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Accounting Policies of Sky Industries Ltd. Company
Mar 31, 2025
1 CORPORATE INFORMATION
Sky Industries Limited is a Public limited incorporated and domiciled in India, under the Indian Companies Act, 1956. Its equity shares are listed on BSE Limited. Its registered office is situated at C-58, TTC Industrial Area, Thane Belapur Road, Pawne, Navi Mumbai - 400 705.
The Company is engaged in manufacturing of âNarrow Woven Fabricsâ. The Company is engaged in manufacturing and marketing in various products like Hook and Loop Tape Fasteners, Value added items, Velvet tapes etc.
2 BASIS OF PREPARATION, MEASUREMENT AND MATERIAL ACCOUNTING POLICIES2.1) BASIS FOR PREPARATION OF ACCOUNTS(a) Basis of preparation
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the âInd ASâ) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.
The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements. All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.
The financial statements are presented in INR, the functional currency of the Company. Items included in the financial statements of the Company are recorded using the currency of the primary economic environment in which the Company operates (the âfunctional currencyâ).
The Standalone financial statements are approved for issue by the Board of Directors on 24th May, 2025.
These financial statements are prepared under the historical cost convention unless otherwise indicated.
2.2) Key Accounting Estimates and Judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions in the application of accounting policies that affect the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Continuous evaluation is done on the estimation and judgements based on historical experience and other factors, including expectations of future events that are believed to be reasonable. Revisions to accounting estimates are recognised prospectively.
Information about critical judgements in applying accounting policies, as well as estimates and assumptions that have the most significant effect to the carrying amounts of assets and liabilities within the next financial year, are included in the following notes:
(a) Measurement of defined benefit obligations
(b) Measurement and likelihood of occurrence of provisions and contingencies
(c) Recognition of deferred tax assets
(d) Measurement of Lease liabilities and Right of Use Asset (ROUA)
2.3 REVENUE RECOGNITION
The Company derives revenues primarily from sale of manufactured goods, traded goods and related services.
Revenue from contracts with customers is recognised when control of the goods is transferred to the customer on satisfaction of performance obligations. The performance obligations as per contracts with customers are fulfilled at the time of dispatch or delivery of goods depending upon the terms agreed with customer. The Company has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods before transferring them to the customer. Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold is net of variable considerable on account of trade discounts and rebates offered by the Company as part of the contract. Amounts disclosed as revenue are net of returns and allowances. The Company collects goods and services tax on behalf of the government and therefore, these are not economic benefits flowing to the Company. Hence, these are excluded from the revenue.
a) Sale of Goods
Revenue from sale of products is recognized when the control on the goods have been transferred to the customer. The performance obligation in case of sale of product is satisfied at a point in time i.e., when the material is shipped to the customer or on delivery to the customer, as may be specified in the contract.
b) Rendering of services
Revenue of services are recognized when the services are rendered.
c) Dividend
Dividend income from investments is recognised when the shareholderâs rights to receive payment have been established.
d) Interest Income
Interest income is accrued on a time proportion basis, by reference to the principal outstanding and the effective interest rate applicable.
e) Export Incentives
Export incentive income is recognised post-export, based on entitlements under prevailing schemes. It is recognised in the year of exports when it is highly probable that no significant reversal will occur. Estimated rates are used at initial recognition and differences on actual receipt are adjusted when known.
2.4 FOREIGN CURRENCY TRANSACTIONS
a) Functional and Presentation Currency
The financial statements are presented in Indian Rupee (INR), which is Companyâs functional and presentation currency.
b) Initial Recognition
Transactions in foreign currencies are recorded at the exchange rate prevailing on the dates of the transactions. Exchange difference arising on foreign exchange transaction settled during the year are recognized in the Statement of profit and loss of the year.
c) Measurement of foreign currency items at the Balance sheet date
Monetary assets and liabilities denominated in foreign currencies are re-translated into functional currency at the exchange rate prevailing at the end of the reporting period. Non monetary assets and liabilities that are measured based on historical cost in a foreign currency are not re-translated. Exchange differences arising out of these transaction are charged to the profit and loss.
2.5 PROPERTY, PLANT AND EQUIPMENTS AND INTANGIBLE ASSETSa) Property, plant and equipment (PPE)i) Recognition and measurement
Freehold land is carried at cost. All other items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses, if any. Cost includes expenses directly attributable to the acquisition of the assets. The cost of an item of a PPE comprises its purchase price including import duty, and other non-refundable taxes or levies and any directly attributable cost of bringing the assets to its working condition of its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
Expenditure incurred on substantial expansion upto the date of commencement of commercial production are capitalised. Subsequent costs are included in the assetâs carrying amount 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. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
b) Capital Work-In-Progress And Pre-Operative Expenses During Construction Period
Capital work-in progress includes expenditure directly related to construction and incidental thereto. The same is transferred or allocated to respective Property, Plant and Equipment on their completion / commencement of commercial production.
Intangible assets are held on the balance sheet at cost less accumulated amortisation and impairment loss if any.
2.6 IMPAIRMENT OF NON- FINANCIAL ASSETS
The Companyâs non-financial assets other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is an indication of impairment. If any such indication exists, then the assetâs recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a discount rate that reflects current market assessments of time value of money and the risks specific to the CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss. Impairment losses recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amount of the other assets of the CGU on a pro rata basis.
An impairment loss in respect of assets for which impairment loss has been recognized in prior periods, the Company reviews at reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
2.7 DEPRECIATION AND AMORTISATION
Depreciation is computed using Straight Line Method (SLM) over the useful lives of the assets as specified in Schedule II to the Companies Act, 2013. Lease hold land is amortised over the period of lease.
|
Useful lives of the items of Property, Plant and Equipment are as follows: |
|
|
Asset |
Estimated Useful Life |
|
Building |
30 Years |
|
Plant & Machinery |
15 Years |
|
Furniture and Fixtures |
10 Years |
|
Vehicles |
8 Years |
|
Other equipment |
6 Years |
Intangible Assets are amortized over their individual estimated useful lives on a Straight Line basis, commencing from the year in which the same are available to the Company for its intended use. The useful life so determined is as follows:
|
Assets |
Amortisation period |
|
Software Licenses |
3 Years |
The management believes that the useful life as given above the best represent the period over which the management expects to use these assets.
The assets; residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Depreciation and amortization on property, plant and equipment added/disposed off during the year has been provided on pro-rata basis with reference to the date of addition/disposal.
Depreciation and amortization methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.
2.8 FINANCIAL INSTRUMENTS
I. Financial Assets
a) Classification of financial assets
The Company classifies financial assets as subsequently measures at amortised cost, fair value through other comprehensive income or fair value through profit & loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.
i) Debt instrument at amortised cost:
A âdebt Instrumentâ is measured at the amortised cost if both the following conditions are met:
- The asset is held within a business model whose objectives is to hold assets for collecting contractual cash flow and
- Contractual terms of the asset give rise on specified dates to cash flow that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
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 and fees or cost that are an integral part of 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. The category generally applies to trade and other receivable.
ii) Debt instrument at fair value through other comprehensive income (FVOCI):
Assets that are held for collection of contractual cash flow and selling the financial assets, where the assetsâ cash flow represents solely payments of principal and interest are measuring at FVOCI, movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue or foreign exchange gains and losses which are recognised in profit and loss. When the financial assets is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/ (losses). Interest income from these financial assets is included in other income using the EIR method. The Company does not have any instruments classified as fair value through other comprehensive income (FVOCI).
iii) Debt instrument measured at fair value through profit and loss (FVTPL):
Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt instrument that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in profit or loss and presented net in the statement of profit and loss within other gains/ (losses) in the period in which it arises. Interest income from these financial assets is included in other income.
iv) Equity investments:
Investment in associates are accounted using equity method.
All other equity investments which are in scope of Ind-AS 109 are measured at fair value. Equity instrument which are held for trading are classified as at FVTPL. For all other equity investments, the Company has decided to classify the same either at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
For equity investments classified as FVOCI, all fair value changes on the instruments, excluding dividend, are recognized in other comprehensive income (OCI). There is no recycling of the amounts from OCI to statement of profit and loss, even on sale of such investment.
Equity investments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of profit and loss.
Costs of certain unquoted equity instruments has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
b) Initial recognition and measurement
All financial assets are recognised initially at fair value and for those instruments that are not subsequently measured at FVTPL, plus/minus transaction cost that are attributable to the acquisition of the financial assets.
Trade receivables are carried at original invoice price as the sales arrangements do not contain any significant financial component. Purchase or sales of financial assets that required delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date,
i.e., the date that the Company commits to purchase or sell the assets.
c) Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) primarily derecognised (i.e. removed from the Companyâs balance sheet) when :
- The rights to receive cash flows from the asset have expired, or
- The Company has neither transferred nor retained substantially all the risks and rewards of all the assets, but has transferred control of the assets.
When the Company has transferred its rights to receive cash flow from an asset or has entered into a pass-through arrangement, it evaluates whether it has transferred substantially all the risks and rewards of ownership. In such cases, the financial asset is derecognised. When it has neither transferred nor retained substantially all of the risks and rewards of the assets, nor transferred control of the assets, the Company continues to recognise the transferred asset to the extent of the Companyâs continuing involvement. In the case, the Company recognises and associated liability. The transferred asset and the associated liability are measured on a basis that reflect the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and maximum amount of consideration that the Company could be required to repay.
d) Impairment of financial assets
In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on following financial assets and credit risk exposure:
- Financial assets that are debt instruments, and are measured at amortised cost e.g., loan, debt security, deposits, and bank balance.
- Trade Receivables
The Company follows âsimplified approachâ for recognition of impairment loss allowance on trade receivables which do not contain a significant financing component.
The application simplified approach does not require the Company to track change in risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. The Company uses a provision matrix to determine impairment loss allowance on the portfolio of trade receivable. The provision matrix based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. At every reporting date, historically observed default rate updated and change in the forward looking estimates are analysed.
II. Financial Liabilities and equity instruments
Debt and equity instruments issued by an entity are classified as either financial liability or as equity in accordance with substance of the contractual arrangements and the definition of a financial liability and an equity instrument.
a) Equity instruments:
An equity instrument is any contact that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by an entity are recognised at the proceeds received, net of direct issue costs.
b) Financial liabilities :- Classification
Financial liabilities classified as FVTPL or other financial liabilities consists of derivative financial instruments, wherein the gain/losses arising from remeasurement of these Instruments of recognized in the statements of profit and loss. Other financial liability (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method.
c) Initial recognition and measurement:
All financial liabilities are recognised initially at fair value and for those instruments that are not subsequently measured at FVTPL, plus/minus transaction cost that are attributable to issue of these instruments.
d) Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or 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 derecognition of the original liability and the recognition of the new liability. The difference in the respective carrying amounts is recognised in the statement of Profit and Loss.
III. Fair Value
The Company determines the fair value of its financial instruments on the basis of the following hierarchy
a) Level 1 : The fair value of financial instruments quoted in active markets is based on their quoted closing price at the balance sheet date. Examples include exchange traded commodity derivatives and other financial instruments in equity and debt securities which are listed in a recognised stock exchange.
b) Level 2 : The fair value of financial instruments that are not traded in active markets 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 armâs length transactions. For example, the fair value of forward exchange contracts, currency swaps and interest rate swaps is determined by discounting estimated future cash flows using a risk-free interest rate.
c) 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).
2.9 INVENTORIES
Inventories are valued at the lower of cost and net realisable value. Cost includes all costs of purchase, conversion costs, and other costs incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price in the ordinary course of business, less the estimated costs of completion and the costs necessary to make the sale.
Cost is determined using the weighted average cost method or specific identification, as applicable.
a) Raw Material
Cost includes purchase price, taxes (other than recoverable taxes), freight, and other directly attributable expenses. Valued using the moving weighted average cost method. Raw materials are not written down below cost if the related finished goods are expected to be sold at or above cost. However, a write-down is made when a decline in the price of raw materials indicates that the cost of finished goods exceeds their net realisable value.
b) Work-in-Progress (WIP)
Valued at cost, including cost of raw materials, direct labour, and a proportion of manufacturing overheads based on the stage of completion. Cost is determined using the moving weighted average basis.
c) Finished Goods
Include cost of raw materials, conversion costs (direct labour, manufacturing overheads) and packing materials. Valued at the lower of cost of production and net realisable value
d) Stock-in-Trade
Valued at cost or net realisable value, whichever is lower, using the moving weighted average or specific identification method, as applicable.
e) Goods-in-Transit
Valued at cost, including directly attributable costs incurred up to the reporting date.
f) Stores and Spares
Valued at weighted average cost, including all incidental procurement costs.
Due allowance is made for obsolete, slow-moving and defective inventories based on periodic evaluation of the usability and marketability of such items
2.10 BORROWING COSTS
Borrowing Costs that are interest and other costs that the Company incurs in connection with the borrowings of funds and is measured with reference to the effective interest rate applicable to the respective borrowing. Borrowing costs include interest cost measured at EIR and exchange difference arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets, wherever applicable, till the assets are ready for their intended use. Such capitalisation is done only when it is probable that the asset will result in future economic benefits and the costs can be measured reliably. Capitalisation of borrowing cost is suspended and charged to statement when active development is interrupted.
Capitalisation of borrowing costs commences when all the following conditions are satisfied:
i. Expenditure for the acquisition, construction or production of a qualifying asset is being incurred;
ii. Borrowing costs are being incurred; and
iii. Activities that are necessary to prepare the asset for its intended use are in progress.
A qualifying asset is one which necessarily takes substantial period to get ready for intended use. All other borrowing costs are charged to revenue account.
2.11 EMPLOYEE BENEFITS
a) Short term employee benefit obligations
Liabilities for wages, salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related services are recognised in respect of employeeâs services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are to be settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
b) Other long term employee benefit obligations i) Compensated absences
The liabilities for earned leave is not expected to be settled wholly within 12 months after the end of the period in which employees render the related service. Therefore they are measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of reporting period using the projected unit credit method. The benefits are discounted using the market yield at the end of reporting period that have terms approximating to the terms of related obligation. Remeasurement as a result of experience adjustments and changes in actuarial assumptions are recognised in the other comprehensive income.
c) Post-employment obligations
The Company operates the following post-employment schemes:
A. Defined benefit plans such as Gratuity
B. Defined contribution plan such as Provident Fund
Defined Benefit Plans
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligations is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expenses in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in present value of the defined benefit obligation resulting from plan amendment or curtailments are recognised immediately in profit or loss as past service cost.
Defined Contribution Plans
The Company pays provident fund contributions to publicly administered funds as per the local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expenses when they are due. Contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payment is available.
Share Based Payments
Employees of the Company receive remuneration in the form of share-based payments in consideration of the services rendered. Under the equity settled share based payment, the fair value on the grant date of the awards given to employees is recognised as âemployee benefit expensesâ with a corresponding increase in equity over the vesting period. The fair value of the options at the grant date is calculated by an independent valuer basis Black Scholes model. At the end of each reporting period, apart from the non-market vesting condition, the expense is reviewed and adjusted to reflect changes to the level of options expected to vest. When the options are exercised, the Company issues fresh equity shares.
For cash-settled share-based payments, the fair value of the amount payable to employees is recognised as âemployee benefit expensesâ with a corresponding increase in liabilities, over the period of non-market vesting conditions getting fulfilled. The liability is remeasured at each reporting period up to, and including the settlement date, with changes in fair value recognised in employee benefits expenses
2.12 ACCOUNTING FOR TAXES ON INCOME
a) Income Taxes
The income tax expense or credit for the period is the tax payable on the current periodâs 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 i.e. as per the provisions of the Income Tax Act, 1961, as amended from time to time. 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.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on the rates and tax laws enacted or substantively enacted, at the reporting date in the country where the Company operates and generates taxable income. Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Current tax assets and liabilities are offset only if, the Company :
i) has legally enforceable right to set off the recognised amounts; and
ii) Intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
b) Deferred Taxes
Deferred tax is recognised in respect of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purpose
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences only if it is probable that future taxable profits will be available against which they can be used. 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 benefits will be realised; such reductions are reversed when the probability of future taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantially enacted at the reporting date.
Deferred Tax Assets and Liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and Deferred Tax is recognised in the Statement of Profit and 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.
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 offset only if, the Company :
i) has legally enforceable right to set off the recognised amounts; and
ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
2.13 PROVISIONS AND CONTINGENT LIABILITIESa) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of managementâs 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 pretax 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 recognised as interest expense.
Contingent liabilities are not provided for and if material, are disclosed by way of notes to accounts. Contingent Liability is disclosed in the case of:
i. A present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obligation;
ii. A present obligation arising from the past events, when no reliable estimate is possible;
iii. A possible obligation arising from the past events, unless the probability of outflow of resources is remote.
a) Basic Earnings Per Share
Basic Earnings Per Share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Companyâs earnings per share is the net profit for the period after deducting preference dividends, if any, and any attributable distribution tax thereto for the period.
2.15 CASH AND CASH EQUIVALENTS
Cash Flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing Cash Flows. The cash flows from operating, investing and financing activities of the Company are segregated.
Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances, demand deposits with banks where the original maturity is three months or less and other short term highly liquid investments net of bank overdrafts which are repayable on demand as these form an integral part of the Companyâs cash management.
The Company recognises a liability for dividends to equity holders of the Company when the dividend is authorised and the dividend is no longer at the discretion of the Company. As per the corporate laws in India, a dividend is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
Mar 31, 2024
MATERIAL ACCOUNTING POLICIES
2.3 REVENUE RECOGNITION
Revenue from contracts with customers is recognized on transfer of control of promised goods or services to a customer at an amount that reflects the consideration to which the Company is expected to be entitled to in exchange for those goods or services.
Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract. This variable consideration is estimated based on the expected value of outflow. Revenue (net of variable consideration) is recognized only to the extent that it is highly probable that the amount will not be subject to significant reversal when uncertainty relating to its recognition is resolved.
a) Sale of Goods
Revenue from sale of products is recognized when the control on the goods have been transferred to the customer. The performance obligation in case of sale of product is satisfied at a point in time i.e., when the material is shipped to the customer or on delivery to the customer, as may be specified in the contract.
b) Rendering of services
Revenue of services are recognized when the services are rendered.
c) Dividend
Dividend income from investments is recognised when the shareholderâs rights to receive payment have been established.
d) Interest Income
Interest income is accrued on a time proportion basis, by reference to the principal outstanding and the effective interest rate applicable.
e) Export Incentives
Export incentives under various schemes are accounted in the year of Exports.
2.4 FOREIGN CURRENCY TRANSACTIONS
a) Functional and Presentation Currency
The financial statements are presented in Indian Rupee (INR), which is Companyâs functional and presentation currency.
b) Initial Recognition
Transactions in foreign currencies are recorded at the exchange rate prevailing on the dates of the transactions. Exchange difference arising on foreign exchange transaction settled during the year are recognized in the Statement of profit and loss of the year.
c) Measurement of foreign currency items at the Balance sheet date
Monetary assets and liabilities denominated in foreign currencies are re-translated into functional currency at the exchange rate prevailing at the end of the reporting period. Non monetary assets and liabilities that are measured based on historical cost in a foreign currency are not re-translated. Exchange differences arising out of these transaction are charged to the profit and loss.
2.5 PROPERTY, PLANT AND EQUIPMENTS AND INTANGIBLE ASSETS
a) Property, plant and equipment (PPE)
i) Recognition and measurement
Freehold land is carried at cost. All other items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses, if any. Cost includes expenses directly attributable to the acquisition of the assets. The cost of an item of a PPE comprises its purchase price including import duty, and other non-refundable taxes or levies and any directly attributable cost of bringing the assets to its working condition of its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
ii) Subsequent expenditure
Expenditure incurred on substantial expansion upto the date of commencement of commercial production are capitalised. Subsequent costs are included in the assetâs carrying amount 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. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
b) Capital Work-In-Progress And Pre-Operative Expenses During Construction Period
Capital work-in progress includes expenditure directly related to construction and incidental thereto. The same is transferred or allocated to respective Property, Plant and Equipment on their completion / commencement of commercial production.
c) Intangible assets
Intangible assets are held on the balance sheet at cost less accumulated amortisation and impairment loss if any.
2.6 IMPAIRMENT OF NON- FINANCIAL ASSETS
The Companyâs non-financial assets other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is an indication of impairment. If any such indication exists, then the assetâs recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a discount rate that reflects current market assessments of time value of money and the risks specific to the CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss. Impairment losses recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amount of the other assets of the CGU on a pro rata basis.
An impairment loss in respect of assets for which impairment loss has been recognized in prior periods, the Company reviews at reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
2.7 DEPRECIATION AND AMORTISATION
Depreciation is computed using Straight Line Method (SLM) over the useful lives of the assets as specified in Schedule II to the Companies Act, 2013. Lease hold land is amortised over the period of lease.
The management believes that the useful life as given above the best represent the period over which the management expects to use these assets.
The assets; residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Depreciation and amortization on property, plant and equipment added/disposed off during the year has been provided on pro-rata basis with reference to the date of addition/disposal.
Depreciation and amortization methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.
2.8 FINANCIAL INSTRUMENTS
I. Financial Assets
a) Classification of financial assets
The Company classifies financial assets as subsequently measures at amortised cost, fair value through other comprehensive income or fair value through profit & loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.
i) Debt instrument at amortised cost:
A âdebt Instrumentâ is measured at the amortised cost if both the following conditions are met:
- The asset is held within a business model whose objectives is to hold assets for collecting contractual cash flow and
- Contractual terms of the asset give rise on specified dates to cash flow that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
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 and fees or cost that are an integral part of 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. The category generally applies to trade and other receivable.
ii) Debt instrument at fair value through other comprehensive income (FVOCI):
Assets that are held for collection of contractual cash flow and selling the financial assets, where the assetsâ cash flow represents solely payments of principal and interest are measuring at FVOCI, movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue or foreign exchange gains and losses which are recognised in profit and loss. When the financial assets is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/ (losses). Interest income from these financial assets is included in other income using the EIR method. The Company does not have any instruments classified as fair value through other comprehensive income (FVOCI).
iii) Debt instrument measured at fair value through profit and loss (FVTPL):
Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt instrument that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in profit or loss and presented net in the statement of profit and loss within other gains/ (losses) in the period in which it arises. Interest income from these financial assets is included in other income.
iv) Equity investments:
Investment in associates are accounted using equity method.
All other equity investments which are in scope of Ind-AS 109 are measured at fair value. Equity instrument which are held for trading are classified as at FVTPL. For all other equity investments, the Company has decided to classify the same either at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
For equity investments classified as FVOCI, all fair value changes on the instruments, excluding dividend, are recognized in other comprehensive income (OCI). There is no recycling of the amounts from OCI to statement of profit and loss, even on sale of such investment.
Equity investments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of profit and loss.
Costs of certain unquoted equity instruments has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
b) Initial recognition and measurement
All financial assets are recognised initially at fair value and for those instruments that are not subsequently measured at FVTPL, plus/minus transaction cost that are attributable to the acquisition of the financial assets.
Trade receivables are carried at original invoice price as the sales arrangements do not contain any significant financial component. Purchase or sales of financial assets that required delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date,
i.e., the date that the Company commits to purchase or sell the assets.
c) Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) primarily derecognised (i.e. removed from the Companyâs balance sheet) when :
- The rights to receive cash flows from the asset have expired, or
- The Company has neither transferred nor retained substantially all the risks and rewards of all the assets, but has transferred control of the assets.
When the Company has transferred its rights to receive cash flow from an asset or has entered into a pass-through arrangement, it evaluates whether it has transferred substantially all the risks and rewards of ownership. In such cases, the financial asset is derecognised. When it has neither transferred nor retained substantially all of the risks and rewards of the assets, nor transferred control of the assets, the Company continues to recognise the transferred asset to the extent of the Companyâs continuing involvement. In the case, the Company recognises and associated liability. The transferred asset and the associated liability are measured on a basis that reflect the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and maximum amount of consideration that the Company could be required to repay.
d) Impairment of financial assets
In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on following financial assets and credit risk exposure:
- Financial assets that are debt instruments, and are measured at amortised cost e.g., loan, debt security, deposits, and bank balance.
- Trade Receivables
The Company follows âsimplified approachâ for recognition of impairment loss allowance on trade receivables which do not contain a significant financing component.
The application simplified approach does not require the Company to track change in risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. The Company uses a provision matrix to determine impairment loss allowance on the portfolio of trade receivable. The provision matrix based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. At every reporting date, historically observed default rate updated and change in the forward looking estimates are analysed.
II. Financial Liabilities and equity instruments
Debt and equity instruments issued by an entity are classified as either financial liability or as equity in accordance with substance of the contractual arrangements and the definition of a financial liability and an equity instrument.
a) Equity instruments:
An equity instrument is any contact that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by an entity are recognised at the proceeds received, net off direct issue costs.
b) Financial liabilities :- Classification
Financial liabilities classified as FVTPL or other financial liabilities consists of derivative financial instruments, wherein the gain/losses arising from remeasurement of these Instruments of recognized in the statements of profit and loss. Other financial liability (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method.
c) Initial recognition and measurement:
All financial liabilities are recognised initially at fair value and for those instruments that are not subsequently measured at FVTPL, plus/minus transaction cost that are attributable to issue of these instruments.
d) Derecognition:
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or 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 derecognition of the original liability and the recognition of the new liability. The difference in the respective carrying amounts is recognised in the statement of Profit and Loss.
III. Fair Value
The Company determines the fair value of its financial instruments on the basis of the following hierarchy:
a) Level 1 : The fair value of financial instruments quoted in active markets is based on their quoted closing price at the balance sheet date. Examples include exchange traded commodity derivatives and other financial instruments in equity and debt securities which are listed in a recognised stock exchange.
b) Level 2 : The fair value of financial instruments that are not traded in active markets 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 armâs length transactions. For example, the fair value of forward exchange contracts, currency swaps and interest rate swaps is determined by discounting estimated future cash flows using a risk-free interest rate.
c) 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).
2.9 INVENTORIES
Inventories are stated at the lower of cost and net realizable value.
Cost of Raw Material is determined on a First In First Out (FIFO) basis.
Packing materials are valued at cost.
Finished goods are valued at cost or net realizable value whichever is lower. Cost comprises direct materials and where applicable, direct labour costs, those overheads but excluding borrowing cost that have been incurred in bringing the inventories to their present location and condition. Cost is arrived on weighted average cost basis.
Work in Progress is valued at cost or net realizable value whichever is less. Cost comprises direct materials and appropriate portion of direct labour costs, manufacturing overheads but excluding borrowing cost that have been incurred in bringing the inventories to their present location and condition.
2.10 BORROWING COSTS
Borrowing Costs that are interest and other costs that the Company incurs in connection with the borrowings of funds and is measured with reference to the effective interest rate applicable to the respective borrowing. Borrowing costs include interest cost measured at EIR and exchange difference arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets, wherever applicable, till the assets are ready for their intended use. Such capitalisation is done only when it is probable that the asset will result in future economic benefits and the costs can be measured reliably. Capitalisation of borrowing cost is suspended and charged to statement when active development is interrupted.
Capitalisation of borrowing costs commences when all the following conditions are satisfied:
i. Expenditure for the acquisition, construction or production of a qualifying asset is being incurred;
ii. Borrowing costs are being incurred; and
iii. Activities that are necessary to prepare the asset for its intended use are in progress.
A qualifying asset is one which necessarily takes substantial period to get ready for intended use. All other borrowing costs are charged to revenue account.
2.11 EMPLOYEE BENEFITS
a) Short term employee benefit obligations
Liabilities for wages, salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related services are recognised in respect of employeeâs services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are to be settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
b) Other long term employee benefit obligations i) Compensated absences
The liabilities for earned leave is not expected to be settled wholly within 12 months after the end of the period in which employees render the related service. Therefore they are measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of reporting period using the projected unit credit method. The benefits are discounted using the market yield at the end of reporting period that have terms approximating to the terms of related obligation. Remeasurement as a result of experience adjustments and changes in actuarial assumptions are recognised in the other comprehensive income.
c) Post-employment obligations
The Company operates the following post-employment schemes:
A. Defined benefit plans such as Gratuity
B. Defined contribution plan such as Provident Fund
Defined Benefit Plans
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligations is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expenses in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in present value of the defined benefit obligation resulting from plan amendment or curtailments are recognised immediately in profit or loss as past service cost.
Defined Contribution Plans
The Company pays provident fund contributions to publicly administered funds as per the local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expenses when they are due. Contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payment is available.
Share Based Payments
Employees of the Company receive remuneration in the form of share-based payments in consideration of the services rendered. Under the equity settled share based payment, the fair value on the grant date of the awards given to employees is recognised as âemployee benefit expensesâ with a corresponding increase in equity over the vesting period. The fair value of the options at the grant date is calculated by an independent valuer basis Black Scholes model. At the end of each reporting period, apart from the non-market vesting condition, the expense is reviewed and adjusted to reflect changes to the level of options expected to vest. When the options are exercised, the Company issues fresh equity shares.
For cash-settled share-based payments, the fair value of the amount payable to employees is recognised as âemployee benefit expensesâ with a corresponding increase in liabilities, over the period of non-market vesting conditions getting fulfilled. The liability is remeasured at each reporting period up to, and including the settlement date, with changes in fair value recognised in employee benefits expenses.
2.12 ACCOUNTING FOR TAXES ON INCOME
a) Income Taxes
The income tax expense or credit for the period is the tax payable on the current periodâs 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 i.e. as per the provisions of the Income Tax Act, 1961, as amended from time to time. 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.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on the rates and tax laws enacted or substantively enacted, at the reporting date in the country where the Company operates and generates taxable income. Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Current tax assets and liabilities are offset only if, the Company :
i) Has legally enforceable right to set off the reocgnised amounts; and
ii) Intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
b) Deferred Taxes
Deferred tax is recognised in respect of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purpose.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences only if it is probable that future taxable profits will be available against which they can be used. 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 benefits will be realised; such reductions are reversed when the probability of future taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantially enacted at the reporting date.
Deferred Tax Assets and Liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and Deferred Tax is recognised in the Statement of Profit and 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.
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 offset only if, the Company :
i) Has legally enforceable right to set off the reocgnised amounts; and
ii) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
Mar 31, 2015
1.1 Basis for preparation of financial statements
The financial statements have been prepared on historical cost
convention and as a going concern and in accordance with the Generally
Accepted Accounting Principles in India (Indian GAAP) to comply with
the Accounting Standards notified under the Companies (Accounting
Standards) Rules, 2006 (as amended) and the Section 211(3C) of the
Companies Act, 1956.The company follows mercantile system of accounting
and recognizes income and expenditure on accrual basis.
Estimates and Assumptions used in the preparation of financial
statements are based upon the management's evaluation of relevant fact
and the circumstances as of the date of the financial statements, which
may differ from the actual results at a subsequent date.
1.2 Inventories:
Inventories are valued at cost or net realizable value whichever is
lower; cost is ascertained on the following basis:
a. Raw Material, Packing Material, tools, spares and consumable are
valued at cost on plus direct cost incurred to bring the stock to its
existing level.
b. Work in progress are valued at cost of manufacturing based on cost
of Raw material and labour and overheads cost up to the relevant stage
of completion.
c. Finished Goods valued at cost or Market price which ever is less.
1.3 Cash and cash equivalents (for purposes of Cash Flow Statement):
Cash comprises cash in hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
1.4 Events occurring after the date of Balance Sheet:
Material events occurring after the date of Balance Sheet are
considered up to the date of approval of the accounts by the board of
directors. There are no substantial events having an impact on the
results of the current year Balance Sheet.
1.5 Prior Period Items and Changes in Accounting Policies;
No Prior Period items have materially affected this year's financial
statements.
1.6 Depreciation:
Depreciation on all tangible assets has been calculated on Straight
Line Method (SLM) as per the rates and manner prescribed under Schedule
XIV of the Companies Act, 1956.
1.7 Revenue recognition:
Sales are accounted on net of tax, less sales Returns / rejection.
Revenue from sale of products is recognized upon passage of title to
the customer on acceptance of goods which generally coincides with the
dispatch of materials.
Export Incentives receivable are accounted on accrual basis.
Dividend Income is recognized when the right to receive the dividend is
unconditional at the Balance Sheet date.
Interest Income is recognized on accrual basis.
1.8 Fixed Asset;
Fixed Assets are accounted at cost of acquisition or construction.
Fixed assets are capitalized net of CENVAT / VAT for which credit is
taken and includes borrowing cost directly attributable to construction
or acquisition of fixed assets, up to the date the asset is ready to
use.
1.9 Employee Benefits
The Company makes annual contributions to the Employee's Group
Gratuity-cum-life assurance scheme of Life Insurance Corporation of
India, a funded, defined benefit plan for qualifying employees. Gratuity
is payable to all eligible employees on super annuation, death or
separation / termination in terms of the provisions of the payment of
Gratuity Act or as per the Company's policy whichever is beneficial to
the employees.
1.10 Borrowing costs:
Borrowing costs that are directly attributable to the acquisition,
construction or production of fixed assets are capitalized as part of
the cost of that asset. Other borrowing costs are recognized as an
expense in the period in which they are incurred.
1.11 Related Party Transactions:
The related parties are identified by the management of the Company and
relied upon by the Auditors. The related party transactions are
reported at their net value (Excluding indirect taxes).
1.12 Taxes on income:
Tax Expenses for the year, comprising Current Tax including Wealth Tax,
and is included in determining the net profit for the year. A provision
is made for the current tax and based on tax liability computed in
accordance with relevant tax rates and tax laws.
1.13 Deferred Tax-Asset/Liability:
The Accounting Standard 22 "Accounting for Taxes on Income" issued by
the Institute of Chartered accountants of India, has become applicable
to the Company. The Deferred Tax is recognized for all 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 and measured using relevant
enacted tax rates. Deferred Tax Assets are recognized only if there is
reasonable certainty that they will be realized and are reviewed for
the appropriateness of their respective carrying value at each balance
sheet date.
1.14 Miscellaneous Expenditure:
Miscellaneous expenditure is written off over a period of future
economic benefit available not exceeding five years.
1.15 Foreign Currency Transaction
All transactions in foreign currency are recorded at the rate of
exchange prevailing on dates when the relevant transactions take place.
In case of payment/realizations against these transactions in the same
accounting year the respective expense/income head is debited/credited.
In case of transactions where payments/realizations take place in the
subsequent years the exchange gains/losses are accounted under exchange
rate difference.
1.16 Provisions and contingencies;
The company recognizes provisions when there is a present legal or
constructive obligation as a result of past event that probably require
an outflow of resources and a reliable estimate can be made of the
amount of the obligation. A disclosure of a contingent liability is
made when there is possible obligation or a present obligation that
may, but probably will not, require an outflow of resources. Where
there is possible obligation or a present obligation that the
likelihood of outflow of resources is remote, no provision or
disclosure is made. Provisions are not discounted to its present value
and are determined based on best estimates required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect current best estimates.
1.17 Capital work in Progress:
The Expenditure which is of Capital nature and the assets for which it
is incurred which has not come into existence/put to use during the
year is shown under this head.
1.18 Earning Per Shares;
The basic earning per share is computed using the weighted average
number of common shares outstanding during the periods. Diluted earning
per share is computed using the weighted average number of common and
dilutive common equivalent shares outstanding during the period, except
where the results would be anti-dilutive.
Mar 31, 2014
1.1 Basis for preparation of financial statements
The financial statements have been prepared on historical cost
convention and as a going concern and in accordance with the Generally
Accepted Accounting Principles in India (Indian GAAP) to comply with
the Accounting Standards notified under the Companies (Accounting
Standards) Rules, 2006 (as amended) and the Section 211(3C) of the
Companies Act, 1956.The company follows mercantile system of accounting
and recognizes income and expenditure on accrual basis.
Estimates and Assumptions used in the preparation of financial
statements are based upon the management''s evaluation of relevant fact
and the circumstances as of the date of the financial statements, which
may differ from the actual results at a subsequent date.
1.2 Inventories;
Inventories are valued at cost or net realizable value whichever is
lower; cost is ascertained on the following basis:
a. Raw Material, Packing Material, tools, spares and consumable are
valued at cost on plus direct cost incurred to bring the stock to its
existing level.
b. Work in progress are valued at cost of manufacturing based on cost
of Raw material and labour and overheads cost up to the relevant stage
of completion.
c. Finished Goods valued at cost or Market price which ever is less.
1.3 Cash and cash equivalents (for purposes of Cash Flow Statement):
Cash comprises cash in hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
1.4 Events occurring after the date of Balance Sheet:
Material events occurring after the date of Balance Sheet are
considered up to the date of approval of the accounts by the board of
directors. There are no substantial events having an impact on the
results of the current year Balance Sheet.
1.5 Prior Period Items and Changes in Accounting Policies:
No Prior Period items have materially affected this year''s financial
statements.
1.6 Depreciation:
Depreciation on all tangible assets has been calculated on Straight
Line Method (SLM) as per the rates and manner prescribed under Schedule
XIV ofthe Companies Act, 1956.
1.7 Revenue recognition:
Sales are accounted on net of tax, less sales Returns / rejection.
Revenue from sale of products is recognized upon passage of title to
the customer on acceptance of goods which generally coincides with the
dispatch of materials.
Export Incentives receivable are accounted on accrual basis.
Dividend Income is recognized when the right to receive the dividend is
unconditional at the Balance Sheet date.
Interest Income is recognized on accrual basis.
1.8 Fixed Asset:
Fixed Assets are accounted at cost of acquisition or construction.
Fixed assets are capitalized net of CENVAT / VAT for which credit is
taken and includes borrowing cost directly attributable to construction
or acquisition of fixed assets, up to the date the asset is ready to
use.
1.9 Employee Benefits
The Company makes annual contributions to the Employee''s Group
Gratuity-cum-life assurance scheme of Life Insurance Corporation of
India, a funded, defined benefit plan for qualifying employees.
Gratuity is payable to all eligible employees on super annuation, death
or separation / termination in terms of the provisions of the payment
of Gratuity Act or as per the Company''s policy whichever is beneficial
to the employees.
1.10 Borrowing costs:
Borrowing costs that are directly attributable to the acquisition,
construction or production of fixed assets are capitalized as part of
the cost of that asset. Other borrowing costs are recognized as an
expense in the period in which they are incurred.
1.11 Related Party Transactions:
The related parties are identified by the management of the Company and
relied upon by the Auditors. The related party transactions are
reported at their net value (Excluding indirect taxes).
1.12 Taxes on income:
Tax Expenses for the year, comprising Current Tax including Wealth Tax,
and is included in determining the net profit for the year. A provision
is made for the current tax and based on tax liability computed in
accordance with relevant tax rates and tax laws.
1.13 Deferred Tax-Asset/Liability:
The Accounting Standard 22 "Accounting for Taxes on Income" issued by
the Institute of Chartered accountants of India, has become applicable
to the Company. The Deferred Tax is recognized for all 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 and measured using relevant
enacted tax rates. Deferred Tax Assets are recognized only if there is
reasonable certainty that they will be realized and are reviewed for
the appropriateness of their respective carrying value at each balance
sheet date.
1.14 Miscellaneous Expenditure;
Miscellaneous expenditure is written off over a period of future
economic benefit available not exceeding five years.
1.15 Foreign Currency Transaction
All transactions in foreign currency are recorded at the rate of
exchange prevailing on dates when the relevant transactions take place.
In case of payment/realizations against these transactions in the same
accounting year the respective expense/income head is debited/credited.
In case of transactions where payments/realizations take place in the
subsequent years the exchange gains/losses are accounted under exchange
rate difference.
1.16 Provisions and contingencies:
The company recognizes provisions when there is a present legal or
constructive obligation as a result of past event that probably require
an outflow of resources and a reliable estimate can be made of the
amount of the obligation. A disclosure of a contingent liability is
made when there is possible obligation or a present obligation that
may, but probably will not, require an outflow of resources. Where
there is possible obligation or a present obligation that the
likelihood of outflow of resources is remote, no provision or
disclosure is made. Provisions are not discounted to its present value
and are determined based on best estimates required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect current best estimates.
1.17 Capital work in Progress;
The Expenditure which is of Capital nature and the assets for which it
is incurred which has not come into existence/put to use during the
year is shown under this head.
1.18 Earning Per Shares:
The basic earning per share is computed using the weighted average
number of common shares outstanding during the periods. Diluted earning
per share is computed using the weighted average number of common and
dilutive common equivalent shares outstanding during the period, except
where the results would be anti-dilutive.
Mar 31, 2013
1.1 Basis for preparationof financial statements
The financial statements have been prepared on historical cost
convention and as a going concern and in accordance with the Generally
Accepted Accounting Principles in India (Indian GAAP) to comply with
the Accounting Standards notified under the Companies (Accounting
Standards) Rules, 2006 (as amended) and the Section 211(3C) of the
Companies Act, 1956.Thecompany follows mercantile systemof accounting
and recognizes income and expenditureon accrual basis. Estimates and
Assumptions used in the preparation of financial statements are based
upon the management''s evaluation of relevant fact and the circumstances
as of the date of the financial statements, which may differ from the
actual results at a subsequent date.
1.2 Inventories :
Inventories are valued at cost or net realizable value whichever is
lower; cost is ascertained on the following basis :
a. Raw Material, Packing Material, tools, spares and consumable are
valued at cost on plus direct cost incurred to bring the stock to its
existing level.
b. Work in progress are valued at cost of manufacturing based on cost
of Raw material and labour and overheads cost up to the relevant stage
of completion.
c. Finished Goods valuedatcostorMarket price which everisless.
1.3 Cash and cash equivalents(forpurposesof CashFlow Statement) :
Cash comprises cash in hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amountsof cash and which are
subjecttoinsignificant riskof changesinvalue.
1.4 Events occurring after the dateof Balance Sheet :
Material events occurring after the date of Balance Sheet are
considered up to the date of approval of the accounts by the boardof
directors. There arenosubstantial events havingan impactonthe resultsof
the current year Balance Sheet.
1.5 Prior Period Items and Changes in Accounting Policies :
No Prior Period items have materially affected this year''s financial
statements.
1.6 Depreciation :
Depreciation on all tangible assets has been calculated on Straight
Line Method (SLM) as per the rates and manner prescribed under Schedule
XIV of the Companies Act, 1956.
1.7 Revenuerecognition :
Sales are accounted on net of tax, less sales Returns / rejection.
Revenue from sale of products is recognized upon passage of titletothe
customeronacceptanceof goods which generally coincides with the
dispatchof materials.
Export Incentives receivable are accountedon accrual basis.
Dividend Income isrecognized when the righttoreceive the
dividendisunconditionalatthe Balance Sheet date.
Interest Incomeisrecognized onaccrual basis.
1.8 Fixed Asset :
Fixed Assets are accounted at cost of acquisition or construction.
Fixed assets are capitalized net of CENVAT / VAT for which credit is
taken and includes borrowing cost directly attributable to construction
or acquisition of fixed assets, up to the date the asset is ready to
use.
1.9 EmployeeBenefits
The Company makes annual contributions to the Employee''s Group
Gratuity-cum-life assurance scheme of Life Insurance Corporation of
India, a funded, defined benefit plan for qualifying employees.
Gratuity is payable to all eligible employees on super annuation, death
or separation / termination in terms of the provisions of the payment
of Gratuity Actorasper the Company''s policy whicheverisbeneficialto the
employees.
1.10 Borrowing costs :
Borrowing costs that are directly attributable to the acquisition,
construction or production of fixed assets are capitalized as part of
the cost of that asset. Other borrowing costs are recognized as an
expense in the period in which they are incurred.
1.11 Related Party Transactions :
The related parties are identified by the management of the Company and
relied upon by the Auditors. The related party transactions are
reported at their net value (Excluding indirect taxes).
1.12 Taxesonincome:
Tax Expenses for the year, comprising Current Tax including Wealth Tax,
and is included in determining the net profit for the year. A provision
is made for the current tax and based on tax liability computed in
accordance with relevant tax rates and tax laws.
1.13 DeferredTax- Asset/ Liability :
The Accounting Standard22 "Accounting for TaxesonIncome" issuedby the
Instituteof Chartered accountantsof India, has become applicable to the
Company. The Deferred Tax is recognized for all 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 and measured using relevant enacted tax rates.
Deferred Tax Assets are recognized onlyif there is reasonable certainty
that they will be realized and are reviewed for the appropriateness of
their respective carrying value at each balance sheet date.
1.14 Miscellaneous Expenditure :
Miscellaneous expenditureis written off overaperiodof future economic
benefit available not exceeding five years.
1.15 ForeignCurrencyTransaction
All transactions in foreign currency are recorded at the rate of
exchange prevailing on dates when the relevant transactions take place.
In case of payment/realizations against these transactions in the same
accounting year the respective expense/income head is debited/credited.
In case of transactions where payments/realizations take place in the
subsequent years the exchangegains/losses are accounted under
exchangerate difference.
1.16 Provisions and contingencies :
The company recognizes provisions when there is a present legal or
constructive obligation as a result of past event that probably require
an outflow of resources and a reliable estimate canbe made of the
amount of the obligation.Adisclosure of a contingent liability is made
when there is possible obligation or a present obligation that may, but
probably will not, requirean outflowof resources. Where thereispossible
obligationor apresent obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made. Provisions are
not discounted to its present value and are determined based on best
estimates required to settle the obligation at the balance sheet date.
These are reviewed at each balance sheet date and adjusted to reflect
current best estimates.
1.17 Capital workinProgress :
The Expenditure whichis of Capital nature and the assets for
whichitisincurred which has not come into existence/put to use during
the yearisshown under this head.
1.18 EarningPerShares:
The basic earning per share is computed using the weighted average
number of common shares outstanding during the periods. Diluted earning
per share is computed using the weighted average number of common and
dilutive common equivalent shares outstanding during the period, except
where the results wouldbeanti-dilutive.
Mar 31, 2010
A. Basis of Accounting:
The financial statements have been prepared to comply in all material
respects with the relevant provision of the Companies Act, 1956 and the
mandatory Accounting Standards issued by the Institute of Chartered
Accountants of India ("ICAI"). The financial statements have been
prepared under the historical cost convention on an accrual basis. The
accounting policies have been consistently applied by the Company and
are consistent with those used in the previous year.
B. Use of Estimates:
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities, revenues and expenses, and disclosure of contingent
liabilities. Difference between the actual results and estimates are
recognized in the period in which the results materialize/are known.
C. Fixed Assets:
Fixed Assets are stated at cost less accumulated depreciation. Cost
includes original cost of acquisition, taxes, duties, interest on
borrowings up to the period of time the asset is put to use, and other
incidental expenses related to acquisition and installation of the
concerned asset.
Carrying amount of cash generating units/assets are reviewed at balance
sheet date to determine whether there is any indication of impairment.
If such indication exists, the recoverable amount is estimated as the
net selling price or value in use, whichever is higher. Impairment
loss, if any, is recognized whenever carrying amount exceeds the
recoverable amount.
Profit or Loss on sale, transfer or disposal of Fixed Asset is
recognized in the year of such sale, transfer or disposal.
D. Depreciation/Amortization:
Depreciation is provided following the straight-line method at the
rates specified in Schedule XIV to the Companies Act, 1956. The cost of
leasehold land is amortized over the period of lease. Computer software
is amortized over a period of 3 years.
E. Investments:
Long Term Investments are stated at cost unless otherwise stated.
Provision is made for diminution in the value of investments, where
diminution is other than temporary.
F. Inventory:
Inventories are valued at lower of cost and net realizable value.
Cost of Raw materials, Packing materials is ascertained on FIFO basis
net of Cenvat.
Finished goods and work in progress include cost of conversion and
other costs incurred in bringing the inventories to their present
location and condition.
Expenditure on Stores and Spares is written off as incurred.
G. Foreign Currency Transactions:
Foreign currency transactions are booked at the exchange rates
prevailing on the date of transaction. Gains and losses arising out of
the subsequent fluctuations in exchange rates are accounted for on
realization. Monetary assets and liabilities have been translated at
the exchange rates prevailing as on the date of Balance Sheet. Exchange
gains / losses are recognized in the Profit and Loss Account. However,
exchange differences relating to fixed assets up to the year ended 31st
March, 2007 have been included in the carrying amount of fixed assets.
The discount or premium in forward exchange contracts, arising from the
difference between the forward rate and the spot rate at the inception
of such a contract is amortized as income or expense over the period of
the contract.
H. Revenue Recognition:
Sales are booked at the time of dispatch from the Companys premises.
Sales are reflected inclusive of excise duty and net of trade discount.
Export incentives receivable under Duty Entitlement Pass Book Scheme
are accounted on accrual basis.
1. Retirement/ Other Benefits:
i. Defined Contribution Plan:
The Company makes defined contribution to Provident Fund, which are
recognized in the Profit and Loss Account on accrual basis.
ii. Defined Benefit Plan:
The Companys liabilities under payment of Gratuity Act, long term
compensated absences and pension are determined on the basis of
actuarial valuation made at the end of each financial year using the
projected unit credit method. Actuarial gain and losses are recognized
immediately in the statement of the Profit And Loss Account as income
or expenses. Obligation is measured at the present value of estimated
future cash flows using a discounted rate that is determined by
reference to market yields at the Balance Sheet date on Government
bonds where the currency and terms of the Government bonds are
consistent with the currency and estimated terms of the defined benefit
obligation.
J. Grants/Subsidies:
Grants / Subsidies related to revenue are presented as a credit to the
profit and loss statement or are deducted in reporting the related
expenses.
K. Borrowing Costs:
Interest and commitment charges incurred in connection with borrowing
of the funds, which are directly attributable to the acquisition,
construction or production of an asset that necessarily takes
substantial period of time to get ready for its intended use, upto the
time the said asset is put to use are capitalized as a part of the cost
of that asset. Other borrowing costs are recognized as an expense in
the period in which they are incurred.
L. Accounting for Taxes on income:
Current tax is determined as the amount of tax payable in respect of
the taxable income for the year, as per the provisions of the
Income-tax Act, 1961.
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax assets, subject to consideration of prudence, are
recognised and carried forward 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. The
tax effect is calculated on the accumulated timing difference at the
year end based on the tax rates and laws enacted or substantially
enacted on the balance sheet date.
M. Proposed Dividend
Proposed Dividend, if any, subject to shareholders approval at the
Annual General Meeting, is provided in the books.
N. Earning Per Share:
The basic earning per share is computed using the weighted average
number of common shares outstanding during the period. Diluted earning
per share is computed using the weighted average number of common and
dilutive common equivalent shares outstanding during the period, except
where the results would be anti-dilutive.
O. Provisions
Provisions are recognized in the accounts in respect of present
probable obligations, the amount of which can be reliably estimated.
Contingent liabilities are disclosed in respect of possible obligations
that arise from past events but their existence is confirmed by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Company.
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