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Accounting Policies of Arrow Textiles Ltd. Company

Mar 31, 2015

(a) Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention, on accrual basis and in accordance with the generally accepted accounting principles in India ("GAAP") and comply with the accounting standards as specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. The Financial statements are presented in Indian Rupees rounded off to the nearest thousand.

(b) Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

(c) Revenue Recognition

i. Income from sale of product / goods is recognized when significant risks and rewards of ownership of products / goods are passed on to customers or when the full / complete services have been provided. Sales are stated at contractual realizable value and net of goods returned.

ii. Full provision is made for any loss in the year in which when it is first foreseen.

iii. Interest income is generally recognized on a time proportion method.

iv. Claims for price variation/exchange rate variation in case of contracts are accounted for on acceptance.

v. Interest refund on loan under 'TUF' scheme is accounted on receipt basis.

vi. Dividend Income is recognized when the right to receive dividend is established.

(d) Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any, attributable cost of bringing the asset to its working condition for its intended use. Finance cost relating to acquisition of fixed assets is included to the extent they relate to the period till such assets are ready to be put to intended use.

Capital Work-In-Progress

Expenses incurred for acquisition of Capital Assets outstanding at each Balance Sheet date are disclosed under Capital work-in-Progress. Advances given towards the acquisition of Fixed Assets are shown separately as Capital Advances under heading Long Term Loans & Advances.

(e) Depreciation Tangible Assets:

Depreciation is provided on Straight Line Method (SLM). Depreciation is provided from the date of acquisition till the date of sale / disposal of assets. The management of the Company has reviewed / determined / re assessed the remaining useful lives of the tangible fixed assets. Accordingly, the depreciation on tangible fixed assets is provided in accordance with the provisions of Schedule II of the Companies Act, 2013.

Intangible Assets:

Intangible Asset are depreciated in accordance with Accounting standard (AS) 26 "Intangible Assets" as specified under section 133 of the companies Act,2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

(f) inventories

Inventories are valued as follows:

1) Raw Materials Cost on FIFO basis.

2) Components, Stores and Spares, Cost on FIFO basis. Packing Materials

3) Work-in-Progress Cost on FIFO basis. Cost includes direct materials and labour cost and proportionate manufacturing overheads based on normal operating capacity.

4) Finished goods Cost or net realizable value whichever is lower. The cost comprises of cost of purchase, cost of conversion and other cost including manufacturing overheads incurred in bringing them to present location and condition, as the case may be.

In accordance withAccounting Standard - 2, issued by Institute of Chartered Accountants of India, provision is made of excise duty on closing stock of finished goods.

(g) investments

Investments that are readily realizable and intended to be held but not more than a year are classified as Current Investments. All other investments are classified as Long-Term Investments. Carrying amount of the individual investment is determined on the basis of the average carrying amount of the total holding of the investments.

Long-Term Investments are stated at cost less provision for other than temporary diminution in value. Current Investments are carried at lower of cost or fair value.

(h) Employee Benefits

Liability is provided for retirement benefits for Provident Fund, Gratuity and Leave Encashment in respect of all eligible employees. The Company has Gratuity Scheme with Life Insurance Corporation of India. Premium thereof is paid in terms of policy and charged to Profit & Loss Account. The liability in respect of defined benefit schemes like gratuity and leave encashment is provided in the accounts on the basis of actuarial valuations as at year end. Contributions under the defined contribution schemes are charged to revenue.

(i) Foreign Currency Transactions

(i) Foreign exchange transactions are recorded at the closing rate prevailing on the dates of the respective transactions. Exchange difference arising on foreign exchange transactions settled during the year is recognized in the statement of the Profit and Loss Account.

(ii) Monetary assets and liabilities denominated in foreign currencies are converted at the closing rate as on Balance Sheet date. The resultant exchange difference is recognized in the statement of the Profit and Loss Account.

(iii) Non-monetary assets and liabilities denominated in foreign currencies are carried at the exchange rate prevalent on the date of the transaction.

(J) Borrowing Costs

Borrowing costs that are directly attributable to and incurred on acquiring qualifying assets (assets that necessarily takes a substantial period of time for its intended use) are capitalized. Other borrowing costs are recognized as expenses in the period in which the same are incurred.

(k) Taxation

Tax expenses are the aggregate of current tax and deferred tax charged or credited in the statement of Profit & Loss for the period.

Current Tax

The charge of income tax is calculated in accordance with the relevant tax regulations applicable to the Company.

Deferred Tax

Deferred Tax charge or credit reflects the tax effects of timing difference between accounting income and taxable income for the period. The Deferred Tax charge or credit and the corresponding Deferred Tax Liabilities or Assets are recognized using the tax rates that have been enacted or substantially enacted by the Balance Sheet date. Deferred Tax Assets are recognized only to the extent if there is reasonable certainty that the asset can be realized in future, however, where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only of there is virtual certainty of realization of such assets. Deferred tax assets are reviewed at each Balance Sheet date.

Minimum Alternate Tax (MAT)

In case the Company is liable to pay income tax under Minimum Alternate Tax u/s 115JB of Income Tax Act,1961, the amount of tax paid in excess of normal income tax liability is recognized as an asset only if there is convincing evidence for realization of such asset during the specified period. MAT Credit Entitlement is recognized in accordance with the Guidance Note on accounting treatment in respect of Minimum Alternate Tax (MAT) issued by The Institute of Chartered Accountants of India.

(l) Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to Profit & Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable value.

(m) Contingent Assets, Contingent Liabilities and Provisions

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources and the amount of which can be reliably estimated.

Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future event not wholly within the control of the Company. Contingent Assets are neither recognized nor disclosed in the financial statements. Provisions of Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

(n) Earning Per Share (EPS)

The earning considered in ascertaining the company's EPS comprises of the net profit after tax. Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding during the year. Diluted Earnings Per Share is computed and disclosed using the weighted average number of common and dilutive common equivalent shares outstanding during the year, except when the results would be anti-dilutive.

(o) Miscellaneous Expenses

Miscellaneous Expenses are written off in the year in which they are incurred.

c) Terms & Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. This distribution will be in proportion to the number of equity shares held by the shareholders.


Mar 31, 2014

(a) Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

(b) Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention, on accrual basis and in accordance with the generally accepted accounting principles in India ("GAAP") and comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956 ("The Act") read with the General circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. The Financial statements are presented in Indian Rupees rounded off to the nearest thousand.

(c) Revenue Recognition

i. Income from sale of product / goods is recognized when significant risks and rewards of ownership of products / goods are passed on to customers or when the full / complete services have been provided. Sales are stated at contractual realizable value and net of goods returned.

ii. Full provision is made for any loss in the year in which when it is first foreseen.

iii. Interest income is generally recognized on a time proportion method.

iv. Claims for price variation/exchange rate variation in case of contracts are accounted for on acceptance.

v. Interest refund on loan under ''TUF'' scheme is accounted on receipt basis.

vi. Dividend Income is recognized when the right to receive dividend is established.

(d) Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any, attributable cost of bringing the asset to its working condition for its intended use. Finance cost relating to acquisition of fixed assets is included to the extent they relate to the period till such assets are ready to be put to intended use.

(e) Capital Work-In-Progress

Expenses incurred for acquisition of Capital Assets outstanding at each Balance Sheet date are disclosed under Capital work-in-Progress. Advances given towards the acquisition of Fixed Assets are shown separately as Capital Advances under heading Long Term Loans & Advances.

(f) Depreciation

Depreciation on fixed assets is provided as per the Straight Line Method at the rates and in the manner as specified in Schedule XIV of the Companies Act, 1956. Depreciation on additions / deletions of assets during the year is provided on pro-rata basis.

(g) Inventories

Inventories are valued as follows:

1) Raw Materials Valued at Cost on FIFO basis.

2) Components, Stores and Spares, Valued at Cost on FIFO basis. Packing Materials

3) Work-in-Progress Valued at Cost on FIFO basis. Cost includes direct materials and labour cost and proportionate manufacturing overheads based on normal operating capacity.

4) Finished goods Valued at Cost or net realizable value whichever is lower. The cost comprises of cost of purchase, cost of conversion and other cost including manufacturing overheads incurred in bringing them to present location and condition, as the case may be.

In accordance with Accounting Standard - 2, issued by Institute of Chartered Accountants of India, provision is made of excise duty on closing stock of finished goods.

(h) Investments

Investments that are readily realizable and intended to be held but not more than a year are classified as Current Investments. All other investments are classified as Long Term Investments. Carrying amount of the individual investment is determined on the basis of the average carrying amount of the total holding of the investments. Long-Term Investments are stated at cost less provision for other than temporary diminution in value. Current Investments are carried at lower of cost and fair value.

(i) Employee Benefits

Liability is provided for retirement benefits for Provident Fund, Gratuity and Leave Encashment in respect of all eligible employees. The Company has Gratuity Scheme with Life Insurance Corporation of India. Premium thereof is paid in terms of policy and charged to Profit & Loss Account. The liability in respect of defined benefit schemes like gratuity and leave encashment is provided in the accounts on the basis of actuarial valuations as at year end. Contributions under the defined contribution schemes are charged to revenue.

(j) Foreign Currency Transactions

Foreign exchange transactions are recorded at the closing rate prevailing on the dates of the respective transactions. Exchange difference arising on foreign exchange transactions settled during the year is recognized in the Profit and Loss Account.

Monetary assets and liabilities denominated in foreign currencies are converted at the closing rate as on Balance Sheet date. The resultant exchange difference is recognized in the Profit and Loss Account.

Exchange rate differences arising on a monetary item that, in substance, forms part of the company''s net investment in a non-integral foreign operation are accumulated in foreign currency transaction reserve in the company''s financial statements until the disposal of net investment.

Non monetary assets and liabilities denominated in foreign currencies are carried at the exchange rate prevalent on the date of the transaction.

(k) Borrowing Costs

Borrowing costs that are directly attributable to and incurred on acquiring qualifying assets (assets that necessarily takes a substantial period of time for its intended use) are capitalized. Other borrowing costs are recognized as expenses in the period in which the same are incurred.

(l) Taxation

Ta x expenses are the aggregate of current tax and deferred tax charged or credited in the statement of Profit & Loss Account for the period.

Current Tax

The charge of income tax is calculated in accordance with the relevant tax regulations applicable to the Company.

Deferred Tax

Deferred Ta x charge or credit reflects the tax effects of timing difference between accounting income and taxable income for the period. The Deferred Tax charge or credit and the corresponding Deferred Tax Liabilities or Assets are recognized using the tax rates that have been enacted or substantially enacted by the Balance Sheet date. Deferred Ta x Assets are recognized only to the extent if there is reasonable certainty that the asset can be realized in future, however, where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only of there is virtual certainty of realization of such assets. Deferred tax assets are reviewed at each Balance Sheet date.

Minimum Alternate Tax (MAT)

In case the Company is liable to pay income tax under Minimum Alternate Tax u/s 115JB of Income Tax Act,1961, the amount of tax paid in excess of normal income tax liability is recognized as an asset only if. There is convincing evidence for realization of such asset during the specified period. MAT Credit Entitlement is recognized in accordance with the Guidance Note on accounting treatment in respect Minimum Alternate Tax (MAT) issued by The Institute of Chartered Accountants of India.

(m) Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to Profit & Loss Account in the year in which an asset is identified as impaired. The impairment loss is recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(n) Contingent Assets, Contingent Liabilities and Provisions

Provisions involving substantial degree of estimation in measurement are recoznized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources and the amount of which can be reliably estimated.

Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Liablities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future event not wholly within the control of the Company.

Contingent Assets are neither recognized nor disclosed in the financial statements. Provisions Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet Date.

(o) Earning Per Share (EPS)

The earning considered in ascertaining the company''s EPS comprises of the net profit after tax. Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding during the year. Diluted Earnings Per Share is computed and disclosed using the weighted average number of common and dilutive common equivalent shares outstanding during the year, except when the results would be anti-dilutive.

(p) Miscellaneous Expenses

Miscellaneous Expenses are written off in the year in which they are incurred.

Note:

*Aryanish Finance and Investments Pvt. Ltd., Bayside Property Developers Pvt. Ltd., Delta Real Estate consultancy Pvt. Ltd. are holding Equity Shares in the capacity of trustees for Aarti J Mody Trust, Aditi J Mody Trust and Anjali J Mody Trust, respectively.

c) Terms & Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. This distribution will be in proportion to the number of equity shares held by the shareholders.


Mar 31, 2013

(a) use of estimates

The preparation of financial statements requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

(b) Basis of preparation of financial statements

The financial statements are prepared under the historical cost convention, on accrual basis and in accordance with the generally accepted accounting principles in India ("GAAP"), as specified in Companies (Accounting Standard - "AS") Rules, 2006 issued by Central Government and the applicable relevant provisions of the Companies Act, 1956. The Financial statements are presented in Indian Rupees rounded off to the nearest thousand.

(c) revenue recognition

i. Income from sale of product / goods is recognized when significant risks and rewards of ownership of products / goods are passed on to customers or when the full / complete services have been provided. Sales are stated at contractual realizable value and net of goods returned.

ii. Full provision is made for any loss in the year in which when it is first foreseen.

iii. Interest income is generally recognized on a time proportion method.

iv. Claims for price variation/exchange rate variation in case of contracts are accounted for on acceptance.

v. Interest refund on loan under ''TUF'' scheme is accounted on receipt basis.

vi. Dividend Income is recognized when the right to receive dividend is established.

(d) goodwill

On the acquisition of an undertaking, the difference between the purchase consideration and the value of the net assets acquired is considered as Goodwill. Value of Goodwill is amortized over a period of five years on straight line basis from the year of creation.

(e) fixed assets

Fixed Assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any, attributable cost of bringing the asset to its working condition for its intended use. Finance cost relates to acquisition of fixed assets are included to the extent they relate to the period till such assets are ready to be put to intended use.

(f) capital Work-in-progress

Expenses incurred for acquisition of Capital Assets outstanding at each Balance Sheet date are disclosed under Capital work-in-Progress. Advances given towards the acquisition of Fixed Assets are shown separately as Capital Advances under heading Long Term Loans & Advances.

(g) depreciation

Depreciation on fixed assets is provided as per the Straight Line Method at the rates and in the manner as specified in Schedule XIV of the Companies Act, 1956. Depreciation on additions / deletions of assets during the year is provided on pro-rata basis.

(h) inventories

Inventories are valued as follows:

Raw Materials Valued at Cost on FIFO basis.

Components, Stores and Spares, Packing Materials

Valued at Cost on FIFO basis.

Work-in-Progress Valued at Cost on FIFO basis. Cost includes direct materials and labour cost and proportionate manufacturing overheads based on normal operating capacity. Finished goods Valued at Cost or net realizable value whichever is lower. The cost comprises of cost of purchase, cost of conversion and other cost including manufacturing overheads incurred in bringing them to present location and condition, as the case may be.

In accordance with Accounting Standard - 2, issued by Institute of Chartered Accountants of India, provision is made of excise duty on closing stock of finished goods.

(i) investments

Investments that are readily realizable and intended to be held but not more than a year are classified as Current Investments. All other investments are classified as Long Term Investments. Carrying amount of the individual investment is determined on the basis of the average carrying amount of the total holding of the investments.

Long-Term Investments are stated at cost less provision for other than temporary diminution in value. Current Investments are carried at lower of cost and fair value.

(j) Employee Benefts

Liability is provided for retirement benefits for Provident Fund, Gratuity and Leave Encashment in respect of all eligible employees. The Company has Gratuity Scheme with Life Insurance Corporation of India. Premium thereof is paid in terms of policy and charged to Profit & Loss Account. The liability in respect of defined benefit schemes like gratuity and leave encashment is provided in the accounts on the basis of actuarial valuations as at year end. Contributions under the defined contribution schemes are charged to revenue.

(k) foreign currency Transactions

Foreign exchange transactions are recorded at the closing rate prevailing on the dates of the respective transactions. Exchange difference arising on foreign exchange transactions settled during the year is recognized in the Profit and Loss Account.

Monetary assets and liabilities denominated in foreign currencies are converted at the closing rate as on Balance Sheet date. The resultant exchange difference is recognized in the Profit and Loss Account.

Exchange rate differences arising on a monetary item that, in substance, forms part of the company''s net investment in a non-integral foreign operation are accumulated in foreign currency transaction reserve in the company''s financial statements until the disposal of net investment.

Non monetary assets and liabilities denominated in foreign currencies are carried at the exchange rate prevalent on the date of the transaction.

(l) Borrowing costs

Borrowing costs that are directly attributable to and incurred on acquiring qualifying assets (assets that necessarily takes a substantial period of time for its intended use) are capitalized. Other borrowing costs are recognized as expenses in the period in which the same are incurred.

(m) Taxation

Tax expenses are the aggregate of current tax and deferred tax charged or credited in the statement of Profit & Loss Account for the period.

current Tax

The charge of income tax is calculated in accordance with the relevant tax regulations applicable to the Company.

deferred Tax

Deferred Tax charge or credit reflects the tax effects of timing difference between accounting income and taxable income for the period. The Deferred Tax charge or credit and the corresponding Deferred Tax Liabilities or Assets are recognized using the tax rates that have been enacted or substantially enacted by the Balance Sheet date. Deferred Tax Assets are recognized only to the extent if there is reasonable certainty that the asset can be realized in future, however, where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only of there is virtual certainty of realization of such assets. Deferred tax assets are reviewed at each Balance Sheet date.

minimum alternate Tax (maT)

In case the Company is liable to pay income tax under Minimum Alternate Tax u/s 115JB of Income Tax Act,1961, the amount of tax paid in excess of normal income tax liability is recognized as an asset only if. There is convincing evidence for realization of such asset during the specified period. MAT Credit Entitlement is recognized in accordance with the Guidance Note on accounting treatment in respect Minimum Alternate Tax (MAT) issued by The Institute of Chartered Accountants of India.

(n) impairment of assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to Profit & Loss Account in the year in which an asset is identified as impaired. The impairment loss is recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(o) contingent assets, contingent liabilities and provisions

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resource and the amount of which can be reliably estimated.

Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future event not wholly within the control of the Company.

Contingent Assets are neither recognized nor disclosed in the financial statements. Provisions of Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

(p) earning per share (eps)

The earning considered in ascertaining the company''s EPS comprises of the net profit after tax. Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding during the year. Diluted Earnings Per Share is computed and disclosed using the weighted average number of common and dilutive common equivalent shares outstanding during the year, except when the results would be anti-dilutive.

(q) miscellaneous expenses

Miscellaneous Expenses are written off in the year in which they are incurred.


Mar 31, 2012

A) Basis of preparation of Financial Statements

The financial statements are prepared under the historical cost convention, on accrual basis and in accordance with the generally accepted accounting principles in india ("GAAP"), as specified in Companies (Accounting Standard) Rules, 2006 issued by Central Govt. and the applicable relevant provisions of the Companies Act, 1956. The Financial statements are presented in Indian Rupees rounded off to the nearest thousand.

b) Revenue Recognition

- Income from sale of goods is recognized when significant risks and rewards of ownership of goods is passed on to customers or when the full / complete services have been provided. Sales are stated at contractual realizable value and net of goods returned. Sales are stated at contractual realizable value and net of goods returned.

- Full provision is made for any loss in the year in which it is first foreseen.

- Interest income is generally recognized on a time proportion method.

- Claims for price variation/exchange rate variation in case of contracts are accounted for on acceptance.

- Interest refund on loan under 'TUF' scheme is accounted on receipt basis.

- Dividend Income is recognized when the right to receive dividend is established.

c) Goodwill

On the acquisition of an undertaking, the difference between the purchase consideration and the fair value of the net assets acquired is considered as Goodwill. Value of Goodwill is amortized over a period of five years on straight line basis from the year of creation.

d) Fixed Assets

All fixed assets are stated at cost of acquisition less accumulated depreciation and impairment loss, if any. In case fixed assets are acquired for new projects/expansion, finance cost on borrowings and other related expenses incurred up to the date asset is ready to use, incurred towards acquiring fixed assets are capitalized.

e. capital Work-in-progress

Expenses incurred for acquisition of Capital Assets outstanding at each balance sheet date are disclosed under Capital Work-in-Progress. From Current year onwards advances given towards the acquisition of Fixed Assets are shown separately as Capital Advances under heading Long Term Loans & Advances.

f. Depreciation

Depreciation on fixed assets is provided as per the straight line method at the rates and in the manner specified in Schedule XIV of Companies Act, 1956. Depreciation on additions / deletions of assets during the year is provided on a pro-rata basis.

g. inventories

Inventories are valued as follows:

1 Raw materials Cost of Raw Materials is determined on cost basis.

2 Components, Stores and Spares Packing Materials At cost basis

3 Work-in-Progress Material at cost basis. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

4 Finished goods Material at cost basis, includes cost of conversion and other cost incurred.

The cost comprises of cost of purchase, cost of conversion and other cost including manufacturing overheads incurred in bringing them to present location and condition, as the case may be. In accordance with Accounting Standard -2, issued by Institute of Chartered Accountants of India, provision is made of excise duty on closing stock of finished goods.

h. investments

Investments that are readily realizable and intended to be held for not more than a year are classified as Current Investments. All other investments are classified as Non Current Investment. Carrying amount of the individual investment is determined on the basis of the average carrying amount of the total holding of the investments.

i. Retirement Benefits

Retirement benefit in the form of contribution to Provident Fund is charged to the Profit & Loss Account of the year when the contributions to the respective funds are due. The Company has Gratuity Scheme with Life Insurance Corporation of India. Premium thereof is paid in terms of policy and charged to Profit & Loss Account. Liabilities with regard to Gratuity plan and Leave Encashment are determined by actuarial valuation at each Balance Sheet Date. Short term and Long term employee benefits are recognized as expenses in the Profit and Loss Account.

j. Foreign currency Transactions

Transctions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary items denominated in foreign currencies, if any at year end are restated at the year end rate. Non monetary foreign currency items are carried at cost.Any gain or loss on account of exchange difference either on settlement or on translation is recognized in the Profit & Loss Account.

k. Borrowing costs

Borrowing costs that are directly attributable to and incurred on acquiring qualifying assets (assets that necessarily takes a substantial period of time for its intended use) are capitalized. Other borrowing costs are recognized as expenses in the period in which the same are incurred.

l. Accounting for Taxes on income

Tax expenses are the aggregate of current tax and deferred tax charged or credited in the Statement of Profit & Loss Account for the year.

current Tax

The current charge of income tax is calculated in accordance with the relevant tax regulations applicable to the Company.

Deferred Tax

Deferred Tax charge or credit reflects the tax effects of timing difference between accounting income and taxable income for the period. The Deferred Tax charge or credit and the corresponding Deferred Tax Liabilities or Assets are reconized using the tax rates that have been enacted or substantialy enacted by the Balance Sheet date. Where there isunabsorbed depreciation or carry forward losses, Deferred Tax Assets are recognized only if there is virtual certainity of realization of such assets in future. Deferred Tax is reviewed at each Balance Sheet.

m. Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit & Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

n. contingent Assets, contingent Liabilities and provisions.

Provisions involving substantial degree of estimation in measurement are recoznized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources and the amount of which can be reliably estimated.

Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Liablities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future event not wholly within the control of the Company.

Contingent Assets are neither recognized nor disclosed in the financial statements. Provisions Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet Date.

o. Earning per share (Eps)

The earning considered in ascertaining the Company's EPS comprises of the net profit after tax. Basic Earnings Per Share is computed and disclosed using the weighted average number of common shares outstanding during the year. Diluted Earnings Per Share is computed and disclosed using the weighted average number of common and dilutive common equivalent shares outstanding during the year, except when the results would be anti-dilutive.


Mar 31, 2010

(a) Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention, on accrual basis and in accordance with the generally accepted accounting principles in India ("GAAP"), the Accounting Standards ("AS") issued by the Institute of Chartered Accountants of India and the applicable relevant provisions of the Companies Act, 1956.

(b) Revenue Recognition

i. Sale of Product and material are recognized when significant risks and rewards of ownership of products are passed on to customers or when the full / complete services have been provided. Sales are stated at contractual realizable value and net of goods returned.

ii. Full provision ismade for any lossin the year inwhich whenit is first foreseen. iii. Interest income is generally recognized on a time proportion method.

iv. Claims for price variation/exchange rate variation in case of contracts are accounted for on acceptance.

v. Interest refund on loan under ‘TUF’ scheme is accounted on receipt basis.

(c) Goodwill

On the acquisition of an undertaking, the difference between the purchase consideration and the value of the net assets acquired is considered as Goodwill. Value of Goodwill is amortized over a period of five years onstraight line basis from the yearofcreation.

(d) FixedAssets

Fixed Assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost including borrowing cost of bringing the asset to its working condition for its intended use.

Capital Work-In-Progress

In respect of supply-cum-erection contracts, the value of supplies received at site and accepted and not installedis treatedasCapital Work-in-Progress.

Expenditure during construction period are included under "Capital Work in Progress". Capital Work in Progressisstated at the amount expendedup to the date of Balance Sheet.

(e) Depreciation

Depreciation on assets is provided on Straight Line Method at the rates and in the manner as prescribed in Schedule XIV of the Companies Act, 1956. Depreciation is provided from the date of acquisition and put to use till the dateof sale of assets orlast day of the period.



(f) Inventories

Inventories are valued as follows:

- Raw materials Cost of Raw Materials is determined on FIFO basis.

- Components, stores and spares, Atcost/Purchase price.

packing materials

- Work in Progress Raw Material cost at FIFO basis. Cost includes direct

materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

- Finished goods Raw Material cost at FIFO basis, includes cost of conversion

and other cost incurred in bringing the inventories to their present location and conditions.



(g) Foreign Currency Transactions

The reporting currency of the company is the Indian rupee.

Exchange differences arising on foreign currency transactions settled during the year are recognized in the profit and loss account for the year.

All outstanding foreign currency denomination monetary assets and liabilities are translated at the exchange rates prevailing on the Balance Sheet date.

(h) Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of asset till such time as the asset is ready for its intended use or sale. Other borrowing costs are recognized as an expense in the period in which they are incurred.

(i) Accounting for Taxes on Income

Provision for current tax and fringe benefit tax is made, at the current rate of tax, based on assessable income computed on the basis of relevant tax rates and tax laws. Deferred tax resulting from timing differences between the book profits and the tax profits is accounted to the extent that the timing differences are expected to crystallize. Deferred tax assets are not recognized unless there is sufficient assurance with respect to reversal of the same in the future.

(j) Impairment of Assets

Asset that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the assets net selling price and its value in use for the purpose of opening impairment assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

(k) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each balance sheet date.

(l) Segment Accounting

There is only one Segment so separate disclosure not applicable.

(m) Employee Benefits

Retirement benefit in the form of contribution to Provident Fund is charged to the Profit and Loss Account of the period when the contributions to the respective funds are due.

The company has gratuity scheme with Life Insurance Corporation of India. The premium thereof is paid in terms of the policy and charged to Profit and Loss Account. Leave encashment and other benefit are provided on the basis of actuarial valuation at the year end.

(n) Earning Per Share (EPS)

The earning considered in ascertaining the company’s EPS comprises of the net profit aftertax. Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding during the year. Diluted earnings per share is computed and disclosed using the weighted average number of common and dilutive common equivalent shares outstanding during the year, except when the results would be anti-dilutive.

(O) Miscellaneous Expenses

From current year onward, the Company has changed its accounting policy for preliminary expenditure and now preliminary expenditure are fully amortized in the year which it is incurred.

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