Note No.1 Significant Accounting Policies 1. Basis of Preparation of Financial Statements a. The financial statements have been brpared in compliance with the applicable Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and other pronouncement of Institute of Chartered Accountant of India, with relevant provisions of Companies Act, 2013; applicable guidelines issued by the Securities Exchange Board of India (SEBI) and generally accepted accounting principles applicable in India (GAAP). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires changes in the accounting policy hitherto in use. b. The financial statements have been brpared under historical cost convention on an accrual basis. c. All the assets and liabilities have been classified as current or noncurrent as per Companyvs normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of product and time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be 12 months for the purpose of current — noncurrent classification of assets & liabilities. 2. Use of Estimates The brparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management believes the assumption used in the estimates is prudent and reasonable. Difference between the actual results and estimates are recognized in the period in which the results are known /materialized. 3. Fixed Assets Fixed Assets are stated at cost less accumulated debrciation and impairment losses. Cost includes capital cost, freight, duties, taxes and other incidental expense incurred during the construction / installation stage attributable to bringing the asset to working condition for its intended use. 4. Debrciation and Amortization a. Debrciation on Fixed Assets, other than assets acquired on lease, is being provided over the useful life of an asset on written down value method and in the manner specified in Schedule II of the Companies Act, 2013. b. Assets acquired on lease are amortized over the period of lease in equal installments. c. Intangible Assets are amortized over their respective individual estimated useful lives on WDV basis. 5. Intangible Assets Intangible assets are recognized if it is probable that future economic benefits that are attributable to the asset will flow to the company and the cost of the assets can be measured reliably. 6. Impairment of Assets As at each balance sheet date, the carrying amount of assets is tested for impairment so as to determine a. the provision for impairment loss, if any, required or b. the reversal, if any, required for impairment loss recognized in brvious periods. Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined a. in the case of an individual asset, at the higher of net selling price and the value in use. b. in the case of a cash-generating unit (a group of assets that generates identified independent cash flows), at the higher of the cash generating unit's selling price and the value in use. Value in use is determined as the brsent value of estimated future cash flow from the continuing use of an asset and from its disposal at the end of its useful life. 7. Borrowing Cost Borrowing Costs attributable to the acquisition or construction of qualifying assets are capitalized as a part of the cost of such assets. All other borrowing costs are charged to revenue. 8. Inventories a. Inventories are valued at lower of cost and estimated net realizable value. Cost is determined on 'First-in First-out', 'Specific Identification', or "Weighted Averages' basis as applicable. Cost of Inventories Comprises of all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition. Cost of semi finished and finished goods are determined on absorption costing method. b. All raw materials purchased are simultaneously issued for production. Accordingly material-in-process includes such raw materials as well. Semi Finished Goods are goods manufactured and pending for br-shipment inspection. Materials consumed are materials used in production of semi finished and finished goods only. c. Identification of a specific item and determination of estimated net realizable value involve technical judgment of the management. The valuation is further supported by certificate from an independent approved valuer, which has been relied upon by the Auditors. 9. Investments Long-term investments including those held through nominees are stated at cost. Provision for diminution in the value of long-term investments (including Loans and Advances to Subsidiaries considered as a part of net investment) is made only if such a decline is other than temporary in the opinion of the management. Current investments are carried at lower of cost and fair value. 10. Revenue Recognition Sale of Goods: Revenue from sales of goods is recognized when risk and rewards of ownership of the products are passed on to the customers, which is generally on dispatch of goods and is stated net of returns, trade discounts, claims etc. Dividend on Investment: Revenue is recognized when the right to receive payment is established. Interest Income: Interest Income is recognized on time proportionate basis. Export Incentives: Export Incentive including duty drawback is recognized on accrual basis in the year of export. 11. Foreign Currency Transactions: a. Initial Recognition: Transactions denominated in foreign currencies are normally recorded at the exchange rate brvailing at the time of the transaction. b. Conversion: Monetary items denominated in foreign currencies at the year-end are translated at closing rates. Non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of transaction and investment in foreign companies are recorded at the exchange rates brvailing on the date of making the investments. Contingent Liabilities are translated at closing rate. Exchange difference arising on translation of Loan and Advances to non — integral wholly owned subsidiaries and forming part of net investment, are recognized in foreign currency translation reserve. Such accumulated exchange differences are taken to statement of profit and loss account on liquidation or on proportionate basis on partial liquidation of such loans and advances. c. Exchange Differences: Exchange differences arising on the settlement of monetary items or on restatement of monetary items at rates different from those at which they were initially recorded during the year, or reported in brvious financial statements, are recognized as income or as expenses in the year in which they arise. d. Forward Exchange Contract not intended for trading or speculation purposes: The brmium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of contract. Exchange differences on such contract are recognized in the statement of profit and loss in the year in which the exchange rate changes. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense. 12. Employee Benefits a. Short term and other long term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered. b. Employee's Retirement benefits and long term Compensated Absences are recognized as an expense in the statement of profit and loss for the year in which the employee has rendered services. The expense is recognized at the brsent value of the amounts payable, determined using actuarial valuation by an independent actuary using the projected unit credit method. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the statement of profit and loss. c. In respect of Employee Stock Options, the excess of market price of shares as at the date of grant of option granted to employee (including certain employees' of subsidiaries) over the exercise price is treated as Employee Compensation Cost and amortized on a straight — line basis over the vesting period. 13. Provision for Current and Deferred Taxation a. Income tax expense for the year, comprising current tax and deferred tax is included in determining the net profit for the Year. b. A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and Tax laws. 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 debrciation 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. At each balance sheet date the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable Income will be available against which such deferred tax assets can be realized. c. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the carrying amount of a 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. 14. Earnings per Share The basic earnings per share is computed by dividing the net profit after tax for the year by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per shares, net profit after tax for the year and weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, 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. the average market value of the outstanding shares) 15. 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. 16. Lease Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease or other systematic basis more rebrsentative of the time pattern of the user's benefits. 17. Provision, Contingent Liabilities and Contingent Assets Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if a. the Company has a brsent obligation as a result of past event, b. a probable outflow of resources is expected to settle the obligation and c. the amount of the obligation can be reliably estimated Contingent Liability is disclosed in case of a. a brsent obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation b. a possible obligation, unless the probability of outflow of resources is remote. Contingent Assets are neither recognized, nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet Date. 2 The Board in its meeting held on 28thJuly, 2015 had approved a Scheme of Capital Reduction under section 100 to 104 of the Companies Act 1956 read with section 52 of the Companies Act 2013 for setting off of accumulated losses as on 31st March, 2015 of H264.3 crores against the Share Premium Account. The Shareholder have approved Scheme via postal ballot on 16th Jan, 2016 & Scheme is filed with High Court for its approval. 3 Previous year's figure have been regrouped/ rearranged wherever necessary. For HARIBHAKTI & CO. LLP Chartered Accountants F.R. No.: 103523W CHETAN DESAI Partner M.No.: 17000 For B. KHOSLA & CO. Chartered Accountants F.R. No.: 000205C SANDEEP MUNDRA Partner M.No.: 075482 For and on behalf of the Board PURU AGGARWAL Group CFO SUNIL AGRAWAL Chairman & Managing Director DIN :00061142 BRAHM PRAKASH Company Secretary RAHIMULLAH Whole Time Director DIN :00043791 Place ;Jaipur, date : 19th May, 2016 |