Mar 31, 2016
1 CORPORATE INFORMATION
Tinna Rubber And Infrastructure Limited (the company) was incorporated on 4th March 1987. The Company is a public limited company incorporated and domiciled in India and has its registered office at Delhi, India. The Company is listed on BSE Limited . The Company is primarily engaged in the conversion of used Tyres into Crumb Rubber and Steel wires obtained in the process. The company manufacture Crumb Rubber Modifier (CRM), Crumb Rubber Modified Bitumen (CRMB), Polymer Modified Bitumen (PMB), Bitumen Emulsion, Reclaimed Rubber/ Ultra fine Crumb Rubber compound, Cut Wire Shots etc. The products are primarily used for making / repair of road, tyres and auto part industry. The Company''s manufacturing units are located at Panipat in Haryana, Wada in Maharashtra, Haldia in West Bengal, Gummidipundi in Tamil Nadu, Kalamb in Himachal Pradesh. The Company is also engaged in the activity of making holding & nurturing its investment in various businesses over the past years. The company has nurtured its investment in the business of Trading in Agro commodity and Agro warehousing, Construction Chemicals, Real Estate, Wine etc.
2 SIGNIFICANT ACCOUNTING POLICIES
2.01 Basis of preparation of Financial Statements
The financial statements of the Company have been prepared and presented in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply with all material respects with the accounting standards specified under section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year except for the change in accounting policy explained below.
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 Schedule III of the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities.
2.02 Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles in India requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, as at the end of the reporting period. Although these estimates are based on the managementâs best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Changes in estimates are reflected in the financial statements in the period in which changes are made and if material, their effects are disclosed in the notes to the Financial Statements.
Change in Estimates
During the year 2015-16, depreciation on Plant and machinery and Electrical Fittings located at Crumb Rubber, steel Wire and Cut Wire Shots manufacturing units has been provided considering the revised useful life as 12 years based on technical re-assessment conducted by the company as against earlier estimated useful life of 8 years.
2.03 Tangible fixed assets
a) Tangible assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, taxes, duties, freight and other incidental expenses related to acquisition and installation of the concerned assets are further adjusted by the amount of CENVAT credit and VAT credit availed wherever applicable and subsidy directly attributable to the cost of fixed asset. Interest and other borrowing costs during construction period to finance qualifying fixed assets is capitalized if capitalization criteria are met.
b) The Company identifies and determines cost of each component/ part of the asset separately, if the component/ part has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset. Similarly, when significant parts of plant and equipment are required to be replaced at intervals or when a major inspection/overhauling is required to be performed, such cost of replacement or inspection is capitalized (if the recognition criteria is satisfied) in the carrying amount of plant and equipment as a replacement cost or cost of major inspection/overhauling, as the case may be and depreciated separately based on their specific useful life.
c) Subsequent expenditure related to an item of tangible asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day to day repair and maintenance expenditure are charged to the statement of profit and loss for the period during which such expenses are incurred.
d) Capital work-in- progress comprises cost of fixed assets that are not yet ready for their intended use at the balance sheet date and are carried at cost comprising direct cost , related incidental expenses and interest on borrowings their against.
e) Preoperative expenditure and trial run expenditure accumulated as capital work in progress is allocated on the basis of prime cost of fixed assets in the year of commencement of commercial production.
f) Gains or losses arising from disposal of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is disposed off.
2.04 Intangible assets
a) Acquired intangible assets
Intangible assets including software licenses of enduring nature and contractual rights acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.
b) Research and development cost
Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognized as an intangible asset when it is probable that the future economic benefits that are attributable to the asset will flow to the Company and cost of the assets can be measured reliably.
c) Gains or losses arising from disposal of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is disposed off.
2.05 Depreciation and amortization
a) Depreciation on tangible assets is provided on prorata basis on straight line method over the useful lives of assets and in the manner prescribed in Schedule II of The Companies Act, 2013.
b) Plant and Machinery, Tools and Equipment and Electrical fittings and installations in Crumb Rubber Plant, Steel Plant and Cut Wire Shot Plant are depreciated over the estimated useful life of 12 years, which are different than those indicated in Schedule II of Companies Act, 2013. Based on technical assessment, the Management believes that the useful lives as given above best represent the period over which the Management expects to use these assets.
c) Leasehold buildings are depreciated over their useful life of Ten years based upon their respective lease agreement.
d) Amortization of intangible Assets :
Intangible assets are amortized on a straight line basis over their estimated useful life of six years.
2.06 Investments
"Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.
Current investments are carried in the financial statements at the lower of cost and fair value of each investment individually. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize any decline, other than temporary, in the carrying value of each investment.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.
2.07 Inventories
i) Raw Materials, Stores and Spare parts are valued at cost. Materials and other items held for use in the production of inventories are not written down below cost, if the finished products in which they will be incorporated are expected to be sold at or above cost. Raw Material, Stores and Spares & and Raw Material contents of work in progress are valued by using the first in first out (FIFO) method.
ii) Finished goods are valued at cost plus excise duty or net realizable value whichever is lower. The finished goods are valued by using weighted average cost method. Cost of finished goods includes direct Raw Material, labour cost, allocable overhead manufacturing expenses and excise duty.
iii) Work-in-progress are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.
iv) The stocks of scrap materials have been taken at net realizable value.
v) Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
2.08 Foreign currency transactions
Foreign currency transactions and balances
i) Initial recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
ii) Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Nonmonetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.
iii) Exchange differences
Exchange differences arising on conversion / settlement of foreign currency monetary items and on foreign currency liabilities relating to fixed assets acquisition are recognized as income or expense in the year in which they arise.
iv) Bank Guarantee And Letter of Credit
Bank Guarantee And Letter of Credits are recognized at the point of negotiation with Banks and converted at the rates prevailing on the date of Negotiation. However, Outstanding at the period end are recognized at the rate prevailing as on that date and total sum is considered as contingent liability.
2.09 Retirement Benefits To Employees
i) Provident fund
Retirement benefit in the form of provident fund is a defined contribution scheme. The contributions to provident fund are made in accordance with the relevant scheme and are charged to the statement of profit and loss for the year when the contributions are due. The Company has no obligation, other than the contribution payable to the provident fund.
ii) Gratuity
The Company''s gratuity scheme is a defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the projected unit credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of the estimated future cash flows. The discount rate used for determining the present value of the obligation under defined benefit plan, is based on the market yields on government securities as at the balance sheet date. Actuarial gains and losses arising from experience adjustment and changes in actuarial assumptions are recognized immediately in the Statement of Profit and Loss in the period in which they arise.
iii) Leave Encashment
Accrual for leave encashment benefit is based on actuarial valuation using projected unit credit method as on the balance sheet date in pursuance of the company''s leave rules.
2.10 Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
i) Sale of Goods:
Revenue from sale of Goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, and are recorded net of returns and trade discount. The Company collects sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economics benefits flowing to the company and therefore are excluded from revenue. Excise Duty is deducted from revenue(Gross) to arrive at revenue from operations (net). sales do not include inter-divisional transfers.
ii) Job Work
In case of Job works, the system of accounting in financial books are to consider net effect of material received and dispatched whereas in excise records complete details of input/ output quantity and excise duty is accounted for.
iii) Composite Services
In respect of Mobile blending unit where company has got composite price of material consumed & equipment rental, the rate for equipment rental is calculated on the basis of charge received under similar job work arrangements with government refineries and the remaining portion of income is considered as sale price of material
iv) Interest:
Interest income is recognized on a time proportion basis, except on doubtful or sticky loans and advances which is accounted on receipt basis.
v) Dividend from investment in Shares :
Dividend income is recognized when the right to receive the payment is established.
vi) Claims
Claims are recognized when there exists reasonable certainty with regard to the amounts to be realized and the ultimate collection thereof.
vii) Export Incentive
Export incentives under various schemes notified by the Government have been recognized on the basis of their entitlement rates in accordance with the Foreign Trade Policy 2015-20. Benefits in respect of advance licenses are recognized when there is reasonable assurance that the Company will comply with the conditions attached to them and incentive will be received.
2.11 Future Contracts
Profit / Loss on contracts for future settled during the year are recognized in the Statement of Profit and Loss. Future contracts outstanding at year-end are marked to market at fair value. Any losses arising on that account are recognized in the Statement of Profit and Loss for the year.
2.12 Prior Period Items/ Extraordinary Items
Prior Period expenses/incomes, are shown as prior period items in the profit and loss account as per the provision of Accounting Standard-5 "Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies" notified under the Companies (Accounting Standards) Rules ,2006 (as amended). Items of income or expenses that arise from events or transactions that are distinct from ordinary activities of the enterprise and are not expected to recurr frequently or regularly are treated as extraordinary items.
2.13 Segment reporting Identification of segments
The Company''s operating businesses are organized and managed separately according to the nature of products manufactured, with each segment representing a strategic business unit that offers different products. Allocation of common costs Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.
Unallocated items
Unallocated items include general corporate income and expense items which are not allocated to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole."
2.14 Taxes on Income
Tax expense for the year comprises of direct taxes and indirect taxes.
DIRECT TAXES
i) Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.
ii) Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each reporting date. The company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
iii) Minimum Alternate Tax (MAT) paid in a year is charged to the Statement of Profit and Loss as Current Tax. The Company recognizes MAT Credit available as an asset only to the extent that there is convincing evidence that the company will pay normal income tax during the specified period, i.e., the period for which MAT Credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset in accordance with the Guidance Note on accounting for Credit Available in respect of Minimum Alternative Tax under the Income Tax Acts, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement". The company reviews the "MAT Credit Entitlement" asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.
INDIRECT TAXES
i) Excise duty (including education cess) has been accounted for in respect of the goods cleared. The company is providing excise duty liability in respect of finished products
ii) Service Tax has been accounted for in respect of services rendered.
iii) Final sales tax / Value added tax liability is ascertained on the finalization of assessments in accordance to provisions of sales tax / value added tax laws of respective states where the company is having offices/works.
2.15 Impairment of assets
"The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or cash-generating unitâs (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.
Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit and loss. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
2.16 Leases
Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.
2.17 Borrowing costs
Borrowing cost includes interest and ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.
2.18 Earning per share
Basic earning per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earning per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earning per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented.
2.19 Provisions and Contingent Liabilities Provisions
A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. Provisions are not discounted to their present value and are determined based on the best estimates required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Contingent Liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
2.20 Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
Mar 31, 2015
2.01 Basis of preparation
The financial statements of the Company have been prepared and
presented in accordance with generally accepted accounting principles
in India (Indian GAAP). The Company has prepared these financial
statements to comply with all material respects with the accounting
standards specified under section 133 of the Companies Act, 2013, read
together with paragraph 7 of the Companies (Accounts) Rules, 2014. The
financial statements have been prepared on an accrual basis and under
the historical cost convention. The accounting policies adopted in the
preparation of financial statements are consistent with those of
previous year except for the change in accounting policy explained
below.
All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in Schedule III of the Companies Act, 2013. Based on
the nature of products and the time between acquisition of assets for
processing and their realisation in cash and cash equivalents, the
Company has ascertained its operating cycle as 12 months for the
purpose of current/non-current classification of assets and
liabilities.
2.02 Change in Accounting Policies
(i) Depreciation on fixed assets
From the current year Schedule XIV of the Companies Act, 1956 has been
replaced by Schedule II of the Companies Act, 2013. Due to such change,
depreciation is being provided as given below.
a) Useful Lives / Depreciation Rates
Schedule II of the Companies Act, 2013 prescribes useful lives of the
assets and the depreciation is being provided on the straight line
method as per their useful lives prescribed in Schedule II of the
Companies Act, 2013. However, Schedule II allows companies to use
higher/ lower useful lives and residual values ; if such useful lives
and residual values can be technically supported and justification for
difference is disclosed in the financial statements. The management
believes that depreciation rates currently used fairly reflect its
estimate of the useful lives and residual values of fixed assets,
though these rates in certain cases are different from lives prescribed
under Schedule II of the Companies Act, 2013. Unless stated otherwise,
the impact of such change in policy for the current year is likely to
hold good for future years also.
b) Assets for a value not exceeding Rs. 5000/-
The depreciation on assets for a value not exceeding Rs. 5000/- which
were written off in the year of purchase as per erstwhile Companies
Act, 1956, are being charged on the basis of their useful lives
prescribed in the Schedule II of the Companies Act, 2013.
2.03 Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles in India requires the management to make
judgments, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities and the disclosure of
contingent liabilities, at the end of the reporting period. Although
these estimates are based on the management's best knowledge of current
events and actions, uncertainty about these assumptions and estimates
could result in the outcomes requiring a material adjustment to the
carrying amounts of assets or liabilities in future periods. Changes in
estimates are reflected in the financial statements in the period in
which changes are made and if material, their effects are disclosed in
notes to accounts.
2.04 Tangible fixed assets
a) Tangible assets are stated at cost, net of accumulated depreciation
and accumulated impairment losses, if any. The cost comprises purchase
price, taxes, duties, freight and other incidental expenses related to
acquisition and installation of the concerned assets are further
adjusted by the amount of CENVAT credit and VAT credit availed wherever
applicable and subsidy directly attributable to the cost of fixed
asset. Interest and other borrowing costs during construction period to
finance qualifying fixed assets is capitalised if capitalisation
criteria are met.
b) Subsequent expenditure related to an item of tangible asset is added
to its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day to day
repair and maintenance expenditure are charged to the statement of
profit and loss for the period during which such expenses are incurred.
c) Capital work-in- progress comprises cost of fixed assets that are
not yet ready for their intended use at the balance sheet date and are
carried at cost comprising direct cost , related incidental expenses
and interest on borrowings their against.
d) Preoperative expenditure and trial run expenditure accumulated as
capital work in progress is allocated on the basis of prime cost of
fixed assets in the year of commencement of commercial production.
e) Gains or losses arising from disposal of fixed assets are measured
as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and
loss when the asset is disposed off.
2.05 Intangible assets
a) Acquired intangible assets
Intangible assets including software licenses of enduring nature and
contractual rights acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortisation and accumulated
impairment losses, if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use.
b) Research and development cost
Research costs are expensed as incurred. Development expenditure
incurred on an individual project is recognized as an intangible asset
when it is probable that the future economic benefits that are
attributable to the asset will flow to the Company and cost of the
assets can be measured reliably.
c) Gains or losses arising from disposal of an intangible asset are
measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognised in the statement of
profit and loss when the asset is disposed off.
2.06 Depreciation and amortization
a) Depreciation on fixed assets is provided on prorata basis on
straight line method using the useful lives of assets and in the manner
prescribed in Schedule II of The Companies Act, 2013.
b) Plant and Machinery, Tools and Equipment and Electrical fittings and
installations in Crumb Rubber Plant, Steel Plant and Cut Wire Shot
Plant are depreciatied over the estimated useful life of 8 years, which
are lower than those indicated in Schedule II. On the basis of
technical assessment, management believes that the useful lives as
given above best represent the period over which the assets are
expected to be used.
c) Leasehold buildings are depreciated over their useful life of 10
year based upon their respective lease agreement.
d) Amortisation of intangible Assets :
Intangible assets are amortised on a straight line basis over their
estimated useful life of six years.
2.07 Investments
"Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments. "
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
2.08 Inventories
i) Raw Materials, Stores and Spare parts are valued at cost. Materials
and other items held for use in the production of inventories are not
written down below cost, if the finished products in which they will be
incorporated are expected to be sold at or above cost. Raw Material,
Stores and Spares & and Raw Material contents of work in progress are
valued by using the first in first out (FIFO) method.
ii) Finished goods are valued at cost plus excise duty or net
realizable value whichever is lower. The finished goods are valued by
using weighted average cost method. Cost of finished goods includes
direct Raw Material, labour cost, allocable overhead manufacturing
expenses and excise duty.
iii) Work-in-progress are valued at lower of cost and net realizable
value. Cost includes direct materials and labour and a proportion of
manufacturing overheads based on normal operating capacity.
iv) The stocks of scrap materials have been taken at net realisable
value.
v) Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
2.09 Foreign currency transactions
Foreign currency transactions and balances
i) Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
ii) Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non- monetary items, which are
measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction.
iii) Exchange differences
Exchange differences arising on conversion / settlement of foreign
currency monetary items and on foreign currency liabilities relating to
fixed assets acquisition are recognised as income or expense in the
year in which they arise.
iv) Bank Guarantee And Letter of Credit
Bank Guarantee And Letter of Credits are recognized at the point of
negotiation with Banks and converted at the rates prevailing on the
date of Negotiation, However, Outstanding at the period end are
recognized at the rate prevailing as on that date and total sum is
considered as contingent liability.
2.10 Retirement Benefits
i) Provident fund
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contributions to provident fund are made in
accordance with the relevant scheme and are charged to the statement of
profit and loss for the year when the contributions are due. The
Company has no obligation, other than the contribution payable to the
provident fund.
ii) The Company's gratuity scheme is a defined benefit plan. The
present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected unit credit
method, which recognises each period of service as giving rise to
additional unit of employee benefit etitlement and measures each unit
separately to build up the final obligation. The obligation is measured
at the present value of the estimated future cash flows. The discount
rate used for determining the present value of the obligation under
defined benefit plan, is based on the market yields on government
securities as at the balance sheet date. Actuarial gains and lossses
are recognised immidiately in the Statement of Profit and Loss.
iii) Leave Encashment
Accrual for leave encashment benefit is based on acturial valuation as
on the balance sheet date in pursuance of the company's leave rules.
2.11 Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
i) Sale of Goods:
Revenue from sale of Goods is recognised when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
and are recorded net of returns and trade discount. The Company
collects sales taxes and value added taxes (VAT) on behalf of the
government and, therefore, these are not economics benefits flowing to
the company and therefore are excluded from revenue. Excise Duty is
deducted from revenue(Gross) to arrive at revenue from operations
(net). sales do not include inter-divisional transfers.
ii) Job Work
In case of Job works, the system of accounting in financial books are
to consider net effect of material received and dispatched whereas in
excise records complete details of input/ output quantity and excise
duty is accounted for.
iii) Composite Services
In respect of Mobile blending unit where company has got composite
price of material consumed & equipment rental, the rate for equipment
rental is calculated on the basis of charge received under similar job
work arrangements with government refineries and the remaining portion
of income is considered as sale price of material
iv) Interest:
Interest income is recognized on a time proportion basis, except on
doubtful or sticky loans and advances which is accounted on receipt
basis.
v) Dividend from investment in Shares :
Dividend income is recognized when the right to receive the payment is
established.
vi) Claims
Claims are recognised when there exists reasonable certainty with
regard to the amounts to be realised and the ultimate collection
thereof.
2.12 Future Contracts
Profit/ Loss on contracts for future settled during the year are
recognised in the Statement of Profit and Loss. Future contracts
outstanding at year-end are marked to market at fair value. Any losses
arising on that account are recognised in the Statement of Profit and
Loss for the year.
2.13 Prior Period Items/ Extraordinary Items
Prior Period expenses/incomes, are shown as prior period items in the
profit and loss account as per the provision of Accounting Standard-5
"Net Profit or Loss for the Period, Prior Period Items and Changes in
Accounting Policies" notified under the Companies (Accounting
Standards) Rules ,2006 (as amended). Items of income or expenses that
arise from events or transactions that are distinct from ordinary
activities of the enterprise and are not expected to recurr frequently
or regularly are treated as extraordinary items.
2.14 Segment reporting
"Identification of segments The Company's operating businesses are
organized and managed separately according to the nature of products
and services provided, with each segment representing a strategic
business unit that offers different products and serves different
markets. The Company is operating in a single reportable segment namely
Crumb Rubber, Crumb Rubber Modifier, Modified Bitumen and Emulsion
Bitumen etc. It also operates in other non- reportable segments of
Investment in companies engaged in Trading of Agro commodity and Agro
warehousing, Constructions Chemicals, Real Estate, Wine etc.
Secondary segment: Geographical Segment The analysis of geographical
segment is not applicable since all the works are situated within India
including exports executed from India."
2.15 Taxes on Income
Tax expense for the year comprises of direct taxes and indirect taxes.
DIRECT TAXES
i) Current income-tax is measured at the amount expected to be paid to
the tax authorities in accordance with the Income- tax Act, 1961
enacted in India. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted, at the reporting
date. Current income tax relating to items recognized directly in
equity is recognized in equity and not in the statement of profit and
loss.
ii) Deferred income taxes reflect the impact of timing differences
between taxable income and accounting income originating during the
current year and reversal of timing differences for the earlier years.
Deferred tax is measured using the tax rates and the tax laws enacted
or substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized only to the extent that
there is reasonable certainty that sufficient future taxable income
will be available against which such deferred tax assets can be
realized. In situations where the company has unabsorbed depreciation
or carry forward tax losses, all deferred tax assets are recognized
only if there is virtual certainty supported by convincing evidence
that they can be realized against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The company writes-down the carrying amount of deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realized. Any such write- down is reversed to the extent that it
becomes reasonably certain or virtually certain, as the case may be,
that sufficient future taxable income will be available.
iii) Minimum Alternate Tax (MAT) paid in a year is charged to the
Statement of Profit and Loss as Current Tax. The Company recognizes MAT
Credit available as an asset only to the extent that there is
convincing evidence that the company will pay normal income tax during
the specified period, i.e., the period for which MAT Credit is allowed
to be carried forward. In the year in which the company recognizes MAT
credit as an asset in accordance with the Guidance Note on accounting
for Credit Available in respect of Minimum Alternative Tax under the
Income Tax Acts, 1961, the said asset is created by way of credit to
the statement of profit and loss and shown as "MAT Credit Entitlement".
The company reviews the "MAT Credit Entitlement" asset at each
reporting date and writes down the asset to the extent the company does
not have convincing evidence that it will pay normal tax during the
specified period.
iv) Wealth tax is ascertained in accordance with the provisions of the
Wealth Tax Act 1957.
INDIRECT TAXES
i) Excise duty (including education cess) has been accounted for in
respect of the goods cleared. The company is providing excise duty
liability in respect of finished products
ii) Service Tax has been accounted for in respect of services rendered.
iii) Final sales tax / Value added tax liability is ascertained on the
finalization of assessments in accordance to provisions of sales tax /
value added tax laws of respective states where the company is having
offices/works.
2.16 Impairment of assets
"The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the company
estimates the asset's recoverable amount. An asset's recoverable amount
is the higher of an asset's or cash-generating unit's (CGU) net selling
price and its value in use. The recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets.
Where the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. In determining net
selling price, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate
valuation model is used.
Impairment losses of continuing operations, including impairment on
inventories, are recognized in the statement of profit and loss. After
impairment, depreciation is provided on the revised carrying amount of
the asset over its remaining useful life."
2.17 Leases
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognized as an expense
in the statement of profit and loss on a straight-line basis over the
lease term.
2.18 Borrowing costs
"Borrowing cost includes interest and ancillary costs incurred in
connection with the arrangement of borrowings and exchange differences
arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost. Borrowing costs
directly attributable to the acquisition, construction or production of
an asset that necessarily takes a substantial period of time to get
ready for its intended use or sale are capitalized as part of the cost
of the respective asset. All other borrowing costs are expensed in the
period they occur."
2.19 Earning per share
Basic earning per share is computed by dividing the profit/(loss) aster
tax (including the post tax effect of extraordinary
items, if any) by the weighted average number of equity shares
outstanding during the year. Diluted earning per share is computed by
dividing the profit/(loss) after tax (including the post tax effect of
extraordinary items, if any) as adjusted for dividend, interest and
other charges to expense or income (net of any attributable taxes)
relating to the dilutive potential equity shares, by the weighted
average number of equity shares considered for deriving basic earning
per share and the weighted average number of equity shares which could
have been issued on the conversion of all dilutive potential equity
shares. Potential equity shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net profit per share
from continuing ordinary operations. Potential equity shares are deemed
to be converted as at the beginning of the period, unless they have
been issued at a later date. The dilutuve potential equity shares are
adjusted for the proceeds receivable had the shares been actually
issued at fair value (i.e. average market value of the outstanding
shares). Dilutive potential equity shares are determined independently
for each period presented.
2.19 Provisions and Contingent Liabilities Provisions
A provision is recognized when the companyhas a present obligation as a
result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of obligation.
Provisions are not discounted to their present value and are determined
based on the best estimates required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
Contingent Liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The Company does not
recognize a contingent liability but discloses its existence in the
financial statements.
2.20 Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
Mar 31, 2014
1.01 BASIS OF PREPARATION
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP).The Company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under the Companies accounting Standards) Rules, 2006, (as amended),
relevant provisions of the Companies Act,1956,read with general
circular 8/2014 dated 4th April,2014 issued by Ministry of Corporate
Affairs. The financial statements have been prepared on an accrual
basis and under the historical cost convention. The accounting policies
adopted in the preparation of financial statements are consistent with
those of previous year.
2.02 USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles in India requires the management to make
judgments, estimates and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities and the disclosure of
contingent liabilities, at the end of the reporting period. Although
these estimates are based on the management''s best knowledge of
current events and actions, uncertainty about these assumptions and
estimates could result in the outcomes requiring a material adjustment
to the carrying amounts of assets or liabilities in future periods.
Changes in estimates are reflected in the financial statements in the
period in which changes are made and if material, their effects are
disclosed in notes to accounts.
2.03 TANGIBLE FIXED ASSETS
a) Tangible assets are stated at cost, net of accumulated depreciation
and accumulated impairment losses, if any. The cost comprises purchase
price, taxes, duties, freight and other incidental expenses related to
acquisition and installation of the concerned assets are further
adjusted by the amount of CENVAT credit and VAT credit availed wherever
applicable and subsidy directly attributable to the cost of fixed
asset. Interest and other borrowing costs during construction period
to finance qualifying fixed assets is capitalised if capitalisation
criteria are met.
b) Subsequent expenditure related to an item of tangible asset is added
to its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day to day
repair and maintenance expenditure are charged to the statement of
profit and loss for the period during which such expenses are incurred.
c) Capital work-in- progress comprises cost of fixed assets that are
not yet ready for their intended use at the balance sheet date and are
carried at cost comprising direct cost , related incidental expenses
and interest on borrowings their against.
d) Preoperative expenditure and trial run expenditure accumulated as
capital work in progress is allocated on the basis of prime cost of
fixed assets in the year of commencement of commercial production.
e) Gains or losses arising from disposal of fixed assets are measured
as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and
loss when the asset is disposed off.
2.04 INTANGIBLEASSETS
a) Acquired intangible assets
Intangible assets including software licenses of enduring nature and
contractual rights acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortisation and accumulated
impairment losses, if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use.
b) Research and development cost
Research costs are expensed as incurred. Development expenditure
incurred on an individual project is recognized as an intangible asset
when it is probable that the future economic benefits that are
attributable to the asset will flow to the Company and cost of the
assets can be measured reliably.
c) Gains or losses arising from disposal of an intangible asset are
measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognised in the statement of
profit and loss when the asset is disposed off.
2.05 DEPRECIATIONAND AMORTIZATION
a) Depreciation on tangible fixed assets is provided on straight line
basis using the rates and in the manner as prescribed in Schedule XIV
of the Companies Act, 1956, which approximates the useful lives of the
assets estimated by the management. Depreciation on Crumb Rubber Plant
has been provided at 11.875% per annum considering the useful life of
the Plant as 8 years on straight line method. Depreciation on other
Plant and Machinery has been provided on Straight line Method on rates
as per Schedule XIV of the Companies Act, 1956
b) Depreciation on mobile phones has been provided @ 16.21% p.a on
straight line method.
c) Depreciation on leasehold building has been provided @ 10% p.a on
the basis of straight line method.
d) Computer Software are amortized over a period of 5 years.
e) Assets costing not more than 5,000/- each individually are
depreciated at 100%.
2.06 INVESTMENTS
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
2.07 INVENTORIES
i) Raw Materials, Stores and Spare parts are valued at cost. Materials
and other items held for use in the production of inventories are not
written down below cost, if the finished products in which they will be
incorporated are expected to be sold at or above cost. Raw Material,
Stores and Spares and Raw Material contents of work in progress are
valued by using the first in first out (FIFO) method.
ii) Finished goods are valued at cost plus excise duty or net
realizable value whichever is lower. The finished goods are valued by
using weighted average cost method. Cost of finished goods includes
direct Raw Material, labour cost, allocable overhead manufacturing
expenses and excise duty.
iii) Work-in-progress are valued at lower of cost and net realizable
value. Cost includes direct materials and labour and a proportion of
manufacturing overheads based on normal operating capacity.
iv) The stocks of scrap materials have been taken at net realisable
value.
v) Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
2.08 FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions and balances
i) Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
ii) Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items, which are
measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction.
iii) Exchange differences
Exchange differences arising on conversion / settlement of foreign
currency monetary items and on foreign currency liabilities relating to
fixed assets acquisition are recognised as income or expense in the
year in which they arise.
iv) Bank Guarantee And Letter of Credit
Bank guarantee and letter of credits are recognized at the point of
negotiation with Banks and converted at the rates prevailing on the
date of negotiation, however, outstanding at the period end are
recognized at the rate prevailing as on that date and total sum is
considered as contingent liability.
2.09 RETIREMENT BENEFITS
i) Provident fund
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contributions to provident fund are made in
accordance with the relevant scheme and are charged to the statement of
profit and loss for the year when the contributions are due. The
Company has no obligation, other than the contribution payable to the
provident fund.
ii) The Company''s gratuity scheme is a defined benefit plan. The
present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected unit credit
method, which recognises each period of service as giving rise to
additional unit of employee benefit etitlement and measures each unit
separately to build up the final obligation. The obligation is measured
at the present value of the estimated future cash flows. The discount
rate used for determining the present value of the obligation under
defined benefit plan, is based on the market yields on government
securities as at the balance sheet date. Actuarial gains and lossses
are recognised immidiately in the Statement of Profit and Loss.
iii) Leave Encashment
Accrual for leave encashment benefit is based on acturial valuation as
on the balance sheet date in pursuance of the company''s leave rules.
2.10 REVENUERECOGNITION
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
i) Sale of Goods:
Revenue from sale of Goods is recognised when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
and are recorded net of returns and trade discount. The Company
collects sales taxes and value added taxes (VAT) on behalf of the
government and, therefore, these are
not economics benefits flowing to the company and therefore are
excluded from revenue. Excise Duty is deducted from revenue(Gross) to
arrive at revenue from operations (net). sales do not include inter-
divisional transfe''
ii) Job Work
In case of Job works, the system of accounting in financial books are
to consider net effect of material received and dispatched whereas in
excise records complete details of input/ output quantity and excise
duty is accounted for.
iii) Composite Services
In respect of Mobile blending unit where company has got composite
price of material consumed & equipment rental, the rate for equipment
rental is calculated on the basis of charge received under similar job
work arrangements with government refineries and the remaining portion
of income is considered as sale price of material.
iv) Interest
Interest income is recognized on a time proportion basis, except on
doubtful or sticky loans and advances which is accounted on receipt
basis.
v) Dividend from investment in Shares
Dividend income is recognized when the right to receive the payment is
established.
vi) Claims
Claims are recognised when there exists reasonable certainty with
regard to the amounts to be realised and the ultimate collection
thereof.
2.11 FUTURE CONTRACTS
Profit/ Loss on contracts for future settled during the year are
recognised in the Statement of Profit and Loss. Future contracts
outstanding at year-end are marked to market at fair value. Any losses
arising on that account are recognised in the Statement of Profit and
Loss for the year.
2.12 PRIOR PERIOD ITEMS/EXTRAORDINARY ITEMS
Prior Period expenses/incomes, are shown as prior period items in the
profit and loss account as per the provision of Accounting Standard-5
"Net Profit or Loss for the Period, Prior Period Items and Changes in
Accounting Policies" notified under the Companies (Accounting
Standards) Rules ,2006 (as amended). Items of income or expenses that
arise from events or transactions that are distinct from ordinary
activities of the enterprise and are not expected to recurr frequently
or regularly are treated as extraordinary items.
2.13 SEGMENTREPORTING Identification of segments
The Company''s operating businesses are organized and managed
separately according to the nature of products and services provided,
with each segment representing a strategic business unit that offers
different products and serves different markets. The Compnay is
operating in a single segment namely Crumb Rubber, Crumb Rubber
Modifier, Modified Bitumen and Emulsion Bitumen.
Secondary segment: Geographical Segment
The analysis of geographical segment is not applicable since all the
works are situated within India including exports executed from India.
2.14 TAXES ON INCOME
Tax expense for the year comprises of direct taxes and indirect taxes.
DIRECT TAXES
i) Current income-tax is measured at the amount expected to be paid to
the tax authorities in accordance with the Income-tax Act, 1961 enacted
in India. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
ii) Deferred income taxes reflect the impact of timing differences
between taxable income and accounting income originating during the
current year and reversal of timing differences for the earlier year
Deferred tax is measured using the tax rates and the tax laws enacted
or substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized only to the extent that
there is reasonable certainty that sufficient future taxable income
will be available against which such deferred tax assets can be
realized. In situations where the company has unabsorbed depreciation
or carry forward tax losses, all deferred tax assets are recognized
only if there is virtual certainty supported by convincing evidence
that they can be realized against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The company writes- down the carrying amount of
deferred tax asset to the extent that it is no longer reasonably
certain or virtually certain, as the case may be, that sufficient
future taxable income will be available against which deferred tax
asset can be realized. Any such write-down is reversed to the extent
that it becomes reasonably certain or virtually certain, as the case
may be, that sufficient future taxable income will be available.
iii) Minimum Alternate Tax (MAT) paid in a year is charged to the
Statement of Profit and Loss as Current Tax. The Company recognizes MAT
Credit available as an asset only to the extent that there is
convincing evidence that the company will pay normal income tax during
the specified period, i.e., the period for which MAT Credit is allowed
to be carried forward. In the year in which the company recognizes MAT
credit as an asset in accordance with the Guidance Note on accounting
for Credit Available in respect of Minimum Alternative Tax under the
Income Tax Acts, 1961, the said asset is created by way of credit to
the statement of profit and loss and shown as "MAT Credit Entitlement".
The company reviews the "MAT Credit Entitlement" asset at each
reporting date and writes down the asset to the extent the company does
not have convincing evidence that it will pay normal tax during the
specified period.
iv) Wealth tax is ascertained in accordance with the provisions of the
Wealth Tax Act 1957.
INDIRECT TAXES
i) Excise duty (including education cess) has been accounted for in
respect of the goods cleared. The company is providing excise duty
liability in respect of finished products.
ii) Service Tax has been accounted for in respect of services rendered.
iii) Final sales tax / Value added tax liability is ascertained on the
finalization of assessments in accordance to provisions of sales tax /
value added tax laws of respective states where the company is having
offices/ works.
2.15 IMPAIRMENT OFASSETS
The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the company
estimates the asset''s recoverable amount. An asset''s recoverable
amount is the higher of an asset''s or cash-generating unit''s (CGU)
net selling price and its value in use. The recoverable amount is
determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or
groups of assets. Where the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. In determining
net selling price,
recent market transactions are taken into account, if available. If no
such transactions can be identified, an appropriate valuation model is
used.
Impairment losses of continuing operations, including impairment on
inventories, are recognized in the statement of profit and loss. After
impairment, depreciation is provided on the revised carrying amount of
the asset over its remaining useful life.
2.16 LEASES
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognized as an expense
in the statement of profit and loss on a straight-line basis over the
lease term.
2.17 BORROWING COSTS
Borrowing cost includes interest and ancillary costs incurred in
connection with the arrangement of borrowings and exchange differences
arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
2.18 EARNINGPER SHARE
Basic earning per share is computed by dividing the profit/(loss) aster
tax (including the post tax effect of extraordinary items, if any) by
the weighted average number of equity shares outstanding during the
year. Diluted earning per share is computed by dividing the
profit/(loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income (net of any attributable taxes) relating to the
dilutive potential equity shares, by the weighted average number of
equity shares considered for deriving basic earning per share and the
weighted average number of equity shares which could have been issued
on the conversion of all dilutive potential equity shares. Potential
equity shares are deemed to be dilutive only if their conversion to
equity shares would decrease the net profit per share from continuing
ordinary operations. Potential equity shares are deemed to be converted
as at the beginning of the period, unless they have been issued at a
later date. The dilutuve potential equity shares are adjusted for the
proceeds receivable had the shares been actually issued at fair value
(i.e. average market value of the outstanding shares). Dilutive
potential equity shares are determined independently for each period
presented.
2.19 PROVISIONS AND CONTINGENTLIABILITIES Provisions
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of obligation.
Provisions are not discounted to their present value and are determined
based on the best estimates required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
Contingent Liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The Company does not
recognize a contingent liability but discloses its existence in the
financial statements.
2.20 CASH AND CASH EQUIVALENTS
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
c) Terms/rights attached to equity shares
(i) The Company has only one class of equity shares having a par value
of Rs. 10/- per share. Each holder of Equity share is entitled to one
vote per share.
(ii) In the event of liquidation of the Company ,the holders of equity
share will be entitled to receive remaining assets of the Company after
distribution of all preferential amounts. The distribution will be in
proportion to the number of equity shares held by the shareholders.
In earlier year, the Company had forfeited 78,800 equity shares of
Rs.10/- each in respect of which calls remained in arrears. Accordingly a
sum of Rs.5,24,333/- being the amount originally paid up on shares
forfeited and Rs.45,48,667/- being the amount of share premium on such
shares were shown in share capital account and Capital reserve
respectively in the financial year 2012-13. During the year, the
Company has reissued 78800 forfeited equity shares of Rs.10/- each at a
premium of Rs.36/- per equity share to the existing shareholders.
Accordingly share capital has increased by Rs.7,88,000/-, share premium
account by Rs.28,36,800/- and a sum of Rs.5,24,333/- being surplus on
re-issue of, forfeited shares has been transferred to capital reserve.
a) Term Loan from Bank (Secured)
I. The Company has been sanctioned a term loan of Rs.14,00,00,000/- by
Syndicate Bank for the purpose of setting of new machineries, buildings
etc. for production of crumb rubber mainly for their own consumption.
II. Primary security
The term loan is secured by way of hypothecation of plant and machinery
furniture fixture,generator,office equipment and computers and work in
progress at Panipat, Wada, Haldia and Chennai (Gummidipundi) plants of
the Company and Unregistered equitable mortgage (UREM) of land and
building at Wada and Chennai (Gummidipundi) plants of the Company.
Collateral securities
A. The term loan is further secured by way of equitable mortgage of
land and building at:
i) Land and Building located at Refinery Road, Village Rajapur, Tehsil
and District Panipat - 132103
ii) Land and Building located at Tirlokpur Road, Village Rampur Jattan,
Industrial Estate ,Kala- Amb,Nahan District Sirmour (H.P)
iii) Farm House at No.6, Sultanpur, Mandi Road, Mehrauli, New Delhi-
110030
vi) Land and Building located at Village Pali,Taluka
Wada,District-Thane, Maharashtra
v) Land and Building located at No. 17 Chithur Natham Village,
Gummidipundi Taluk,Thiruvallur Dist,Tamilnadu
B. Other Properties
i) Building at CRMB Plant at Mangalore Refinery and Petrochemicals Ltd.
Kuthethur Post, Via Katipalla, Mangalore- 575030
ii) Plant and Machinery ,Furniture and Fixture,Generator,office
equipment,computers and work in progress.
1. a) The Company has availed working capital limits of Rs.1200 lacs
(previous year Rs.1200 lacs) from Syndicate
Bank which is secured by hypothecation of stocks and book debts of the
Company. The working capital limit is further secured by collateral
securities as mentioned under term loan from Syndicate Bank. (Refer
point 5(a) above).
b) Aggregate amount of Working capital limits secured by way of
179,019,484 121,891,232
personal guarantees of Shri Bhupinder Kumar and Shri Kapil Sekhri,
Directors of the Company and Shri Gaurav Sekhri (Relative of Director).
c) Working capital limits from bank include cheques issued but not
presented as on the Balance Sheet date amounting to
Rs.6,08,30,778/-(Previous year Rs.8,27,233)
2. Unsecured loans from directors and companies are repayable on
demand. Repayment of interest has been made as per stipulations.
15. OTHER NON CURRENT ASSETS
Long term trade receivable include claim receivable of Rs. 2,75,44,112/-
from Food Corporation of India Limited (F.C.I) and Project and
Equipment Corporation of India Limited (P.E.C) for which the Company
has filed suits for recovery. However, as per order of Company Law
Board dated 9th June, 2009, if any amount is received, the amount to
the extent of 50% will be paid to separated group. A provision of
Rs.137,72,056/- has been made as per CLB order. The Company has filed an
appeal pending before the Hon''ble High Court of India on 06/02/2013 and
is hopeful of recovering the amount due from Food Corporation of India
(F.C.I ) and Project and Equipment Corporation Of India Limited
(P.E.C), Hence no provision has been considered necessary in respect of
the aforesaid receivables.
Mar 31, 2013
2.01 BASIS OF PREPARATION
The financial statements of the Company have been prepared on
historical cost convention as a going concern on accrual basis, in
accordance with the requirements of the Companies Act, 1956 and in
accordance with generally accepted accounting principles in India
(Indian GAAP) and comply with Accounting Standards notified under the
Companies (Accounting Standards) Rules, 2006, (as amended) to the
extent applicable. Accounting policies have been consistently applied
and where a newly issued accounting standard is initially adopted or
where an existing accounting policy requires a change due to more
appropriate presentation of financial statements, such changes are
suitably incorporated. The management evaluates all recently issued or
revised accounting standards on an ongoing basis.
2.02 PRESENTATION AND DISCLOSURE OF FINANCIAL STATEMENTS
The presentation and disclosure of the financial statements have been
made in accordance with the revised Schedule VI notified by the Central
Government vide notification no. S.O 447(E), dated 28th February 2011
(as amended by notification no. F No. 2/6/2008-CL-V, dated 30th March
2011) which has become effective for accounting periods commencing on
or after 1st April 2011.
2.03 USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles in India requires the management to make
judgments, estimates and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities and the disclosure of
contingent liabilities, at the end of the reporting period. Although
these estimates are based on the management''s best knowledge of
current events and actions, uncertainty about these assumptions and
estimates could result in the outcomes requiring a material adjustment
to the carrying amounts of assets or liabilities in future periods.
Changes in estimates are reflected in the financial statements in the
period in which changes are made and if material, their effects are
disclosed in notes to accounts.
2.04 TANGIBLE FIXEDASSETS
a) Tangible assets are stated at cost, net of accumulated depreciation
and accumulated impairment losses, if any. The cost comprises purchase
price, taxes, duties, freight and other incidental expenses related to
acquisition and installation of the concerned assets are further
adjusted by the amount of CENVAT credit and VAT credit availed wherever
applicable and subsidy directly attributable to the cost of fixed
asset. Interest and other borrowing costs during construction period
to finance qualifying fixed assets is capitalised if capitalisation
criteria are met.
b) Subsequent expenditure related to an item of tangible asset is added
to its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day to day
repair and maintenance expenditure are charged to the statement of
profit and loss for the period during which such expenses are incurred.
c) Capital work-in- progress comprises cost of fixed assets that are
not yet ready for their intended use at the balance sheet date and are
carried at cost comprising direct cost , related incidental expenses
and interest on borrowings their against.
d) Preoperative expenditure and trial run expenditure accumulated as
capital work in progress is allocated on the basis of prime cost of
fixed assets in the year of commencement of commercial production.
e) Gains or losses arising from disposal of fixed assets are measured
as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and
loss when the asset is disposed off.
2.05 INTANGIBLEASSETS
a) Acquired intangible assets
Intangible assets including software licenses of enduring nature and
contractual rights acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortisation and accumulated
impairment losses, if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use.
b) Research and development cost
Research costs are expensed as incurred. Development expenditure
incurred on an individual project is recognized as an intangible asset
when it is probable that the future economic benefits that are
attributable to the asset will flow to the Company and cost of the
assets can be measured reliably.
c) Gains or losses arising from disposal of an intangible asset are
measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognised in the statement of
profit and loss when the asset is disposed off.
2.06 DEPRECIATION AND AMORTIZATION
a) Depreciation on tangible fixed assets is provided on straight line
basis using the rates and in the manner as prescribed in Schedule XIV
of the Companies Act, 1956, which approximates the useful lives of the
assets estimated by the management. Depreciation on Crumb Rubber Plant
has been provided at 11.875% per annum considering the useful life of
the Plant as 8 years on straight line method. Depreciation on other
Plant and Machinery has been provided on Straight line Method on rates
as per Schedule XIV of the Companies Act, 1956
b) Computer Software are amortized over a period of 5 years.
c) Assets costing not more than 5,000/- each individually are
depreciated at 100%.
2.07 INVESTMENTS
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
2.08 INVENTORIES
i) Raw Materials, Stores And Spare parts are valued at cost. Materials
and other items held for use in the production of inventories are not
written down below cost, if the finished products in which they will be
incorporated are expected to be sold at or above cost. Raw Material,
Stores & Spares & Raw Material contents of work in progress are valued
by using the first in first out (FIFO) method.
ii) Finished goods are valued at cost plus excise duty or net
realizable value whichever is lower. The finished goods are valued by
using weighted average cost method. Cost of finished goods includes
direct Raw Material, labour cost, allocable overhead manufacturing
expenses and excise duty.
iii) Work-in-progress are valued at lower of cost and net realizable
value. Cost includes direct materials and labour and a proportion of
manufacturing overheads based on normal operating capacity.
iv) The stocks of scrap materials have been taken at net realisable
value.
v) Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
2.09 FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions and balances
i) Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
ii) Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items, which are
measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction.
iii) Exchange differences
Exchange differences arising on conversion / settlement of foreign
currency monetary items and on foreign currency liabilities relating to
fixed assets acquisition are recognised as income or expense in the
year in which they arise.
iv) Bank Guarantee And Letter of Credit
Bank Guarantee And Letter of Credits are recognized at the point of
negotiation with Banks and converted at the rates prevailing on the
date of Negotiation, However, Outstanding at the period end are
recognized at the rate prevailing as on that date and total sum is
considered as contingent liability.
2.10 RETTREMENTBENEFTTS
i) Provident fund
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contributions to provident fund are made in
accordance with the relevant scheme and are charged to the statement of
profit and loss for the year when the contributions are due. The
Company has no obligation, other than the contribution payable to the
provident fund.
ii) The Company''s gratuity scheme is a defined benefit plan. The
present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected unit credit
method, which recognises each period of service as giving rise to
additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation. The obligation is measured
at the present value of the estimated future cash flows. The discount
rate used for determining the present value of the obligation under
defined benefit plan, is based on the market yields on government
securities as at the balance sheet date. Actuarial gains and losses
are recognised immediately in the Statement of Profit and Loss.
iii) Leave Encashment
Accrual for leave encashment benefit is based on actuarial valuation as
on the balance sheet date in pursuance of the company''s leave rules.
2.11 REVENUE RECOGNITION
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
i) Sale Of Goods:
Revenue from sale of Goods is recognised when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
and are recorded net of returns and trade discount. The Company
collects sales taxes and value added taxes (VAT) on behalf of the
government and, therefore, these are not economics benefits flowing to
the company and therefore are excluded from revenue. Excise Duty is
deducted from revenue(Gross) to arrive at revenue from operations
(net). sales do not include inter- divisional transfers.
ii) Job Work
In case of Job works, the system of accounting in financial books are
to consider net effect of material received and dispatched whereas in
excise records complete details of input/ output quantity and excise
duty is accounted for.
iii) Composite Services
In respect of Mobile blending unit where company has got composite
price of material consumed & equipment rental, the rate for equipment
rental is calculated on the basis of charge received under similar job
work arrangements with government refineries and the remaining portion
of income is considered as sale price of material
iv) Interest:
Interest income is recognized on a time proportion basis, except on
doubtful or sticky loans and advances which is accounted on receipt
basis.
v) Dividend from investment in Shares :
Dividend income is recognized when the right to receive the payment is
established.
2.12 FUTURE CONTRACTS
Profit/ Loss on contracts for future settled during the year are
recognised in the Statement of Profit and Loss. Future contracts
outstanding at year-end are marked to market at fair value. Any losses
arising on that account are recognised in the Statement of Profit and
Loss for the year.
2.13 PRIOR PERIOD ITEMS/ EXTRAORDINARY ITEMS
Prior Period expenses/incomes, are shown as prior period items in the
profit and loss account as per the provision of Accounting Standard-5
"Net Profit or Loss for the Period, Prior Period Items and Changes in
Accounting Policies" notified under the Companies (Accounting
Standards) Rules ,2006 (as amended). Items of income or expenses that
arise from events or transactions that are distinct from ordinary
activities of the enterprise and are not expected to recurr frequently
or regularly are treated as extraordinary items.
2.14 SEGMENT REPORTING Identification of segments
The Company''s operating businesses are organized and managed
separately according to the nature of products and services provided,
with each segment representing a strategic business unit that offers
different products and serves different markets. The Company is
operating in a single segment namely Crumb Rubber, Crumb Rubber
Modifier, Modified Bitumen and Emulsion Bitumen.
Secondary segment:
Geographical Segment ÂThe analysis of geographical segment is not
applicable since all the works are situated within India including
exports executed from India.
2.15 TAXES ON INCOME
Tax expense for the year comprises of direct taxes and indirect taxes.
DIRECTTAXES
i) Current income-tax is measured at the amount expected to be paid to
the tax authorities in accordance with the Income-tax Act, 1961 enacted
in India. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
ii) Deferred income taxes reflect the impact of timing differences
between taxable income and accounting income originating during the
current year and reversal of timing differences for the earlier yea''
Deferred tax is measured using the tax rates and the tax laws enacted
or substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized only to the extent that
there is reasonable certainty that sufficient future taxable income
will be available against which such deferred tax assets can be
realized. In situations where the company has unabsorbed depreciation
or carry forward tax losses, all deferred tax assets are recognized
only if there is virtual certainty supported by convincing evidence
that they can be realized against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The company writes- down the carrying amount of
deferred tax asset to the extent that it is no longer reasonably
certain or virtually certain, as the case may be, that sufficient
future taxable income will be available against which deferred tax
asset can be realized. Any such write-down is reversed to the extent
that it becomes reasonably certain or virtually certain, as the case
may be, that sufficient future taxable income will be available.
iii) Minimum Alternate Tax (MAT) paid in a year is charged to the
Statement of Profit and Loss as Current Tax. The Company recognizes MAT
Credit available as an asset only to the extent that there is
convincing evidence that the company will pay normal income tax during
the specified period, i.e., the period for which MAT Credit is allowed
to be carried forward. In the year in which the company recognizes MAT
credit as an asset in accordance with the Guidance Note on accounting
for Credit Available in respect of Minimum Alternative Tax under the
Income Tax Acts, 1961, the said asset is created by way of credit to
the statement of profit and loss and shown as "MAT Credit Entitlement".
The company reviews the "MAT Credit Entitlement" asset at each
reporting date and writes down the asset to the extent the company does
not have convincing evidence that it will pay normal tax during the
specified period.
iv) Wealth tax is ascertained in accordance with the provisions of the
Wealth Tax Act 1957.
INDIRECTTAXES
i) Excise duty (including education cess) has been accounted for in
respect of the goods cleared. The company is providing excise duty
liability in respect of finished products.
ii) Service Tax has been accounted for in respect of services rendered.
iii) Final sales tax / Value added tax liability is ascertained on the
finalization of assessments in accordance to provisions of sales tax /
value added tax laws of respective states where the company is having
offices/works.
2.16 IMPAIRMENT OFASSETS
The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the company
estimates the asset''s recoverable amount. An asset''s recoverable
amount is the higher of an asset''s or cash-generating unit''s (CGU)
net selling price and its value in use. The recoverable amount is
determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or
groups of assets. Where the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. In determining
net selling price, recent market transactions are taken into account,
if available. If no such transactions can be identified, an appropriate
valuation model is used.
Impairment losses of continuing operations, including impairment on
inventories, are recognized in the statement of profit and loss. After
impairment, depreciation is provided on the revised carrying amount of
the asset over its remaining useful life.
2.17 LEASES
Leases, where the lesser effectively retains substantially all the
risks and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognized as an expense
in the statement of profit and loss on a straight-line basis over the
lease term.
2.18 BORROWING COSTS
Borrowing cost includes interest and ancillary costs incurred in
connection with the arrangement of borrowings and exchange differences
arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
2.19 EARNING PER SHARE
Basic earnings per share is computed by dividing the profit/(loss) aster
tax (including the post tax effect of extraordinary items, if any) by
the weighted average number of equity shares outstanding during the
year. Diluted earnings per share is computed by dividing the
profit/(loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income (net of any attributable taxes) relating to the
dilutive potential equity shares, by the weighted average number of
equity shares considered for deriving basic earnings per share and the
weighted average number of equity shares which could have been issued
on the conversion of all dilutive potential equity shares. Potential
equity shares are deemed to be dilutive only if their conversion to
equity shares would decrease the net profit per share from continuing
ordinary operations. Potential equity shares are deemed to be converted
as at the beginning of the period, unless they have been issued at a
later date. The dilutive potential equity shares are adjusted for the
proceeds receivable had the shares been actually issued at fair value
(i.e. average market value of the outstanding shares). Dilutive
potential equity shares are determined independently for each period
presented.
2.20 PROVISIONS AND CONTINGENT LIABILITIES Provisions
A provision is recognized when the company has a present obligation as a
result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of obligation.
Provisions are not discounted to their present value and are determined
based on the best estimates required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
Contingent Liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The Company does not
recognize a contingent liability but discloses its existence in the
financial statements.
2.21 CASH AND CASH EQUIVALENTS
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
Mar 31, 2012
I. GENERAL
The financial statements are prepared under historical cost convention
using the accrual system of accounting in accordance with the
accounting principles generally accepted in India and the requirements
of the Companies Act, 1956,including the mandatory Accounting Standards
as prescribed by the Companies (Accounting Standards) Rules,2006.
II. USE OF ESTIMATES :
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that effect reportable amount of assets and
liabilities on the date of financial statements and the reported amount
of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the year in
which the results are known / materialized.
III. FIXED ASSETS:
a) Fixed assets are stated at cost of acquisition net of cenvat credit
of excise duty / countervailing duty or of construction, including
preoperative financial and incidental expenses attributable to
acquisition or construction of fixed assets less depreciation.
b) Capital work in progress are carried at cost, comprising direct
costs and related incidental expenses.
c) Expenses of revenue nature, which are related to project setup are
transferred to capital work in progress pending capitalization. These
expenses are to be allocated to fixed assets in the year of
commencement of the related projects.
d) Intangible assets are stated at cost of acquisition less accumulated
amortization.
IV. DEPRECIATION:
a) Fixed assets have been depreciated on straight line method in
accordance with the rates as prescribed in Schedule XIV and provisions
of the Companies Act, 1956 on such assets put to use.
b) Computer Software are amortized over a period of 5 years.
c) Assets costing not more than Rs. 5,000/- each individually are
depreciated at 100%.
d) Buildings on the leasehold/ rental premises are amortised over the
lease period.
V INVESTMENTS:
a) Non-current investments are valued at cost after appropriate
adjustment, if necessary for permanent diminution in their value.
b) Current investments are stated at lower of cost and fair value on
the date of Balance sheet.
VI. INVENTORIES:
a) The raw materials, stores & spare parts are valued at cost. The raw
material, stores & spares & raw material contents of work in progress
are valued by using the first in first out (FIFO) method while the
finished goods are valued by using weighted average cost method. Cost
relating to finished goods means direct raw material, labour cost &
allocable overhead manufacturing expenses.
b) Work in progress and material in progress are valued at raw material
cost & additionally any specific cost attributable to such WIP.
c) Finished goods are valued at cost plus excise duty or net realizable
value whichever is lower. The policy of valuation of inventories is in
accordance with Accounting Standard-2 (Revised) of the Institute of
Chartered Accountants of India.
d) Damaged goods / scrap stocks are valued at net realizable value.
VII. TAXES:
a) DIRECT TAXES:
i) CURRENT TAX :
Provision for income tax, is based on assessable / assessed profits /
losses computed in accordance with the provisions of the Income Tax
Act, 1961.
ii) DEFERRED TAX :
Deferred income tax, expense or benefit is recognized on timing
differences, being the difference between the accounting income and the
taxable income that originate in one period & are capable of reversal
in one or more subsequent periods. Deferred tax assets or liabilities
are measured using the tax rates and laws enacted or substantively
enacted as on balance sheet date.
Deferred tax assets are recognized and carried forward to the extent
there is a reasonable certainty that sufficient future taxable income
will be available against which such deferred tax assets can be
realized. j
iii) WEALTH TAX :
Wealth tax is ascertained in accordance with the provisions of the
Wealth Tax Act 1957.
b) INDIRECT TAXES:
i) EXCISE DUTY:
Excise duty (including education cess) has been accounted for in
respect of the goods cleared. The company is providing excise duty
liability in respect of finished products.
ii) SERVICE TAX:
Service Tax has been accounted for in respect of services rendered.
iii) SALES TAX / VALUE ADDED TAX:
Final sales tax / Value added tax liability is ascertained on the
finalization of assessments in accordance to provisions of sales tax /
value added tax laws of respective states where the company is having
offices/works.
VIII. REVENUE RECOGNITION:
a) SALE :
i. Export sale is recognized as on the date of shipment and accounted
for on the rates prevailing on the date of transaction. The revenue in
respect of export benefit is recognized on post exports basis, at the
rate at which the entitlement accrues
ii. Domestic sales are inclusive of excise duty.
iii. In case of Job works, the system of accounting in financial books
are to consider net effect of material received and dispatched whereas
in excise records complete details of input/ output quantity and excise
duty is accounted for.
iv. In respect of Mobile blending unit where company has got composite
price of material consumed & equipment rental, the rate for equipment
rental is calculated on the basis of charge received under similar job
work arrangements with government refineries and the remaining portion
of income is considered as sale price of material.
b) INTEREST INCOME:
Interest income is recognized on accrual basis, except on doubtful or
sticky loans and advances which is accounted on receipt basis.
c) DIVIDEND FROM INVESTMENT IN SHARES:
Dividend income is recognized when the right to receive the payment is
established.
IX. GRATUITY / RETIREMENTS BENEFITS:
a) Company's contribution to provident fund are charged to profit &
loss account.
b) The company is following the Accounting Standard-15 (Revised) issued
by The Institute of Chartered Accountants of India for gratuity and
leave encashment and the same is valued on the basis of actuarial
valuation.
X. RESEARCH AND DEVELOPMENT:
Net of revenue expenditure on research and development is charged to
profit and loss account in the year in which it is incurred. Capital
expenditure on research and development is shown as fixed assets and
depreciation is considered as per Schedule XIV of the Companies Act,
1956.
XI. FOREIGN EXCHANGE TRANSACTIONS:
a) Foreign currency transactions are accounted for at equivalent rupee
value converted at the exchange rates prevailing at the time of such
transaction.
b) Monetary Assets & Liabilities in foreign currency are translated at
the year end rate through exchange fluctuation account to the
respective accounts as per the guidance issued by The Institute of
Chartered Accountants of India.
c) Short / excess payments received for export on account of difference
in foreign exchange are accounted through exchange fluctuation account.
d) Bank guarantee and letter of credits are recognized at the point of
negotiation with banks and converted at the rates prevailing on the
date of negotiation, however, outstanding at the period end are
recognized at the rate prevailing as on that date and total sum is
considered as contingent liability.
e) Short / excess payments for import/ export on account of difference
in foreign exchange are charged to the profit & loss account.
XII. BORROWING COST:
Borrowing costs that are directly attributable to the acquisition and
construction of qualifying assets are capitalized as part of the cost
of such asset. 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 in the period in which they are
incurred.
XIII. IMPAIRMENT OF ASSETS:
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. Recoverable value is the higher of an
asset's net selling price and value in use. An impairment loss is
charged to the 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.
XIV. LEASES:
Leases of assets under which the lessor effectively retains all the
risks and benefits of ownership are classified as operating lease.
Payments made under operating lease are charged to profit and loss
account over the period of lease.
XV. SEGMENT REPORTING:
(a) Primary Segment: Business Segment
The company's operating business are organized and managed separately
according to the nature of products, with each segment representing a
strategic business unit that offers different products. The identified
segments are bitumen division, trading in poultry feed, trading in
construction chemicals & agricultural activity division.
(b) Secondary segment: Geographical Segment
The analysis of geographical segment is not applicable since all the
works are situated within India including exports executed from India.
(c) Unallocated items:
All common income, expenses, assets and liabilities where so ever are
not possible to be allocated to different segments are treated as
unallocated items.
XVI. OPERATING EXPENSES:
For works performed at the site of customers and deduction made by them
for expenses - electricity and steam charges etc. are accounted for on
accrual basis.
XVII. PRIOR PERIOD ITEMS:
Significant items of income & expenditure which relate to prior
accounting period, other than those occasioned by events occurring
during or after the close of year and which is treated as relatable by
the current year are accounted in the profit & loss account under
respective head of account.
Mar 31, 2010
1. GENERAL :
a) The financial statements have been prepared under the historical
cost convention in accordance with the generally accepted accounting
standards and relevant provisions of the Companies Act 1956 adopted
consistently by the company.
b) The company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis, except that certain transactions are accounted on cash
basis,since it is possible to ascertain with reasonable accuracy the
quantum to be providedl for, such is (i) bank commission / charges on
foreign transactions, (:i) insurance claims, (Ml) export demurrage: or
claims, (iv) interest on calls in arrears / doubtful loans & advances,
(v) income tax sales tax , wealth tax / service tax / excise duty /
cess.
i. USE OF ESTIMATES:
The presentation of financial statements in conformity with the
generally accepte accounting principles requnes estimates and
assumptions to be made that effect reportable amount of assets and
liablities on the date of financial statements and the reported amount
of revenues and expenses during the reporting period Difference between
the actual results and estimates are recognized in the year in which
are known / materlializad
3. FIXED ASSETS:
a) Fixed assets are stated at cast of acquisition net of medvat
(cenvet) credit of excise duty/ countervating duty or of construction,
including preoperative, financial and incidental & expenses
attributable to acquisition or construction of fixed assets less
depreciation.
b) Capital work in progress are carried at cost, comprising direct
costs, related Incidental expenses & attributable interest
c) Expenses of revenue nature, which are related to project setup are
transferred to capital work in progress pending capitalisation.These
expenses are to be allocated to fixed assets in the year of
commencement of the related projects.
4. DEPRECIATION:
(a) Fixed assets have been depreciated on straight line method in
accordance with the rates as prescribed in Schedule XIV and provisions
of the Companies Act. 1956 on such assets put to use.
(b) Assets costing not more than ? 5,000/- each individually are
depreciated at 100*4.
5. INVESTMENTS:
(a) Long term investments are valued at cost after appropriate
adjustment, ii necessary for permanent diminution in their value,
(b) Current investments are stated at lower of cost and fair value on
the date of Balance sheet.
6. INVENTORIES:
a) The raw materials, stores & spare parts are valued it cost. The raw
material, stores & scares & raw matenal contents of work in progress
are valued by using the first in first out (FIFO) method while the
finished goods are valued by using weighted average cost method. Cost
relating to finished goods mean direct raw material, labour cost &.
allocable overhead manufacturing expenses.
b) Work in progress and material in progress are valued at raw material
cost plus 20% of raw materia! cost or 50 % of conversion cost
whichever is lower.
c) Finished goods are valued at cost plus excise duty or realizable
value whichever is lower. The policy of valuation of inventories is in
accordance with Accounting Standard-2 (Revised) of the Institute of
Chartered Accountants of India.
d) Damaged goods / scrap stocks are valued at expected realizable
value.
7. EXCISE DUTY :
Excise duly (including education cess) has been accounted for in
respect of the goods cleared. The company is providing excise duty
liability in respect of finished products
8. SERVICE TAX :
Service Tax has been accounted for in respect of services rendered.
9. REVENUE RECOGNITION:
a) SALE :
i. Export sale is recognized as on the date of shipment and accounted
on the rates prevailing on the
date of negotiations of documents. The revenue in respect of export
benefit is recognized on post
exports basis, at the rate at which the entitlement accrues
ii. Domestic sales are inclusive of excise duty
iii. In case of Job works at Mumbai unit the system of accounting in
financial books are to consider net effect of material received and
dispatched whereas in excise records complete details of input / output
quantity and excise duty is accounted for.
b) INTEREST INCOME :
Interest income is recognised on accrual basis, except on doubtful or
sticky loans and advances.
c) DIVIDEND FROM INVESTMENT IN SHARES :
Dividend income is recognized when the right to receive the payment is
established.
10. GRATUITY/RETIREMENTS BENEFITS:
i) Companys contribution to provident fund are charged to profit &
loss account.
ii) The company is following the Accounting Standard-15 (Revised)
issued by The Institute of Chartered Accountants of India for gratuity
and leave encashment and the same is valued on the basis of actuarial
valuation.
11. RESEARCH AND DEVELOPMENT:
Net of revenue expenditure on research and development is charged to
profit and loss account in the year in which it is incurred. Capital
expenditure on research and development is shown as fixed assets and
depreciation is considered.
12. FOREIGN EXCHANGE TRANSACTIONS:
a) Foreign currency transactions are accounted for at equivalent rupee
value converted at the rates prevailing at the time of such
transaction.
b) Export on collection / import on payment basis, as on the close of
the year are finally adjusted on the basis of exchange rates prevailing
as on that date through exchange fluctuation account to the respective
accounts as per the guidance issued by The Institute of Chartered
Accountants of India.
c) Short / excess payment received for export on account of difference
in foreign exchange are accounted through exchange fluctuation account.
d) Bank guarantee and letter of credits are recognized at the point of
negotiation with banks and converted at the rates prevailing on the
date of negotiation, however, outstanding at the period end are
recognized at the rate prevailing as on that date and total sum is
considered as contingent liability.
e) Short / excess payment for import of assets on account of difference
in foreign exchange are accounted for as the cost of respective asset.
f) Short / excess payment for import of raw material and consumable
expenses on account of difference in foreign exchange are accounted for
as the cost of respective material.
13. DIRECT TAXES
a) INCOME TAX / WEALTH TAX:
Provision for income tax. if any, is based on assessable / assessed
profits / losses computed In accordance with the previsions of the
Income Tax Act, 1961. Wealth tax is ascertained in accordance with the
provisions of the Wealth Tax Act
b) DEFERRED TAX:
Deferred income tax, expanse or benefit is recognized on timing
differences, being the difference between the acoounting income and the
taxable income that originate in one period & are capable of reversal
in one or more subsequent period. Deferred tax assets of liabilities
are measured using the tax rates and laws enacted or substantively
enacted as on balance sheet date.
Deterred tax assets are recognized and carried forward to the extent
there is a reasonable certainly that sufficient future taxable income
will be available against which such deferred tax assets can be
realized.
c) SALES TAX/VALUE ADDED TAX.
Final sates tax hability value added tax liability is ascertained on
the finalisation of assessments in accordance to provisions of sales
tax laws / value added tax laws at respective states where the company
i.e having office/Works.
14. BORROWING COST:
Borrowing costs that are directly attributable to the acquisition and
construction of qualifying assets are capitalized as part of the cost
of such asset. A - qua!ifying aset is one that necessarly takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revunue in the period in .which they are
Incurred.
15 IMPAIRMENT OF ASSETS:
An asset is treated as Impaired when the carring cost of the asset
exceeds its recoverable value. Recoverable value is the higher of an
assets net selling price and value in use. An impairment Ioss is
charged to the 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.
16. LEASES:
Laeses of assets under which the lessor effectively retains all the
ricks and hens-tits of ownership are classified as operating lease
Payment made under operating lease are charged 10 profit and lose
account over the period of lease.
17. SEGMENT REPORTING:
(a) Primary Segment: Business Segmenl
The companys operatlng business. are organized and managed separately
according to the nature of products with each segment represeenting a
strategic business unit that offers different products. The identified
segments are bitumen division, trading in poultry seeds and
agricultural activity division.
(b) Secondary segment: Geographical Segment
The analysis of geographical segment is not applicable since alt the
works are situated within India including exports executed from India
(c) Unallocated Items:
All common income, expenses, assets and Iiabilities where so ever are
not possible to be allocated to different segments are treated as
unallowed terns.
18. OPERATING EXPENSES:
For works performed at the site of refineries and deduction made by
them for expenses - electricity and steam charges etc. are accounted
for on estimated basis.
19. PRIOR PERIOD ITEMS:
Significant items of income & expenditure which relate to prior
accounting period, other than those occasioned by events occurring
during or after the close of year and which is treated as relatable by
the current year are accounted in the profit & loss account under
respective head of nominal account.
Mar 31, 2009
1. GENERAL:
a) The financial statements have been prepared under the historical
cost convention in accordance with the generally accepted accounting
standards and relevant provisions of the Companies Act, 1956 as adopted
consistently by the company.
b) The company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis, except that certain transactions are accounted on cash basis,
since it is not possible to ascertain with reasonable accuracy the
quantum to be provided for, such as (i) bank commission / charges on
foreign transactions, (ii) insurance claims, (Hi) export demurrages or
claims, (iv) interest on calls in arrears / doubtful loans & advances,
(v) income tax / sales tax / wealth tax / service tax / excise duty /
cess.
2. USE OF ESTIMATES:
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that effect reportable amount of assets and
liabilities on the date of financial statements and the reported amount
of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the year in
which the results are known / materialized.
3. FIXED ASSETS:
(a) Fixed assets are stated at cost of acquisition, net of modvat
(cenvet) credit of excise duty/ countervailing duty or of construction,
including preoperative, financial and incidental expenses attributable
to acquisition or construction of fixed assets less depreciation.
(b) Capital work in progress are carried at cost, comprising direct
costs, related incidental expenses & attributable interest.
(c) Expenses of revenue nature, which are related to project setup are
transferred to capital work in progress pending capitalisation.These
expenses are to be allocated to fixed assets in the year of
commencement of the related projects.
4. DEPRECIATION:
(a) Fixed assets have been depreciated on straight line method in
accordance with the rates as prescribed in Schedule XIV and provisions
of the Companies Act, 1956 on such assets put to use.
(b) Assets costing not more than Rs.5,0007- each individually are
depreciated at 100%.
5. INVESTMENTS:
(a) Long term investments are valued at cost after appropriate
adjustment, if necessary for permanent diminution in their value.
(b) Current investments are stated at lower of cost and fair value on
the date of Balance sheet.
6. INVENTORIES
a) The raw materials, stores & spare parts are valued at cost. The raw
material, stores & spares & raw material contents of work in progress
are valued by using the first in first out (FIFO) method while the
finished goods are valued by using weighted average cost method. Cost
relating to finished goods _mean direct raw material, labour cost &
allocable overhead manufacturing expenses.
b) Work in progress and material in progress are valued at raw material
cost plus 20% of raw material cost or 50 % of conversion cost whichever
is lower.
c) Finished goods are valued at cost plus excise duty or realizable
value whichever is lower. The policy of valuation of inventories is in
accordance with Accounting Standard-2 (Revised) of the Institute of
Chartered Accountants of India.
d) Damaged goods / scrap stocks are valued at expected realizable
value.
7. EXCISE DUTY:
Excise duty (including education cess) has been accounted for in
respect of the goods cleared. The company is providing excise duty
liability in respect of finished products
8. SERVICETAX
Service Tax has been accounted for in respect of services rendered.
9. REVENUE RECOGNITION a) SALE:
i) Export sale is recognized as on the date of shipment and accounted
on the rates prevailing on the date of negotiations of documents. The
revenue in respect of export benefit is recognized on post exports
basis, at the rate at which the entitlement accrues
i) Domestic sales are inclusive of sales tax / vat and inclusive of
excise duty.
Mi) In case of Job works at Mumbai unit the system of accounting in
financial books are to consider net effect of material received and
dispatched whereas in excise records complete details of input / output
quantity and excise duty is accounted for.
b) INTEREST INCOME.
Interest income is recognised on accrual basis, except on doubtful or
sticky loans and advances.
c) DIVIDEND FROM INVESTMENT IN SHARES:
Dividend income is recognized when the right to receive the payment is
established.
d) EXPORTS BENEFITS:
Export benefits are recognized on accrual basis. In the case of
licenses, premium is accounted for at the estimated market rate
prevailing on the balance sheet date and finally adjusted in the year
of transfer or utilization.
10. GRATUITY/RETIREMENTS BENEFITS:
i) Companys contribution to provident fund are charged to profit &
loss account.
i) The company is following the Accounting Standard-15 (Revised) issued
by The Institute of Chartered Accountants of India for gratuity and
leave encashment and the same is valued on the basis of actuarial
valuation.
11. RESEARCH AND DEVELOPMENT:
Net of revenue expenditure on research and development is charged to
profit and loss account in the year in which it is incurred. Capital
expenditure on research and development is shown as fixed assets and
depreciation is considered.
12. FOREIGN EXCHANGETRANSACTIONS:
a) Foreign currency transactions are accounted for at equivalent rupee
value converted at the rates prevailing at the time of such
transaction.
b) Export on collection / import on payment basis, as on the close of
the year are finally adjusted on the basis of exchange rates prevailing
as on that date through exchange fluctuation account to the respective
accounts as per the guidance issued by The Institute of Chartered
Accountants of India.
c) Short / excess payment received for export on account of difference
in foreign exchange are accounted through exchange fluctuation account.
d) Bank guarantee and letter of credits are recognized at the point of
negotiation with banks and converted at the rates prevailing on the
date of negotiation, however, outstanding at the period end are
recognized at the rate prevailing as on that date and total sum is
considered as contingent liability.
e) Short / excess payment for import of assets on account of difference
in foreign exchange are accounted for as the cost of respective asset.
f) Short / excess payment for import of raw material and consumable
expenses on account of difference in foreign exchange are accounted for
as the cost of respective material.
13. DIRECTTAXES:
a) INCOME TAX / WEALTH TAX / FRINGE BENEFIT TAX:
Provision for income tax, if any, is based on assessable / assessed
profits / losses computed in accordance with the provisions of the
Income Tax Act, 1961. Wealth tax and fringe benefit tax is ascertained
in accordance with the provisions of the Wealth Tax Act and Fringe
benefit tax respectively.
b) DEFERRED TAX:
Deferred income tax, expense or benefit is recognized on timing
differences, being the difference between the accounting income and the
taxable income that originate in one period & are capable of reversal
in one or more subsequent period. Deferred tax assets or liabilities
are measured using the tax rates and laws enacted or substantively
enacted as on balance sheet date.
Deferred tax assets are recognized and earned forward to the extent
there is a reasonable certainty that sufficient future taxable income
will be available against which such deferred tax assets can be
realized.
c) SALES TAX / VALUE ADDED TAX:
Final sales tax liability /Value added tax liability is ascertained on
the finalisation of assessments in accordance to provisions of sales
tax laws / value added tax laws of respective states where the company
is having offices/works.
14. BORROWING COST:
Borrowing costs that are directly attributable to the acquisition and
construction of qualifying assets are capitalized as part of the cost
of such asset. 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 in the period in which they are
incurred.
15. IMPAIRMENT OF ASSETS.
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. Recoverable value is the higher of an
assets net selling price and value in use. An impairment loss is
charged to the 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.
16. LEASES:
Leases of assets under which the lessor effectively retains all the
risks and benefits of ownership are classified as operating lease.
Payments made under operating lease are charged to profit and loss
account over the period of lease.
17. SEGMENT REPORTING:
(a) Primary Segment: Business Segment
The companys operating business are organized and managed separately
according to the nature of products, with each segment representing a
strategic business unit that offers different products. The identified
segments are bitumen division, commissioning of plants, and
agricultural activity division.
(b) Secondary Segment: Geographical Segment
The analysis of geographical segment is not applicable since all the
works are situated within India including exports executed from India.
(c) Unallocated items
All common income, expenses, assets and liabilities where so ever are
not possible to be allocated to different segments are treated as
unallocated items.
18. OPERATING EXPENSES:
For works performed at the site of refineries and deduction made by
them for expenses - electricity and steam charges etc. are accounted
for on estimated basis.
19. PRIOR PERIOD ITEMS:
Significant items of income & expenditure which relate to prior
accounting period, other than those occasioned by events occurring
during or after the close of year and which is treated as relatable by
the current year are accounted in the profit & loss account under
respective head of nominal account.
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