Home  »  Company  »  AI Champdany Industr  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of AI Champdany Industries Ltd. Company

Mar 31, 2015

The significant accounting policies followed by the company are summarized below:

1.1. Accounting Convention:

The Financial statements have been prepared in accordance with accrual method of accounting following the historical cost convention as modified by revaluation of certain Fixed Assets.

1.2. Fixed Assets:

Fixed Assets are stated at cost of acquisition, which are, inclusive of subsequent improvements thereto except for certain Fixed Assets, which were revalued. For Assets acquired at a composite price at cost as allocated to each assets by independent Valuers. Assets retired from active use are stated at values estimated by independent valuers.

Cost includes incidental expenses of acquisition/installation and financial cost relating to borrowed funds attributable to construction/ acquisition of fixed assets for the period upto commencement of commercial production / installation.

In respect of revalued assets, the difference between the written down value of the assets as on the date of revaluation and the then replacement value is transferred to Revaluation Reserve.

1.3. Depreciation:

(A) Depreciation of Fixed Assets is provided to the extent of depreciable amount on the straight line method based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.

(B) Premium paid for leasehold land is amortised over the period of the lease

(C) Freehold land and assets retired from active use are not depreciated.

1.4. Investments:

Long-term investments are stated at cost less provision for permanent diminution if any, in the value of such investment. Dividend Income is accounted for on receipt.

1.5. Inventories:

Inventories are valued on the following basis: (i) Raw Material at lower of cost and net realisable value, (ii) Finished Goods at lower of cost and contract value and net realisable value, (iii) Stores & Spares and work-in-process at cost or under.

In the case of Raw Materials and Stores & Spares, cost is generally ascertained on weighted average basis. Work-in-process and Finished Goods are valued on full cost absorption basis. Necessary provision is made for obsolete, slow-moving, non-moving and defective items of inventories.

1.6. Capital Subsidy:

Subsidies relating to Fixed Assets are initially credited to Capital Reserve and the amount is adjusted against the depreciation charged over the useful life of the asset.

1.7. Miscellaneous expenses:

Share issue expenses are amortized over a period of ten years.

1.8. Foreign Currency transactions:

i) Monetary assets and liabilities relating to foreign currency transactions remaining unsettled at the year-end are translated at closing spot rates on the last day of the year.

ii) The difference in translation in monetary assets and liabilities and realised gains and losses in foreign exchange transactions other than those relating to fixed assets are recognized in the Statement of Profit and Loss.

iii) Exchange differences in respect of liabilities incurred to acquire fixed assets are adjusted to the carrying amount of such fixed assets.

1.9. Sales:

Sales comprise of sale of goods and services and include freight and other charges recovered from customers.

1.10. Related Income:

Export incentives / Related Income are accounted to the extent considered certain of realisation by the Management.

1.11. Retiral benefits:

Contributions to the Provident and Superannuation Funds, which are in accordance with the respective schemes, are charged to revenue on accrual basis.

Retirement benefits including gratuity are provided for in the Books of Accounts on the basis of actuarial valuation except one unit of the company, which has been treated on cash basis from 1997-98 to 2006-07. Such liability has been provided on the basis of valuation made by the Actuary in line with the parameters & requirement of AS 15 (Revised 2005) issued by the Institute of Chartered Accountants of India.

1.12. Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.13. Revenue expenditure on Research & Development is charged to Statement of Profit and Loss of the year in which it is incurred.

1.14. Capital expenditure on Research & Development is shown as addition to Fixed Assets.

1.15. Insurance claims are recognised on receipt/assessment of related claim from Insurance Authorities.

1.16. Intangible Assets:

Intangible Assets are stated at. cost of acquisition less accumulated amortisation. Computer Software is amortised over a period of 5 years on Straight Line basis.

2.2 2,683,045 equity shares has been alloted on 15.05.2013 and 2,204,786 equity shares has been alloted on 25.09.2012 to promoter group companies on preferencial basis under SEBI (ICDR) Regulation 2009 with a locking period of 3 years. Equity Shares carry voting rights at the General Meeting of the Company and are entitled to dividend and to participate in surplus, if any, in the event of winding up. The Company has alloted 22,00,000 7% Cumulative Preference Shares of Rs 10 each on 25.09.2004. which are redeemeble at par on or before the expiring of 20 years from the date of allotment has been redeemed during the year 2012-13. The company has alloted 12,414,353 non-convertible 2% Cumulative Preference Shares of Rs 5 each on 30.03.2010 which are redeemable at par on or before fifteen years from the date of allotement with a locking period of 3 years. Preference shareholders are entitled to get fixed rate of dividend in preference to the equity share but are not entitled to vote at General Meeting of the Company unless dividend has been in arrears for the prescribed minimum period.


Mar 31, 2014

1.1. Accounting Convention :

The Financial statements have been prepared in accordance with accrual method of accounting following the historical cost convention as modified by revaluation of certain Fixed Assets.

1.2. Fixed Assets:

Fixed Assets are stated at cost of acquisition, which are, inclusive of subsequent improvements thereto except for certain Fixed Assets, which were revalued. For Assets acquired at a composite price at cost as allocated to each assets by independent valuers. Assets retired from active use are stated at values estimated by independent valuers.

Cost includes incidental expenses of acquisition/installation and financial cost relating to borrowed funds attributable to construction/ acquisition of fixed assets for the period upto commencement of commercial production / installation.

In respect of revalued assets, the difference between the written down value of the assets as on the date of revaluation and the then replacement value is transferred to Revaluation Reserve.

1.3. Depreciation :

(A) Depreciation on Fixed Assets have been provided for both on Straight line and Reducing balance method as hereunder. Method and rates consistently used for the purpose of depreciation charged for the year as follows :

1) Plant & Machinery and Electrical Installation Unit at Jagatdal

(a) Straight Line Method

i) Certain specified items (included in electrical installation)

– Additions for the period 1.1.71 to 31.3.87 * 5.25%

ii) Plant and Machinery and Electrical Installation (other than (i) above)

– Additions for the period 1.1.77 to 31.12.82 (on single shift basis) * 3.39%

– Additions for the period 1.1.83 to 31.3.87 (on single shift basis) * 5.28%

– Additions from the year 1987-88 At rates prescribed in Schedule

XIV of the Companies Act, 1956

* Rates applied in prior years following the company Law Board Circular No. 1/86 dated 21 May 1986.

(b) Reducing Balance Method

Certain portion of Electrical Installation At rates prescribed in Schedule and Plant & Machinery (added upto 1976) XIV of the Companies Act,1956 Other Units (i) Reducing Balance Method On Plant & Machinery acquired prior to 1 April 1979 At rates prescribed in Schedule XIV of the Companies Act 1956 (ii) Straight Line Method On Plant & Machinery acquired after 31 March 1979 At rates previously determined On assets acquired upto 30 September 1986 in accordance with Section 205(2)(b) of the Companies Act, 1956. On assets acquired after 30 September 1986 At rates prescribed in Schedule XIV of the Companies Act 1956.

2) Other assets on reducing balance Method At rates prescribed in Schedule XIV of the Companies Act 1956

(B) Premium paid for leasehold land is amortised over the period of the lease

(C) Freehold land and assets retired from active use are not depreciated.

1.4. Investments :

Long-term investments are stated at cost less provision for permanent diminution if any, in the value of such investment. Dividend Income is accounted for on receipt.

1.5. Inventories :

Inventories are valued on the following basis: (i) Raw Material at lower of cost and net realisable value, (ii) Finished Goods at lower of cost and contract value and net realisable value, (iii) Stores & Spares and work- in-process at cost or under.

In the case of Raw Materials and Stores & Spares, cost is generally ascertained on weighted average basis. Work-in-process and Finished Goods are valued on full cost absorption basis. Necessary provision is made for obsolete, slow-moving, non-moving and defective items of inventories.

1.6. Capital Subsidy :

Subsidies relating to Fixed Assets are initially credited to Capital Reserve and the amount is adjusted against the depreciation charged over the useful life of the asset.

1.7. Miscellaneous expenses :

Share issue expenses are amortized over a period of ten years.

1.8. Foreign Currency transactions :

i) Monetary assets and liabilities relating to foreign currency transactions remaining unsettled at the year- end are translated at closing spot rates on the last day of the year.

ii) The difference in translation in monetary assets and liabilities and realised gains and losses in foreign exchange transactions other than those relating to fixed assets are recognised in the Statement of Profit and Loss.

iii) Exchange differences in respect of liabilities incurred to acquire fixed assets are adjusted to the carrying amount of such fixed assets.

1.9. Sales :

Sales comprise sale of goods and services and include freight and other charges recovered from customers.

1.10. Related Income :

Export incentives / Related Income are accounted to the extent considered certain of realisation by the Management.

1.11. Retiral benefits :

Contributions to the Provident and Superannuation Funds, which are in accordance with the respective schemes, are charged to revenue on accrual basis.

Retirement benefits including gratuity are provided for in the Books of Accounts on the basis of actuarial valuation except one unit of the company, which has been treated on cash basis from 1997-98 to 2006-07. Such liability has been provided on the basis of valuation made by the Actuary in line with the parameters & requirement of AS 15 (Revised 2005) issued by the Institute of Chartered Accountants of India.

1.12. Borrowing Costs :

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.13. Revenue expenditure on Research & Development is charged to Statement of Profit and Loss of the year in which it is incurred.

1.14. Capital expenditure on Research & Development is shown as addition to Fixed Assets.

1.15. Insurance claims are recognized on receipt/assessment of related claim from Insurance Authorities.

1.16. Intangible Assets :

Intangible Assets are stated at cost of acquisition less accumulated amortization. Computer Software is amortized over a period of 5 years on Straight Line basis.

2.2 2,683,045 equity shares has been alloted on 15.05.2013 and 2,204,786 equity shares has been alloted on 25.09.2012 to promoter group companies on preferencial basis underSEBI(ICDR) Regulation 2009 with a locking period 3 years. Equity Shares carry voting rights at the General Meeting of the Company and are entitled to dividend and to participate in surplus, if any, in the event of winding up. The Company has alloted 2,200,000 7% Cumulative Preference Shares of Rs 10 each on 25.09.04. which are redeemeble at par on or before the expiring of 20 years from the date of allotement has been redeemed during the year 2012-13. The company has alloted 12,414,353 non-convertible 2% Cumulative Preference Shares of Rs 5 each on 30.03.2010 which are reddmable at par on or before fifteen years from the date of allotement with a locking period of 3 years. Preference shareholders are entitled to get fixed rate of dividend in preference to the equity share but are not entitled to vote at General Meeting of the Company unless dividend has been in arrears for the prescribed minimum period.

* Secured by hypothecation on stocks of raw material, stock -in-process, stores, manufactured goods, book debts, bill, moveable plant & machinery and other current assets and also mortgage on second charge basis by deposit of title deeds by constructive delivery with Exim Bank, Exim Bank acting as agent of the consortium of banks, all documents of title evidences, deeds and writings in order to creat a security on the Company''s immovable properties together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth, and also by way of second charge on 100% shareholding of Champdany Constructions Ltd, a wholly owned subsidiary of the company.


Mar 31, 2013

1.1. Accounting Convention:

The Financial statements have been prepared in accordance with accrual method of accounting following the historical cost convention as modified by revaluation of certain Fixed Assets.

1.2. Fixed Assets:

Fixed Assets are stated at cost of acquisition, which are, inclusive of subsequent improvements thereto except for certain Fixed Assets, which were revalued. For Assets acquired at a composite price at cost as allocated to each assets by independent Valuers. Assets retired from active use are stated at values estimated by independent valuers.

Cost includes incidental expenses of acquisition/installation and financial cost relating to borrowed funds attributable to construction/ acquisition of fixed assets for the period upto commencement of commercial production / installation.

In respect of revalued assets, the difference between the written down value of the assets as on the date of revaluation and the then replacement value is transferred to Revaluation Reserve.

1.3. Depreciation:

A) Depreciation on Fixed Assets has been provided for both on Straight line and Reducing balance method as hereunder. Method and rates consistently used for the purpose of depreciation charged for the year as follows:

1) Plant & Machinery and Electrical Installation

Units at Jagatdal

a) Straight Line Method

i) Certain specified items (included in electrical installation)

- Additions for the period 1.1.71 to 31.3.87 * 5.25% ii) Plant and Machinery and Electrical Installation

(other than (i) above)

- Additions for the period 1.1.77 to 31.12.82 (on single shift basis) * 3.39%

- Additions for the period 1.1.83 to 31.3.87 (on single shift basis) * 5.28%

- Additions from the year 1987-88 At rates prescribed in Schedule

XIV of the Companies Act, 1956. * Rates applied in prior years following the company Law Board Circular No. 1/86 dated 21 May 1986.

b) Reducing Balance Method

Certain portion of Electrical Installation At rates prescribed in Schedule and Plant & Machinery (added upto 1976) XIV of the Companies Act,1956.

Other Units i) Reducing Balance Method

On Plant & Machinery acquired prior to 1 April 1979 At rates prescribed in Schedule

XIV of the Companies Act, 1956. ii) Straight Line Method

On Plant & Machinery acquired after 31 March 1979 At rates previously determined on assets acquired upto 30 September 1986 in accordance with Section

205(2)(b) of the Companies Act, 1956.

On assets acquired after 30 September 1986 At rates prescribed in Schedule

XIV of the Companies Act, 1956.

2) Other assets on reducing balance Method At rates prescribed in Schedule

XIV of the Companies Act, 1956.

B) Premium paid for leasehold land is amortised over the period of the lease.

C) Freehold land and assets retired from active use are not depreciated.

1.4. Investments:

Long-term investments are stated at cost less provision for permanent diminution if any, in the value of such investment. Dividend Income is accounted for on receipt.

1.5. Inventories:

Inventories are valued on the following basis: (i) Raw Material at lower of cost and net realisable value, (ii) Finished Goods at lower of cost and contract value and net realisable value, (iii) Stores & Spares and work-in-process at cost or under.

In the case of Raw Materials and Stores & Spares, cost is generally ascertained on weighted average basis. Work-in-process and Finished Goods are valued on full cost absorption basis. Necessary provision is made for obsolete, slow-moving, non-moving and defective items of inventories.

1.6. Capital Subsidy:

Subsidies relating to Fixed Assets are initially credited to Capital Reserve and the amount is adjusted against the depreciation charged over the useful life of the asset.

1.7. Miscellaneous expenses:

Share issue expenses are amortized over a period of ten years.

1.8. Foreign Currency transactions:

i) Monetary assets and liabilities relating to foreign currency transactions remaining unsettled at the year-end are translated at closing spot rates on the last day of the year.

ii) The difference in translation in monetary assets and liabilities and realised gains and losses in foreign exchange transactions other than those relating to fixed assets are recognised in the Statement of Profit and Loss.

iii) Exchange differences in respect of liabilities incurred to acquire fixed assets are adjusted to the carrying amount of such fixed assets.

1.9. Sales:

Sales comprise sale of goods and services and include freight and other charges recovered from customers.

1.10.Related Income:

Export incentives / Related Income are accounted to the extent considered certain of realisation by the Management.

1.11.Retiral benefits:

Contributions to the Provident and Superannuation Funds, which are in accordance with the respective schemes, are charged to revenue on accrual basis.

Retirement benefits including gratuity are provided for in the Books of Accounts on the basis of actuarial valuation except for one unit of the company, which has been treated on cash basis from 1997-98 to 2006 -07.

Such liability has been provided on the basis of valuation made by the Actuary in line with the parameters and requirement of AS 15 (Revised 2005) issued by the Institute of Chartered Accountants of India.

1.12. Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.13. Revenue expenditure on Research and Development is recognised in the Statement of Profit and Loss of the year in which it is incurred.

1.14. Capital expenditure on Research and Development is shown as addition to Fixed Assets.

1.15. Insurance claims are recognised on receipt/assessment of related claim from Insurance Authorities.

1.16. Intangible Assets:

Intangible Assets are stated at cost of acquisition less accumulated amortisation. Computer Software is amortised over a period of 5 years on Straight Line basis.


Mar 31, 2012

1.1. Accounting Convention:

the Financial statements have been prepared in accordance with accrual method of accounting following the historical cost convention as modified by revaluation of certain Fixed Assets.

1.2. Fixed Assets:

Fixed Assets are stated at cost of acquisition, which are, inclusive of subsequent improvements thereto except for certain Fixed Assets, which were revalued. For Assets acquired at a composite price at cost as allocated to each assets by independent Valuers. Assets retired from active use are stated at values estimated by independent valuers.

Cost includes incidental expenses of acquisition/installation and financial cost relating to borrowed funds attributable to construction/acquisition of fixed assets for the period upto commencement of commercial production/installation.

In respect of revalued assets, the difference between the written down value of the assets as on the date of revaluation and the then replacement value is transferred to Revaluation Reserve.

1.3. Depreciation:

(A) Depreciation on Fixed Assets has been provided for both on Straight line and Reducing balance method as hereunder. Method and rates consistently used for the purpose of depreciation charged for the year as follows:

1) Plant & Machinery and Electrical Installation

Units at Jagatdal

(a) Straight Line Method

i) Certain specified items (included in electrical installation)

- Additions for the period 1.1.71 to 31.3.87 * 5.25%

ii) Plant and Machinery and Electrical Installation (other than (i) above)

- Additions for the period 1.1.77 to 31.12.82 (on single shift basis) * 3.39%

- Additions for the period 1.1.83 to 31.3.87 (on single shift basis) * 5.28%

- Additions from the year 1987-88 At rates prescribed in Schedule XIV of the Companies Act, 1956.

* Rates applied in prior years following the company Law Board Circular No. 1/86 dated 21st May 1986.

b) Reducing Balance Method

Certain portion of Electrical Installation At rates and Plant & Machinery (added upto 1976) prescribed in Schedule XIV of the Companies Act, 1956.

Other Units

(i) Reducing Balance Method

On Plant & Machinery acquired prior At rates to 1st April 1979 prescribed in Schedule XIV of the Companies Act, 1956.

(ii) Straight Line Method

On Plant & Machinery acquired after 31st March At rates 1979 on assets acquired upto 30th September previously 1986 determined in accordance with Section 205(2)(b) of the Companies Act, 1956.

On assets acquired after 30th September 1986 At rates prescribed in Schedule XIV of the Companies Act, 1956.

2) Other assets on reducing balance Method At rates prescribed in Schedule XIV of the Companies Act, 1956.

(B) Premium paid for leasehold land is amortised over the period of the lease

(C) Freehold land and assets retired from active use are not depreciated.

1.4. Investments:

Long-term investments are stated at cost less provision for permanent diminution if any, in the value of such investment. Dividend Income is accounted for on receipt.

1.5. Inventories:

Inventories are valued on the following basis:

(i) Raw Material at lower of cost and net realisable value,

(ii) Finished Goods at lower of cost and contract value and net realisable value,

(iii) Stores & Spares and work-in-process at cost or under.

In the case of Raw Materials and Stores & Spares, cost is generally ascertained on weighted average basis. Work-in-process and Finished Goods are valued on full cost absorption basis. Necessary provision is made for obsolete, slow-moving, non-moving and defective items of inventories.

1.6. Capital Subsidy:

Subsidies relating to Fixed Assets are initially credited to Capital Reserve and the amount is adjusted against the depreciation charged over the useful life of the asset.

1.7. Miscellaneous expenses:

Share issue expenses are amortized over a period of ten years.

1.8. Foreign Currency transactions:

i) Monetary assets and liabilities relating to foreign currency transactions remaining unsettled at the year-end are translated at closing spot rates on the last day of the year.

ii) The difference in translation in monetary assets and liabilities and realised gains and losses in foreign exchange transactions other than those relating to fixed assets are recognised in the Profit & Loss Account.

iii) Exchange differences in respect of liabilities incurred to acquire fixed assets are adjusted to the carrying amount of such fixed assets.

1.9. Sales:

Sales comprise sale of goods and services and include freight and other charges recovered from customers.

1.10. Related Income:

Export incentives/Related Income are accounted to the extent considered certain of realisation by the Management.

1.11. Retiral benefits:

Contributions to the Provident and Superannuation Funds, which are in accordance with the respective schemes, are charged to revenue on accrual basis.

Retirement benefits including gratuity are provided for in the Books of Accounts on the basis of actuarial valuation except one unit of the company, which has been treated on cash basis from* 1997-98 to 2006-07. Such liability has been provided on the basis of valuation made by the Actuary in line with the parameters & requirement of AS 15 (Revised 2005) issued by the Institute of Chartered Accountants of India.

1.12. Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.13. Revenue expenditure on Research & Development is charged to Profit & Loss Account of the year in which it is incurred.

1.14. Capital expenditure on Research & Development is shown as addition to Fixed Assets.

1.15. Insurance claims are recognised on receipt/assessment of related claim from Insurance Authorities.

1.16. Intangible Assets:

Intangible Assets are stated at cost of acquisition less accumulated amortisation. Computer Software is amortised over a period of 5 years on Straight Line basis.


Mar 31, 2011

The significant accounting policies followed by the company are summarized below: -

1.1. Accounting Convention: The Financial statements have been prepared in accordance with accrual method of accounting following the historical cost convention as modified by revaluation of certain Fixed Assets.

1.2. Fixed Assets:

Fixed Assets are stated at cost of acquisition, which are, inclusive of subsequent improvements thereto except for certain Fixed Assets, which were revalued. For Assets acquired at a composite price at cost as allocated to each assets by independent Valuers. Assets retired from active use are stated at values estimated by independent valuers.

Cost includes incidental expenses of acquisition/installation and financial cost relating to borrowed funds attributable to construction/ acquisition of fixed assets for the period upto commencement of commercial production / installation.

In respect of revalued assets, the difference between the written down value of the assets as on the date of revaluation and the then replacement value is transferred to Revaluation Reserve.

1.3. Depreciation:

(A) Depreciation on Fixed Assets have been provided for both on Straight line and Reducing balance method as hereunder. Method and rates consistently used for the purpose of depreciation charged for the year as follows:

1) Plant & Machinery & Electrical Installation Unit at Jagatdal

(a) Straight Line Method

i) Certain specified items (included in electrical installation)

- Additions for the period 1.1.71 to 31.3.87 * 5.25%

ii) Plant and Machinery and Electrical Installation

(other than (i) above)

- Additions for the period 1.1.77 to 31.12.82 (on single shift basis) * 3.39%

- Additions for the period 1.1.83 to 31.3.87 (on single shift basis) * 5.28%

- Additions from the year 1987-88 At rates prescribed in Schedule

XIV of the Companies Act, 1956 * Rates applied in prior years following the company Law Board Circular No. 1/86 dated 21st May 1986.

(b) Reducing Balance Method

Certain portion of Electrical Installation and Plant & Machinery (added upto 1976)

At rates prescribed in Schedule XIV of the Companies Act,1956

Other Units

(i) Reducing Balance Method

On Plant & Machinery acquired prior to 1st April 1979 At rates prescribed in Schedule XIV of the Companies Act 1956

(ii) Straight Line Method

On Plant & Machinery acquired after 31st March 1979 on assets acquired upto 30th September 1986

At rates previously determined in accordance with Section 205(2)(b) of the Companies Act, 1956.

On assets acquired after 30th September 1986 At rates prescribed in Schedule XIV of the Companies Act 1956.

2) Other assets on reducing balance Method At rates prescribed in Schedule XIV of the Companies Act 1956

(B) Premium paid for leasehold land is amortised over the period of the lease

(C) Freehold land and assets retired from active use are not depreciated.

1.4. Investments :

Long-term investments are stated at cost less provision for permanent diminution if any, in the value of such investment. Dividend Income is accounted for on receipt.

1.5. Inventories:

Inventories are valued on the following basis: (i) Raw Material at lower of cost and net realisable value, (ii) Finished Goods at lower of cost and contract value and net realisable value, (iii) Stores & Spares and work-in- process at cost or under.

In the case of Raw Materials and Stores & Spares, cost is generally ascertained on weighted average basis. Work-in-process and Finished Goods are valued on full cost absorption basis. Necessary provision is made for obsolete, slow-moving, non-moving and defective items of inventories.

1.6. Capital Subsidy :

Subsidies relating to Fixed Assets are initially credited to Capital Reserve and the amount is adjusted against the depreciation charged over the useful life of the asset.

1.7. Miscellaneous expenses :

Share issue expenses are amortized over a period of ten years.

1.8. Foreign Currency transactions :

i) Monetary assets and liabilities relating to foreign currency transactions remaining unsettled at the year-end are translated at closing spot rates on the last day of the year.

ii) The difference in translation in monetary assets and liabilities and realised gains and losses in foreign exchange transactions other than those relating to fixed assets are recognised in the Profit & Loss Account.

iii) Exchange differences in respect of liabilities incurred to acquire fixed assets are adjusted to the carrying amount of such fixed assets.

1.9. Sales : Sales comprise sale of goods and services and include freight and other charges recovered from customers.

1.10. Related Income : Export incentives / Related Income are accounted to the extent considered certain of realisation by the Management.

1.11. Retiral benefits : Contributions to the Provident and Superannuation Funds, which are in accordance with the respective schemes, are charged to revenue on accrual basis.

Retirement benefits including gratuity are provided for in the Books of Accounts on the basis of actuarial valuation except one unit of the company, which has been treated on cash basis from 1997-98 to 2006-07. Such liability has been provided on the basis of valuation made by the Actuary in line with the parameters & requirement of AS 15 (Revised 2005) issued by the Institute of Chartered Accountants of India.

1.12. Borrowing Costs : Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.13. Revenue expenditure on Research & Development is charged to Profit & Loss Account of the year in which it is incurred.

1.14. Capital expenditure on Research & Development is shown as addition to Fixed Assets.

1.15. Insurance claims are recognised on receipt/assessment of related claim from Insurance Authorities.

1.16. Intangible Assets :

Intangible Assets are stated at cost of acquisition less accumulated amortisation. Computer Software is amortised over a period of 5 years on Straight Line basis.


Mar 31, 2010

The significant accounting policies followed by the company are summarized below: -

1.1. Accounting Convention: The Financial statements have been prepared in accordance with accrual method of accounting following the historical cost convention as modified by revaluation of certain Fixed Assets.

1.2. Fixed Assets: Fixed Assets are stated at cost of acquisition, which are, inclusive of subsequent improvements thereto except for certain Fixed Assets, which were revalued. For Assets acquired at a composite price at cost as allocated to each assets by independent Valuers. Assets retired from active use are stated at values estimated by independent valuers.

Cost includes incidental expenses of acquisition/installation and financial cost relating to borrowed funds attributable to construction/ acquisition of fixed assets for the period upto commencement of commercial production / installation.

In respect of revalued assets, the difference between the written down value of the assets as on the date of revaluation and the then replacement value is transferred to Revaluation Reserve.

1.3. Depreciation: (A) Depreciation on Fixed Assets have been provided for both on Straight line and Reducing balance method as hereunder. Method and rates consistently used for the purpose of depreciation charged for the year as follows:

1) Plant & Machinery & Electrical Installation Unit at Jagatdal (a) Straight Line Method i) Certain specified items (included in electrical installation

- Additions for the period 1.1.71 to 31.3.87 * 5.25% ii) Plant and Machinery and Electrical Installation (other than (i) above)

- Additions for the period 1.1.77 to 31.12.82 (on single shift basis) * 3.39%

- Additions for the period 1.1.83 to 31.3.87 (on single shift basis) * 5.28%

- Additions from the year 1987-88 At rates prescribed in Schedule

XIV of the Companies Act, 1956 *Rates applied in prior years following the company Law Board Circular No. 1/86 dated 21st May 1986. b) Reducing Balance Method

Certain portion of Electrical Installation At rates prescribed in Schedule and Plant & Machinery (added upto 1976) XIV of the Companies Act,1956 Other Units (i) Reducing Balance Method On Plant & Machinery acquired At rates prescribed in Schedule prior to 1st April 1979 XIV of the Companies Act 1956

(ii) Straight Line Method

On Plant & Machinery acquired after 31st March 1979

On assets acquired upto 30th September 1986 At rates previously determined in accordance with Section 205(2)(b) of the Companies Act, 1956.

On assets acquired after 30th September 1986 At rates prescribed in Schedule

XIV of the Companies Act 1956.

2) Other assets on reducing balance Method At rates prescribed in Schedule

XIV of the Companies Act 1956

(B) Premium paid for leasehold land is amortised over the period of the lease

(C) Freehold land and assets retired from active use are not depreciated.

1.4. Investments:

Long-term investments are stated at cost less provision for permanent diminution if any, in the value of such investment. Dividend Income is accounted for on receipt.

1.5. Inventories:

Inventories are valued on the following basis: (i) Raw Material at lower of cost and net realisable value, (ii) Finished Goods at lower of cost and contract value and net realisable value, (iii) Stores & Spares and work-in- process at cost or under.

In the case of Raw Materials and Stores & Spares, cost is generally ascertained on weighted average basis. Work-in-process and Finished Goods are valued on full cost absorption basis. Necessary provision is made for obsolete, slow-moving, non-moving and defective items of inventories.

1.6. Capital Subsidy:

Subsidies relating to Fixed Assets are initially credited to Capital Reserve and the amount is adjusted against the depreciation charged over the useful life of the asset.

1.7. Miscellaneous expenses:

Share issue expenses are amortized over a period of ten years.

1.8. Foreign Currency transactions:

i) Monetary assets and liabilities relating to foreign currency transactions remaining unsettled at the year end are translated at closing spot rates on the last day of the year.

ii) The difference in translation in monetary assets and liabilities and realised gains and losses in foreign exchange transactions other than those relating to fixed assets are recognised in the Profit & Loss Account.

iii) Exchange differences in respect of liabilities incurred to acquire fixed assets are adjusted to the carrying amount of such fixed assets.

1.9. Sales:

Sales comprise sale of goods and services and include freight and other charges recovered from customers.

1.10.Related Income: Export incentives / Related Income are accounted to the extent consider -ed certain of realisation by the Management.

1.11.Retiral benefits:

Contributions to the Provident and Superannuation Funds, which are in accordance with the respective schemes, are charged to revenue on accrual basis.

Retirement benefits including gratuity are provided for in the Books of Accounts on the basis of actuarial valuation except one unit of the company, which has been treated on cash basis from 1997-98 to 2006-07.

Such liability has been provided on the basis of valuation made by the Actuary in line with the parameters & requirement of AS 15 (Revised 2005) issued by the Institute of Chartered Accountants of India.

1.12.Borrowing Costs:

Borrowing costs that are attributable to the acquisition or constru -ction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.13. Revenue expenditure on Research & Development is charged to Profit & Loss Account of the year in which it is incurred.

1.14. Capital expenditure on Research & Development is shown as addition to Fixed Assets.

1.15. Insurance claims are recognised on receipt/assessment of related claim from Insurance Authorities.

1.16. Intangible Assets:

Intangible Assets are stated at cost of acquisition less accumulated amortisation. Computer Software is amortised over a period of 5 years on Straight Line basis.

 
Subscribe now to get personal finance updates in your inbox!