensated absences in the period in which the employee renders the services. The Company provides for the expected cost of compensated absence in the statement of profit and loss as the additional amount that the company expects to pay as a result of the unused entitlement that has accumulated based on actuarial valuations carried out by an independent actuary at the balance sheet date.
Ind AS 116 requires lessees to determine the lease term as non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assess whether its reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to the company''s operations taking into account the location of the asset and the availability of alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future economic conditions, the company has concluded that no changes are required to lease periods relating to existing lease contracts.
A lease that transfers substantially all the risks and rewards incidental to ownership to the lessee is classified as a finance lease. All other leases are classified as operating leases.
Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in profit or loss as finance costs, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Company''s general policy on the borrowing costs. Contingent rentals are recognised as expenses in the periods in which they are incurred.
Operating lease payments are generally recognised as an expense in the profit or loss on a straight-line basis over the lease term. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue.
In March 2019, the Ministry of Corporate Affairs, issued the Companies (Indian Accounting Standards) Amendment Rules 2018, notifying Ind AS 116 "Leases" which replaces Ind AS 17 "Leases". The new standard shall
require lessees to recognize the Leases on their Balance Sheet with limited exemptions related to low value asset and assets with a lease term of less than 12 months.
Lessees will use a single accounting model for all leases. Accordingly, the lessee is required to recognize "Right of Use" asset representing its right to use the underlying asset and a "Lease Liability" representing its obligations to make lease payments.
Investments in subsidiaries, goodwill and intangible assets are tested for impairment at least annually and when events occur or changes in circumstances indicate that the recoverable amount of the asset or cash generating units to which they pertain is less than its carrying value. The recoverable value of cash generating units is higher of value-in-use and fair value less cost to dispose. The calculation of value in use of a cash generating unit involves use of significant estimates and assumptions which includes turnover and earnings multiples, growth rates and net margins used to calculate projected cash flows, risk adjusted discount rate, future economic and market conditions.
(q) Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset unless the asset does not generate cash inflows that are largely independent of those from other assets or Company''s assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assetInitial recognition and measurement
All financial assets are recognized 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. Purchase or sale of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the assets.
Investment in subsidiaries are carried at cost less impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount.
For purposes of subsequent measurement, financial assets are classified in four categories;
at amortised cost through profit or loss
at amortised cost through other comprehensive income
at fair value through other comprehensive income
at fair value through profit or loss
Financial assets at amortized cost
A financial asset is measured at the amortised cost if both the following conditions are met:
The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
This category is the most relevant to the Company. All the Loans and other receivables under financial assets (except investments) are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Trade receivables do not carry any interest and are stated at their nominal value as reduced by impairment amount.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit and loss. The losses arising from impairment are recognised in the statement of profit and loss. This category generally applies to trade and other receivables.
Financial assets at fair value through the statement of profit and loss/other comprehensive income
Instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.
If the Company decides to classify an instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the statement of OCI. There is no recycling of the amounts from OCI to Statement of Profit & Loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Company''s balance sheet) when:
The rights to receive cash flows from the asset have expired, or the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material lay to a third party under a ''pass-through'' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a passthrough arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Impairment of financials assets
The Management has evaluated the impairment provision requirement under IND AS 109 and has listed below major facts for trade and other receivables impairment provisioning:
The Company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e., financial assets which are credit impaired on purchase/ origination.
Expected Credit Loss (ECL) impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss. This amount is reflected under the head ''other expenses'' in the Statement of Profit & Loss. The balance sheet presentation for various financial instruments is described below:
Financial assets measured as at amortized cost and other contractual revenue receivables- ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.
Financial assets measured at FVTOCI- Since financial assets are already reflected at fair value, impairment allowance is not further reduced from its value. Rather, ECL amount is presented as ''accumulated impairment amount'' in the OCI.
Financial liabilitiesInitial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through the statement of profit or loss, loans and borrowings, trade payables and other payables.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Company''s financial liabilities include trade and other payables, loans and borrowings including other payables.
The measurement of financial liabilities depends on their classification, as described below Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit and loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.
This category generally applies to interest-bearing loans and borrowings.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or it expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Government grants are initially recognized at fair value if there is reasonable assurance that they will be received and the Company will comply with the conditions associated with the grant;
(t) Recent accounting pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
Mar 31, 2023
2. SIGNIFICANT ACCOUNTING POLICIES TO FINANCIAL STATEMENTS:
2.1 Basis for preparation of financial accounting
(i) Statement of Compliance
The financial statement of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified pursuant to-Section 133 of the Companies Act, 2013 (''the Act''), read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act together with the comparative period data.
(ii) Historical cost conversion
The Financial Statements have been prepared on historical cost conventions basis, except for the following:
⢠Certain financial instruments that are measured at fair value at the end of each reporting period;
⢠Defined benefit plans - plan assets measured at fair value.
(iii) Current and Non-Current classification
Based on the nature of activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of classifications of its assets and liabilities as current and non-current.
2.2 Use of estimates and assumptions
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of circumstances surrounding the estimates. Changes in estimates are reflected in the financial statement in the period in which changes are made and if material, their effects are disclosed in the notes to the financial statement
The company has consistently applied following accounting policies to all the period presented in these financial statements.
a) Property, plant and equipment
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its tangible assets recognized as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost of the transition date.
Free hold land is carried at cost and all other items of Property, Plant and Equipment are recorded at their cost of acquisition, net of taxes, less accumulated depreciation and impairment losses, if any. The cost thereof comprises of its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost for bringing the asset to its working condition for its intended use.
Borrowing costs on Property, Plant and Equipment''s are capitalised when the relevant recognition criteria specified in Ind AS 23 Borrowing Costs is met.
Significant spares which have a usage period in excess of one year are also considered as part of Property, Plant and Equipment and are depreciated over their useful life.
Decommissioning costs, if any, on Property, Plant and Equipment are estimated at their present value and capitalised as part of such assets.
An item of property, plant and equipment and any significant part initially recognised is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized.
The residual values and useful lives of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Subsequent cost is included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset, is derecognized when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred.
Depreciation:
The Company depreciated its property, plant and equipment over the useful life in the manner prescribed in Schedule II of the Companies Act 2013 for the proportionate period of use during the year. The depreciation on assets is provided on the straight-line method considering the useful life and residual value of respective asset. The residual values are not more than 5% of the original cost of the asset. Depreciation on assets purchased /installed during the year is calculated on a pro-rata basis from the date of such purchase /installation.
b) Intangibles
Intangible assets that are acquired by the Company and that have finite useful lives are measured at cost less accumulated amortization and accumulated impairment losses, if any. Subsequent expenditures are capitalised only when they increase the future economic benefits embodied in the specific asset to which they relate.
De-recognition of intangible assets
Intangible assets are de-recognised either on their disposal or where no future economic benefits are expected from their use. Gain or loss arising on such de-recognition is recognised in profit or loss and are measured as the difference between the net disposal proceeds, if any, and the carrying amount of respective intangible assets as on the date of derecognition.
c) Inventories
Raw Material are valued at lower of moving weighted average cost and net realizable value.
Finished goods are valued at lower of cost or net realizable value.
The cost of work in progress and finished goods comprises direct material, direct labour, other direct cost and related production overheads.
Stores and spares, parts and components are valued at cost.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
d) Impairment of non-financial assets
Assets subject to amortization are tested for impairment provided that an event or change in circumstances indicates that their carrying amount might not be recoverable. These are treated as impaired when the carrying cost thereof exceeds its recoverable value. Recoverable value is higher of the asset''s net selling price or value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount receivable from the sale of an asset in an arm''s length transaction between knowledgeable, willing parties, less the cost of disposal. An impairment loss is charged for when an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
e) Revenue Recognition
Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts and taxes, revenue from sale of goods is recognized on transfer of significant risk and rewards of ownership of products to the customers, which is generally on dispatch of goods.
Revenue from job charges is recognized on completion of job work.
Contract balances Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due a contract asset is recognized for the earned consideration that is conditional.
Trade receivables
A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognized when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Company performs under the contract
Dividend
Dividend income is recognised when the Company''s right to receive the payment is established, which is generally when shareholders approve the dividend.
Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
f) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of noncash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
g) Leases
The Company evaluates each contract or arrangement, whether it qualifies as lease as defined under Ind AS 116.
The Company as a lessee
The Company enters into an arrangement for lease of land, buildings, plant and machinery including computer equipment and vehicles. Such arrangements are generally for a fixed period but may have extension or termination options. The Company assesses, whether the contract is, or contains, a lease, at its inception. A contract is, or contains, a lease if the contract conveys the right to -
a) control the use of an identified asset,
b) obtain substantially all the economic benefits from use of the identified asset, and
c) direct the use of the identified asset
The Company determines the lease term as the non-cancellable period of a lease, together with periods covered by an option to extend the lease, where the Company is reasonably certain to exercise that option.
The Company at the commencement of the lease contract recognizes a Right-of-Use (RoU) asset at cost and corresponding lease liability, except for leases with term of less than twelve months (short term leases) and low-value assets. For these short term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the lease term.
The cost of the right-of-use asset comprises the amount of the initial measurement of the lease liability, any lease payments made at or before the inception date of the lease, plus any initial direct costs, less any lease incentives received. Subsequently, the right-of-use assets are measured at cost less any accumulated depreciation and accumulated impairment losses, if any. The right-of-use assets are depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful life of right-of-use assets are determined on the same basis as those of property, plant and equipment.
The Company applies Ind AS 36 to determine whether an RoU asset is impaired and accounts for any identified impairment loss as described in the impairment of non-financial assets below.
For lease liabilities at the commencement of the lease, the Company measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined, if that rate is not readily determined, the lease payments are discounted using the incremental borrowing rate that the Company would have to pay to borrow funds, including the consideration of factors such as the nature of the asset and location, collateral, market terms and conditions, as applicable in a similar economic environment.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
The Company recognizes the amount of the re-measurement of lease liability as an adjustment to the right-of-use assets. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognizes any remaining amount of the re-measurement in statement of profit and loss.
Lease liability payments are classified as cash used in financing activities in the statement of cash flows.
Company as a lessor-
Leases under which the Company is a lessor are classified as finance or operating leases. Lease contracts where all the risks and rewards are substantially transferred to the lessee, the lease contracts are classified as finance leases. All other leases are classified as operating leases. For leases under which the Company is an intermediate lessor, the Company accounts for the head-lease and the sub-lease as two separate contracts. The sub-lease is further classified either as a finance lease or an operating lease by reference to the RoU asset arising from the head-lease.
h) Foreign Currency Transactions
On initial recognition, transactions in currencies other than the Company''s functional currency (foreign currencies) are translated at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency at the exchange rate at that date Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous period are recognised in profit or loss in the period in which they arise.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
i) Taxation
Current Income Taxes:
The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company and its subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred Tax
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the standalone financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized, or the deferred income tax liability is settled. Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
MAT Credit:
Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as a deferred tax asset only to the extent that there is reasonable certainty that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. The MAT credit to the extent there is reasonable certainty that the Company will utilize the credit is recognised in the Statement of profit and loss and corresponding debit is done to the Deferred Tax Asset as unused tax credit.
j) Employee Benefits
Short term employee benefits:
Employee benefits payable wholly within twelve months of rendering the service the service is classified as short-term employee benefits and are recognized in the period in which the employee renders the related service.
Post-Employment benefits:
Defined benefit plans: All employees are covered under Employees'' Gratuity Scheme., the liability is determined based on actuarial valuation using the Projected Unit Cost Method. Re-measurement of the net defined benefit liability, which comprise actuarial gains/losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest) are recognized in Other Comprehensive Income. Net interest expense and other expenses related to defined benefit plans are recognized in the Statement of Profit and Loss.
Defined contribution plans: All employees are covered under contributory provident fund benefit of a contribution of 12% of basic salary. Contributions to defined contribution scheme is charges to the Statement of Profit and Loss of the year, on due basis. There are no obligations other than the contributions payable to the respective funds.
Long-term employee benefits: Provision for long-term employee benefits comprise of compensated absences. There are measured on the basis of year-end actuarial valuation in line with the Company''s rules for compensated absences. Remeasurement gains or losses are recognized in profit or loss in the period in which they arise.
k) Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are considered as a part of cost of such assets less interest earned on the temporary investment. A qualifying asset is one that necessarily takes substantial period of time to get ready for the intended use. All other borrowing costs are charged to Statement of Profit & Loss in the year in which they are incurred.
Mar 31, 2015
1.1 GENERAL:
The financial statements have been prepared on historical cost basis
and in accordance with the applicable provisions of the Companies Act,
2013 and Accounting Standards referred therein.
1.2 REVENUE RECOGNITION:
(i) All revenue and expenses are accounted on accrual basis, except to
the extent stated otherwise.
(ii) Export incentives granted by Government or other authorities to
encourage exports are accounted on acceptance of the claims by the
authorities and/or when there is reasonable certainty that the claims
would be accepted.
1.3 USE OF ESTIMATES:
The preparation of financial statements in conformity with the
generally accepted accounting principles often requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities on the
date of the financial statements and reported amount of revenue and
expenses during the reporting period. Any differences between the
actual result and estimates are recognized in the period in which the
results are known / materialised.
1.4 FIXED ASSETS:
Fixed assets are stated at cost net of recoverable taxes and includes
amount added on revaluation less accumulated depreciation and
impairment loss if any. All cost including finance cost till
commencement of commercial production, net changes on foreign exchange
contracts and adjustments arising from exchange rate variations
attributable to the fixed assets are capitalised.
1.5 DEPRECIATION:
(i) Depreciation is provided on Straight line method at the rates
derived from useful life of assets and in the manner prescribed in
Schedule II to the Companies Act, 2013
(ii) Freehold land is not amortised/depreciated.
1.6 INVENTORIES:
(i) Inventories are stated at the lower of cost or net realizable
value. Cost is determined on FIFO basis and is reduced by CENVAT & VAT
credits available under the respective laws. Net realizable value is
determined after reducing the estimated selling cost from the estimated
selling price.
(ii) The cost of work in progress and finished goods comprises direct
material, direct labour, other direct cost and related production
overheads. Excise duty is included in the value of the finished goods.
(iii) Stores and spares, parts and components are valued at cost or
below the cost.
1.7 INVESTMENTS:
Long term investments are carried at cost. However, when there is a
diminution in value other than temporary, the provision for diminution
in value is made and the carrying amount of long term investments is
reduced to recognise the decline. Current investments are stated at
lower of cost or fair value.
1.8 PROVISION FOR DOUBTFUL DEBTS / ADVANCES:
Provision is made in accounts for doubtful debts / advances which in
the opinion of the management are considered doubtful of recovery.
1.9 RETIREMENT BENEFITS :
(i) Company's contribution to Provident Fund and Employee's Pension
Scheme, 1995 are charged to Profit & Loss statement.
(ii) For Liabilities in respect of staff gratuity, the Company had
entered into an agreement with the Life Insurance Corporation of India
(LIC) under group gratuity scheme and the periodical payments towards
the premium on the policy is charged to the profit and loss statement.
The additional liability, if any, in respect of the above arising on
retirement are charges to profit and loss accounts based on valuation
report.
(iii) The Company provides for the Liability at year end on account of
unavailed earned leave as per the actuarial valuation.
1.10 FOREIGN CURRENCY TRANSACTIONS:
(i) A transaction in foreign currency is recorded at the exchange rate
prevailing on the date of the transaction
(ii) Gains or losses upon settlement of the transactions during the
year are recognised in the Profit & Loss statement
(iii) Foreign Currency transactions remaining unsettled at the end of
the year are revalued at the exchange rate prevailing at the end of the
year except disputed liabilities & doubtful debts.
(iv) Gains or Losses arising as a result of the above are adjusted in
the Profit & Loss statement
(v) Non monetary foreign currency items are carried at cost.
1.11 BORROWING COSTS:
Borrowing costs directly attributable to the acquisition or
construction of fixed assets are capitalised as part of the cost of the
assets, up to the date, the asset is put to use. Other borrowing costs
are charged to the Profit & Loss statement in the year in which they
are incurred.
1.12 LEASES:
a) Operating Lease:
Lease of assets under which all the risk and rewards of ownership are
effectively retained by the Lessor is classified as operating leases.
Lease payments under operating leases are recognized as an expenses on
accrual basis in accordance with respective lease agreements.
b) Finance Lease:
Assets acquired under leases where Company has substantially all the
risks and rewards of ownership are classified as finance lease. Assets
acquired under finance lease are capitalized and corresponding lease
liability is recorded at an amount equal to the fair value of the
leased asset at the inception of the lease. Initial costs incurred in
connection with the specific leasing activities directly attributable
to activities performed by the Company are included as part of the
amount recognized as an asset under the lease.
1.13 IMPAIRMENT OF ASSETS :
Where there is an indication that if any Asset is impaired, the
recoverable amount, if any, is estimated and the impairment loss is
recognised as an expense in the profit and loss statement to the extent
carrying amount exceeds recoverable amount impairment loss recognized
in earlier accounting period is reversed if there is any improvement in
recoverable amount.
1.14 ACCOUNTING FOR TAXES ON INCOME:
Deferred tax is recognized subject to the consideration of prudence in
respect of deferred tax assets on timing differences,being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods.
1.15 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS :
(i) A provision is recognized when there is a present obligation as a
result of a past event,it is probable that an outflow of resources will
be required to settle the obligation in respect of which reliable
estimate can be made. Provision is not discounted to its present value
and is determined based on the best estimate required to settle the
obligation at the year end date. These are reviewed at each year end
date & adjusted to reflect the best current estimate.
(ii) Disclosure of contingent liabilities are made when there is a
possible obligation or present obligation that may, but probably will
not require an outflow of resources.
(iii) Contingent asset is neither recognized nor disclosed in the
financial statements.
Mar 31, 2014
1.1 GENERAL:
The financial statements have been prepared on historical cost basis
and in accordance with the applicable provisions of the Companies Act,
1956 and Accounting Standards referred therein.
1.2 REVENUE RECOGNITION:
(i) All revenue and expenses are accounted on accrual basis, except to
the extent stated otherwise.
(ii) Export incentives granted by Government or other authorities to
encourage exports are accounted on acceptance of the claims by the
authorities and/or when there is reasonable certainty that the claims
would be accepted.
1.3 USE OF ESTIMATES:
The preparation of financial statements in conformity with the
generally accepted accounting principles often requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities on the
date of the financial statements and reported amount of revenue and
expenses during the reporting period. Any differences between the
actual result and estimates are recognized in the period in which the
results are known/materialised.
1.4 FIXED ASSETS:
Fixed assets are stated at cost net of recoverable taxes and includes
amount added on revaluation less accumulated depreciation and
impairment loss if any. All cost including finance cost till
commencement of commercial production, net changes on foreign exchange
contracts and adjustments arising from exchange rate variations
attributable to the fixed assets are capitalised.
1.5 DEPRECIATION :
(i) Depreciation is provided on Straight line method at the rates and
in the manner prescribed in Schedule XIV to the Company Act, 1956
except on certain Plant & Machineries which have commenced commercial
production during 1992-93 and 1993-94, on which depreciation has been
provided on written down value method at the rates and in the manner
prescribed in Schedule XIV to the Companies Act,1956.
(ii) Free hold land is not amortised/depreciated.
1.6 INVENTORIES:
(i) Inventories are stated at the lower of cost or net realizable
value. Cost is determined on FIFO basis. and is reduced by CENVAT & VAT
credits available under the respective laws. Net realizable value is
determined after reducing the estimated selling cost from the estimated
selling price.
(ii) The cost of work in progress and finished goods comprises direct
material, direct labour, other direct cost and related production
overheads. Excise duty is included in the value of the finished goods.
(iii) Stores and spares, parts and components are valued at cost or
below the cost.
1.7 INVESTMENTS:
Long term investments are carried at cost. However, when there is a
diminution in value other than temporary, the provision for diminution
in value is made and the carrying amount of long term investments is
reduced to recognise the decline. Current investments are stated at
lower of cost or fair value.
1.8 PROVISION FOR DOUBTFUL DEBTS/ADVANCES:
Provision is made in accounts for doubtful debts/advances which in the
opinion of the management are considered doubtful of recovery.
1.9 RETIREMENT BENEFITS:
(i) Company''s contribution to Provident Fund and Employee''s Pension
Scheme, 1995 are charged to Profit & Loss statement.
(ii) For Liabilities in respect of staff gratuity, the Company had
entered into an agreement with the Life Insurance Corporation of India
(LIC) under group gratuity scheme and the periodical payments towards
the premium on the policy is charged to the profit and loss statement.
The additional liability, if any, in respect of the above arising on
retirement and not covered/not funded are paid/provided and
accordingly, charged to the profit and loss statement in the year of
retirement/payment or otherwise.
(iii) Liability for Leave Encashment is determined based on the number
of days of encashable leave to the credit of each employees as on the
balance sheet date and provided in accounts on accrual basis.
1.10 FOREIGN CURRENCY TRANSACTIONS:
(i) A transaction in foreign currency is recorded at the exchange rate
prevailing on the date of the transaction.
(ii) Gains or losses upon settlement of the transactions during the
year are recognised in the Profit & Loss statement.
(iii) Foreign Currency transactions remaining unsettled at the end of
the year are revalued at the exchange rate prevailing at the end of the
year except disputed liabilities & doubtful debts.
(iv) Gains or Losses arising as a result of the above are adjusted in
the Profit & Loss statement.
(v) Non monetary foreign currency items are carried at cost.
1.11 BORROWING COSTS:
Borrowing costs directly attributable to the acquisition or
construction of fixed assets are capitalised as part of the cost of the
assets, up to the date, the asset is put to use. Other borrowing costs
are charged to the Profit & Loss statement in the year in which they
are incurred.
1.12 LEASES:
a) Operating Lease:
Lease of assets under which all the risk and rewards of ownership are
effectively retained by the Lessor is classified as operating leases.
Lease payments under operating leases are recognized as an expenses on
accrual basis in accordance with respective lease agreements.
b) Finance Lease:
Assets acquired under leases where Company has substantially all the
risks and rewards of ownership are classified as finance lease. Assets
acquired under finance lease are capitalized and corresponding lease
liability is recorded at an amount equal to the fair value of the
leased asset at the inception of the lease. Initial costs incurred in
connection with the specific leasing activities directly attribu-table
to activities performed by the Company are included as part of the
amount recognized as an asset under the lease.
1.13 IMPAIRMENT OF ASSETS:
Where there is an indication that if any Asset is impaired, the
recoverable amount, if any, is estimated and the impairment loss is
recognised as an expense in the profit and loss statement to the extent
carrying amount exceeds recoverable amount. Impairment loss recognized
in earlier accounting period is reversed if there is any improvement in
recoverable amount.
1.14 ACCOUNTING FOR TAXES ON INCOME:
Deferred tax is recognized subject to the consideration of prudence in
respect of deferred tax assets on timing differences, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods.
1.15 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
(i) A provision is recognized when there is a present obligation as a
result of a past event, it is probable that an outflow of resources
will be required to settle the obligation in respect of which reliable
estimate can be made. Provision is not discounted to its present value
and is determined based on the best estimate required to settle the
obligation at the year end date. These are reviewed at each year end
date & adjusted to reflect the best current estimate.
(ii) Disclosure of contingent liabilities are made when there is a
possible obligation or present obligation that may,but probably will
not require an outflow of resources.
(iii) Contingent asset is neither recognized nor disclosed in the
financial statements.
Mar 31, 2013
1.1 GENERAL :
The financial statements have been prepared on historical cost basis
and in accordance with the applicable provisions of the Companies Act,
1956 and Accounting Standards referred therein.
1.2 REVENUE RECOGNITION:
(i) All revenue and expenses are accounted on accrual basis, except to
the extent stated otherwise.
(ii) Export incentives granted by Government or other authorities to
encourage exports are accounted on acceptance of the claims by the
authorities and/or when there is reasonable certainty that the claims
would be accepted.
1.3 USE OF ESTIMATES:
The preparation of financial statements in conformity with the
generally accepted accounting principles often requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities on the
date of the financial statements and reported amount of revenue and
expenses during the reporting period. Any differences between the
actual result and estimates are recognized in the period in which the
results are known / materialised.
1.4 FIXED ASSETS :
(i) Fixed assets are stated at cost net of recoverable taxes and
includes amount added on revaluation less accumulated depreciation and
impairment loss if any. All cost including finance cost till
commencement of commercial production, net changes on foreign exchange
contracts and adjustments arising from exchange rate variations
attributable to the fixed assets are capitalised.
1.5 DEPRECIATION:
(i) Depreciation is provided on Straight line method at the rates and
in the manner prescribed in Schedule XIV to the Company Act, 1956
except on certain Plant & Machineries which have commenced commercial
production during 1992-93 and 1993-94, on which depreciation has been
provided on written down value method at the rates and in the manner
prescribed in Schedule XIV to the Companies Act, 1956.
(ii) Freehold land is not amortised/depreciated.
1.6 INVENTORIES:
(i) Inventories are stated at the lower of cost or net realizable
value. Cost is determined on FIFO basis, and is reduced by CENVAT & VAT
credits available under the respective laws.Net realizable value is
determined after reducing the estimated selling cost from the estimated
selling price.
(ii) The cost of work in progress and finished goods comprises direct
material, direct labour, other direct cost and related production
overheads. Excise duty is included in the value of the finished goods.
(iii) Stores and spares, parts and components are valued at cost or
below the cost.
1.7 INVESTMENTS:
Long term investments are carried at cost. However, when there is a
diminution in value other than temporary, the provision for diminution
in value is made and the carrying amount of long term investments is
reduced to recognise the decline. Current investments are stated at
lower of cost or fair value.
1.8 PROVISION FOR DOUBTFUL DEBTS / ADVANCES:
Provision is made in accounts for doubtful debts / advances which in
the opinion of the management are considered doubtful of recovery.
1.9 RETIREMENT BENEFITS :
(i) Company''s contribution to Provident Fund and Employee''s Pension
Scheme, 1995 are charged to Profit & Loss statement.
(ii) For Liabilities in respect of staff gratuity, the Company had
entered into an agreement with the Life Insurance Corporation of India
(LIC) under group gratuity scheme and the periodical payments towards
the premium on the policy is charged to the profit and loss statement.
The additional liability, if any, in respect of the above arising on
retirement and not covered/not funded are paid / provided and
accordingly, charged to the profit and loss statement in the year of
retirement/payment or otherwise.
(iii) Liability for Leave Encashment is determined based on the number
of days of encashable leave to the credit of each employees as on the
balance sheet date and provided in accounts on accrual basis.
1.10 FOREIGN CURRENCY TRANSACTIONS:
(i) A transaction in foreign currency is recorded at the exchange rate
prevailing on the date of the transaction
(ii) Gains or losses upon settlement of the transactions during the
year are recognised in the Profit & Loss statement
(iii) Foreign Currency transactions remaining unsettled at the end of
the year are revalued at the exchange rate prevailing at the end of the
year except disputed liabilities & doubtful debts.
(iv) Gains or Losses arising as a result of the above are adjusted in
the Profit & Loss statement
(v) Non monetary foreign currency items are carried at cost.
1.11 BORROWING COSTS:
Borrowing costs directly attributable to the acquisition or
construction of fixed assets are capitalised as part of the cost of the
assets, up to the date, the asset is put to use. Other borrowing costs
are charged to the Profit & Loss statement in the year in which they
are incurred.
1.12 LEASES:
a) Operating Lease :
Lease of assets under which all the risk and rewards of ownership are
effectively retained by the Lessor is classified as operating leases.
Lease payments under operating leases are recognized as an expenses on
accrual basis in accordance with respective lease agreements.
b) Finance Lease:
Assets acquired under leases where Company has substantially all the
risks and rewards of ownership are classified as finance lease.
Assets acquired under finance lease are capitalized and corresponding
lease liability is recorded at an amount equal to the fair value of the
leased asset at the inception of the lease. Initial costs incurred in
connection with the specific leasing activities directly attributable
to activities performed by the Company are included as part of the
amount recognized as an asset under the lease.
1.13 IMPAIRMENT OF ASSETS:
Where there is an indication that if any Asset is impaired, the
recoverable amount, if any, is estimated and the impairment loss is
recognised as an expense in the profit and loss statement to the extent
carrying amount exceeds recoverable amount. Impairment loss recognized
in earlier accounting period is reversed if there is any improvement in
recoverable amount.
1.14 ACCOUNTING FOR TAXES ON INCOME:
Deferred tax is recognized subject to the consideration of prudence in
respect of deferred tax assets on timing differences, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods.
1.15 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
(i) A provision is recognized when there is a present obligation as a
result of a past event, it is probable that an outflow of resources
will be required to settle the obligation in respect of which reliable
estimate can be made.Provsion is not discounted to its present value
and is determined based on the best estimate required to settle the
obligation at the year end date. These are reviewed at each year end
date & adjusted to reflect the best current estimate.
(ii) Disclosure of contingent liabilities are made when there is a
possible obligation or present obligation that may, but probably will
not require an outflow of resources.
(iii) Contingent asset is neither recognized nor disclosed in the
financial statements.
Mar 31, 2012
1.1 GENERAL:
The financial statements have been prepared on historical cost basis
and in accordance with the applicable provisions of the Companies Act,
1956 and Accounting Standards referred therein.
1.2 REVENUE RECOGNITION:
(i) All revenue and expenses are accounted on accrual basis, except to
the extent stated otherwise.
(ii) Export incentives granted by Government or other authorities to
encourage exports are accounted on acceptance of the claims by the
authorities and/or when there is reasonable certainty that the claims
would be accepted.
1.3 USE OF ESTIMATES:
The preparation of financial statements in conformity with the
generally accepted accounting principles often requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities on the
date of the financial statements and reported amount of revenue and
expenses during the reporting period. Any differences between the
actual result and estimates are recognized in the period in which the
results are known / materialised.
1.4 FIXED ASSETS:
(i) Fixed assets are stated at cost net of recoverable taxes and
includes amount added on revaluation less accumulated depreciation and
impairment loss if any. All cost including finance cost till
commencement of commercial production, net changes on foreign exchange
contracts and adjustments arising from exchange rate variations
attributable to the fixed assets are capitalised.
1.5 DEPRECIATION:
(i) Depreciation is provided on Straight line method at the rates and
in the manner prescribed in Schedule XIV to the Company Act, 1956
except on certain Plant & Machineries which have commenced commercial
production during 1992-93 and 1993-94, on which depreciation has been
provided on written down value method at the rates and in the manner
prescribed in Schedule XIV to the Companies Act,1956.
(ii) Freehold land is not amortised/depreciated.
1.6 INVENTORIES:
(i) Inventories are stated at the lower of cost or net realizable
value. Cost is determined on FIFO basis. and is reduced by CENVAT &
VAT credits available under the respective laws.Net realizable value is
determined after reducing the estimated selling cost from the estimated
selling price.
(ii) The cost of work in progress and finished goods comprises direct
material, direct labour, other direct cost and related production
overheads. Excise duty is included in the value of the finished goods
inventory.
(iii) Raw Materials, stores and spares, parts and components are valued
at cost or below the cost.
1.7 INVESTMENTS:
Long term investments are carried at cost. However, when there is a
diminution in value other than temporary, the provision for diminution
in value is made and the carrying amount of long term investments is
reduced to recognise the decline.Current investments are stated at
lower of cost or fair value.
1.8 PROVISION FOR DOUBTFUL DEBTS / ADVANCES:
Provision is made in accounts for doubtful debts / advances which in
the opinion of the management are considered doubtful of recovery.
1.9 RETIREMENT BENEFITS:
(i) Company's contribution to Provident Fund and Employee's Pension
Scheme, 1995 are charged to Profit & Loss Account.
(ii) For Liabilities in respect of staff gratuity,the Company had
entered into an agreement with the Life Insurance Corporation of India
(LIC) under group gratuity scheme and the periodical payments towards
the premium on the policy is charged to the profit and loss account.The
additional liability, if any, in respect of the above arising on
retirement and not covered/not funded are paid / provided and
accordingly, charged to the profit and loss account in the year of
retirement/payment or otherwise.
(iii) Liability for Leave Encashment is determined based on the number
of days of encashable leave to the credit of each employees as on the
balance sheet date and provided in accounts on accrual basis.
1.10 FOREIGN CURRENCY TRANSACTIONS:
(i) A transaction in foreign currency is recorded at the exchange rate
prevailing on the date of the transaction
(ii) Gains or losses upon settlement of the transactions during the
year are recognised in the Profit & Loss Account
(iii) Foreign Currency transactions remaining unsettled at the end of
the year are revalued at the exchange rate prevailing at the end of the
year except disputed liabilities & doubtful debts.
(iv) Gains or Losses arising as a result of the above are adjusted in
the Profit & Loss Account.
(v) Non monetary foreign currency items are carried at cost.
1.11 BORROWING COSTS:
Borrowing costs directly attributable to the acquisition or
construction of fixed assets are capitalised as part of the cost of the
assets, up to the date, the asset is put to use. Other borrowing costs
are charged to the Profit & Loss Account in the year in which they are
incurred.
1.12 LEASES:
a) Operating Lease:
Lease of assets under which all the risk and rewards of ownership are
effectively retained by the Lessor is classified as operating
leases.Lease payments under operating leases are recognized as an
expenses on accrual basis in accordance with respective lease
agreements.
b) Finance Lease:
Assets acquired under leases where Company has substantially all the
risks and rewards of ownership are classified as finance lease.
Assets acquired under finance lease are capitalized and corresponding
lease liability is recorded at an amount equal to the fair value of the
leased asset at the inception of the lease. Initial costs incurred in
connection with the specific leasing activities directly attributable
to activities performed by the Company are included as part of the
amount recognized as an asset under the lease.
1.13 DEFERRED REVENUE EXPENDITURE:
One time significant expenditure, the benefit of which is likely to
accrue over a longer period as per the management's judgment is treated
as deferred revenue expenditure and written off within a period of not
exceeding five years including year of incurrence of expenditure.
1.14 IMPAIRMENT OF ASSETS:
Where there is an indication that if any Asset is impaired, the
recoverable amount, if any, is estimated and the impairment loss is
recognised as an expense in the profit and loss account to the extent
carrying amount exceeds recoverable amount. Impairment loss recognized
in earlier accounting period is reversed if there is any improvement in
recoverable amount.
1.15 ACCOUNTING FOR TAXES ON INCOME:
Deferred tax is recognized subject to the consideration of prudence in
respect of deferred tax assets on timing differences, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods.
1.16 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
(i) A provision is recognized when there is a present obligation as a
result of a past event, it is probable that an outflow of resources
will be required to settle the obligation in respect of which reliable
estimate can be made.Provsion is not discounted to its present value
and is determined based on the best estimate required to settle the
obligation at the year end date. These are reviewed at each year end
date & adjusted to reflect the best current estimate.
(ii) Disclosure of contingent liabilities are made when there is a
possible obligation or present obligation that may, but probably will
not require an outflow of resources.
(iii) Contingent asset is neither recognized nor disclosed in the
financial statements.
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