Mar 31, 2016
NOTES TO THE ACCOUNTS
NOTE-1 SIGNIFICANT ACCOUNTING POLICIES
1. BASIS FOR PREPARATION OF ACCOUNTS
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.
2. USE OF ESTIMATES
The presentation of financial statements in conformity with the Indian GAAP requires the management to make estimates and assumptions to be made that may affect the balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts of incomes and expenses during the reporting period. Although these estimates are based upon management best knowledge of current events and actions, actual results could differ from those estimated.
3. FIXED ASSETS
Fixed Assets are stated at cost, net of VAT/ CENVAT, less accumulated depreciation. All costs comprises purchase price, non-refundable duties, levies and borrowing costs till assets are ready for intended use are capitalized. Machinery spares that can be used only in connection with an item of fixed asset and their use is expected to be irregular are capitalized. Replacement of such spares is charged to revenue.
4. INTANGIBLE ASSETS
In accordance with the Accounting Standard (AS) 26 relating to intangible assets, all costs incurred on technical know-how / license fee relating to production process are charged to revenue in the year of incurrence. Costs incurred on technical knowhow / license fee relating to process design/ plants/ facilities are capitalized, at the time of capitalization of the said plant/ facility and amortized on pro-rata basis over a period of five years. Computer software is capitalized on the date of installation and is amortized on pro-rata basis over a period of three years.
5. IMPAIRMENT OF ASSETS
Carrying amount of cash generating units/ assets is reviewed for impairment. Impairment, if any, is recognized where the carrying amount exceeds the recoverable amount being the higher of net realizable price and value in use.
6. EXPENDITURE INCURRED DURING CONSTRUCTION PERIOD
Expenditure directly relating to construction activity including trial run production expenses (net of income, if any) is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which is not related to the construction activity nor is incidental thereto, is charged to the Statement of Profit & Loss.
7. INVESTMENTS
Investments are classified into current and long-term investments. Current investments are stated at the lower of cost and quoted/ fair value. Long term investments are stated at cost less any provision for diminution in value other than temporary.
8. REVENUE RECOGNITION
Sales are inclusive of, excise duty, service tax and net of sales tax and discount. Export sales are net of ocean freight and insurance.
Revenue in respect of long-term turnkey works contracts is recognized under percentage of completion method, subject to such contracts having progressed to a reasonable extent. Revenue in respect of installation services is recognized on completion of services for which ascertained amount is more likely to be recovered than not.
9. INVENTORY VALUATION
Inventories are valued at lower of cost or net realizable value except scrap which is valued at net realizable value. The cost is determined by using first-in-first-out (FIFO) method. Finished goods and work-in progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
Excise duty on closing stock of finished goods and scrap are accounted for on the basis of payments made in respect of goods cleared and also provision is made for goods lying in the factory and included in the value of such stocks.
10. DEPRECIATION
Depreciation on fixed assets is provided on straight-line method at the rates and in the manner prescribed in Schedule II to the Companies Act, 2013, Individual assets costing Rs.5000 or less are depreciated in full in the year of purchase. Leasehold land for lease period below 90 years is amortized over the period of lease from the date of commencement of commercial operations.
1 1. PRODUCT WARRANTY EXPENSES
Liability for Warranties is recognized at the time the claim is accepted. The necessary provisions are made with respect to warranties claimed and accepted up to the end of one month from the close of the year.
12. FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the date of the transaction. Monetary items denominated in foreign currencies outstanding at the year-end are translated at exchange rate applicable as on that date. Non monetary items are valued at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit & Loss.
13. BORROWING COST
Borrowing costs that are attributable to the acquisition or the construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.
14. INCOME ON INVESTMENTS
Dividend on shares is accounted for, as and when the right to receive the same is established.
15. CLAIMS
Claims receivables are accounted for depending on the certainty of receipt and claims payables are accounted at the time of acceptance.
16. EMPLOYEE''S BENEFITS
i. Short term employee benefit are recognized as an expenses at the undiscounted amount in the Statement of Profit & Loss of the year in which related service is rendered.
ii. The company has defined contribution plans for post-retirement benefit, namely Employee Provident Fund Scheme administered through Provident Fund Commissioner and company contribution is charged to revenue every year.
iii. Company contribution to state plans namely Employees State Insurance Fund & Employee Welfare Fund are charged to revenue every year.
iv. The company has defined benefit plan namely Leave Encashment / Compensated absence and Gratuity, the liability for which is determined on the basis of an actuarial valuation at the end of the year. Gratuity Trust is administrated through Life Insurance Corporation of India (LIC).
v. Termination benefits are recognized as expense immediately.
vi. Gain or Loss arising out of actuarial valuation is recognized in the Statement of Profit & Loss as income or expense.
17. DERIVATIVES
In case of forward contracts, the difference between the forward rate and the exchange rate, being the premium or discount, at the inception of a forward exchange contract is recognized as income/expense over the life of the contract. Exchange differences on such contracts are recognized in the Statement of Profit & Loss in the reporting period in which the rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the period.
18. TAXATION
Provision for current income tax is made after taking credit for allowances and exemptions. In case of matters under appeal, due to disallowance or otherwise, provision is made when the said liabilities are accepted by the company.
In accordance with the Accounting Standard 22-Accounting for Taxes on income, the deferred tax for timing differences between the book & tax profit for the period is accounted for using the tax rates and the tax laws that have been enacted or substantively enacted as of the balance sheet date.
Deferred tax assets arising from temporary timing difference are recognized to the extent there is virtual certainty that the asset will be realized in future.
Minimum alternative tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay income tax higher than that computed under MAT, during the period that MAT is permitted to be set off under the Income Tax Act, 1961 (specified period). In the year, in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in the guidance note issued by the Institute of Chartered Accountants of India (ICAI), the said asset is created by way of a credit to the profit and loss and shown as MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay income tax higher than MAT during the specified period.
19. GOVERNMENT GRANTS
Government grant in the nature of promoter''s contribution is treated as capital receipt and credited to investment subsidy account.
Grant in the nature of revenue subsidy is treated as revenue receipt and credited to profit and loss account.
20. PROVISION AND CONTINGENT LIABILITIES
Show cause notices issued by various government authorities are not considered as obligation. When the demand notice are raised against such show cause notice and are disputed by the company then these are classified as possible obligations. 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 notes.
21. LEASES
Leases of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Annual lease payments are recognized as an expense on straight-line basis and in accordance with the respective lease agreements.
Assets acquired under leases where company has substantially all the risks and rewards of ownership are classified as finance lease. Assets acquired under the finance lease are capitalized and corresponding lease liability is recorded at an amount equal to the fair value of the leased asset at the inception of the lease or present value of minimum lease payment, whichever is lower.
22. PROPOSED DIVIDEND
Dividend as proposed by Board of Directors is provided for in the books of account, pending approval at the Annual General Meeting.
23. CENVAT/VAT
CENVAT / VAT claimed on capital assets are credited to assets/ capital work in progress account. CENVAT / VAT on purchase of raw materials and other materials are deducted from the cost of such material.
Mar 31, 2015
1. BASIS FOR PREPARATION OF ACCOUNTS
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.
2. USE OF ESTIMATES
The presentation of financial statements in conformity with the Indian
GAAP requires the management to make estimates and assumptions to be
made that may affect the balances of assets and liabilities and
disclosures relating to contingent liabilities as at the date of the
financial statements and the reported amounts of incomes and expenses
during the reporting period. Although these estimates are based upon
management best knowledge of current events and actions, actual results
could differ from those estimated.
3. FIXED ASSETS
Fixed Assets are stated at cost, net of VAT/ CENVAT, less accumulated
depreciation. All costs comprises purchase price, non-refundable
duties, levies and borrowing costs till assets are ready for intended
use are capitalized. Machinery spares that can be used only in
connection with an item of fixed asset and their use is expected to be
irregular are capitalized. Replacement of such spares is charged to
revenue.
4. INTANGIBLE ASSETS
In accordance with the Accounting Standard (AS) 26 relating to
intangible assets, all costs incurred on technical know-how / license
fee relating to production process are charged to revenue in the year
of incurrence. Costs incurred on technical know-how / license fee
relating to process design/ plants/ facilities are capitalized, at the
time of capitalization of the said plant/ facility and amortized on
pro-rata basis over a period of five years. Computer software is
capitalized on the date of installation and is amortized on pro-rata
basis over a period of three years.
5. IMPAIRMENT OF ASSETS
Carrying amount of cash generating units/ assets is reviewed for
impairment. Impairment, if any, is recognized where the carrying amount
exceeds the recoverable amount being the higher of net realizable price
and value in use.
6. EXPENDITURE INCURRED DURING CONSTRUCTION PERIOD
Expenditure directly relating to construction activity including trial
run production expenses (net of income, if any) is capitalized.
Indirect expenditure incurred during construction period is capitalized
as part of the indirect construction cost to the extent to which the
expenditure is indirectly related to construction or is incidental
thereto. Other indirect expenditure (including borrowing costs)
incurred during the construction period which is not related to the
construction activity nor is incidental thereto, is charged to the
Statement of Profit & Loss.
7. INVESTMENTS
Investments are classified into current and long-term investments.
Current investments are stated at the lower of cost and quoted/ fair
value. Long term investments are stated at cost less any provision for
diminution in value other than temporary.
8. REVENUE RECOGNITION
Sales are inclusive of, excise duty, service tax and net of sales tax
and discount. Export sales are net of ocean freight and
insurance.
Revenue in respect of long-term turnkey works contracts is recognized
under percentage of completion method, subject to such contracts having
progressed to a reasonable extent. Revenue in respect of installation
services is recognized on completion of services for which ascertained
amount is more likely to be recovered than not.
9. INVENTORY VALUATION
Inventories are valued at lower of cost or net realizable value except
scrap which is valued at net realizable value. The cost is determined
by using first-in-first-out (FIFO) method. Finished goods and work-in
progress include costs of conversion and other costs incurred in
bringing the inventories to their present location and condition.
Excise duty on closing stock of finished goods and scrap are accounted
for on the basis of payments made in respect of goods cleared and also
provision is made for goods lying in the factory and included in the
value of such stocks.
10. DEPRECIATION
Depreciation on fixed assets is provided on straight-line method at the
rates and in the manner prescribed in Schedule II to the Companies Act,
2013, Individual assets costing Rs.5000 or less are depreciated in full
in the year of purchase. Leasehold land for lease period below 90 years
is amortized over the period of lease from the date of commencement of
commercial operations.
11. PRODUCT WARRANTY EXPENSES
Liability for Warranties is recognized at the time the claim is
accepted. The necessary provisions are made with respect to warranties
claimed and accepted up to the end of one month from the close of the
year.
12. FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in foreign currencies are normally recorded at
the exchange rate prevailing at the date of the transaction. Monetary
items denominated in foreign currencies outstanding at the year-end are
translated at exchange rate applicable as on that date. Non monetary
items are valued at the exchange rate prevailing on the date of
transaction. Any income or expense on account of exchange difference
either on settlement or on translation is recognized in the Statement
of Profit & Loss.
13. BORROWING COST
Borrowing costs that are attributable to the acquisition or the
construction of qualifying assets are capitalized as part of cost of
such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
14. INCOME ON INVESTMENTS
Dividend on shares is accounted for, as and when the right to receive
the same is established.
15. CLAIMS
Claims receivables are accounted for depending on the certainty of
receipt and claims payables are accounted at the time of acceptance..
16. EMPLOYEE'S BENEFITS
i. Short term employee benefit are recognized as an expenses at the
undiscounted amount in the Statement of Profit & Loss of the year in
which related service is rendered.
ii. The company has defined contribution plans for post-retirement
benefit, namely Employee Provident Fund Scheme administered through
Provident Fund Commissioner and company contribution is charged to
revenue every year.
iii . Company contribution to state plans namely Employees State
Insurance Fund & Employee Welfare Fund are charged to revenue every
year.
iv. The company has defined benefit plan namely Leave Encashment /
Compensated absence and Gratuity, the liability for which is determined
on the basis of an actuarial valuation at the end of the year. Gratuity
Trust is administrated through Life Insurance Corporation of India
(LIC).
v. Termination benefits are recognized as expense immediately.
vi. Gain or Loss arising out of actuarial valuation is recognized in
the Statement of Profit & Loss as income or expense.
17. DERIVATIVES
In case of forward contracts, the difference between the forward rate
and the exchange rate, being the premium or discount, at the inception
of a forward exchange contract is recognized as income/expense over the
life of the contract. Exchange differences on such contracts are
recognized in the Statement of Profit & Loss in the reporting period in
which the rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognized as income or as
expense for the period.
18. TAXATION
Provision for current income tax is made after taking credit for
allowances and exemptions. In case of matters under appeal, due to
disallowance or otherwise, provision is made when the said liabilities
are accepted by the company.
In accordance with the Accounting Standard 22-Accounting for Taxes on
income, the deferred tax for timing differences between the book & tax
profit for the period is accounted for using the tax rates and the tax
laws that have been enacted or substantively enacted as of the balance
sheet date.
Deferred tax assets arising from temporary timing difference are
recognized to the extent there is virtual certainty that the asset will
be realized in future.
Minimum alternative tax (MAT) credit is recognized as an asset only
when and to the extent there is convincing evidence that the Company
will pay income tax higher than that computed under MAT, during the
period that M AT is permitted to be set off under the Income Ta x Act,
1961 (specified period). In the year, in which the MAT credit becomes
eligible to be recognized as an asset in accordance with the
recommendations contained in the guidance note issued by the Institute
of Chartered Accountants of India (ICAI), the said asset is created by
way of a credit to the profit and loss and shown as MAT credit
entitlement. The Company reviews the same at each balance sheet date
and writes down the carrying amount of MAT credit entitlement to the
extent there is no longer convincing evidence to the effect that the
Company will pay income tax higher than MAT during the specified
period.
19. GOVERNMENT GRANTS
Government grant in the nature of promoter's contribution is treated as
capital receipt and credited to investment subsidy account.
Grant in the nature of revenue subsidy is treated as revenue receipt
and credited to profit and loss account.
20. PROVISION AND CONTINGENT LIABILITIES
Show cause notices issued by various government authorities are not
considered as obligation. When the demand notice are raised against
such show cause notice and are disputed by the company then these are
classified as possible obligations. 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 notes.
21. LEASES
Leases of assets under which all the risks and rewards of ownership are
effectively retained by the lessor are classified as operating leases.
Annual lease payments are recognized as an expense on straight-line
basis and in accordance with the respective lease agreements.
Assets acquired under leases where company has substantially all the
risks and rewards of ownership are classified as finance lease. Assets
acquired under the finance lease are capitalized and corresponding
lease liability is recorded at an amount equal to the fair value of the
leased asset at the inception of the lease or present value of minimum
lease payment, whichever is lower.
22. PROPOSED DIVIDEND
Dividend as proposed by Board of Directors is provided for in the books
of account, pending approval at the Annual General Meeting.
23. CENVAT/VAT
CENVAT / VAT claimed on capital assets are credited to assets/ capital
work in progress account. CENVAT / VAT on purchase of raw materials and
other materials are deducted from the cost of such material.
Mar 31, 2014
1. BASIS FOR PREPARATION OF ACCOUNTS
The Financial Statements have been prepared under historical cost
convention on accrual basis in accordance with generally accepted
accounting principles and applicable Accounting Standards as specified
in Companies (Accounting Standard) Rules, 2006 under Companies Act,
1956.
2. USE OF ESTIMATES
The presentation of financial statements in conformity with the Indian
GAAP requires the management to make estimates and assumptions to be
made that may affect the balances of assets and liabilities and
disclosures relating to contingent liabilities as at the date of the
financial statements and the reported amounts of incomes and expenses
during the reporting period. Although these estimates are based upon
management best knowledge of current events and actions, actual results
could differ from those estimated.
3. FIXED ASSETS
Fixed Assets are stated at cost, net of VAT/ CENVAT, less accumulated
depreciation. All costs comprises purchase price, non- refundable
duties, levies and borrowing costs till assets are ready for intended
use are capitalized. Machinery spares that can be used only in
connection with an item of fixed asset and their use is expected to be
irregular are capitalized. Replacement of such spares is charged to
revenue.
4. INTANGIBLE ASSETS
In accordance with the Accounting Standard (AS) 26 relating to
intangible assets, all costs incurred on technical know-how / license
fee relating to production process are charged to revenue in the year
of incurrence. Costs incurred on technical know- how / license fee
relating to process design/ plants/ facilities are capitalized, at the
time of capitalization of the said plant/ facility and amortized on
pro-rata basis over a period of five years. Computer software is
capitalized on the date of installation and is amortized on pro-rata
basis over a period of three years.
5. IMPAIRMENT OF ASSETS
Carrying amount of cash generating units/ assets is reviewed for
impairment. Impairment, if any, is recognized where the carrying amount
exceeds the recoverable amount being the higher of net realizable price
and value in use.
6. EXPENDITURE INCURRED DURING CONSTRUCTION PERIOD
Expenditure directly relating to construction activity including trial
run production expenses (net of income, if any) is capitalized.
Indirect expenditure incurred during construction period is capitalized
as part of the indirect construction cost to the extent to which the
expenditure is indirectly related to construction or is incidental
thereto. Other indirect expenditure (including borrowing costs)
incurred during the construction period which is not related to the
construction activity nor is incidental thereto, is charged to the
Statement of Profit & Loss.
7. INVESTMENTS
Investments are classified into current and long-term investments.
Current investments are stated at the lower of cost and quoted/ fair
value. Long term investments are stated at cost less any provision for
diminution in value other than temporary.
8. REVENUE RECOGNITION
Sales are inclusive of, excise duty, service tax and net of sales tax
and discount. Export sales are net of ocean freight and insurance.
Revenue in respect of long-term turnkey works contracts is recognized
under percentage of completion method, subject to such contracts having
progressed to a reasonable extent. Revenue in respect of installation
services is recognized on completion of services for which ascertained
amount is more likely to be recovered than not.
9. INVENTORY VALUATION
Inventories are valued at lower of cost or net realizable value except
scrap which is valued at net realizable value. The cost is determined
by using first-in-first-out (FIFO) method. Finished goods and work-in
progress include costs of conversion and other costs incurred in
bringing the inventories to their present location and condition.
Excise duty on closing stock of finished goods and scrap are accounted
for on the basis of payments made in respect of goods cleared and also
provision is made for goods lying in the factory and included in the
value of such stocks.
10. DEPRECIATION
Depreciation on fixed assets is provided on straight-line method at the
rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956, except in case of mobile phones on which depreciation has
been charged on pro-rata basis over four years . Individual assets
costing Rs.5000 or less are depreciated in full in the year of
purchase. Leasehold land for lease period below 90 years is amortized
over the period of lease from the date of commencement of commercial
operations.
11. PRODUCT WARRANTY EXPENSES
Liability for Warranties is recognized at the time the claim is
accepted. The necessary provisions are made with respect to warranties
claimed and accepted up to the end of one month from the close of the
year.
12. FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in foreign currencies are normally recorded at
the exchange rate prevailing at the date of the transaction. Monetary
items denominated in foreign currencies outstanding at the year-end are
translated at exchange rate applicable as on that date. Non monetary
items are valued at the exchange rate prevailing on the date of
transaction. Any income or expense on account of exchange difference
either on settlement or on translation is recognized in the Statement
of Profit & Loss.
13. BORROWING COST
Borrowing costs that are attributable to the acquisition or the
construction of qualifying assets are capitalized as part of cost of
such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
14. INCOME ON INVESTMENTS
Dividend on shares is accounted for, as and when the right to receive
the same is established.
15. CLAIMS
Claims receivables are accounted for depending on the certainty of
receipt and claims payables are accounted at the time of acceptance.
16. EMPLOYEE''S BENEFITS
i. Short term employee benefit are recognized as an expenses at the
undiscounted amount in the Statement of Profit & Loss of the year in
which related service is rendered.
ii. The company has defined contribution plans for post-retirement
benefit, namely Employee Provident Fund Scheme administered through
Provident Fund Commissioner and company contribution is charged to
revenue every year.
iii. Company contribution to state plans namely Employees State
Insurance Fund & Employee Welfare Fund are charged to revenue every
year.
iv. The company has defined benefit plan namely Leave Encashment /
Compensated absence and Gratuity, the liability for which is determined
on the basis of an actuarial valuation at the end of the year. Gratuity
Trust is administrated through Life Insurance Corporation of India
(LIC).
v. Termination benefits are recognized as expense immediately.
vi. Gain or Loss arising out of actuarial valuation is recognized in
the Statement of Profit & Loss as income or expense.
17. DERIVATIVES
In case of forward contracts, the difference between the forward rate
and the exchange rate, being the premium or discount, at the inception
of a forward exchange contract is recognized as income/expense over the
life of the contract. Exchange differences on such contracts are
recognized in the Statement of Profit & Loss in the reporting period in
which the rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognized as income or as
expense for the period.
18. TAXATION
Provision for current income tax is made after taking credit for
allowances and exemptions. In case of matters under appeal, due to
disallowance or otherwise, provision is made when the said liabilities
are accepted by the company.
In accordance with the Accounting Standard 22-Accounting for Taxes on
income, the deferred tax for timing differences between the book & tax
profit for the period is accounted for using the tax rates and the tax
laws that have been enacted or substantively enacted as of the balance
sheet date.
Deferred tax assets arising from temporary timing difference are
recognized to the extent there is virtual certainty that the asset will
be realized in future.
Minimum alternative tax (MAT) credit is recognized as an asset only
when and to the extent there is convincing evidence that the Company
will pay income tax higher than that computed under MAT, during the
period that MAT is permitted to be set off under the Income Tax Act,
1961 (specified period). In the year, in which the MAT credit becomes
eligible to be recognized as an asset in accordance with the
recommendations contained in the guidance note issued by the Institute
of Chartered Accountants of India (ICAI), the said asset is created by
way of a credit to the profit and loss and shown as MAT credit
entitlement. The Company reviews the same at each balance sheet date
and writes down the carrying amount of MAT credit entitlement to the
extent there is no longer convincing evidence to the effect that the
Company will pay income tax higher than MAT during the specified
period.
19. GOVERNMENT GRANTS
Government grant in the nature of promoter''s contribution is treated as
capital receipt and credited to investment subsidy account.
Grant in the nature of revenue subsidy is treated as revenue receipt
and credited to profit and loss account.
20. PROVISION AND CONTINGENT LIABILITIES
Show cause notices issued by various government authorities are not
considered as obligation. When the demand notice are raised against
such show cause notice and are disputed by the company then these are
classified as possible obligations.
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 notes.
21. LEASES
Leases of assets under which all the risks and rewards of ownership are
effectively retained by the lessor are classified as operating leases.
Annual lease payments are recognized as an expense on straight-line
basis and in accordance with the respective lease agreements.
Assets acquired under leases where company has substantially all the
risks and rewards of ownership are classified as finance lease. Assets
acquired under the finance lease are capitalized and corresponding
lease liability is recorded at an amount equal to the fair value of the
leased asset at the inception of the lease or present value of minimum
lease payment, whichever is lower.
22. PROPOSED DIVIDEND
Dividend as proposed by Board of Directors is provided for in the books
of account, pending approval at the Annual General Meeting.
23. CENVAT/VAT
CENVAT / VAT claimed on capital assets are credited to assets/ capital
work in progress account. CENVAT / VAT on purchase of raw materials and
other materials are deducted from the cost of such material.
Mar 31, 2012
1. BASIS FOR PREPARATION OF ACCOUNTS
The Financial Statements have been prepared under historical cost
convention on accrual basis in accordance with generally accepted
accounting principles and applicable Accounting Standards as specified
in Companies (Accounting Standard) Rules, 2006 under Companies Act,
1956.
2. USE OF ESTIMATES
The presentation of financial statements in conformity with the Indian
GAAP requires the management to make estimates and assumptions to be
made that may affect the balances of assets and liabilities and
disclosures relating to contingent liabilities as at the date of the
financial statements and the reported amounts of incomes and expenses
during the reporting period. Although these estimates are based upon
management best knowledge of current events and actions, actual results
could differ from those estimated.
3. FIXED ASSETS
Fixed Assets are stated at cost, net of VAT/CENVAT, less accumulated
depreciation. All costs comprises purchase price, non- refundable
duties, levies and borrowing costs till assets are ready for intended
use are capitalised. Capital expenditure on assets not owned by company
is reflected in capital work in progress account till the period of
completion and thereafter in the fixed assets. Machinery spares that
can be used only in connection with an item of fixed asset and their
use is expected to be irregular are capitalized. Replacement of such
spares is charged to revenue. Advance paid towards the acquisition of
fixed assets, and the cost of assets not ready for intended use, before
the year end, are disclosed under capital work-in- progress.
4. INTANGIBLE ASSETS
In accordance with the Accounting Standard (AS) 26 relating to
intangible assets, all costs incurred on technical know-how/license
fee relating to production process are charged to revenue in the year
of incurrence. Costs incurred on technical know-how/license fee
relating to process design/plants/facilities are capitalized, at the
time of capitalization of the said plant/facility and amortized on
pro-rata basis over a period of five years. Computer software is
capitalized on the date of installation and is amortized on pro-rata
basis over a period of three years.
5. IMPAIRMENT OF ASSETS
Carrying amount of cash generating units/assets is reviewed for
impairment. Impairment, if any, is recognized where the carrying amount
exceeds the recoverable amount being the higher of net realizable price
and value in use.
6. EXPENDITURE INCURRED DURING CONSTRUCTION PERIOD
Expenditure directly relating to construction activity including trial
run production expenses (net of income, if any) is capitalized.
Indirect expenditure incurred during construction period is capitalized
as part of the indirect construction cost to the extent to which the
expenditure is indirectly related to construction or is incidental
thereto. Other indirect expenditure (including borrowing costs)
incurred during the construction period which is not related to the
construction activity nor is incidental thereto, is charged to the
Profit & Loss Account.
7. INVESTMENTS
Investments are classified into current and long-term investments.
Current investments are stated at the lower of cost and quoted/fair
value. Long term investments are stated at cost less any provision for
diminution in value other than temporary.
8. REVENUE RECOGNITION
Sales are inclusive of, excise duty, service tax and net of sales tax
and discount. Export sales are net of ocean freight and insurance.
Revenue in respect of long-term turnkey works contracts is recognized
under percentage of completion method, subject to such contracts having
progressed to a reasonable extent. Revenue in respect of installation
services is recognized on completion of services for which ascertained
amount is more likely to be recovered than not.
9. INVENTORY VALUATION
Inventories are valued at lower of cost or net realizable value except
scrap which is valued at net realizable value. The cost is determined
by using first-in-first-out (FIFO) method. Finished goods and work-in
progress include costs of conversion and other costs incurred in
bringing the inventories to their present location and condition.
Excise duty on closing stock of finished goods and scrap are accounted
for on the basis of payments made in respect of goods cleared and also
provision is made for goods lying in the factory and included in the
value of such stocks.
10. DEPRECIATION
Depreciation on fixed assets is provided on straight-line method at the
rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956, except in case of mobile phones on which depreciation has
been charged on pro-rata basis over four years, Individual assets
costing Rs.5000 or less are depreciated in full in the year of
purchase. Leasehold land for lease period below 90 years is amortized
over the period of lease from the date of commencement of commercial
operations.
11. PRODUCT WARRANTY EXPENSES
Liability for Warranties is recognized at the time the claim is
accepted. The necessary provisions are made with respect to warranties
claimed and accepted up to the end of one month from the close of the
year.
12. FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in foreign currencies are normally recorded at
the exchange rate prevailing at the date of the transaction. Monetary
items denominated in foreign currencies outstanding at the year-end are
translated at exchange rate applicable as on that date. Non monetary
items are valued at the exchange rate prevailing on the date of
transaction. Any income or expense on account of exchange difference
either on settlement or on translation is recognized in the profit and
loss account.
13. BORROWING COST
Borrowing costs that are attributable to the acquisition or the
construction of qualifying assets are capitalized as part of cost of
such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use, All other
borrowing costs are charged to revenue.
14. INCOME ON INVESTMENTS
Dividend on shares is accounted for, as and when the right to receive
the same is established.
15. CLAIMS
Claims receivables are accounted for depending on the certainty of
receipt and claims payables are accounted at the time of acceptance.
16. EMPLOYEE'S BENEFITS
i. Short term employee benefit are recognized as an expenses at the
undiscounted amount in the profit and loss account of the year in which
related service is rendered.
ii. The company has defined contribution plans for post-retirement
benefit, namely Employee Provident Fund Scheme administered through
Provident Fund Commissioner and company contribution is charged to
revenue every year.
iii. Company contribution to state plans namely Employees State
Insurance Fund & Employee Welfare Fund are charged to revenue every
year.
iv. The company has defined benefit plan namely Leave
Encashment/Compensated absence and Gratuity, the liability for which is
determined on the basis of an actuarial valuation at the end of the
year. Gratuity Trust is administrated through Life Insurance
Corporation of India (LIC).
v. Termination benefits are recognized as expense immediately.
vi. Gain or Loss arising out of actuarial valuation is recognized in
the profit & loss account as income or expense.
17. DERIVATIVES
In case of forward contracts, the difference between the forward rate
and the exchange rate, being the premium or discount, at the inception
of a forward exchange contract is recognized as income/expense over the
life of the contract. Exchange differences on such contracts are
recognized in the profit and loss account in the reporting period in
which the rates change, Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognized as income or as
expense for the period.
18. TAXATION
Provision for current income tax is made after taking credit for
allowances and exemptions. In case of matters under appeal, due to
disallowance or otherwise, provision is made when the said liabilities
are accepted by the company.
In accordance with the Accounting Standard 22-Accounting for Taxes on
income, the deferred tax for timing differences between the book & tax
profit for the period is accounted for using the tax rates and the tax
laws that have been enacted or substantively enacted as of the balance
sheet date.
Deferred tax assets arising from temporary timing difference are
recognized to the extent there is virtual certainty that the asset will
be realized in future.
Minimum alternative tax (MAT) credit is recognized as an asset only
when and to the extent there is convincing evidence that the Company
will pay income tax higher than that computed under MAT, during the
period that MAT is permitted to be set off under the Income Ta x Act,
1961 (specified period). In the year, in which the MAT credit becomes
eligible to be recognized as an asset in accordance with the
recommendations contained in the guidance note issued by the Institute
of Chartered Accountants of India (ICAI), the said asset is created by
way of a credit to the profit and loss account and shown as MAT credit
entitlement. The Company reviews the same at each balance sheet date
and writes down the carrying amount of MAT credit entitlement to the
extent there is no longer convincing evidence to the effect that the
Company will pay income tax higher than MAT during the specified
period.
19. GOVERNMENT GRANTS
Government grant in the nature of promoter's contribution is treated as
capital receipt and credited to investment subsidy account.
Grant in the nature of revenue subsidy is treated as revenue receipt
and credited to profit and loss account.
20. PROVISION AND CONTINGENT LIABILITIES
Show cause notices issued by various government authorities are not
considered as obligation. When the demand notice are raised against
such show cause notice and are disputed by the company then these are
classified as possible obligations, 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 notes.
21. LEASES
Leases of assets under which all the risks and rewards of ownership are
effectively retained by the lessor are classified as operating leases.
Annual lease payments are recognized as an expense on straight-line
basis and in accordance with the respective lease agreements.
Assets acquired under leases where company has substantially all the
risks and rewards of ownership are classified as finance lease. Assets
acquired under the finance lease are capitalized and corresponding
lease liability is recorded at an amount equal to the fair value of the
leased asset at the inception of the lease or present value of minimum
lease payment, whichever is lower.
22. PROPOSED DIVIDEND
Dividend as proposed by Board of Directors is provided for in the books
of account, pending approval at the Annual General Meeting.
23. CENVAT/VAT
CENVAT/VAT claimed on capital assets are credited to assets/capital
work in progress account. CENVAT/VAT on purchase of raw materials and
other materials are deducted from the cost of such material.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article