ಕಂಪನಿಯ ಅಕೌಂಟಿಗ್ ಪಾಲಿಸಿ DCM Ltd.
Mar 31, 2018
1. Significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these financial statements and in preparing the opening Ind AS Balance Sheet as at April 1, 2016 for the purposes of the transition to Ind AS.
a. Current and non-current classification
All assets and liabilities are classified into current and non-current.
Assets
An asset is classified as current when it satisfies any of the following criteria:
- It is expected to be realised in, or is intended for sale or consumption in, the Companyâs normal operating cycle;
- It is held primarily for the purpose of being traded;
- It is expected to be realised within 12 months after the reporting date; or
- It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date. Current assets include the current portion of non-current financial assets. All other assets are classified as non-current.
Liabilities
A liability is classified as current when it satisfies any of the following criteria:
- It is expected to be settled in the Companyâs normal operating cycle;
- It is held primarily for the purpose of being traded;
- It is due to be settled within 12 months after the reporting date; or
- The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
Current liabilities include the current portion of financial liabilities some part of which may be non-current. All other liabilities are classified as noncurrent.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Operating cycle
Based on the nature of products/ activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and noncurrent.
b. Measurement of fair values
A number of the Companyâs accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.
The Company has an established control framework with respect to the measurement of fair values. This includes the corporate finance team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the board of directors.
The corporate finance team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.
Significant valuation issues are reported to the Companyâs audit committee.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
c. Property, Plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation and accumulated impairment losses, if any.
Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.
When parts of an item of property, plant and equipment having significant cost have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Gains or losses on disposal of an item of property, plant and equipment is recognised in the statement of profit or loss.
All spare parts which are expected to be used for more than one accounting period are capitalised as property, plant and equipment.
Capital work-in-progress is stated at cost, net of impairment loss, if any. The cost of self-constructed assets includes the cost of materials, direct labour, and any other costs directly attributable to bringing the assets to a working condition and location for their intended use, the initial estimate of dismantling and removing the items and restoring the site on which they are located.
Transition to IndAS
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at April 1, 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of such property, plant and equipment.
Subsequent expenditure
Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the Company and the cost of the item can be measured reliably.
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in the statement of profit and loss as incurred.
Depreciation is provided on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives.
(i) The Company follows straight-line method of depreciation in respect of buildings, plant and machinery, all assets of IT Division, all assets of Engineering Division and written down value method in respect of other assets.
(ii) The depreciation charged on all property, plant and equipment is on the basis of useful life specified in Part âCâ of Schedule II to the Companies Act, 2013 which represents useful lives of the assets.
(iii) On assets sold, discarded, etc., during the year, depreciation is provided up to the date of sale/discard.
(iv) Depreciation has been calculated on a pro-rata basis in respect of acquisition/installation during the year.
(v) Leasehold improvements are amortised over the balance of the primary lease period or the useful lives of assets, whichever is shorter.
(vi) Freehold land is not depreciated
Depreciation methods, useful lives and residual values are reviewed at each financial year, and changes, if any, are accounted for prospectively. Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (up to) the date on which asset is ready for use (disposed of).
d. Intangible assets
Recognition and measurement
Intangible assets comprise computer software. Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the tax authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset are recognised in the statement of profit and loss when the asset is derecognised.
Transition to Ind AS
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its Intangible assets recognised as at April 1, 2016 measured as per the previous GAAP, and use that carrying value as the deemed cost of such intangible assets.
Subsequent expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in statement of profit and loss as incurred.
Amortisation
The managementâs estimates of the useful lives of the Software are 3-5 years.
Amortisation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
e. Inventories
(i) Stores, spares and components are valued at cost or under.
(ii) Raw materials, process stocks, finished goods and stock in trade are valued at lower of cost and net realisable value.
(iii) Land (for development) on conversion into inventory from fixed assets is valued at the lower of its historical cost and net realisable value, and includes appropriate share of land development expenses and finance cost of borrowed funds relatable thereto.
Cost of inventories, other than land (for development), is ascertained on the weighted average basis in textiles division and moving weighted average basis in engineering division. Further, in respect of the manufactured inventories, i.e., process stocks and finished goods, appropriate share of manufacturing expenses are included on absorption costing basis. Work in process relating to software contracts includes salary and other directly identifiable expenses incurred on fixed price contracts, till the completion of specified deliverables, and are valued at cost or net realisable value, whichever is lower.
f. Financial instruments
Recognition and initial measurement
(i) Financial assets
Trade receivables issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provision of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of financial asset or financial liabilities, as appropriate, on initial recognition.
Classification and subsequent measurement
On initial recognition, a financial asset is classified as measured at
- amortised cost;
- FVTPL
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
- the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investmentâs fair value in OCI (designated as FVOCI-equity investment). The election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Impairment
The Company recognizes loss allowance using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all financial assets with contractual cash flows other than trade receivable, ECLs are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of ECLs (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised as an impairment gain or loss in the Statement of Profit and Loss.
(ii) Financial liabilities
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit and loss. Any gain or loss on derecognition is also recognised in profit or loss.
(iii) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the assets and settle the liabilities simultaneously.
(iv) Investment in Subsidiaries
Investments in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries, the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.
Derecognition
(i) Financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.
If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
(ii) Financial liabilities
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in statement of profit or loss.
g. Impairment of Non-financial assets
The Companyâs non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assetâs recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.
h. Non-current assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities are classified as held for sale if it is highly probable that they recovered primarily through sale rather than through continuing use.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any resultant loss on a disposal group is allocated first to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets and employee benefit assets, which continue to be measured in accordance with the Companyâs other accounting policies. Losses on initial classification as held for sale and subsequent gains and losses on re-measurement are recognised in profit or loss.
Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or depreciated.
i. Employee benefits Short-term employee benefits:
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. Employee benefit liabilities such as salaries, wages, casual leave allowance and bonus, etc. that are expected to be settled wholly within twelve months after the end of the year in which the employees render the related service are recognised in respect of employeesâ services up to the end of the reporting year and are measured at an undiscounted amount expected to be paid when the liabilities are settled.
Defined contribution plans
Provident Fund: A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts.
The Company makes specified monthly contributions towards employee provident fund and employee state insurance to Government administered fund which is a defined contribution plan. The Companyâs contribution is recognised as an expense in the statement of profit or loss during the period in which the employee renders the related service and also includes contribution to national pension scheme and overseas social security contribution.
The Company makes specified monthly contribution towards superannuation fund to Superannuation Trust which is managed by the Life Insurance Corporation of India (âLICâ).
Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Companyâs obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The Company has following defined benefit plans:
Gratuity: The Companyâs gratuity scheme is a defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation carried out by an independent actuary, 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 as the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plans is based on the market yields on Government securities as at the balance sheet date for the estimated term of the obligation.
Remeasurements of the defined benefit liability, which comprise actuarial gains and losses are recognized in OCI.
Other long-term employee benefits
Benefits under the Companyâs compensated absences are other long term employee benefits. The Companyâs net obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual independent actuarial valuation using the projected unit credit method. Remeasurements gains or losses are recognised in statement of profit or loss in the period in which they arise.
j. Provisions and contingent liabilities
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost. Expected future operating losses are not provided for.
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 not wholly within the control of the Company. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the possibility of an outflow of economic benefits is remote.
k. Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and rebates. Revenue is recognised only when recovery of the consideration is probable, the associated costs can be estimated reliably, there is no continuing management involvement, and the amount of revenue can be measured reliably.
Revenue from sale of goods is recognised when significant risks and rewards of ownership are transferred to the customer and no significant uncertainty exists regarding its collection. Sales are inclusive of excise duty and exclusive of sales tax/ Goods and services tax.
Revenue from software development contracts is recognised on the basis of milestone achieved, as provided in the contract.
Revenue on maintenance contracts is recognised on pro-rata basis linked with the period of contract.
Services income is recognised on accrual basis, as provided in the contracts.
In respect of Land Development Project, sale of rights on outright basis is recognised in the year in which risk and rewards are transferred.
Other income
Dividend income is recognised in statement of profit or loss on the date on which the Company''s right to receive payment is established.
Interest income or expense is recognised using the effective interest method.
The âeffective interest rateâ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
- the gross carrying amount of the financial asset ; or
- the amortised cost of the financial liability
When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses. Interest income is included in other income in the statement of profit and loss.
l. Leases
i. Determining whether an arrangement contains a lease
At inception of an arrangement, it is determined whether the arrangement is or contains a lease.
At inception or on reassessment of the arrangement that contains a lease, the payments and other consideration required by such an arrangement are separated into those for the lease and those for other elements on the basis of their relative fair values. If it is concluded for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. The liability is reduced as payments are made and an imputed finance cost on the liability is recognised using the incremental borrowing rate.
ii. Assets held under leases
Leases of property, plant and equipment that transfer to the Company substantially all the risks and rewards of ownership are classified as finance leases. The leased assets are measured initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with the accounting policy applicable to similar owned assets.
Assets held under leases that do not transfer to the Company substantially all the risks and rewards of ownership (i.e. operating leases) are not recognised in the Companyâs Balance Sheet.
iii. Lease payments
Payments made under operating leases are generally recognised in statement of profit or loss on a straight-line basis over the term of the lease unless such payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases. Lease incentives received are recognised as an integral part of the total lease expense over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance charge and the reduction of the outstanding liability. The finance charges is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
iv. Assets given on lease
Amounts due from lessees under finance leases are recognised as receivables at the amount of the Companyâs net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Companyâs net investment outstanding in respect of the leases.
Rental income from operating leases is generally recognised on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Companyâs expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.
m. Income tax
Income tax comprises current and deferred tax. Current tax expense is recognized in statement of profit or loss except to the extent that it relates to items recognized directly in other comprehensive income or equity, in which case it is recognized in other comprehensive income or equity.
i. Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.
Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.
ii. Deferred tax
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognized in respect of carried forward tax losses and tax credits. Deferred tax is not recognized for:
- temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction;
- temporary differences related to investments in subsidiaries to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
- taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, in case of a history of recent losses, the Company recognizes a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realized. Deferred tax assets â unrecognized or recognized, are reviewed at each reporting date and are recognized/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised.
Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be real.
Minimum Alternative Tax (âMATâ) expense under the provisions of the Income-tax Act, 1961 is recognised as an asset when it is probable that future economic benefit associated with it in the form of adjustment of future income tax liability, will flow to the Company and the asset can be measured reliably. MAT credit entitlement is set off to the extent allowed in the year in which the Company becomes liable to pay income taxes at the enacted tax rates. MAT credit entitlement is reviewed at each reporting date and is written down to reflect the amount that is reasonably certain to be set off in future years against the future income tax liability. MAT Credit Entitlement is presented as part of deferred tax in the balance sheet. n. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
In accordance with Ind AS 108 â Operating Segments, the operating segments used to present segment information are identified on the basis of internal reports used by the Companyâs Management to allocate resources to the segments and assess their performance.
The Board of Directors is collectively the Companyâs âChief Operating Decision Makerâ or âCODMâ within the meaning of Ind AS 108.
In addition to the significant accounting policies applicable to the segments as set out in note 2 of notes forming part of the financial statement, the accounting policies in relation to segment accounting are as under :-
i) Segment assets and liabilities
All segment assets and liabilities have been allocated to the various segments on the basis of specific identification. Segment assets consist principally of fixed assets, capital work in progress, inventories, trade receivables, other financial and non-financials assets and loans. Segment assets do not include unallocated corporate assets, investments, advance tax and other assets not specifically identifiable with any segment.
Segment liabilities include all operating liabilities and consist principally of trade payables and accrued liabilities. Segment liabilities do not include borrowings and those related to income taxes.
ii) Segment revenue and expenses
Segment revenue and expenses are directly attributable to the segment and have been allocated to various segments on the basis of specific identification. Segment revenue does not include interest income and other income in respect of non-segmental activities. Segment expenses do not include depreciation on unallocated corporate fixed assets, interest expense, tax expense and other expenses in respect of non-segmental activities.
iii) Inter segment sales
Inter-segment sales are accounted for at cost and are eliminated in consolidation.
o. Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
p. Earnings per share
Basic earnings per equity share is computed by dividing:
- the net profit attributable to equity shareholders of the Company
- by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares.
- Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
q. Borrowing cost:
Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.
r. Finance expense
Finance expenses comprises of interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest cost) incurred in connection with the borrowings of funds. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognized in the statement of profit and loss using the effective interest method.
s. Government grant:
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Government grants relating to income are deferred and recognised in the statement of profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to statement of profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.
t. Research and development expenses
Expenditure on research is expensed off under the respective heads of account in the period in which it is incurred.
Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised, if the cost can be reliably measured, the product or process is technically and commercially feasible and the Company has sufficient resources to complete the development and right to use the asset. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads that are directly attributable to preparing the asset for its intended use. Other development expenditure is recognised in the statement of profit or loss as an expense as incurred.
Capitalised development expenditure is stated at cost less accumulated amortisation and impairment losses. Property, plant and equipment used for research and development are depreciated in accordance with the Companyâs policy as stated above.
Materials identified for use in research and development process are carried as inventories and charged to the statement of profit or loss on consumption of such materials for research and development activities.
u. Foreign currency transactions and translation
Transactions in foreign currencies are translated into the respective functional currencies of the Company at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. The resulting difference is recorded in the Statement of Profit and Loss.
Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Exchange differences are recognised in statement of profit or loss.
The Company uses derivative financial instruments such as forward exchange contracts to hedge its risk associated foreign currency fluctuations. Such derivatives are stated at fair value. Any gains or losses arising from changes in fair value are taken directly to statement of profit or loss.
v. Foreign operations:
The assets and liabilities of foreign operations are translated into INR, the functional currency of the Company, at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into INR at the exchange rates at the dates of the transaction or an average rate if the average rate approximates the actual rate at the date of the transaction.
In accordance with Ind AS 101, the Company has elected to deem foreign currency translation differences that arose prior to the date of transition to Ind AS, i.e. April 1, 2016, in respect of all foreign operations to be nil at the date of transition. From April 1, 2016 onwards, such exchange differences are recognised in OCI and accumulated in equity (as exchange differences on translating the financial statements of a foreign operation).
w. Recent accounting pronouncements
Standards issued but not yet effective
Ind AS 115 âRevenue from Contracts with Customersâ
On 28 March 2018, Ministry of Corporate Affairs (MCA) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers.
The standard permits two possible methods of transition:
- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach) The effective date for adoption of Ind AS 115 is financial periods beginning on or after 1 April 2018.The Company will adopt the standard on 1 April 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended 31 March 2018 will not be retrospectively adjusted. The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.
Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:
On 28 March 2018, Ministry of Corporate Affairs (MCA) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.
The amendment will come into force from 1 April 2018. The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.
Mar 31, 2016
1. Significant accounting policies
a) Accounting convention:
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 (âthe 2013 Actâ) / Companies Act, 1956 (âthe 1956 Actâ), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention except revaluation of certain plots of land. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
Comparative figures do not include the figures of erstwhile DCM Engineering Limited which is amalgamated with the Company with effect from appointed date i.e. April 1, 2014 and the effect of amalgamation for the year ended March 31, 2015 has been adjusted in the reserves and surplus. Consequently, the comparative figures are not comparable with the figures for the year ended March 31, 2016.
b) Current-non-current classification:
All assets and liabilities are classified into current and non-current.
Assets:
An asset is classified as current when it satisfies any of the following criteria:
(i) It is expected to be realized in, or is intended for sale or consumption in, the Companyâs normal operating cycle;
(ii) it is held primarily for the purpose of being traded;
(iii) it is expected to be realized within 12 months after the reporting date; or
(iv) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date. Current assets include the current portion of non-current assets.
All other assets are classified as non-current.
Liabilities:
A liability is classified as current when it satisfies any of the following criteria:
(i) it is expected to be settled in the Companyâs normal operating cycle;
(ii) it is held primarily for the purpose of being traded;
(iii) it is due to be settled within 12 months after the reporting date; or
(iv) the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
Current liabilities include current portion of non-current liabilities.
All other liabilities are classified as non-current.
Operating cycle:
Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. The Company has ascertained its operating cycle being a period within 12 months for the purpose of classification of assets and liabilities as current and non- current.
c) Use of estimates:
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported amount of income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.
d) Fixed assets:
Fixed assets, other than certain plots of land, which have been revalued, are stated at cost of acquisition/ construction less accumulated depreciation. The cost includes all pre-operative expenses and the financing cost of borrowed funds relating to the construction period in the cases of new projects and expansion of existing factories. Certain lands, which are revalued, are stated at revalued figures on the basis of valuation reports of approved valuers.
e) Impairment:
The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment if any indication of impairment exists. The following intangible assets are tested for impairment each financial year even if there is no indication that the asset is impaired:
(a) an intangible asset that is not yet available for use; and
(b) an intangible asset that is amortized over a period exceeding ten years from the date when the asset is available for use.
If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognized for such excess amount. The impairment loss is recognized as an expense in the Statement of Profit and Loss, unless the asset is carried at revalued amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the extent a revaluation reserve is available for that asset.
The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.
When there is indication that an impairment loss recognized for an asset (other than a revalued asset) in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss. In case of revalued assets such reversal is not recognized.
f) Depreciation and amortization:
(i) The Company follows straight-line method of depreciation in respect of buildings, plant and machinery, all assets of IT Division, all assets of Engineering Division and written down value method in respect of other assets.
(ii) The depreciation charged on all fixed assets is on the basis of useful life specified in Part âCâ of Schedule II to the Companies Act, 2013, with effect from April 01, 2014.
iii) On assets sold, discarded, etc., during the year, depreciation is provided up to the date of sale/discard.
iv) Depreciation has been calculated on a pro-rata basis in respect of acquisition/installation during the year.
v) Leasehold improvements are amortized over the balance of the primary lease period.
vi) Computer software are amortized as per its useful life ranging from 3 to 5 years.
g) Investments:
Long-term investments, are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.
h) Inventories:
i) Stores, spares and components are valued at cost or under.
ii) Raw materials, process stocks, finished goods and stock in trade are valued at lower of cost and net realizable value.
iii) Land (for development) on conversion into inventory from fixed assets is valued at the lower of its historical cost and net realizable value, and includes appropriate share of land development expenses and finance cost of borrowed funds relatable thereto.
Cost of inventories, other than land (for development), is ascertained on the weighted average basis in textiles division and moving weighted average basis in engineering division. Further, in respect of the manufactured inventories, i.e., process stocks and finished goods, appropriate share of manufacturing expenses are included on absorption costing basis. Work in process relating to software contracts includes salary and other directly identifiable expenses incurred on fixed price contracts, till the completion of specified deliverables, and are valued at cost or net realizable value, whichever is lower.
i) Revenue recognition:
i) Revenue from sale of goods is recognized when significant risks and rewards of ownership are transferred to the customer and no significant uncertainty exists regarding its collection. Sales are inclusive of excise duty and exclusive of sales tax.
ii) Revenue from software development contracts is recognized on the basis of milestone achieved, as provided in the contract.
iii) Revenue on maintenance contracts is recognized on pro-rata basis linked with the period of contract.
iv) Services income is recognized on accrual basis, as provided in the contracts.
v) In respect of Land Development Project, sale of rights on outright basis is recognized in the year in which risk and rewards are transferred.
vi) Interest income is recognized using the time proportion method.
j) Excise duty:
Excise duty on sales is being deducted from gross sales and any increase/ decrease in excise duty on finished goods are being shown separately in the Statement of Profit and Loss.
k) Employeesâ benefits:
The Companyâs obligations towards various employee benefits have been recognized as follows:
Short-term employee benefits
All employee benefits payable/available wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages, and bonus, etc., are recognized in the Statement of Profit and Loss in the period in which the employee renders the related service.
Post employment benefit
Defined contribution plan
A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts. The Company makes specified monthly contributions towards employee provident fund and employee state insurance to Government administered fund which is a defined contribution plan. The Companyâs contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service and also includes overseas social security contribution.
The Company makes specified monthly contribution towards superannuation fund to Superannuation Trust which is managed by the Life Insurance Corporation of India (âLICâ).
Defined benefit plan
The Companyâs gratuity scheme is a defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation carried out by an independent actuary, 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 as the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plans is based on the market yields on Government securities as at the balance sheet date for the estimated term of the obligation. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.
Other long term employee benefits
Benefits under compensated absences constitute other long-term employee benefits. The liability in respect of compensated absences is provided on the basis of an actuarial valuation done by an independent actuary at the year-end using the projected unit credit method. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.
l) Provisions, contingent liabilities and contingent assets:
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. A contingent liability is disclosed where there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. The Company does not recognize assets which are of contingent nature. However, if it has become virtually certain that an inflow of economic benefits will arise; the asset and related income are recognized in the financial statements of the period in which the change occurs.
m) Earnings/(loss) per share:
Basic earnings/(loss) per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings/(loss) per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
n) Taxes on income:
Income-tax liability is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income tax Act, 1961.
Deferred tax is recognized, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or subsequent periods. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized if there is virtual certainty that there will be sufficient future taxable income available to realize such losses.
MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the period for which the MAT credit can be carried forward for set-off against the normal tax liability. In the year in which MAT credit becomes eligible to be recognized as an asset in accordance with the recommendation contained in the Guidance Note on âAccounting for Credit Available in respect of Minimum Alternative Tax under The Income Tax Act, 1961â issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.
o) Foreign exchange transactions:
i) Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction.
Monetary items denominated in foreign currency are reported using the closing exchange rates on the date of the balance sheet.
The exchange differences arising on settlement of monetary items or on reporting these items at the rates different from the rates at which these were initially recorded / reported in previous financial statements, are recognized as income / expense in the period in which they arise, except for exchange differences arising during construction period on restatement of foreign currency liabilities incurred in relation to the project which are adjusted in cost of fixed assets.
In case of forward exchange contracts, the premium or discount, arising at the inception of such contracts, is amortized as income or expense over the life of the contract and the exchange difference on such contracts, i.e., difference between the exchange rate at the reporting / settlement date and the exchange rate on the date of inception of contract / the last reporting date, is recognized as income / expense for the period except for exchange differences arising during construction period on restatement of foreign currency liabilities incurred in relation to the project which are adjusted in cost of fixed assets. Derivatives not covered in AS -11 are marked to market at balance sheet date and resulting loss, if any, is recognized in the Statement of Profit and Loss in view of the principle of prudence.
(ii) In respect of financial statements of integral foreign operations of foreign branches, fixed assets are recorded at cost, based on the exchange rate prevailing on the date of transactions. Current assets and current liabilities are reported using the exchange rates on the date of the balance sheet. Incomes and expenses are translated at the average of monthly closing rates of exchange. The resultant exchange gains / losses are recognized in the Statement of Profit and Loss.
p) Government grant:
Grants from the government are recognized when there is a reasonable assurance that the conditions attached to them shall be complied with, and the grants will be received.
When the grant is revenue in nature, it is recognized as a deduction from the expenses to which they are intended to compensate.
q) Research and development:
Expenditure on research is expensed off under the respective heads of account in the period in which it is incurred.
Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized, if the cost can be reliably measured, the product or process is technically and commercially feasible and the Company has sufficient resources to complete the development and right to use the asset. The expenditure capitalized includes the cost of materials, direct labour and an appropriate proportion of overheads that are directly attributable to preparing the asset for its intended use. Other development expenditure is recognized in the Statement of Profit and Loss as an expense as incurred.
Capitalized development expenditure is stated at cost less accumulated amortization and impairment losses. Fixed assets used for research and development are depreciated in accordance with the Companyâs policy as stated above.
Materials identified for use in research and development process are carried as inventories and charged to the Statement of Profit and Loss on consumption of such materials for research and development activities.
r) Cash and cash equivalents:
Cash and cash equivalents includes cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.
s) Leases:
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased asset are classified as operating leases. Operating lease charges are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term
Mar 31, 2015
A) Accounting convention:
'The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant provisions ofthe
Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956
Act"), as applicable. The financial statements have been prepared on
accrual basis under the historical cost convention except revaluation
ofcertain plots ofland. The accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year.
b) Operating cycle:
Based on the nature of products/ activities of the Company and the
normal time between acquisition of assets and their realisation in cash
or cash equivalent, the company has determined its current operating
cycle as 12 months for the purpose of classification of its assets and
liabilities as current & non-current.
c) Use of estimates:
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialise.
d) Fixed assets:
Fixed assets, other than certain plots of land, which have been
revalued, are stated at cost of acquisition/ construction less
accumulated depreciation. The cost includes all pre-operative expenses
and the financing cost of borrowed funds relating to the construction
period in the cases of new projects and expansion of existing
factories. Certain lands, which are revalued, are stated at revalued
figures on the basis of valuation reports of approved valuers.
e) Impairment:
The carrying values of assets / cash generating units at each balance
sheet date are reviewed for impairment if any indication of impairment
exists. The following intangible assets are tested for impairment each
financial year even if there is no indication that the asset is
impaired:
(a) an intangible asset that is not yet available for use; and
(b) an intangible asset that is amortised over a period exceeding ten
years from the date when the asset is available for use.
If the carrying amount of the assets exceed the estimated recoverable
amount, an impairment is recognised for such excess amount. The
impairment loss is recognised as an expense in the Statement of Profit
and Loss, unless the asset is carried at revalued amount, in which case
any impairment loss of the revalued asset is treated as a revaluation
decrease to the extent a revaluation reserve is available for that
asset.
The recoverable amount is the greater of the net selling price and
their value in use. Value in use is arrived at by discounting the
future cash flows to their present value based on an appropriate
discount factor.
When there is indication that an impairment loss recognised for an
asset (other than a revalued asset) in earlier accounting periods no
longer exists or may have decreased, such reversal of impairment loss
is recognised in the Statement of Profit and Loss, to the extent the
amount was previously charged to the Statement of Profit and Loss. In
case of revalued assets such reversal is not recognised.
f) Depreciation and amortisation:
(i) The Company follows straight-line method of depreciation in respect
of buildings, plant and machinery, and all assets of IT Division and
written down value method in respect of other assets.
(ii) The depreciation charged on all fixed assets is on the basis of
useful life specified in Part "C" of Schedule II to the Companies Act,
2013,with effect from April 01, 2014.
iii) On assets sold, discarded, etc., during the year, depreciation is
provided up to the date of sale/discard.
iv) Depreciation has been calculated on a pro-rata basis in respect of
acquisition/installation during the year.
v) Leasehold improvements are amortised over the balance of the primary
lease period.
vi) Computer software are amortised as per its useful life ranging from
3 to 5 years.
g) Investments:
Long-term investments, are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and
fair value. Cost of investments include acquisition charges such as
brokerage, fees and duties.
h) Inventories:
i) Stores, spares and components are valued at cost or under.
ii) Raw materials, process stocks, finished goods and stock in trade
are valued at lower of cost and net realisable value.
iii) Land (for development) on conversion into inventory from fixed
assets is valued at the lower of its historical cost and net realisable
value, and includes appropriate share of land development expenses and
finance cost of borrowed funds relatable thereto.
Cost of inventories, other than land (for development), is ascertained
on the weighted average basis. Further, in respect of the manufactured
inventories, i.e., process stocks and finished goods, appropriate share
of manufacturing expenses are included on absorption costing basis.
Work in process relating to software contracts includes salary and
other directly identifiable expenses incurred on fixed price contracts,
till the completion of specified deliverables, and are valued at cost
or net realisable value, whichever is lower.
i) Revenue recognition:
i) Sale of goods is recognised at the point of despatch of finished
goods to customers which coincides with the transfer of risk and reward
of ownership. Sales are inclusive of excise duty and exclusive of sales
tax.
ii) Revenue from software development contracts is recognised on the
basis of milestone achieved, as provided in the contract.
iii) Revenue on maintenance contracts is recognised on pro-rata basis
linked with the period of contract.
iv) Services income is recognised on accrual basis, as provided in the
contracts.
v) In respect of Land Development Project, sale of rights on outright
basis is recognised in the year in which risk and reward are
transfered.
vi) Interest income is recognised using the time proportion method.
j) Excise duty:
Excise duty on sales is being deducted from gross sales and any
increase/ decrease in excise duty on finished goods are being shown
separately in the statement of profit and loss.
k) Research and development expenditure:
Revenue expenditure pertaining to research is charged to the Statement
of Profit and Loss. Development costs of products are also charged to
the Statement of Profit and Loss unless a product's technical
feasibility has been established, in which case such expenditure is
capitalised. The amount capitalised comprises expenditure that can be
directly attributed or allocated on a reasonable and consistent basis
to creating, producing and making the asset ready for its intended use.
Fixed assets utilised for research and development are capitalised and
depreciated in accordance with the policies stated for Fixed Assets.
l) Employees' benefits:
Employee benefits include provident fund, superannuation fund, employee
state insurance scheme, gratuity, and compensated absences.
Defined contribution plans
The Company's contribution to provident fund, superannuation fund and
employee state insurance scheme are considered as defined contribution
plans and are charged as an expense based on the amount of contribution
required to be made and when services are rendered by the employees.
Defined benefit plans
For defined benefit plans in the form of gratuity, the cost of
providing benefits is determined using the Projected Unit Credit
method, with actuarial valuations being carried out at each balance
sheet date. Actuarial gains and losses are recognised in the Statement
of Profit and Loss in the period in which they occur. Past service cost
is recognised immediately to the extent that the benefits are already
vested and otherwise is amortised on a straight-line basis over the
average period until the benefits become vested. The retirement benefit
obligation recognised in the Balance Sheet represents the present value
of the defined benefit obligation as adjusted for unrecognised past
service cost, as reduced by the fair value of scheme assets. Any asset
resulting from this calculation is limited to past service cost, plus
the present value of available refunds and reductions in future
contributions to the schemes.
Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
include compensated absences which are expected to occur within twelve
months after the end of the period in which the employee renders the
related service.
The cost of short-term compensated absences is accounted as under:
(a) in case of accumulated compensated absences, when employees render
the services that increase their entitlement of future compensated
absences; and
(b) in case of non-accumulating compensated absences, when the absences
occur.
Long-term employee benefits
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related service are recognised as a liability at the present value of
the defined benefit obligation as at the balance sheet date less the
fair value of the plan assets out of which the obligations are expected
to be settled.
m) Provisions, contingent liabilities and contingent assets:
A provision is recognized when an enterprise has a present obligation
as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted to
its present value and are determined based on best estimate required to
settle the obligation at the Balance Sheet date. These are reviewed at
each Balance Sheet date and adjusted to reflect the current best
estimates. A contingent liability is disclosed where there is a
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. The Company does not recognize
assets which are of contingent nature. However, if it has become
virtually certain that an inflow of economic benefits will arise; the
asset and related income are recognized in the financial statements of
the period in which the change occurs.
n) Earnings/(loss) per share:
Basic earnings/(loss) per share are calculated by dividing the net
profit or loss for the year attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings/(loss) per share, the
net profit or loss for the year attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
o) Taxes on income:
Income-tax liability is ascertained on the basis of assessable profits
computed in accordance with the provisions of the Income tax Act, 1961.
Deferred tax is recognised, on timing difference, being the difference
between taxable income and accounting income that originate in one
period and are capable of reversal in one or subsequent periods.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognised if there is virtual certainty that
there will be sufficient future taxable income available to realize
such losses.
p) Foreign exchange transactions:
i) Transactions in foreign currency are recorded at the exchange rates
prevailing on the date of the transaction.
Monetary items denominated in foreign currency are reported using the
closing exchange rates on the date of the balance sheet.
The exchange differences arising on settlement of monetary items or on
reporting these items at the rates different from the rates at which
these were initially recorded / reported in previous financial
statements, are recognised as income / expense in the period in which
they arise, except for exchange differences arising during construction
period on restatement of foreign currency liabilities incurred in
relation to the project which are adjusted in cost of fixed assets.
In case of forward exchange contracts, the premium or discount, arising
at the inception of such contracts, is amortised as income or expense
over the life of the contract and the exchange difference on such
contracts, i.e., difference between the exchange rate at the reporting
/ settlement date and the exchange rate on the date of inception of
contract / the last reporting date, is recognised as income / expense
for the period except for exchange differences arising during
construction period on restatement of foreign currency liabilities
incurred in relation to the project which are adjusted in cost of fixed
assets. Derivatives not covered in AS -11 are marked to market at
balance sheet date and resulting loss, if any, is recognized in the
statement of profit and loss in view of the principle of prudence.
(ii) In respect of financial statements of integral foreign operations
of foreign branches, fixed assets are recorded at cost, based on the
exchange rate prevailing on the date of transactions. Current assets
and current liabilities are reported using the exchange rates on the
date of the balance sheet. Incomes and expenses are translated at the
average of monthly closing rates of exchange. The resultant exchange
gains / losses are recognised in the statement of profit and loss.
(i) The Company has issued one class of equity shares having at par
value of Rs. 10 each per share. Each holder of equity shares is
entitled to one vote
Eer share with a right to receive per share dividend declared by the
Company. In the event of liquidation of the Company, holder of equity
shares will e entitle to receive remaining assets of the Company after
distribution of all preferential amount. The distribution will be in
proportion to the number of shares held by shareholder.
(ii) There is no change in issued, subscribed and paid up share capital
during the current year and corresponding previous year.
(iii) The shareholders holding more than 5% shares of the Company are
as under:
* Term loans from banks include:
 Term loans aggregating Rs. 11,302.48 lacs (Previous year: Rs.
9,513.64 lacs) are secured by first charge with the charge created for
availing cash credit, overdraft and working capital demand loan
facilities described in note 8, on existing as well as future block of
movable assets and an equitable mortgage, by deposit of title deeds of
land admeasuring 129.47 acres and all the immovable assets, both
present and future, pertaining to the Textile Division at Hissar.
Rs. 187.50 lacs repayable in 1 quarterly installments, Rs. 168.98 lacs
repayable in 8 quarterly installments, Rs. 813 lacs repayable in 15
quarterly installments, Rs. 546.00 lacs repayable in 16 quarterly
installments and Rs. 9,587 lacs repayable in 32 quarterly installments.
 Rs. 49.39 lacs (Previous year: Rs. 22.86 lacs) relate to assets
purchased under hire purchase/financing arrangements with banks and are
secured by way of hypothecation of the specified assets. Repayable in
equal monthly installments.
** Rs. 53.22 lacs (Previous year: Rs. 60.59 lacs) relate to assets
purchased under hire purchase/financing arrangements with finance
companies and are secured by way of hypothecation ofthe specified
assets. Repayable in equal monthly installments.
# Refer note 10.
* As at 31 March 2015, the Company has unabsorbed depreciation under
the provisions of the Income-tax Act, 1961. Consequent to the
provisions of Accounting Standard 22 - "Accounting for Taxes on
Income", in the absence of virtual certainty, deferred tax assets have
been recognised only to the extent of deferred tax liability.
- Loans repayable on demand from DanKs include
 Cash credit/overdraft and working capital demand loan facilities
relating to Textile Division at Hissar aggregating Rs. 11,919.10 lacs
(Previous year : Rs. 11,250.30 lacs) and other non-fund based
facilities from a bank, are secured by way of hypothecation of stocks /
stores and book debts, both present and future. These are further
secured by equitable mortgage of land admeasuring 129.47 acres and all
immovable assets, both present and future, and first charge, ranking
pari-passu with the charge created for availing term loans as described
in note 4, by way of hypothecation of existing as well as future block
of movable assets pertaining to the Division
 Cash credit facilities relating to IT Division, aggregating Rs.
42.80 lacs (Previous year :Rs. 372.52 lacs) and other non-fund based
facilities from a bank, are secured by way of first
charge/hypothecation of inventories, book debts and other assets of the
Division (both present and future), and by way of first charge on
office property at Hyderabad. The above facility is further secured by
way of first charge created / to be created on other fixed assets of
the Division.
** Rs. Nil (Previous year: Rs. 1,000.00 lacs) secured by way of pledge
of equity shares in Teak farms Private Limited, Juhi Developers Private
Limited
(Investments in promotor group) and personal guarantee of Mr. Sumant
Bharat Ram.
# Based upon the information available with the Company, the balance
due to the Micro, Small and Medium Enterprises as defined under the
MSMED Act, 2006 is Rs Nil (Previous year : Rs. Nil). Further, no
interest has been paid or payable during the year under the terms ofthe
MSMED Act, 2006.
* Refer note 4
** No amount is due for transfer under Investor Education and
Protection Fund in view of SORA, pursuant to which certain past dues
have been rescheduled for payment.
@ In terms of SORA, the Company will not dispose offits shareholding in
Purearth Infrastructure Limited until the completion of the land
development project at Bara Hindu Rao/ Kishan Ganj, Delhi.
* Refer note 37
* Includes Rs. 66.84 lacs (Previous year : Rs. 49.74 lacs) in unpaid
dividend account, Rs. 13.57 lacs (Previous year : Rs. 17.13 lacs)
deposited with Debenture trustees and Rs. 9.17 lacs (Previous year :
Rs. 12.21 lacs) earmarked for other specific uses.
** Includes Rs. 33.87 lacs (Previous year : Rs. 113.85 lacs) deposited
with Debenture trustees, Rs. 192.49 lacs (Previous year: Rs. 221.40
lacs) earmarked for other specific uses and Rs. 17.26 lacs (Previous
year : Rs 16.26 lacs) against margin money.
Mar 31, 2014
A) Accounting convention:
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
Section 211(3C) of the Companies Act, 1956 ("the 1956 Act") (which
continue to be applicable in respect of Section 133 of the Companies
Act, 2013 ("the 2013 Act") and the relevant provisions of the 1956 Act/
2013 Act, as applicable. The financial statements have been prepared on
accrual basis under the historical cost convention except revaluation
of certain plots of land. The accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year.
b) Operating cycle:
Based on the nature of products/ activities of the Company and the
normal time between acquisition of assets and their realisation in cash
or cash equivalent, the company has determined its current operating
cycle as 12 months for the purpose of classification of its assets and
liabilities as current & non-current.
c) Use of estimates:
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the year. Example of
such estimates include provisions for doubtful debts, future
obligations under employee retirement benefit plans, provision for
income taxes and the useful lives of fixed assets. Contingencies are
recorded when it is probable that a liability will be incurred and the
amount can be reasonably estimated. Actual results could differ from
such estimates. The differences between the actual results and
estimates are recognised in the year in which the results are known/
materialized. Any revision to accounting estimate is recognised
prospectively in current and future period.
d) Fixed assets:
Fixed assets, other than certain plots of land, which have been
revalued, are stated at cost of acquisition/ construction less
accumulated depreciation. The cost includes all pre-operative expenses
and the financing cost of borrowed funds relating to the construction
period in the cases of new projects and expansion of existing
factories. Certain lands, which are revalued, are stated at revalued
figures on the basis of valuation reports of approved valuers.
e) Impairment:
At each Balance Sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an asset''s net selling price and value in use. In assessing
value in use, the estimated future cash flows expected from the
continuing use of the asset and from its disposal are discounted to
their present value using a pre-discount rate that reflects the current
market assessments of time value of money and the risks specific to the
asset.
f) Depreciation and amortisation:
(i) The Company follows straight-line method of depreciation in respect
of buildings / plant and machinery and all assets of IT Division and
written down value method in respect of other assets.
(ii) The rates of depreciation charged on all fixed assets are in
accordance with the rates specified in Schedule XIV to the Companies
Act, 1956, except (excluding those relating to IT Division) in the
following cases:
a) Vehicles, office and other equipment  33.33% (Other than computers)
b) Assets acquired upto June 30, 1986
 Plant and machinery  Rates prescribed under the Income-tax Rules,
1962, at the time of acquisition of such assets.
 Factory buildings  3.39%
 Other buildings  1.64%
iii) On assets sold, discarded, etc., during the period/year,
depreciation is not provided up to the date of sale/discard. iv)
Depreciation has been calculated on a pro-rata basis in respect of
acquisition/installation of all assets of the IT Division and on plant
and machinery in other cases. Depreciation on remaining assets is
provided for full year / period irrespective of the date of acquisition.
v) Leasehold improvements are amortised over the balance of the primary
lease period. vi) The intellectual property rights are amortised on a
straight-line basis, based on management estimates of useful life
varying from 1 to 5 years, commencing from the month in which the
asset is available to the Company for use.
vii) Computer software are amortised over a period of 5 years.
g) Investments:
Long-term investments are valued at cost unless there is a permanent
fall in the value thereof.
h) Inventories:
i) Stores, spares and components are valued at cost or under.
ii) Raw materials, process stocks, finished goods and stock in trade
are valued at lower of cost and net realisable value.
iii) Land (for development) on conversion into inventory from fixed
assets is valued at the lower of its historical cost and net realisable
value, and includes appropriate share of land development expenses and
finance cost of borrowed funds relatable thereto.
Cost of inventories, other than land (for development), is ascertained
on the weighted average basis. Further, in respect of the manufactured
inventories, i.e., process stocks and finished goods, appropriate share
of manufacturing expenses are included on absorption costing basis.
Work in process relating to software contracts includes salary and
other directly identifiable expenses incurred on fixed price contracts,
till the completion of specified deliverables, and are valued at cost
or net realisable value, whichever is lower.
i) Revenue recognition:
i) Sale of goods is recognised at the point of despatch of finished
goods to customers which coincides with the transfer of risk and reward
of ownership. Sales are inclusive of excise duty and exclusive of sales
tax.
ii) Revenue from software development contracts is recognised on the
basis of milestone achieved, as provided in the contract.
iii) Revenue on maintenance contracts is recognised on pro-rata basis
linked with the period of contract.
iv) Services income is recognised on accrual basis, as provided in the
contracts.
v) In respect of Land Development Project, sale of rights on outright
basis is recognised in the year of such sale.
vi) Interest income is recognised using the time proportion method.
j) Excise duty:
Excise duty on sales is being deducted from gross sales and any
increase/ decrease in excise duty on finished goods are being shown
separately in the statement of profit and loss.
k) Research and development expenditure:
The revenue expenditure on research and development is expensed out in
the year in which it is incurred. Expenditure, which results in
creation of capital assets, is treated as similar to expenditure on
other fixed assets.
l) Employees'' benefits:
i) Short term employee benefits are charged off at the undiscounted
amount in the year in which the related service is rendered.
ii) Post employment and other long term employee benefits are charged
off in the year in which the employee has rendered services. The amount
charged off is recognised at the present value of the amounts payable
determined using actuarial valuation techniques. Actuarial gain and
losses in respect of post employment and other long term benefits are
charged to statement of profit and loss. m) Provisions, contingent
liabilities and contingent assets:
A provision is recognized when an enterprise has a present obligation
as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted
to its present value and are determined based on best estimate
required to settle the obligation at the Balance Sheet date. These
are reviewed at each Balance Sheet date and adjusted to reflect the
current best estimates. A contingent liability is disclosed where
there is a possible obligation or a present obligation that may,
but probably will not, require an outflow of resources. The Company
does not recognize assets which are of contingent nature. However, if
it has become virtually certain that an inflow of economic benefits
will arise; the asset and related income are recognized in the financial
statements of the period in which the change occurs. n) Earnings/(loss)
per share:
Basic earnings/(loss) per share are calculated by dividing the net
profit or loss for the year attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings/(loss) per share, the
net profit or loss for the year attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
o) Taxes on income:
Income-tax liability is ascertained on the basis of assessable profits
computed in accordance with the provisions of the Income tax Act, 1961.
Deferred tax is recognised, on timing difference, being the difference
between taxable income and accounting income that originate in one
period and are capable of reversal in one or subsequent periods.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognised if there is virtual certainty that
there will be sufficient future taxable income available to realize
such losses.
p) Foreign exchange transactions:
i) Transactions in foreign currency are recorded at the exchange rates
prevailing on the date of the transaction.
Monetary items denominated in foreign currency are reported using the
closing exchange rates on the date of the balance sheet.
The exchange differences arising on settlement of monetary items or on
reporting these items at the rates different from the rates at which
these were initially recorded / reported in previous financial
statements, are recognised as income / expense in the period in which
they arise, except for exchange differences arising during construction
period on restatement of foreign currency liabilities incurred in
relation to the project which are adjusted in cost of fixed assets.
In case of forward exchange contracts, the premium or discount, arising
at the inception of such contracts, is amortised as income or expense
over the life of the contract and the exchange difference on such
contracts, i.e., difference between the exchange rate at the reporting
/settlement date and the exchange rate on the date of inception of
contract / the last reporting date, is recognised as income / expense
for the period except for exchange differences arising during constru
-ction period on restatement of foreign currency liabilities incurred
in relation to the project which are adjusted in cost of fixed assets.
Derivatives not covered in AS -11 are marked to market at balance sheet
date and resulting loss, if any, is recognized in the statement of
profit and loss in view of the principle of prudence.
(ii) In respect of financial statements of integral foreign operations
of foreign branches, fixed assets are recorded at cost, based on the
exchange rate prevailing on the date of transactions. Current assets
and current liabilities are reported using the exchange rates on the
date of the balance sheet. Incomes and expenses are translated at the
average of monthly closing rates of exchange. The resultant exchange
gains / losses are recognised in the statement of profit and loss.
(i) The Company has issued one class of equity shares having at par
value of Rs. 10 each per share. Each holder of equity shares is
entitled to one vote per share with a right to receive per share
dividend declared by the Company. In the event of liquidation of the
Company, holder of equity shares will be entitle to receive remaining
assets of the Company after distribution of all preferential amount.
The distribution will be in proportion to the number of shares held by
shareholder. (ii) There is no change in issued, subscribed and paid up
share capital during the current year and corresponding previous year.
The shareholders holding more than 5% shares of the Company are as
under:
* Term loans from banks include:
 Term loans aggregating Rs. 9,513.64 lacs (Previous year: Rs. 3,804.84
lacs) are secured by first charge with the charge created for availing
cash credit, overdraft and working capital demand loan facilities
described in note 8, on existing as well as future block of movable
assets and an equitable mortgage, by deposit of title deeds, of all the
immovable assets, both present and future, pertaining to the Textile
Division at Hissar. Rs. 925.00 lacs repayable in 5 quarterly
installments, Rs. 248.98 lacs repayable in 12 quarterly installments,
Rs. 987.50 lacs repayable in 19 quarterly installments, Rs. 682.00 lacs
repayable in 20 quarterly installments and Rs. 6,670.16 lacs repayable
in 32 quarterly installments.
 Corporate loan of Rs. Nil (Previous year: Rs. 616.82 lacs) secured by
first charge by way of hypothecation, ranking pari-passu with the
charge created for availing cash credit, overdraft and working capital
demand loan facilities and term loans described in note 8, on existing
as well as future block of movable assets and an equitable mortgage, by
deposit of title deeds, of all the immovable assets, both present and
future, pertaining to the Textile Division at Hissar.
 Rs. 22.86 lacs (Previous year: Rs. 16.41 lacs) relate to assets
purchased under hire purchase/financing arrangements with banks and are
secured by way of hypothecation of the specified assets. Repayable in
equal monthly installments.
** Rs. 60.59 lacs (Previous year: Rs. 63.45 lacs) relate to assets
purchased under hire purchase/financing arrangements with finance
companies and are secured by way of hypothecation of the specified
assets. Repayable in equal monthly installments.
# Refer note 10.
* Loans repayable on demand from banks include
 Cash credit/overdraft and working capital demand loan facilities
relating to Textile Division at Hissar aggregating Rs. 11,250.30 lacs
(Previous year : Rs. 10,567.10 lacs) and other non-fund based
facilities from a bank, are secured by way of hypothecation of stocks /
stores and book debts, both present and future. These are further
secured by equitable mortgage of immovable assets, both present and
future, and first charge, ranking pari-passu with the charge created
for availing term loans as described in note 4, by way of hypothecation
of existing as well as future block of movable assets pertaining to the
Division.
 Cash credit facilities relating to IT Division, aggregating Rs.
372.52 lacs (Previous year :Rs. 422.54 lacs) and other non-fund based
facilities from a bank, are secured by way of first
charge/hypothecation of raw materials, stock-in-progress, finished
goods, stores, spares, book debts and other assets of the Division
(both present and future), and by way of first charge on office
property at Hyderabad. The above facility is further secured by way of
first charge created / to be created on other fixed assets of the
Division.
** Rs. 1,000.00 (Previous year: Rs. Nil) secured by way of pledge of
equity shares in Teak farms Private Limited, Juhi Developers Private
Limited (Investments in promotor group) and personal guarantee of Mr.
Sumant Bharat Ram.
# Based upon the information available with the Company, the balance
due to the Micro, Small and Medium Enterprises as defined under the
MSMED Act, 2006 is Rs Nil (Previous year : Rs. 0.08 lacs). Further, no
interest has been paid or payable during the year under the terms of
the MSMED Act, 2006.
** No amount is due for transfer under Investor Education and
Protection Fund in view of SORA, pursuant to which certain past dues
have been rescheduled for payment.
@ In terms of SORA, the Company will not dispose off its shareholding
in Purearth Infrastructure Limited until the completion of the land
development project at Bara Hindu Rao/ Kishan Ganj, Delhi.
* Refer note 37
# Valued at lower of cost and net realisable value.
## Valued at the lower of its historical cost and net realisable value
and includes appropriate share of land development expenses and finance
cost of borrowed funds.
### Valued at cost or under.
* Includes Rs. 17.13 lacs (Previous year : Rs. 5.14 lacs ) deposited
with Debenture trustees and Rs. 61.94 lacs (Previous year : Rs. 40.19
lacs) earmarked for specific use. ** Includes Rs. 10.53 lacs (Previous
year : Rs. 9.83 lacs) against bank guarantee/ security and Rs. 53.04
lacs (Previous year : Rs. 264.86 lacs ) earmarked for specifice uses.
# Includes Rs. 4.80 lacs (Previous year : Rs. 5.72 lacs) against bank
guarantee/ security, Rs. 113.85 lacs (Previous year : Rs. 279.00 lacs)
deposited with Debenture trustees and Rs. 141.01 lacs (Previous year :
Rs. 99.20 lacs) earmarked for specific uses.
28. Exceptional item of Rs. 1,550.00 lacs (Previous year : Rs. Nil)
represent compensation receivable from the developer of real estate
project, pursuant to a settlement reached in relation to the
residential project.
29. Disclosures required under Accounting Standard - 15 "Employee
Benefits" notified in the Companies (Accounting Standards) Rules, 2006,
are given below: Defined contribution plans Contributions to defined contribution plans charged off for the year are as under :
Defined benefit plans
(a) Gratuity
(b) Compensated absences  Earned / Sick leaves
These are unfunded schemes, the present value of obligation is
determined based on actuarial valuation using the Projected Unit Credit
Method, which recognise 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. Rs./Lacs
Mar 31, 2013
A) Accounting convention:
These financial statements have been prepared under the historical cost
convention except revaluation of certain plots of land, on the accrual
basis of accounting and in accordance with the Generally Accepted
Accounting Principles (''GAAP'') in India and comply with the accounting
standards prescribed by the Companies (Accounting Standards) Rules,
2006 (as amended) and in accordance with the provisions of the
Companies Act, 1956, as adopted consistently by the Company.
b) Use of estimates:
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the year. Example of
such estimates include provisions for doubtful debts, future
obligations under employee retirement benefit plans, provision for
income taxes and the useful lives of fixed assets. Contingencies are
recorded when it is probable that a liability will be incurred and the
amount can be reasonably estimated. Actual results could differ from
such estimates. The differences between the actual results and
estimates are recognised in the year in which the results are known/
materialized. Any revision to accounting estimate is recognised
prospectively in current and future period.
c) Fixed assets:
Fixed assets, other than certain plots of land, which have been
revalued, are stated at cost of acquisition/ construction less
accumulated depreciation. The cost includes all pre-operative expenses
and the financing cost of borrowed funds relating to the construction
period in the cases of new projects and expansion of existing
factories. Certain lands, which are revalued, are stated at revalued
figures on the basis of valuation reports of approved valuers. (d)
Impairment:
At each Balance Sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an asset''s net selling price and value in use. In assessing
value in use, the estimated future cash flows expected from the
continuing use of the asset and from its disposal are discounted to
their present value using a pre-discount rate that reflects the current
market assessments of time value of money and the risks specific to the
asset.
e) Depreciation and amortisation:
(i) The Company follows straight-line method of depreciation in respect
of buildings / plant and machinery and all assets of IT Division and
written down value method in respect of other assets.
(ii) The rates of depreciation charged on all fixed assets are in
accordance with the rates specified in Schedule XIV to the Companies
Act, 1956, except (excluding those relating to IT Division) in the
following cases:
a) Vehicles, office and other equipment - 33.33% (Other than computers)
b) Assets acquired upto June 30, 1986
 Plant and machinery  Rates prescribed under the Income-tax Rules,
1962, at the time of acquisition of such assets.
 Factory buildings  3.39%
 Other buildings  1.64%
iii) On assets sold, discarded, etc., during the period/year,
depreciation is not provided up to the date of sale/discard. iv)
Depreciation has been calculated on a pro-rata basis in respect of
acquisition/installation of all assets of the IT Division and on plant
and machinery in other cases. Depreciation on remaining assets is
provided for full year / period irrespective of the date of
acquisition. v) Leasehold improvements are amortised over the balance
of the primary lease period. vi) The intellectual property rights are
amortised on a straight-line basis, based on management estimates of
useful life varying from 1 to 5 years, commencing from the month in
which the asset is available to the Company for use. vii) Computer
software are amortised over a period of 5 years.
f) Investments:
Long-term investments are valued at cost unless there is a permanent
fall in the value thereof.
g) Inventories:
i) Stores, spares and components are valued at cost or under.
ii) Raw materials, process stocks, finished goods and stock in trade
are valued at lower of cost and net realisable value.
iii) Land (for development) on conversion into inventory from fixed
assets is valued at the lower of its historical cost and net realisable
value, and includes appropriate share of land development expenses and
finance cost of borrowed funds relatable thereto.
Cost of inventories, other than land (for development), is ascertained
on the weighted average basis. Further, in respect of the manufactured
inventories, i.e., process stocks and finished goods, appropriate share
of manufacturing expenses are included on absorption costing basis.
Work in process relating to software contracts includes salary and
other directly identifiable expenses incurred on fixed price contracts,
till the completion of specified deliverables, and are valued at cost
or net realisable value, whichever is lower.
h) Revenue recognition:
i) Sale of goods is recognised at the point of despatch of finished
goods to customers which coincides with the transfer of risk and reward
of ownership. Sales are inclusive of excise duty and exclusive of sales
tax.
ii) Revenue from software development contracts is recognised on the
basis of milestone achieved, as provided in the contract.
iii) Revenue on maintenance contracts is recognised on pro-rata basis
linked with the period of contract.
iv) Services income is recognised on accrual basis, as provided in the
contracts.
v) In respect of Land Development Project, sale of rights on outright
basis is recognised in the year of such sale.
vi) Interest income is recognised using the time proportion method.
i) Excise duty:
Excise duty on sales is being deducted from gross sales and any
increase/ decrease in excise duty on finished goods are being shown
separately in the statement of profit and loss.
j) Research and development expenditure:
The revenue expenditure on research and development is expensed out
in the year in which it is incurred. Expenditure, which results in
creation of capital assets, is treated as similar to expenditure on
other fixed assets.
k) Employees'' benefits:
i) Short term employee benefits are charged off at the undiscounted
amount in the year in which the related service is rendered.
ii) Post employment and other long term employee benefits are charged
off in the year in which the employee has rendered services. The amount
charged off is recognised at the present value of the amounts payable
determined using actuarial valuation techniques. Actuarial gain and
losses in respect of post employment and other long term benefits are
charged to statement of profit and loss.
l) Taxes on income:
Income-tax liability is ascertained on the basis of assessable profits
computed in accordance with the provisions of the Income tax Act, 1961.
Deferred tax is recognised, on timing difference, being the difference
between taxable income and accounting income that originate in one
period and are capable of reversal in one or subsequent periods.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognised if there is virtual certainty that
there will be sufficient future taxable income available to realize
such losses.
m) Foreign exchange transactions:
i) Transactions in foreign currency are recorded at the exchange rates
prevailing on the date of the transaction. Monetary items denominated
in foreign currency are reported using the closing exchange rates on
the date of the balance sheet.
The exchange differences arising on settlement of monetary items or on
reporting these items at the rates different from the rates at which
these were initially recorded / reported in previous financial
statements, are recognised as income / expense in the period in which
they arise, except for exchange differences arising during construction
period on restatement of foreign currency liabilities incurred in
relation to the project which are adjusted in cost of fixed assets.
Mar 31, 2012
A) Accounting convention :
These financial statements have been prepared under the historical cost
convention except revaluation of certain plots of land, on the accrual
basis of accounting and in accordance with the Generally Accepted
Accounting Principles ('GAAP') in India and comply with the
accounting standards prescribed by the Companies (Accounting Standards)
Rules, 2006 (as amended) and in accordance with the provisions of the
Companies Act, 1956, as adopted consistently by the Company,
b) Use of Estimates:
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the year. Example of
such estimates include provisions for doubtful debts, future
obligations under employee retirement benefit plans, provision for
income taxes and the useful lives of fixed assets. Contingencies are
recorded when it is probable that a liability will be incurred and the
amount can be reasonably estimated. Actual results could differ from
such estimates. The differences between the actual results and
estimates are recognized in the year in which the results are known/
materialized. Any revision to accounting estimate is recognized
prospectively in current and future period,
c) Fixed assets :
Fixed assets, other than certain plots of land, which have been
revalued, are stated at cost of acquisition/ construction less
accumulated depreciation. The cost includes all pre-operative expenses
and the financing cost of borrowed funds relating to the construction
period in the cases of new projects and expansion of existing
factories. Certain lands, which are revalued, are stated at revalued
figures on the basis of valuation reports of approved values.
d) Impairment:
At each Balance Sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an assets net selling price and value in use. In assessing
value in use, the estimated future cash flows expected from the
continuing use of the asset and from its disposal are discounted to
their present value using a pre-discount rate that reflects the current
market assessments of time value of money and the risks specific to the
asset.
e) Depreciation and amortization :
(i) The Company follows straight-line method of depreciation in respect
of buildings / plant and machinery and ail assets of IT Division and
written down value method in respect of other assets.
(ii) The rates of depreciation charged on all fixed assets are in
accordance with the rates specified in Schedule XIV to the Companies
Act, 1956, except (excluding those relating to IT Division) in the
following cases :
a) Vehicles, office and other equipment - 33.33%
(Other than computers)
b) Assets acquired upto June 30, 1986
- Plant and machinery - Rates prescribed under the Income-tax Rules,
1962, at the time of acquisition of such assets.
- Factory buildings - 3.39%
- Other buildings - 1.64%
iii) On assets sold, discarded, etc., during the period/year,
depreciation is not provided up to the date of sale/discard.
iv) Depreciation has been calculated on a pro-rata basis in respect of
acquisition/installation of all assets of, the IT Division and on plant
and machinery in other cases. Depreciation on remaining assets is
provided for full year / period irrespective of the date of
acquisition.
v) Leasehold improvements are amortized over the balance of the primary
lease period.
vi) The intellectual property rights are amortized on a straight-line
basis, based on management estimates of useful life varying from 1 to 5
years,
* commencing from the month in which the asset is available to the
Company for use.
vii) Computer software are amortized over a period of 5 years.
f) Investments:
Long-term investments are valued at cost unless there is a permanent
fall in the value thereof.
g) Inventories;
i) Stores, spares and components are valued at cost or under.
ii) Raw materials, process stocks, finished goods and stock in trade
are valued at lower of cost and net realizable value.
iii) Land (for development) on conversion into inventory from fixed
assets is valued at the lower of its historical cost and net realizable
value, and includes appropriate share of land development expenses and
finance cost of borrowed funds relatable thereto.
Cost of inventories, other than land (for development), is ascertained
on the weighted average basis. Further, in respect of the manufactured
inventories, i.e., process stocks and finished goods, appropriate share
of manufacturing expenses are included on absorption costing basis.
Work in process relating to software contracts includes salary and
other directly identifiable expenses incurred on fixed price contracts,
till the completion of specified deliverables, and are valued at cost
or net realizable value, whichever is lower.
h) Revenue recognition :
i) Sale of goods is recognized at the point of dispatch of finished
goods to customers which coincides with the transfer of risk and reward
of ownership. Sales are inclusive of excise duty and exclusive of
sales tax.
ii) Revenue from software development contracts is recognized on the
basis of milestone achieved, as provided in the contract.
iii) Revenue on maintenance contracts is recognized on pro-rata basis
linked with the period of contract.
iv) Services income is recognized on accrual basis, as provided in the
contracts.
v) In respect of Land Development Project, sale of rights on outright
basis is recognized in the year of such sale.
vi) Interest income is recognized using the time proportion method.
i) Excise Duty:
Excise duty on sales is being deducted from gross sales and any
increase/ decrease in excise duty on finished goods is being shown
separately in the statement of profit and loss.
j) Research and development expenditure :
The revenue expenditure on research and development is expensed out in
the year in which it is incurred. Expenditure, which results in
creation of capital assets, is treated as similar to expenditure on
other fixed assets.
k) Employees' Benefits :
i) Short term employee benefits are charged off at the undiscounted
amount in the year in which the related service is rendered.
ii) Post employment and other long term employee benefits are charged
off in the year in which the employee has rendered services. The amount
charged off is recognized at the present value of the amounts payable
determined using actuarial valuation techniques. Actuarial gain and
losses in respect of post employment and other long term benefits are
charged to statement of profit and loss.
1) Taxes on Income :
Income-tax liability is ascertained on the basis of assessable profits
computed in accordance with the provisions of the Income tax Act, 1961.
Deferred tax is recognized, on timing difference, being the difference
between taxable income and accounting income that originate in one
period and are capable of reversal in one or subsequent periods.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognized if there is virtual certainty that
there will be sufficient future taxable income available to realize
such losses.
m) Foreign exchange transactions :
i) Transactions in foreign currency are recorded at the exchange rates
prevailing on the date of the transaction.
Monetary items denominated in foreign currency are reported using the
closing exchange rates on the date of the balance sheet.
The exchange differences arising on settlement of monetary items or on
reporting these items at the rates different from the rates at which
these were initially recorded / reported in previous financial
statements, are recognized as income / expense in the period in which
they arise, except for exchange differences arising during construction
period on restatement of foreign currency liabilities incurred in
celadon to the project which are adjusted in cost of fixed assets.
In case of forward exchange contracts, the premium or discount, arising
at the inception of such contracts, is amortized as income or expense
over the life of the contract and the exchange difference on such
contracts, i.e., difference between the exchange rate at the reporting
/ settlement date and the exchange rate on the date of inception of
contract / the last reporting date, is recognized as income / expense
for the period except for exchange differences arising during
construction period on restatement of foreign currency liabilities
incurred in relation to the project which are adjusted in cost of fixed
assets. Derivatives not covered in AS -11 are marked to market at
balance sheet date and resulting loss, if any, is recognized in the
statement of profit and loss in view of the principle of prudence.
ii) In respect of financial statements of integral foreign operations
of foreign branches, fixed assets are recorded at cost, based on the
exchange rate prevailing on the date of transactions. Current assets
and current liabilities are reported using the exchange rates on the
date of the balance sheet. Incomes and expenses are translated at the
average of monthly closing rates of exchange. The resultant exchange
gains / losses are recognized in the statement of profit and loss.
Mar 31, 2011
A) Accounting convention:
The financial statements are prepared under the historical cost
convention in accordance with applicable Accounting Standards, as
modified to include the revaluation of certain plots of land, and
presentational requirements of the Companies Act, 1956.
b) Use of Estimates:
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the period. Example of
such estimates include provisions for doubtful debts, future
obligations under employee retirement benefit plans, provision for
income taxes and the useful lives of fixed assets. Contingencies are
recorded when it is probable that a liability will be incurred and the
amount can be reasonably estimated. Actual results could differ from
such estimates.
c) Fixed assets:
Fixed assets, other than certain plots of land, which have been
revalued, are stated at cost of acquisition/ construction less
accumulated depreciation. The cost includes all preÃoperative expenses
and the financing cost of borrowed funds relating to the construction
period in the cases of new projects and expansion of existing
factories. Certain lands, which are revalued, are stated at revalued
figures on the basis of valuation reports of approved valuers.
d) Impairment:
At each Balance Sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an assets net selling price and value in use. In assessing
value in use, the estimated future cash flows expected from the
continuing use of the asset and from its disposal are discounted to
their present value using a preÃdiscount rate that reflects the current
market assessments of time value of money and the risks specific to the
asset.
e) Depreciation:
(i) The Company follows straightÃline method of depreciation in respect
of buildings / plant and machinery and all assets of IT Division and
written down value method in respect of other assets.
(ii) The rates
of depreciation charged on all fixed assets are in accordance with the
rates specified in Schedule XIV to the Companies Act, 1956,
except (excluding those relating to IT Division) in the following
cases:
a) Vehicles, office and other equipment à 33.33% (Other than computers)
b) Assets acquired upto June 30, 1986
- Plant and machinery - Rates prescribed under the IncomeÃtax Rules,
1962, at the time of acquisition of such assets.
- Factory buildings - 3.39%
- Other buildings - 1.64%
iii) On assets sold, discarded, etc., during the period/year,
depreciation is not provided up to the date of sale/discard. iv)
Depreciation has been calculated on a proÃrata basis in respect of
acquisition/installation of all assets of the IT Division and on plant
and machinery in other cases. Depreciation on remaining assets is
provided for full year / period irrespective of the date of
acquisition.
v)Leasehold improvements are amortised over the balance of the primary
lease period.
vi) The intellectual property rights are amortized on a straightÃline
basis, based on management estimates of useful life varying from 1 to 5
years, commencing from the month in which the asset is available to the
Company for use.
f) Investments:
LongÃterm investments are valued at cost unless there is a permanent
fall in the value thereof.
g) Inventories:
i) Stores, spares and components are valued at cost or under.
ii) Raw materials, process stocks and finished goods are valued at
lower of cost and net realisable value.
iii) Land (for development) on conversion into stockÃinÃtrade from
fixed assets is valued at the lower of its historical cost and net
realisable value, and includes appropriate share of land development
expenses and finance cost of borrowed funds relatable thereto. Cost of
inventories, other than land (for development), is ascertained on the
weighted average basis. Further, in respect of the manufactured
inventories, i.e., process stocks and finished goods, appropriate share
of manufacturing expenses are included on absorption costing basis.
Work in process relating to software contracts includes salary and
other directly identifiable expenses incurred on fixed price contracts,
till the completion of specified deliverables, and are valued at cost
or net realisable value, whichever is lower. h) Revenue recognition:
i) Sale of goods is recognised at the point of despatch of finished
goods to customers. Sales are inclusive of excise duty and exclusive of
sales tax.
ii) Revenue from software development contracts is recognised on the
basis of milestone achieved, as provided in the contract.
iii) Revenue on maintenance contracts is recognised on proÃrata basis
linked with the period of contract.
iv) Services income is recognised on accrual basis, as provided in the
contracts.
v) In respect of Land Development Project, sale of rights on outright
basis is recognised in the year of such sale.
i) Excise Duty:
Excise duty on sales is being deducted from gross sales and any
increase/ decrease in excise duty on finished goods is being shown
separately in the statement of profit and loss account.
j) Research and development expenditure:
The revenue expenditure on research and development is expensed out in
the year in which it is incurred. Expenditure, which results in
creation of capital assets, is treated as similar to expenditure
on other fixed assets.
k) Employees Benefits:
i) Short term employee benefits are charged off at the undiscounted
amount in the year in which the related service is rendered.
ii) Post employment and other long term employee benefits are charged
off in the year in which the employee has rendered services. The amount
charged off is recognised at the present value of the amounts payable
determined using actuarial valuation techniques. Actuarial gain and
losses in respect of post employment and other long term benefits are
charged to Profit and Loss Account. l) Taxes on Income: IncomeÃtax
liability is ascertained on the basis of assessable profits computed in
accordance with the provisions of the Income tax Act, 1961. Deferred
tax is recognised, on timing difference, being the difference between
taxable income and accounting income that originate in one period and
are capable of reversal in one or subse quent periods. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognised if there is virtual certainty that there will be
sufficient future taxable income available to realize such losses. m)
Foreign exchange transactions:
i) Transactions in foreign currency are recorded at the exchange rates
prevailing on the date of the transaction.
Monetary items denominated in foreign currency are reported using the
closing exchange rates on the date of the balance sheet. The exchange
differences arising on settlement of monetary items or on reporting
these items at the rates different from the rates at which these were
initially recorded / reported in previous financial statements, are
recognised as income / expense in the period in which they arise,
except for exchange differences arising during construction period on
restatement of foreign currency liabilities incurred in relation to the
project which are adjusted in cost of fixed assets.
In case of forward exchange contracts, the premium or discount, arising
at the inception of such contracts, is amortised as income or expense
over the life of the contract and the exchange difference on such
contracts, i.e., difference between the exchange rate at the reporting
/ settlement date and the exchange rate on the date of inception of
contract / the last reporting date, is recognised as income / expense
for the period except for exchange differences arising during
construction period on restatement of foreign currency liabilities
incurred in relation to the project which are adjusted in cost of fixed
assets. Derivatives not covered in AS Ã11 are marked to market at
balance sheet date and resulting loss, if any, is recognized in the
profit and loss account in view of the principle of prudence.
ii) In respect of financial statements of integral foreign operations
of foreign branches, fixed assets are recorded at cost, based on the
exchange rate prevailing on the date of transactions. Current assets
and current liabilities are reported using the exchange rates on the
date of the balance sheet. Incomes and expenses are translated at the
average of monthly closing rates of exchange. The resultant exchange
gains / losses are recognised in the profit and loss account.
Defined benefit plans
(a) Gratuity
(b) Compensated absences à Earned / Sick leaves
These are unfunded schemes, the present value of obligation is
determined based on actuarial valuation using the Projected Unit Credit
Method, which recognise 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. Rs./ Lacs
3. In terms of the Scheme of Restructuring and Arrangement approved by
the Delhi High Court vide its order dated October 29, 2003 under
section 391 and 394 of the Companies Act, 1956 (Act) and subsequent
modification thereto vide Delhi High Court order dated April 28,
2011(hereinafter referred to as SORA), the Company as envisaged
thereunder has:
a) with effect from April 1, 2001, spun off Engineering business into a
subsidiary i.e. DCM Engineering Limited and merged a wholly owned
subsidiary into the Company with effect from April 1, 1999.
b) entered into definitive agreement on February 16, 2004 with Purearth
Infrastructure Limited (PIL), a coÃpromoted company, for sale of
development rights in freehold and leasehold land at Bara Hindu
Rao/Kishanganj for a total consideration of Rs. 28,820 lacs includes
Rs. 3400 lacs on account of leasehold land out of which Rs. 2400 lacs
is subject to certain minimum profit being earned by PIL from the
leasehold land. The status of these agreements is as under:
à In terms of the Freehold Definitive Agreement dated February 16,
2004, the Company had, during the year 2003Ã04, recognised the sale
of development rights to PIL in freehold land at Bara Hindu Rao for a
consideration of Rs.14,449.92 lacs (excluding the outstanding of
Rs.10,962.08 lacs against the sale of rights aggregating Rs. 39,567
lacs in the previous years).
à the "Leasehold Definitive Agreement" dated February 16, 2004 has
technically not come into effect as the conditions to make the
agreement effective are yet to be complied with. As a result, the
Company has considered prudent not to recognize the sale of development
rights in leasehold land and has carried forward the same at its
estimated net realisable value as " Land (for development)" under the
head
inventories in Schedule 7.
Consequent to the above, in terms of the SORA and the definitive
agreements referred to as above, all rights and obligations with
respect to
development of freehold land have been taken over by PIL including the
obligation towards advances aggregating Rs. 460.55 lacs received by
the Company in the previous years against sale of flats on instalment
payment basis, which have been written back during the year 2003Ã04,
as no longer payable. Further, the provisions for contingencies
aggregating Rs.292.53 lacs (Previous year Rs. 402.34 lacs) to cover the
expenses
to be incurred in relation to the above project have been carried
forward as "Contingencies" under the head Provisions in Schedule 8.
Amounts
aggregating Rs.109.81 lacs (Previous year Rs. 100.61 lacs) have been
utilized / adjusted during the year out of the above provision for
contingencies.
c) The outstanding due in terms of SORA as at March 31, 2011 from PIL
on account of sale of development rights aggregate Rs. 8,172.39 lacs
(Previous year Rs. 5,172.39 lacs), against which the Company holds a
security deposit of Rs.300 lacs (Previous year Rs.300 lacs).
Since, in terms of para 43 of the SORA, it can not be implemented
partially as, by its very nature, it would be implemented as a whole
and in totality and that in the event any part of the SORA, either in
part or in whole, is not capable of implementation, the whole SORA will
become null and void and of no effect. The management has confirmed to
the auditors that the conditions contained in the leasehold definitive
agreement (See (b) above) would be complied with and would not result
in to any adverse impact on the financials of the Company or on the
successful implementation of the SORA.
d) The Company has In the previous years accounted for the impact of
financial restructuring, resulting in rescheduling/ waiver of interest/
principal, including the modification of security terms, if any, with
regard to partly convertible debentures, non convertible debentures,
loans from Financial Institutions and certain inter corporate deposits
as envisaged in the SORA.
e) During the previous year, the Company had entered into a One Time
Settlement with a financial institution, pursuant to which liabilities
aggregating Rs. 4,666.31 lacs had been written back under the head
exceptional item in profit and loss account.
f ) After considering the effect of Delhi High Court order dated April
28, 2011, the Company has complied with the debt repayment obligations
including in respect of debentures, deposits, loans and related
interest and where such amount has not been claimed by the concerned
party, deposited an equivalent amount into a ÃNo Lien / Designated
Accounts with scheduled banks. Aggregate of amount so deposited as at
the year end is Rs. 829.71 lacs (Previous year Rs. 723.12 lacs)
Mar 31, 2010
A) Accounting convention:
The financial statements are prepared under the historical cost
convention in accordance with applicable Accounting Standards, as
modified to include the revaluation of certain plots of land, and
presentational requirements of the Companies Act, 1956.
b) Use of Estimates:
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the period. Example of
such estimates include provisions for doubtful debts, future
obligations under employee retirement benefit plans, provision for
income taxes and the useful lives of fixed assets. Contingencies are
recorded when it is probable that a liability will be incurred and the
amount can be reasonably estimated. Actual results could differ from
such estimates.
c) Fixed assets:
Fixed assets, other than certain plots of land, which have been
revalued, are stated at cost of acquisition/ consttuction less
accumulated depreciation. The cost includes all pre-operative expenses
and the financing cost of borrowed funds relating to the consttuction
period in the cases of new projects and expansion of existing
factories. Certain lands, which are revalued, are stated at revalued
figures on the basis of valuation reports of approved valuers.
d) impairment:
At each Balance Sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether thete is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an assets net selling price and value in use. In assessing
value in use, the estimated future cash flows expected from the
continuing use of the asset and from its disposal are discounted to
their present value using a pre- discount rate that reflects the
current market assessments of time value of money and the tisks
specific to the asset.
e) Depreciation:
(i) The Company follows straight-line method of depreciation in respect
of buildings / plant and machinery and all assets of IT Division and
written down value method in respect of other assets. (ii) The rates
of depreciation charged on all fixed assets are in accordance with the
rates specified in Schedule XIV to the Companies Act,
1956, except (excluding those relating to IT Division) in the following
cases:
a) Vehicles, office and other equipment - 33.33% (Other than computers)
b) Assets acquired upto June 30, 1986
- Plant and machinery - Rates prescribed under the Income-tax Rules,
1962, at the time of acquisition of such assets.
- Factory buildings - 3.39%
- Other buildings - 1.64%
iii) On assets sold, discarded, etc., during the period/year,
depreciation is not provided up to the date of sale/discard.
iv) Depreciation has been calculated on a pro-rata basis in respect of
acquisition/installation of all assets of the IT Division and on plant
and
machinery in other cases. Depreciation on temaining assets is provided
for full year / period irrespective of the date of acquisition. v)
Leasehold improvements are amortised over the balance of the ptimary
lease period. vi) The intellectual property rights are amortized on a
straight-line basis, based on management estimates of useful life
varying from 1 to 5
years, commencing from the month in which the asset is available to the
Company for use.
f) Investments:
Long-term investments are valued at cost unless there is a permanent
fall in the value thereof.
g) Inventoties:
i) Stores, spares and components are valued at cost or under.
ii) Raw materials, process stocks and finished goods are valued at
lower of cost and net realisable value.
iii) Land (for development) on conversion into stock-in-trade from
fixed assets is valued at the lower of its historical cost and net
realisable value, and includes appropriate share of land development
expenses and finance cost of borrowed funds relarable thereto. Cost of
inventories, other than land (fot development), is ascertained on the
weighted average basis. Further, in respect of the manufactured
inventories, i.e., process stocks and finished goods, appropriate share
of manufacturing expenses are included on absorption costing basis.
Work in process relating to software contracts includes salaty and
other directly identifiable expenses incurred on fixed price contracts,
till the completion of specified deliverables, and are valued at cost
or net realisable value, whichever is lower. h) Revenue recognirion:
i) Sale of goods is recognised at the point of despatch of finished
goods to customers. Sales are inclusive of excise duty and exclusive of
sales tax.
ii) Revenue from software development contracts is recognised on the
basis of milestone achieved, as provided in the contract.
iii) Revenue on maintenance contracts is recognised on pro-rata basis
linked with the period of contract.
iv) Services income is recognised on accrual basis, as provided in the
contracts.
v) In respect of Land Development Project, sale of rights on outright
basis is recognised in the yeat of such sale.
i) Excise Duty:
Excise duty on sales is being deducted from gross sales and any
increase/ decrease in excise duty on finished goods is being shown
separately in rhe statement of profit and loss account.
j) Research and development expenditute:
The revenue expenditure on research and development is expensed out in
the year in which it is incurred. Expenditure, which results in
cteation of capital assets, is treated as similar to expenditure on
other fixed assets.
k) Employees Benefits;
i) Short term employee benefits are charged off at the undiscounted
amount in the year in which the related service is rendered. ii) Post
employment and other long tetm employee benefits are charged off in the
year in which the employee has tendered services. The amount chatged
off is recognised at the present value of the amounts payable
determined using actuarial valuation techniques. Actuarial gain and
losses in. respect of post employment and other long term benefits are
charged to Profit and Loss Account.
l) Taxes on Income:
Income-tax liability is ascertained on the basis of assessable profits
computed in accordance with the provisions of the Income tax Act, 1961.
Deferred tax is recognised, on timing difference, being the difference
between taxable income and accounting income that originate in one
period and are capable of reversal in one or subsequent periods.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognised if there is virtual certainty that
there will be sufficient futute taxable income available to tealize
such losses. m) Foreign exchange transactions:
i) Ttansactions in foreign currency are recorded at the exchange rates
prevailing on the date of the transaction.
Monetaty items denominated in foreign currency are reported using the
closing exchange rates on the date of the balance sheet. The exchange
differences arising on settlement of monetary items or on reporting
these items at the rates different from the rates at which these were
initially tecotded / reported in previous financial statements, ate
tecognised as income / expense in the period in which they arise,
except for exchange differences arising during construction period on
restatement of foreign currency liabilities incurred in relation to the
project which ate adjusted in cost of fixed assets.
In case of forward exchange contracts, the premium or discount, arising
at the inception of such contracts, is amortised as income or expense
ovet the life of the contract and the exchange difference on such
contracts, i.e., difference between the exchange rate at the tepotting
/ settlement date and the exchange rate on the date of inception of
contract / the last teporting date, is recognised as income / expense
for the period except fot exchange differences arising during
construction period on restatement of foreign currency liabilities
incurred in relation to the project which are adjusted in cost of fixed
assets. Derivatives not covered in AS -11 are marked to market at
balance sheet date and resulting loss, if any, is recognized in the
profit and loss account in view of the principle of prudence. (ii) In
respect of financial statements of integral foreign operations of
foreign branches, fixed assets are recorded at cost, based on the
exchange rate prevailing on the date of transactions. Current assets
and current liabilities are reported using the exchange rates on the
date of the balance sheet. Incomes and expenses are translated at the
average of monthly closing rates of exchange. The resultant exchange
gains / losses ate recognised in the profit and loss account.
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DCM Ltd. ಹೆಚ್ಚಿನ ಮಾಹಿತಿ
-
DCM Ltd. ಟೂಲ್ಸ್
- ಬಲ್ಕ್ ಡೀಲ್ಸ್
-
DCM Ltd. ಕಂಪನಿಯ ವಿವರಗಳು
- ಕಂಪನಿ ಪ್ರೋಫೈಲ್
- ಕಂಪನಿ ಇತಿಹಾಸ
- ಆಡಳಿತ ಮಂಡಳಿ
- ಬಂಡವಾಳದ ಬಗೆ
- ಉತ್ಪನ್ನ
- ಬ್ಯಾಂಕರ್ಸ್/ಅಡಿಟರ್ಸ್/ರೆಜಿಸ್ಟರ್ಸ್
-
ಕಂಪನಿ ಇತಿಹಾಸ
- ಹಕ್ಕುಗಳು
- ಬಿಎಸ್ಇ ಧಾರಣೆ ಇತಿಹಾಸ
- ಎನ್ಎಸ್ಇ ಧಾರಣೆ ಇತಿಹಾಸ
-
DCM Ltd. ಹಣಕಾಸು ಅನುಪಾತದ ಲೆಕ್ಕ
- ಅನುಪಾತ
-
DCM Ltd. ಫಲಿತಾಂಶ
- ತ್ರೈಮಾಸಿಕ ಫಲಿತಾಂಶ
- ಅರ್ಧವಾರ್ಷಿಕ ಫಲಿತಾಂಶ
- ಒಂಭತ್ತು ತಿಂಗಳ ಫಲಿತಾಂಶ
- ವಾರ್ಷಿಕ ವರದಿ
-
DCM Ltd. ಹಣಕಾಸು ಡಾಟಾ
- ಅಡಿಟ್ ಫಲಿತಾಂಶ
- ಹಣದ ಹರಿವು
- ಬ್ಯಾಲೆನ್ಸ್ ಶೀಟ್
-
DCM Ltd. ವರದಿಗಳು
- ಅಕೌಂಟಿಂಗ್ ಪಾಲಿಸಿ
- ಅಡಿಟರ್ಸ್ ವರದಿ
- ನಿರ್ದೇಶಕರ ವರದಿ
- ಖಾತೆಗೆ ಮುಖ್ಯ ವಿಚಾರ
-
DCM Ltd. ಕಾರ್ಪೋರೇಟ್ ವರದಿಗಳು
- ಬುಕ್ ಕ್ಲೋಸರ್
- ಡಿವಿಡೆಂಡ್
- ಬೋರ್ಡ್ ಮೀಟಿಂಗ್
- ಹೆಸರು ಬದಲಾವಣೆ
