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Accounting Policies of Vaswani Industries Ltd. Company
Mar 31, 2024
SIGNIFICANT ACCOUNTING POLICIES
a. Statement of Compliance
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013. The financial statements have also been prepared in accordance with the relevant presentation requirements of the Companies Act, 2013. The Company adopted Ind AS from 1st april 2017.
b. Basis of Accounting
The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles in India, Accounting Standards notified under Section 133 of the Companies Act, 2013 and other relevant provisions thereof. The preparation of the financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialized. All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 2013. Based on the nature of activityrendered by the Company and the time between the cost incurred and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and noncurrent classification of assets and liabilities. The financial statements are presented in Indian rupees rounded off to the nearest rupees.
c. Use of Estimates
The presentation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumption to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statement and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.
d. Property, Plant & Equipment (PPE)
Tangible assets are stated at cost of acquisition (inclusive of freight) or construction net of CENVAT /Tax credit, less accumulated depreciation and impairment loss, if any. All costs, including financial costs till commencement of commercial production and adjustment arising from exchange rate variations attributable to the fixed assets are capitalized.
e. Capital Work- in- progress
Project under commissioning and other capital work-in- progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest
f. Depreciation
a) Depreciation on fixed assets has been provided on Straight Line Method Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.
b) Depreciation on addition to / deduction from fixed assets is being provided on pro-rata basis from/ to the date of acquisition/ disposal.
g. Inventories
Inventories i.e. stores consumables are valued at cost (exclusive of duties & taxes). By Products are valued at estimated realizable value. Raw Materials are valued at cost plus freight using Weighted Average Cost (WAC) method. Finished Goods are valued at cost or net realizable value (NRV) whichever is lower. Finished goods include cost of conversion and other cost for bringing it in the present location and condition including depreciation.
h. Impairment of Assets
(i) Financial assets (other than a fair value)
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
(ii) Non-Financial assets:
Property, plant and equipment and intangible assets
Property, plant and equipment and intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognized in the statement of profit and loss.
i. Financial Instruments
Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability.
Cash and cash equivalents
Cash comprises cash on 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.
Financial assets at amortized cost
Financial assets are subsequently measured at amortized cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognized in profit or loss.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held for trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
j. Revenue
The Company manufactures and sells a range of steel and other products.
Effective April 1, 2018, the Company has applied Ind AS 115 which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts. The Company has adopted Ind AS 115 using the retrospective effect method. The adoption of the new standard did not have a material impact on the Company.
Sale of products
Revenue from sale of products is recognised when control of the products has transferred, being when the products are delivered to the customer. Delivery occurs when the products have been shipped or delivered to the specific location as the case may be, the risks of loss has been transferred, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied. Sale of products include related ancillary services, if any.
Goods are often sold with volume discounts based on aggregate sales over a 12 months period. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated volume discounts. Accumulated experience is used to estimate and provide for the discounts, using the most likely method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. A liability is recognised for expected volume discounts payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the sales are generally made with a credit term of 30-90 days, which is consistent with market practice. Any obligation to provide a refund is recognised as a provision. A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
The Company does not have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year.
As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
Sale of power
Revenue from sale of power is recognised when the services are provided to the customer based on approved tariff rates established by the respective regulatory authorities. The Company doesnât recognise revenue and an asset for cost incurred in the past that will be recovered.
k. Other income
Interest income is accounted on an accrual basis. Dividend income is accounted for when the right to receive income is established.
l. Borrowing Cost
The Borrowing costs that are attributable to the acquisition or construction or production of the qualifying assets are capitalized as per the cost of such assets up to the date when such assets are ready for its intended use. All other borrowing costs are charged to the Profit & Loss A/c.
m. Accounting for Taxes on Income
(a) Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations.
(b) Deferred tax assets and liabilities are recognized for future tax consequences attributable to the timing differences that result between taxable profit and the profit as per the financial statement. Deferred tax assets & liabilities are measured using the tax rates and the tax laws enacted or substantially enacted as on the Balance Sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty for its realization.
(c) The taxable income of the company being lower than the book profits under the provision of the income tax act 1961. The company is liable to pay Minimum Alternate tax (MAT) on its income.
(d) Considering the future profitability & taxable position in the subsequent years the company has recognized MAT Credit as an assets by crediting the provision for income tax & including the same under Loans & advances in accordance with the Guidance note on âAccounting for Credit available in respect of MAT under Income Tax Act 1961â issued by the Institute of Chartered Accountant of India.
n. Cash Flow Statement
Cash flows are reported using the indirect method prescribed in the relevant Accounting Standard , 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.
o. Foreign Currency Transaction
The financial statements of the Company are presented in Indian Rupees (â''â), which is the functional currency of the Company and the presentation currency for the financial statements.
In preparing the financial statements, transactions in currencies other than the Companyâs functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are re-translated at the rates prevailing at the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are re-translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated.
Exchange differences arising on translation of long-term foreign currency monetary items recognised in the financial statements before the beginning of the first Ind AS financial reporting period in respect of which the Company has elected to recognise such exchange differences in equity or as part of cost of assets as allowed under Ind AS 101-âFirst-time adoption of Indian Accounting Standardsâ are added/deducted to/ from the cost of assets as the case may be. Such exchange differences recognised in equity or as part of cost of assets is recognised in the statement of profit and loss on a systematic basis.
Exchange differences arising on the re-translation or settlement of other monetary items are included in the statement of profit and loss for the period.
Mar 31, 2023
SIGNIFICANT ACCOUNTING POLICIES
a. Statement of Compliance
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013. The financial statements have also been prepared in accordance with the relevant presentation requirements of the Companies Act, 2013. The Company adopted Ind AS from 1st april 2017.
b. Basis of Accounting
The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles in India, Accounting Standards notified under Section 133 of the Companies Act, 2013 and other relevant provisions thereof. The preparation of the financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialized. All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 2013. Based on the nature of activity rendered by the Company and the time between the cost incurred and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and noncurrent classification of assets and liabilities. The financial statements are presented in Indian rupees rounded off to the nearest rupees.
c. Use of Estimates
The presentation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumption to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statement and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.
d. Property, Plant & Equipment (PPE)
Tangible assets are stated at cost of acquisition (inclusive of freight) or construction net of CENVAT /Tax credit, less accumulated depreciation and impairment loss, if any. All costs, including financial costs till commencement of commercial production and adjustment arising from exchange rate variations attributable to the fixed assets are capitalized.
e. Capital Work- in- progress
Project under commissioning and other capital work-in- progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest
f. Depreciation
a) Depreciation on fixed assets has been provided on Straight Line Method Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.
b) Depreciation on addition to / deduction from fixed assets is being provided on pro-rata basis from/ to the date of acquisition/ disposal.
g. Inventories
Inventories i.e. stores consumables are valued at cost (exclusive of duties & taxes). By Products are valued at estimated realizable value. Raw Materials are valued at cost plus freight using Weighted Average Cost (WAC) method. Finished Goods are valued at cost or net realizable value (NRV) whichever is lower. Finished goods include cost of conversion and other cost for bringing it in the present location and condition including depreciation.
h. Impairment of Assets
(i) Financial assets (other than a fair value)
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
(ii) Non-Financial assets:
Property, plant and equipment and intangible assets
Property, plant and equipment and intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognized in the statement of profit and loss.
i. Financial Instruments
Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability.
Cash and cash equivalents
Cash comprises cash on 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.
Financial assets at amortized cost
Financial assets are subsequently measured at amortized cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognized in profit or loss.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held for trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
j. Revenue
The Company manufactures and sells a range of steel and other products.
Effective April 1, 2018, the Company has applied Ind AS 115 which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts. The Company has adopted Ind AS 115 using the retrospective effect method. The adoption of the new standard did not have a material impact on the Company.
Sale of products
Revenue from sale of products is recognised when control of the products has transferred, being when the products are delivered to the customer. Delivery occurs when the products have been shipped or delivered to the specific location as the case may be, the risks of loss has been transferred, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied. Sale of products include related ancillary services, if any.
Goods are often sold with volume discounts based on aggregate sales over a 12 months period. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated volume discounts. Accumulated experience is used to estimate and provide for the discounts, using the most likely method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. A liability is recognised for expected volume discounts payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the sales are generally made with a credit term of 30-90 days, which is consistent with market practice. Any obligation to provide a refund is recognised as a provision. A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
The Company does not have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year.
As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
Sale of power
Revenue from sale of power is recognised when the services are provided to the customer based on approved tariff rates established by the respective regulatory authorities. The Company doesnât recognise revenue and an asset for cost incurred in the past that will be recovered.
k. Other income
Interest income is accounted on an accrual basis. Dividend income is accounted for when the right to receive income is established.
l. Borrowing Cost
The Borrowing costs that are attributable to the acquisition or construction or production of the qualifying assets are capitalized as per the cost of such assets up to the date when such assets are ready for its intended use. All other borrowing costs are charged to the Profit & Loss A/c.
m. Accounting for Taxes on Income
(a) Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations.
(b) Deferred tax assets and liabilities are recognized for future tax consequences attributable to the timing differences that result between taxable profit and the profit as per the financial statement. Deferred tax assets & liabilities are measured using the tax rates and the tax laws enacted or substantially enacted as on the Balance Sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty for its realization.
(c) The taxable income of the company being lower than the book profits under the provision of the income tax act 1961. The company is liable to pay Minimum Alternate tax (MAT) on its income.
(d) Considering the future profitability & taxable position in the subsequent years the company has recognized MAT Credit as an assets by crediting the provision for income tax & including the same under Loans & advances in accordance with the Guidance note on âAccounting for Credit available in respect of MAT under Income Tax Act 1961â issued by the Institute of Chartered Accountant of India.
n. Cash Flow Statement
Cash flows are reported using the indirect method prescribed in the relevant Accounting Standard , 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.
o. Foreign Currency Transaction
The financial statements of the Company are presented in Indian Rupees (â''â), which is the functional currency of the Company and the presentation currency for the financial statements.
In preparing the financial statements, transactions in currencies other than the Companyâs functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are re-translated at the rates prevailing at the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are re-translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated.
Exchange differences arising on translation of long-term foreign currency monetary items recognised in the financial statements before the beginning of the first Ind AS financial reporting period in respect of which the Company has elected to recognise such exchange differences in equity or as part of cost of assets as allowed under Ind AS 101-âFirst-time adoption of Indian Accounting Standardsâ are added/deducted to/ from the cost of assets as the case may be. Such exchange differences recognised in equity or as part of cost of assets is recognised in the statement of profit and loss on a systematic basis.
Exchange differences arising on the re-translation or settlement of other monetary items are included in the statement of profit and loss for the period.
Mar 31, 2018
SIGNIFICANT ACCOUNTING POLICIES a. Statement of Compliance
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013. The financial statements have also been prepared in accordance with the relevant presentation requirements of the Companies Act, 2013. The Company adopted Ind AS from 1st april 2017.
b. Basis of Accounting
The financial statement has been prepared under the historical cost conventional accrual basis of accounting. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS), the provisions of the Companies Act, 2013 ("The Companies Act"), as applicable and guidelines issued by the Securities and Exchange Board of India ("SEBI"). The Ind AS are prescribed under section 133 of the Act read with rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. As these are the Company''s first financial statements prepared in accordance with Ind AS, Ind AS 101, First time Adoption of Indian Accounting Standards has been applied.
Up to the year ended March, 31 2017, the Company prepared its financial statements in accordance with the requirements of the Indian GAAP ("Previous GAAP"), which included Standards notified under the Companies (Accounting Standards) Rules, 2006. The date of transition to Ind AS is April 2016.
c. Use of Estimates
The presentation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumption to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statement and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.
d. Property, Plant & Equipment (PPE)
Tangible assets are stated at cost of acquisition (inclusive of freight) or construction net of CENVAT /Tax credit, less accumulated depreciation and impairment loss, if any. All costs, including financial costs till commencement of commercial production and adjustment arising from exchange rate variations attributable to the fixed assets are capitalized.
e. Capital Work- in- progress
Project under commissioning and other capital work-in- progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest
f. Depreciation
a) Depreciation on fixed assets has been provided on Straight Line Method Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.
b) Depreciation on addition to / deduction from fixed assets is being provided on pro-rata basis from/ to the date of acquisition/ disposal.
g. Inventories
Inventories i.e. stores consumables are valued at cost (exclusive of duties & taxes). By Products are valued at estimated realizable value. Raw Materials are valued at cost plus freight using Weighted Average Cost (WAC) method. Finished Goods are valued at cost or net realizable value (NRV) whichever is lower. Finished goods include cost of conversion and other cost for bringing it in the present location and condition including depreciation.
h. Impairment of Assets
(i) Financial assets (other than a fair value)
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
(ii) Non-Financial asset: Property, plant and equipment and intangible assets
Property, plant and equipment and intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognized in the statement of profit and loss.
i. Financial Instrument
Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability.
Cash and cash equivalents
Cash comprises cash on 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.
Financial assets at amortized cost
Financial assets are subsequently measured at amortized cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are
immediately recognized in profit or loss.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held for trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method.
Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on recognition is also recognized in profit or loss.
j. Revenue Recognition
Revenue is recognized only when risks and rewards incidental to ownership are transferred to the customer, it can be reliably measured and it is reasonable to expect ultimate collection.
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the interest rate applicable.
However, where the amount is immaterial / negligible and/or establishment of accruals / determination of amount are not possible no entries are made for the accrual.
k. Other income
Interest income is accounted on an accrual basis. Dividend income is accounted for when the right to receive income is established.
l. Borrowing Cost
The Borrowing costs that are attributable to the acquisition or construction or production of the qualifying assets are capitalized as per the cost of such assets up to the date when such assets are ready for its intended use. All other borrowing costs are charged to the Profit & Loss A/c.
m. Accounting for Taxes on Income
(a) Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations.
(b) Deferred tax assets and liabilities are recognized for future tax consequences attributable to the timing differences that result between taxable profit and the profit as per the financial statement. Deferred tax assets & liabilities are measured using the tax rates and the tax laws enacted or substantially enacted as on the Balance Sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty for its realization.
(c) The taxable income of the company being lower than the book profits under the provision of the income tax act 1961. The company is liable to pay Minimum Alternate tax (MAT) on its income.
(d) Considering the future profitability & taxable position in the subsequent years the company has recognized MAT Credit as an assets by crediting the provision for income tax & including the same under Loans & advances in accordance with the Guidance note on "Accounting for Credit available in respect of MAT under Income Tax Act 1961" issued by the Institute of Chartered Accountant of India.
n. Cash Flow Statement
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.
o. Foreign Currency Transaction
Transactions in foreign currency are recorded in Rupees by applying the exchange rate prevailing on the date of transaction. Transactions remaining unsettled are translated at the rate of exchange ruling at the end of the year. Exchange differences arising on translation or settlement of monetary items are recognized as income or expenses in the period in which they arise in the Statement of Profit and loss.
p. Provision and Contingencies
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the Financial Statement.
q. Employee Benefits:-
a. Provident Fund is a defined contribution scheme and the contributions are charged to the Profit & Loss A/c of the year when the contributions to the Government Funds is due.
b. Gratuity Liability is defined benefit obligations and is provided for on the basis of Actuary Valuation obtained from Registered Actuary.
c. Short Term Compensated absences are provided for based on estimates. Long Term compensated absences are provided for based on actuarial valuation.
d. Actuarial gains / losses are immediate taken to the profit & loss account and are not deferred.
e. Re-measurement of defined benefit plans in respect of post-employment are charged to the Other Comprehensive Income.
r. Segment Reporting:-
a) Business Segment: - The accounting policies adopted for segment reporting are in the line with the accounting policies of the company. Segment Revenue, Segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, Expenses, Assets, Liabilities which relates to the company as whole and not allocable to segment on reasonable basis have been included under "Unallocated revenue/ expenses/ assets/ liabilities".
b) Geographical Segment: - The Company sells its products within India. The condition prevailing in India being uniform. So no separate geographical segment disclosure is considered necessary.
s. Research & Development Expenditure:-
Revenue expenditure pertaining to research is charged to the Profit and Loss Statement. Development costs of products are charged to the Profit and Loss Statement unless a product''s technological feasibility has been established, in which case such expenditure is capitalized.
t. Intangible assets:-
Cost incurred on intangible assets, resulting in future economic benefits are capitalized as intangible assets and amortized on equated basis over the estimated useful life of such assets.
u. Events Occurring After the Balance Sheet Date:
Events occurring after the balance sheet date and related to circumstances existing on the Balance Sheet are accounted for. Events not related to circumstances existing on the Balance Sheet date are disclosed by way note to accounts.
v. Recently notified Indian Accounting Standards (Ind AS), effective on or after April 1, 2018
Ministry of Corporate Affairs ("MCA") through Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the following new amendments to Ind AS which the company has not applied as they are effective for annual periods beginning on or after April 1, 2018:
Ind AS 115 - Revenue from Contracts with Customers
Ind AS 115 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recognition standard Ind AS 18 Revenue, Ind AS 11 Construction Contracts when it becomes effective. The core principle of Ind AS 115 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Under Ind AS 115, an entity recognizes revenue when (or as) a performance obligation is satisfied, i.e. when ''control'' of the goods or services underlying the particular performance obligation is transferred to the customer. The Company has completed its evaluation of the possible impact of Ind AS 115 and will adopt the standard with all related amendments to all contracts with customers retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application. The Company does not expect the impact of the adoption of the new standard to be material on its retained earnings and to its net income on an ongoing basis.
Ind AS 21 - The effect of changes in Foreign Exchange rates
The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The Company is evaluating the impact of this amendment on its financial statements.
Mar 31, 2015
A. Basis of Accounting
These financial statements have been prepared to comply with the
Generally Accepted Accounting Principles in India (Indian GAAP),
including the Accounting Standards notified under the relevant
provisions of the Companies Act, 2013.
The financial statements are prepared on accrual basis under the
historical cost convention. The financial statements are presented in
Indian rupees rounded off to the nearest rupees.
b. Use of Estimates
The presentation of financial statements in conformity with Indian GAAP
requires judgments, estimates and assumption to be made that affect the
reported amount of assets and liabilities, disclosure of contingent
liabilities on the date of the financial statement and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known / materialized.
c. Fixed Assets
Tangible assets are stated at cost of acquisition (inclusive of
freight) or construction net of Cenvat /Tax credit, less accumulated
depreciation and impairment loss, if any. All costs, including
financial costs till commencement of commercial production and
adjustment arising from exchange rate variations attributable to the
fixed assets are capitalized.
d. Capital Work- in- progress
Project under commissioning and other capital work-in- progress are
carried at cost, comprising direct cost, related incidental expenses
and attributable interest
e. Depreciation
a) Depreciation on fixed assets has been provided on Straight Line
Method Depreciation is provided based on useful life of the assets as
prescribed in Schedule II to the Companies Act, 2013.
b) Depreciation on addition to / deduction from fixed assets is being
provided on pro-rata basis from/ to the date of acquisition/ disposal.
f. Inventories
Inventories i.e. stores consumables are valued at cost (exclusive of
excise). By Products are valued at estimated realizable value. Raw
Materials are valued at cost plus freight using Weighted Average Cost
(WAC) method. Finished Goods are valued at cost or net realizable value
(NRV) whichever is lower. Finished goods include cost of conversion and
other cost for bringing it in the present location and condition
including depreciation.
g. Revenue Recognition
Revenue is recognized only when risks and rewards incidental to
ownership are transferred to the customer, it can be reliably measured
and it is reasonable to expect ultimate collection. Revenue from
operations includes sale of goods, services and excise duty.
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the interest rate applicable.
However, where the amount is immaterial / negligible and/or
establishment of accruals / determination of amount are not possible no
entries are made for the accrual.
h. Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is normally charged
to Profit & Loss account in the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount
i. Investments
Long term investments are carried out at cost less any other temporary
diminution in value, determined on the specific identification basis.
Current investments are carried at the lower of cost and fair value.
Profit & Loss on sale of investment is determined on specific
identification basis.
j. Other income
Interest income is accounted on an accrual basis. Dividend income is
accounted for when the right to receive income is established.
k. Borrowing Cost
The Borrowing costs that are attributable to the acquisition or
construction or production of the qualifying assets are capitalized as
per the cost of such assets up to the date when such assets are ready
for its intended use. All other borrowing costs are charged to the
Profit & Loss A/c.
l. Accounting for Taxes on Income
Current tax is determined as the tax payable in respect of taxable
income for the year and is computed in accordance with relevant tax
regulations. Deferred tax assets and liabilities are recognized for
future tax consequences attributable to the timing differences that
result between taxable profit and the profit as per the financial
statement. Deferred tax assets & liabilities are measured using the tax
rates and the tax laws enacted or substantially enacted as on the
Balance Sheet date. Deferred tax assets are recognized only to the
extent there is reasonable certainty for its realization.
The taxable income of the company being lower than the book profits
under the provision of the income tax act 1961. The company is liable
to pay Minimum Alternate tax (MAT) on its income. Considering the
future profitability & taxable position in the subsequent years the
company has recognized MAT Credit as an assets by crediting the
provision for income tax & including the same under Loans & advances in
accordance with the Guidance note on "Accounting for Credit available
in respect of MAT under Income Tax Act 1961" issued by the Institute of
Chartered Accountant of India.
m. Cash Flow Statement
The cash flow statement is prepared as per the Indirect method
prescribed under "Accounting Standard - 3" Cash Flow Statement issued
by the Institute of Chartered Accountants of India.
n. Foreign Currency Transaction
Transactions in foreign currency are recorded in Rupees by applying the
exchange rate prevailing on the date of transaction. Transactions
remaining unsettled are translated at the rate of exchange ruling at
the end of the year. Exchange gain or loss arising on settlement shall
be adjusted in the carrying amount of the respective fixed assets in
case of loans acquired for acquisition of fixed assets.
o. Provision and Contingencies
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
Financial Statement.
p. Employee Benefits:-
a. Provident Fund is a defined contribution scheme and the
contributions are charged to the Profit & Loss A/c of the year when the
contributions to the Government Funds is due.
b. Gratuity Liability is defined benefit obligations and is provided
for on the basis of following formula:-
= Last drawn Salary * 15/26 * No. of Completed year of Services
The above calculation is done only for those employees who have
completed continuous five year of services. However, the above
calculation of Gratuity is not as per Actuary Valuation.
c. Short Term Compensated absences are provided for based on
estimates. Long Term compensated absences are provided for based on
actuarial valuation.
d. Actuarial gains / losses are immediate taken to the profit & loss
account and are not deferred.
q. Segment Reporting:-
Business Segment: - The accounting policies adopted for segment
reporting are in the line with the accounting policies of the company.
Segment Revenue, Segment expenses, segment assets and segment
liabilities have been identified to segments on the basis of their
relationship to the operating activities of the segment. Revenue,
Expenses, Assets, Liabilities which relates to the company as whole and
not allocable to segment on reasonable basis have been included under
"Unallocated revenue/ expenses/ assets/ liabilities".
Geographical Segment: - The Company sells its products within India.
The condition prevailing in India being uniform. So no separate
geographical segment disclosure is considered necessary.
r. Research & Development Expenditure:-
Revenue expenditure pertaining to research is charged to the Profit and
Loss Statement. Development costs of products are charged to the Profit
and Loss Statement unless a product''s technological feasibility has
been established, in which case such expenditure is capitalized.
s. Intangible assets:-
Cost incurred on intangible assets, resulting in future economic
benefits are capitalized as intangible assets and amortized on equated
basis over the estimated useful life of such assets.
Mar 31, 2014
1. Basis of Accounting
(a) The financial statement has been prepared under the historical cost
convention and generally accepted accounting principles
(b) Accrual method of accounting is followed with regard to income &
expenses
2. Use of Estimates
The presentation of financial statements requires estimates and
assumption to be made that affect the reported amount of assets and
liabilities on the date of the financial statement and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known / materialized.
3. Fixed Assets
Fixed assets are stated at cost of acquisition (inclusive of freight)
or construction net of Cenvat /Tax credit, less accumulated
depreciation. All costs, including financial costs till commencement of
commercial production and adjustment arising from exchange rate
variations attributable to the fixed assets are capitalized.
4. Capital Work- in- progress
Project under commissioning and other capital work-in- progress are
carried at cost, comprising direct cost, related incidental expenses
and attributable interest.
5. Depreciation
a) Depreciation on fixed assets has been provided on Straight Line
Method at the rates and in the manners prescribed in Schedule XIV of
the Companies Act, 1956.
b) Depreciation on addition to / deduction from fixed assets is being
provided on pro-rata basis from/ to the date of acquisition/ disposal.
6. Inventories
Inventories i.e. stores consumables are valued at cost (exclusive of
excise). By Products are valued at estimated realizable value. Raw
Materials are valued at cost plus freight using Weighted Average Cost
(WAC) method. Finished Goods are valued at cost or net realizable value
(NRV) whichever is lower. Finished goods include cost of conversion and
other cost for bringing it in the present location and condition
including depreciation.
7. Revenue Recognition
Mercantile method of accounting is employed unless otherwise
specifically stated elsewhere in this schedule. However, where the
amount is immaterial / negligible and/or establishment of accruals /
determination of amount is not possible no entries are made for the
accrual.
Sales are exclusive of excise duty, sales tax & sales returns.
8. Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is normally charged
to Profit & Loss account in the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount
9. Investment
Long term investments are carried out at cost less any other temporary
diminution in value, determined on the specific identification basis.
Current investments are carried at the lower of cost and fair value.
Profit & Loss on sale of investment is determined on specific
identification basis.
10. Other income:-
Interest income is accounted on an accrual basis. Dividend income is
accounted for when the right to receive income is established.
11. Borrowing Cost
The Borrowing costs that are attributable to the acquisition or
construction or production of the qualifying assets are capitalized as
per the cost of such assets up to the date when such assets are ready
for its intended use. All other borrowing costs are charged to the
Profit & Loss A/c.
12. Accounting for Taxes on Income
Current tax is determined as the tax payable in respect of taxable
income for the year and is computed in accordance with relevant tax
regulations.
Deferred tax assets and liabilities are recognized for future tax
consequences attributable to the timing differences that result between
taxable profit and the profit as per the financial statement. Deferred
tax assets & liabilities are measured using the tax rates and the tax
laws enacted or substantially enacted as on the Balance Sheet date.
Deferred tax assets are recognized only to the extent there is
reasonable certainty for its realization.
The taxable income of the company being lower than the book profits
under the provision of the income tax act 1961. The company is liable
to pay Minimum Alternate tax ( MAT) on its income.
Considering the future profitability & taxable position in the
subsequent years the company has recognized MAT Credit as an assets by
crediting the provision for income tax & including the same under Loans
& advances in accordance with the Guidance note on " Accounting for
Credit available in respect of MAT under Income Tax Act 1961" issued by
the Institute of Chartered Accountant of India.
13. Cash Flow Statement
The cash flow statement is prepared as per the Indirect method
prescribed under "Accounting Standard - 3" Cash Flow Statement issued
by the Institute of Chartered Accountants of India.
14. Foreign Currency Transaction
Transactions in foreign currency are recorded in Rupees by applying the
exchange rate prevailing on the date of transaction. Transactions
remaining unsettled are translated at the rate of exchange ruling at
the end of the year. Exchange gain or loss arising on settlement shall
be adjusted in the carrying amount of the respective fixed assets in
case of loans acquired for acquisition of fixed assets.
15. Provision and Contingencies
Provision involving substantial degree of estimation in measurement is
recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
Financial Statement.
16. Employee Benefits:-
a. Provident Fund is a defined contribution scheme and the
contribution is charged to the Profit & Loss A/c of the year when the
contributions to the Government Funds is due.
b. Gratuity Liability is defined benefit obligations and are provided
for on the basis of following formula:-
= Last drawn Salary * 15/26 * No. of Completed year of Services
The above calculation is done only for those employee who have
completed continuous five year of services. However, the above
calculation of Gratuity is not as per Actuary Valuation.
c. Short Term Compensated absences are provided for based on
estimates. Long Term compensated absences are provided for based on
actuarial valuation.
d. Actuarial gains / losses are immediate taken to the profit & loss
account and are not deferred.
17. Segment Reporting:-
a) Business Segment: - The accounting policies adopted for segment
reporting are in the line with the accounting policies of the company.
Segment Revenue, Segment expenses, segment assets and segment
liabilities have been identified to segments on the basis of their
relationship to the operating activities of the segment. Revenue,
Expenses, Assets, Liabilities which relates to the company as whole and
not allocable to segment on reasonable basis have been included under
"Unallocated revenue/ expenses/ assets/ liabilities".
b) Geographical Segment:- The company sell its products within India.
The condition prevailing in India being uniform. So no separate
geographical segment disclosure is considered necessary.
18. Research & Development Expenditure :-
Revenue expenditure is charged to the Profit and Loss A/c and Capital
Expenditure is added to the cost of Fixed Assets in the year in which
it is incurred and depreciation thereon is provided as per the rates
prescribed in Schedule XIV of the Companies Act, 1956.
19. Intangible assets:-
Cost incurred on intangible assets, resulting in future economic
benefits are capitalized as intangible assets and amortized on equated
basis over the estimated useful life of such assets.
Mar 31, 2013
1. Basis of Accounting
(a) The financial statement has been prepared under the historical cost
convention and generally accepted accounting principles
(b) Accrual method of accounting is followed with regard to income &
expenses
2. Use of Estimates
The presentation of financial statements requires estimates and
assumption to be made that affect the reported amount of assets and
liabilities on the date of the financial statement and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized In the period
in which the results are known / materialized.
3. Fixed Assets
Fixed assets are stated at cost of acquisition (inclusive of freight)
or construction net of Cenvat /Tax credit, less accumulated
depreciation. All costs, including financial costs till commencement of
commercial production and adjustment arising from exchange rate
variations attributable to the fixed assets are capitalized.
4 . Capital Work- In- progress
Project under commissioning and other capital work-in- progress are
carried at cost, comprising direct cost, related incidental expenses
and attributable interest
5. PtprccHtiwri
a) Depreciation on fixed assets has been provided on Straight Line
Method at the rates and in the manners prescribed in Schedule XIV of
the Companies Act, 1956.
b) ''Depredation on addition to / deduction from fixed assets is being
provided on pro-rata basis from/ to the date of acquisition/ disposal.
6. invcntpriM
Inventories i.e. stores consumables are valued at cost (exclusive of
excise). By Products are valued at estimated realizable value. Raw
Materials are valued at cost plus freight using Weighted Average Cost
(WAC) method. Finished Goods are valued at cost or net realizable value
(NRV) whichever Is lower. Finished goods Include cost of conversion and
other cost for bringing it in the present location and condition
including depreciation.
7. Revenue Recognition
Mercantile method of accounting is employed unless otherwise
specifically stated elsewhere In this schedule. However, where the
amount Is immaterial / negligible and/or establishment of accruals /
determination of amount is not possible no entries are made for the
accrual. Sales are exclusive of excise duty, sales tax & sales returns.
8. Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is normally charged
to Profit & Loss account in the year In which an asset is identified as
impaired. The impairment loss recognized in prior accounting period is
reversed if there has been a change In the estimate of recoverable
amount
9. Investment
Long term investments are carried out at cost less any other temporary
diminution in value, determined on the specific identification basis.
Current investments are carried at the lower of cost and fair value.
Profit & Loss on sale of investment is determined on specific
identification basis.
10. Other Income
Interest income is accounted on an accrual basis. Dividend income is
accounted for when the right to receive Income Is established.
11. Borrowing Coat
The Borrowing costs that are attributable to the acquisition or
construction or production of the qualifying assets are capitalized as
per the cost of such assets up to the date when such assets are ready
for its intended use. AH other borrowing costs are charged to the
Profit & Loss A/c.
12. Accounting for Taxes on Income
Current tax is determined as the tax payable in respect of taxable
income for the year and is computed in accordance with relevant tax
regulations.
Deferred tax assets and liabilities are recognized for future tax
consequences attributable to the timing differences that result between
taxable profit and the profit as per the financial statement. Deferred
tax assets & liabilities are measured using the tax rates and the tax
laws enacted or substantially enacted as on the Balance Sheet date.
Deferred tax assets are recognized only to the extent there is
reasonable certainty for its realization.
The taxable income of the company being lower than the book profits
under the provision of the income tax act 1961. The company is liable
to pay Minimum Alternate tax (MAT) on its income.
Considering the future profitability & taxable position in the
subsequent years the company has recognized MAT Credit as an assets by
crediting the provision for income tax & including the same under Loans
& advances in accordance with the Guidance note on " Accounting for
Credit available In respect of MAT under Income Tax Act 1961" issued by
the Institute of Chartered Accountant of India.
13. Cash Flow Statement
The cash flow statement Is prepared as per the Indirect method
prescribed under ''''Accounting Standard - 3" Cash Flow Statement issued
by the Institute of Chartered Accountants of India.
14. Foreign Currency Transaction
Transactions in foreign currency are recorded in Rupees by applying the
exchange rate prevailing on the date of transaction. Transactions
remaining unsettled are translated at the rate of exchange ruling at
the end of the year. Exchange gain or loss arising on settlement shall
be adjusted In the carrying amount of the respective fixed assets in
case of loans acquired for acquisition of fixed assets.
15 . Provision and Contingencies
Provision involving substantial degree of estimation in measurement is
recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
Financial Statement.
16. Employee BeneWts!-
a. Provident Fund is a defined contribution scheme and the
contribution is charged to the Profit & Loss A/c of the year when the
contributions to the Government Funds is due.
b. Gratuity Liability is defined benefit obligations and is provided
for on the basis of following formula: -
= Last drawn Salary * 15/26 * No. of Completed year of Services The
above calculation Is done only for those employees who have completed
continuous five year of services. However, the above calculation of
Gratuity is not as per Actuary Valuation.
c. Short Term Compensated absences are provided for based on
estimates. Long Term compensated absences are provided for based on
actuarial valuation.
d. Actuarial gains / losses are immediate taken to the profit & loss
account and are not deferred.
17. Segment Reporting :-
a) Business Segment - :
The accounting policies adopted for segment reporting are in the line
with the accounting policies of the company. Segment Revenue, Segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of their relationship to the operating
activities of the segment. Revenue, Expenses, Assets, Liabilities
which relates to the company as whole and not allocable to segment on
reasonable basis have been included under "Unallocated revenue/
expenses/ assets/ liabilities".
b) Geographical Segment - :
The company sell Its products within India. The condition prevailing in
India being uniform. So no separate geographical segment disclosure is
considered necessary.
18. Research ft Development Expenditure :-
Revenue expenditure Is charged to the Profit and Loss A/c and Capital
Expenditure Is added to the cost of Fixed Assets In the year in which
it is incurred and depreciation thereon is provided as per the rates
prescribed in Schedule XIV of the Companies Act, 1956.
19. Intangible assets:-
Cost incurred on intangible assets, resulting in future economic
benefits are capitalized as intangible assets and amortized on equated
basis over the estimated useful life of such assets.
Mar 31, 2012
1. Basis of Accounting
(a) The financial statement has been prepared under the historical cost
convention and generally accepted accounting principles
(b) Accrual method of accounting Is followed with regard to Income &
expenses
2. Use of Estimates
The presentation of financial statements requires estimates and
assumption to be made that affect the reported amount of assets and
liabilities on the date of the financial statement and the reported
amount of revenues and expenses during the reporting period.
Difference between the actual results and estimates are recognized In
the period In which the results are known / materialized.
3. Fixed Assets
Fixed assets are stated at cost of acquisition (Inclusive of freight)
or construction net of Cenvat /Tax credit, less accumulated
depreciation. All costs. Including financial costs till commencement of
commercial production and adjustment arising from exchange rate
variations attributable to the fixed assets are capitalized.
4. Capital Work- In- progress
Project under commissioning and other capital work-in- progress are
carried at cost, comprising direct cost, related Incidental expenses
and attributable Interest
5. Depreciation
a) Depredation on fixed assets has been provided on Straight Line
Method at the rates and In the manners prescribed In Schedule XIV of
the Companies Act, 1956.
b) Depredation on addition to / dedudion from fixed assets Is being
provided on pro-rata basis from/ to the date of acquisition/ disposal.
6. Inventories
Inventories I.e. stores consumables are valued at cost (exclusive of
excise). By Products are valued at estimated realizable value. Raw
Materials are valued at cost plus freight using Weighted Average Cost
(WAC) method. Finished Goods are valued at cost or net realizable value
(NRV) whichever Is lower. Finished goods Include cost of conversion and
other cost for bringing It In the present location and condition
Including depredation.
7. Revenue Recognition
Mercantile method of accounting Is employed unless otherwise
specifically stated elsewhere In this schedule. However, where the
amount Is Immaterial / negligible and/or establishment of accruals /
determination of amount Is not possible no entries are made for the
accrual. Sales are exclusive of excise duty, sales tax & sales returns.
An asset Is treated as Impaired when the carrying cost of assets
exceeds Its recoverable value. An Impairment loss Is normally charged
to Profit & Loss account In the year In which an asset Is Identified as
Impaired. The Impairment loss recognized In prior accounting period Is
reversed If there has been a change In the estimate of recoverable
amount
9. Investment
Long term Investments are carried out at cost less any other temporary
diminution In value, determined on the specific Identification basis.
Current Investments are carried at the lower of cost and fair value.
Profit & Loss on sale of Investment Is determined on specific
Identification basis.
10. Other Income
Interest Income Is accounted on an accrual basis. Dividend Income Is
accounted for when the right to receive Income Is established.
11. Borrowing Cost
The Borrowing costs that are attributable to the acquisition or
construction or production of the qualifying assets are capitalized as
per the cost of such assets up to the date when such assets are ready
for Its Intended use. All other borrowing costs are charged to the
Profit & Loss A/c.
12. Accounting for Taxes on Income
Current tax Is determined as the tax payable In respect of taxable
Income for the year and Is computed In accordance with relevant tax
regulations.
Deferred tax assets and liabilities are recognized for future tax
consequences attributable to the timing differences that result between
taxable profit and the profit as per the financial statement. Deferred
tax assets & liabilities are measured using the tax rates and the tax
laws enacted or substantially enacted as on the Balance Sheet date.
Deferred tax assets are recognized only to the extent there Is
reasonable certainty for Its realization.
The taxable Income of the company being lower than the book profits
under the provision of the Income tax act 1961. The company Is liable
to pay Minimum Alternate tax (MAT) on Its Income.
Considering the future profitability & taxable position In the
subsequent years the company has recognized MAT Credit as an assets by
crediting the provision for Income tax & Including the same under Loans
& advances In accordance with the Guidance note on " Accounting for
Credit available In respect of MAT under Income Tax Act 1961' Issued by
the Institute of Chartered Accountant of India.
13. Cash Flow Statement
The cash flow statement Is prepared as per the Indirect method
prescribed under 'Accounting Standard - 3' Cash Flow Statement Issued
by the Institute of Chartered Accountants of India.
14. Foreign Currency Transactions
Transactions In foreign currency are recorded In Rupees by applying the
exchange rate prevailing on the date of transaction. Transactions
remaining unsettled are translated at the rate of exchange ruling at
the end of the year. Exchange gain or loss arising on settlement shall
be adjusted In the carrying amount of the respective fixed assets In
case of loans acquired for acquisition of fixed assets.
15. Provision and Contingencies
Provision Involving substantial degree of estimation In measurement Is
recognized when there Is a present obligation as a result of past
events and It Is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed In the
notes. Contingent assets are neither recognized nor disclosed In the
Financial Statement.
16. Employee Benefits;-
a. Provident Fund Is a defined contribution scheme and the
contribution Is charged to the Profit & Loss A/c of the year when the
contributions to the Government Funds Is due.
b. Gratuity Liability Is defined benefit obligations and Is provided
for on the basis of following formula:-
= Last drawn Salary * 15/26 * No. of Completed year of Services The
above calculation Is done only for those employees who have completed
continuous five year of services. However, the above calculation of
Gratuity Is not as per Actuary Valuation.
c. Short Term Compensated absences are provided for based on
estimates. Long Term compensated absences are provided for based on
actuarial valuation.
d. Actuarial gains / losses are Immediate taken to the profit & loss
account and are not deferred.
17. Segment Reporting;-
a) Business Segment : - The accounting policies adopted for segment
reporting are In the line with the accounting policies of the company.
Segment Revenue, Segment expenses, segment assets and segment
liabilities have been Identified to segments on the basis of their
relationship to the operating activities of the segment. Revenue,
Expenses, Assets, Liabilities which relates to the company as whole and
not allocable to segment on reasonable basis have been Included under
"Unallocated revenue/ expenses/ assets/ liabilities'.
b) Geographical Segment The company sell Its products within India. The
condition prevailing In India being uniform. So no separate
geographical segment disclosure Is considered necessary.
18. Research a Development Expenditure
Revenue expenditure Is charged to the Profit and Loss A/c and Capital
Expenditure Is added to the cost of Fixed Assets In the year In which
It Is Incurred and depreciation thereon Is provided as per the rates
prescribed In Schedule XIV of the Companies Act, 1956.
19. Intangible assets-
Cost Incurred on Intangible assets, resulting In future economic
benefits are capitalized as Intangible assets and amortized on equated
basis over the estimated useful life of such assets.
Mar 31, 2010
Accounting Policies and Notes on Accounts for the period ended
31.03.2010
A. SIGNIFICANT ACCOUNTING POLICIES :-
1. Basis of Accounting
(a) The financial statement has been prepared under the historical cost
convention and generally accepted accounting principles
(b) Accrual method of accounting is followed with regard to income &
expenses
2. Use of Estimates
The presentation of financial statements requires estimates and
assumption to be made that affect the reported amount of assets and
liabilities on the date of the financial statement and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known / materialized.
3. Fixed Assets
Fixed assets are stated at cost of acquisition (inclusive of freight)
or construction net of Cenvat /Tax credit, less accumulated
depreciation. All costs, including financial costs till commencement of
commercial production and adjustment arising from exchange rate
variations attributable to the fixed assets are capitalized.
4. Capital Work- in- progress
Project under commissioning and other capital work-in- progress are
carried at cost, comprising direct cost, related incidental expenses
and attributable interest
5. Depreciation
a) Depreciation on fixed assets has been provided on Straight Line
Method at the rates and in the manners prescribed in Schedule XIV of
the Companies Act, 1956.
b) Depreciation on addition to / deduction from fixed assets is being
provided on pro-rata basis from/to the date of acquisition/disposal.
6. Inventories
Inventories i.e. stores consumables are valued at cost (exclusive of
excise). By Products are valued at estimated realizable value. Raw
Materials are valued at cost plus freight using Weighted Average Cost
(WAC) method. Finished Goods are valued at cost or net realizable value
(NRV) whichever is lower. Finished goods include cost of conversion
and other cost for bringing it in the present location and condition
including depreciation.
7. Revenue Recognition
Mercantile method of accounting is employed unless otherwise
specifically stated elsewhere in this schedule. However, where the
amount is immaterial/ negligible and/or establishment of accruals /
determination of amount is not possible no entries are made for the
accrual.
Sales are exclusive of excise duty, sales tax & sales returns.
8. Impairment of Assets :-
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is normally charged
to Profit & Loss account in the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount
9. Investment
Long term investments are carried out at cost less any other temporary
diminution in value, determined on the specific identification basis.
Current investments are carried at the lower of cost and fair value.
Profit & Loss on sale of investment is determined on specific
identification
10. Other income:-
Interest income is accounted on an accrual basis. Dividend income is
accounted for when the right to receive income is established.
11. Borrowing Cost
The Borrowing costs that are attributable to the acquisition or
construction or production of the qualifying assets are capitalized as
per the cost of such assets up to the date when such assets are ready
for its intended use. All other borrowing costs are charged to the
Profit & Loss A/c.
12. Accounting for Taxes on Income
(a) Current tax is determined as the tax payable in respect of taxable
income for the year and is computed in accordance with relevant tax
regulations.
(b) Defereed tax assets and liabilities are recognized for future tax
consequences attributable to the timing differences that result between
taxable profit and the profit as per the financial statement. Deferred
tax assets & liabilities are measured using the tax rates and the tax
laws enacted or substantially enacted as on the Balance Sheet date.
Deferred tax assets are recognized only to the extent there is
reasonable certainty for its realization.
(c) The taxable income of the company being lower than the book profits
under the provision of the income Tax act 1961. The company is liable
to pay Minimum Alternate tax (MAT) on its income.
(d) Considering the future profitability & taxable position in the
subsequent year the company has recognized MAT Credit as an assets by
crediting the
provision for income tax & including the same under Loans & advances in
accordance with the Guidances note on " Accounting for Credit available
in respect of MAT under Income Tax Act 1961" issued by the Institute of
Chartered Accountant of India.
13. Cash Flow Statement
The; cash flow statement is prepared as per the Indirect method
prescribed under. "Accounting Standard - 3" Cash Flow Statement issued
by the Institute of Chartered Accounts of India.
14. Foreign Currency Transaction :-
Transactions in foreign currency are recorded in Rupees by applying the
exchange rate prevailing on the date of transaction. Transactions
remaining unsettled are translated at the rate of exchange ruling at
the end of the year. Exchange gain or loss arising on settlement,
translation is recognized in the profit & loss a/c.
15. Provision and Contingencies
Provision involving substantial degree of estimation in measurement are
recognized when there is a present obligation as a result of past
events and it is probable that there will bean outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
Financial Statement
16. Employee Benefits:-
a. Provident Fund is a defined contribution scheme and the
contribution are charged to profit & Loss A/c of the year when the
contributions to the Government Funds is due.
b. Gratuity Liability is defined benefit obligations and are provided
for on the basis of following formula:-
= Last drawn Salary * 15/26* No. of completed year of Services
The above calculation is done only for those employee who have
completed continuous five year of services. However, the above
calculation of Gratuity is not as per Actuary Valuation.
c. Short Term Compensated absences are provided for based on on
estimates.
Long Term compensated absences are provided for based on actuarial
valuation.
d. Acturial gains/ losses are immediate taken to the profit & loss
account and are not deferred.
16. Segment Reporting
a) Business Segment:- The accounting policies adopted for segment
reporting are in the line with the accounting policies of the company.
Segment Revenue, Segment expenses, segment assets and segment
liabilities have been identified to segments on the basis of their
relationship to the operating activities of the segment. Revenue,
Expenses, Assets, Liabilities which relates to the company as whole and
not allocated to segment on reasonable basis have been included under "
Unallocated revenue/ expenses/ assets/ liabilities".
b) Geographical Segment: The company sell its products within India.
The condition prevailing in India being uniform. So no seperate
geographical segment disclosure is considered necessary.
17. Research & Development Expenditure :-
Revenue expenditure is charged to the Profit and Loss A/c and Capital
Expenditure is added to the cost of Fixed Assets in the year in which
it is incurred and depreciation thereon is provided as per the rates
prescribed in Schedule XIV of the Companies Act, 1956.
18. Intangible assets:-
Cost incurred on intangible assets, resulting in future economic
benefits are capitalized as intangible assets and armotised on equated
basis over the estimated useful life of such assets.
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