SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Use of Estimates The brparation of financial statements in conformity with generally accepted accounting principles in India requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. b. Tangible Fixed Assets Tangible Fixed Assets are valued at cost less accumulated debrciation. The cost comprises purchase price, borrowing cost if capitalization criteria met and directly attributable cost of bringing the assets to its working condition for intended use. c. Debrciation on Tangible Fixed Assets Debrciation on tangible fixed assets is provided on Straight Line Method (SLM) at rates brscribed in Schedule II of Companies Act, 2013. Free Hold land, Leasehold Land and Site Development Expenses are not debrciated. Leasehold land wherever lease period expires is fully debrciated in the year in which the lease expires. d. Intangible Assets and Amortization Intangible assets acquired are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization. Computer software is amortized on SLM over a period brscribed in Schedule II of Companies Act, 2013. e. Capital Work in Progress These are stated at cost relating to items or projects in progress incurred during construction/installation /br-operative period. f. Investments Investments are classified into Current and Long Term Investment. Current Investments are stated at lower of cost and market / fair value. Long Term investments are stated at cost and permanent diminution in value, if any, is provided in the books of accounts. g. Inventories Inventories are valued at the lower of the cost and estimated net realizable value. Cost of inventories is computed on FIFO basis. Work-in-progress and Finished goods include related manufacturing overheads and costs. Finished goods also include the applicable excise duty. Dies being a specialized item (included in stores & spares inventories) are valued at valuation of such stocks at the year end carried out by approved valuer considering its residual useful life or net realizable value whichever is lower. h. Recognition of Government Grants Government grants available to the Company are considered for inclusion in accounts where such benefits have been earned by the Company and it is reasonably certain that the ultimate collection will be made. An appropriate amount in respect of such earned benefits, estimated on a prudent basis, is credited to accounts according to its nature even though the actual amount of such benefits may be finally settled and received after the end of the relevant accounting period. i. Sales Sales include excise duty wherever applicable. j. Purchases Pending receipt of final invoices, materials purchased are accounted for on the basis of pro-forma invoice / purchase order / brvious purchase rates. Subsequent adjustment is done on receipt of final invoice, wherever necessary. k. Foreign Currency Expenditure: i) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency on the date of the transaction. ii) Conversion The monetary assets and liabilities in foreign currency existing at Balance Sheet date are accounted for at brvailing exchange rate at the year end. Non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. iii) Exchange Differences Exchange Differences, arising on settlement / conversion of monetary items, are recognized as income or expenses in the year in which they arise except those relating to acquisition of imported fixed assets, in which case such exchange differences are capitalized. iv) Forward Exchange Contracts The brmium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts except the contracts which are long-term foreign currency monetary items, are recognized in the statement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year. 1. Employee Benefits i) Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered. ii) Post employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expense is recognized at the brsent value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the profit and loss account. m. Taxation Provision for Taxes comprises of Current Tax and Deferred Tax. Deferred Tax Assets are recognized and carried forward to be adjusted against liability on taxable income arising in future, only if there is reasonable certainty that the company would have significant taxable income to realize the benefit of such Deferred Tax Assets. Provision for Wealth Tax liability, if any, is estimated in accordance with the Wealth Tax Act, 1957 and provided for. n. Borrowing Costs Interest and other borrowing costs directly attributable to the acquisition, construction or installation of qualifying capital assets till the date of commercial use of the assets are capitalized. Other borrowing costs are recognized as an expense in the period in which they are incurred. Impairment of Assets The carrying amount of assets is reviewed at each balance sheet date for any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets' net selling price and its value in use. In assessing the value in use, the estimated future cash flows are discounted to their brsent value at the weighted average cost of capital. Provision for impairment is written back in case of sale / discard of impaired assets. Proposed Dividend: Dividend (including Dividend Distribution Tax) if recommended by the Board of Directors, is provided for in the accounts pending Shareholders' approval. Capital Issue Expenses: The entire Capital Issue expenses are written off during the year of issue. Hedging against metal inventory: The Company takes hedging position against its inventory of aluminium metal and for pending import contracts of aluminium metal, which is our principal raw material. The loss/gain from such hedged contracts is charged to consumption of raw material. All open contracts as on the year end are marked to market for all losses. However, any unrealized gain on open contracts is not accounted until actually realized. The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company designates these as cash flow hedges. The Company does not use derivative financial instruments for speculative purposes. In respect of derivative contracts, brmium paid, gains / losses on settlement and provision for losses for cash flow hedges are recognized in the Profit & Loss Account, except in case where they relate to borrowing costs that are attributable to the acquisition or construction of fixed assets, in which case, they are adjusted to the carrying cost of such assets. At every period end, all outstanding derivative contracts are fair valued on a marked-to-market basis and any loss on valuation is recognized in the profit and loss account. Any gain on marked-to-market valuation of respective contracts is only recognized to the extent of the loss on foreign currency, keeping in view the principle of prudence as enunciated in AS-1, Disclosure of Accounting Policies. for A L P S & CO. Chartered Accountants M. P. Jhunjhunwala Chairman & Managing Director M. G. Todi A. K. Hazra A K Khetawat Partner Membership No.052751 Pradeep Agarwal DGM - Finance & Accounts C T O Sumana Raychaudhuri Company Secretary Suhita Mukhopadhyay Place : Kolkata Dated : 2nd day of July, 2015 |
