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Accounting Policies of Ashok Alco-Chem Ltd. Company

Mar 31, 2015

I. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

These financial statements are prepared under historical cost convention on an accrual basis in accordance with the Generally Accepted Accounting Principles in India and the Accounting Standards (AS) as notified under Companies (Accounting Standards) Rules, 2006.

II. USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amount of income and expenses of the period, the reported balances of the assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful life of tangible and intangible fixed assets, provision for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Difference, if any, between the actual results and estimates is recognized in the period in which the results are known.

III. FIXED ASSETS AND DEPRECIATION/ AMORTIZATION

(i) Gross Fixed Assets are stated at historical cost of acquisition / construction net of Cenvat credit/Input Credit under VAT on capital goods. Depreciation on tangible assets is provided on Straight Line Method as specified in Schedule 11 to The Companies Act, 2013.

Intangible Assets are amortised as per AS-26 issued by The Institute of Chartered Accountants of I ndia.

Lease hold land is amortised over the period of lease.

(ii) Fixed assets are eliminated from financial statements either on disposal or when retired from active use. The retired assets are disposed off or discarded immediately.

(iii) Depreciation is provided on pro-rata basis from the day in which assets have been put to use and up to the day on which assets have been used by the company.

IV. IMPAIRMENT OF ASSETS

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

V. FOREIGN CURRENCYTRANSACTIONS

a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approxi mates the actual rate at the date of the transaction.

b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. I n case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract its recognized as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account.

VI. RESEARCH & DEVELOPMENT EXPENSES

Revenue expenditure on Research & Development is charged against the profit for the year in which it is incurred.

VII. REVENUE RECOGNITION

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

Revenue from sale of goods is recognized when the significant risk and reward of ownership of the goods have passed to the buyer which normally coincides with the despatch of goods from the factory of the company. Sales are disclosed net off trade discount, Sales returns.

Revenue in respect of insurance, interest, cash subsidy and other claims is recognized only when it is reasonably certain that the ultimate collection will be made.

VIII. OPERATING LEASES

Lease arrangements where risk and rewards incidental to ownership of an asset, substantially vests with the Lessor, are classified as operating leases.

Rental expenses on assets (land) obtained under operating lease arrangement are recognized on a straight line basis over a term of the lease, and in respect of Immovable Equipments are recognized as per the terms of the Lease agreement.

IX. 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 long - term investments. Provisions, if any are made for permanent diminution in value of investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long - term investments are carried at cost.

X. INVENTORIES

i) Raw materials and packing materials are valued at landed cost determined on FIFO Basis net off VAT/CENVAT, wherever applicable.

ii) The finished and trading goods have been valued at cost or net realizable value whichever is less.

iii) Semi finished goods have been valued at estimated cost, as certified by the management.

iv) Stores & Spares have been valued at cost or market price whichever is lower.

XI. FINANCIAL DERIVATIVES AND COMMODITY HEDGINGTRANSACTIONS

In respect of derivative contract, premium paid, gains/losses on settlement and losses on restatement are recognized in the Statement of Profit and Loss.

XII. RETIREMENT AND OTHER EMPLOYEE BENEFITS

Post -Employment Benefit Plans:

i. Defined Contribution Plan: Contribution for provident fund are accrued in accordance with applicable statutes and deposited with the Regional Provident Fund Commissioner.

ii. Defined Benefit Plan : The liabilities in respect of gratuity and leave encashment are determined using Projected Unit Credit Method with actuarial valuation carried out at the Balance Sheet date. Actuarial gains and losses are recognized in full in the Profit & Loss Account for the period in which they occur.

Contribution in respect gratuity are made to the Group Gratuity Scheme with Life Insurance Corporation of India.

Employee benefits recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost and as reduced by the fair value of respective fund. Short Term Employee Benefits:

The undiscounted amount of short - term employee benefits expected to be paid in exchange for services rendered by employees is recognized during the period when the employee renders the service.

XIII. BORROWING COSTS

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized, as applicable. Other borrowing costs are recognized as an expense in the period in which they are incurred.

XIV. TAXES ON INCOME

Tax expense comprises of Current and Deferred Tax. Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with the provisions of The Income Tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets is reviewed at each balance sheet date. The company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

XV. EARNINGS PER SHARE

Basic Earnings per Share is computed by dividing the net profit attributable to Equity Shareholders for the year, by weighted average number of Equity Shares outstanding during the year. Diluted earning per share is computed using the weighted average number of Equity and dilutive Equity equivalent share outstanding at year-end.

XVI. PROVISIONS AND CONTINGENT LIABILITIES

Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

XVII. ACCOUNTING POLICIES

Accounting Policies not specifically referred to, are consistent and in consonance with generally accepted Accounting principles.




Mar 31, 2014

I. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

These financial statements are prepared under historical cost convention on an accrual basis in accordance with the Generally Accepted Accounting Principles in India and the Accounting Standards (AS) as notified under Companies (Accounting Standards) Rules, 2006.

II. USE OF ESTIMATES:

The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amount of income and expenses of the period, the reported balances of the assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful life of tangible and intangible fixed assets, provision for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Difference, if any, between the actual results and estimates is recognized in the period in which the results are known.

III. FIXED ASSETS AND DEPRECIATION/ AMORTIZATION

(i) Gross Fixed Assets are stated at historical cost of acquisition / construction net of Cenvat credit/Input Credit under VAT on capital goods. Depreciation on tangible assets is provided on Straight Line Method at the rates specified in Schedule XIV to The Companies Act, 1956. Lease hold land is amortised over the period of lease.

(ii) Fixed Assets are eliminated from financial statements either on disposal or when retired from active use. The retired assets are disposed off or discarded immediately.

(iii) Depreciation is provided on pro-rata basis from the month in which assets have been put to use and up to the month on which assets have been used by the company.

IV. IMPAIRMENT OF ASSETS:

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

V. FOREIGN CURRENCY TRANSACTIONS:

a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract its recognized as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account.

VI. REVENUE RECOGNITION:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue from sale of goods is recognized when the significant risk and reward of ownership of the goods have passed to the buyer which normally coincides with the despatch of goods from the factory of the company. Sales are disclosed net off trade discount, Sales returns. Revenue in respect of insurance, interest, cash subsidy and other claims is recognized only when it is reasonably certain that the ultimate collection will be made.

VII. OPERATING LEASES:

Lease arrangements where risk and rewards incidental to ownership of an asset, substantially vests with the Lessor, are classified as operating leases. Rental expenses on assets (land) obtained under operating lease arrangement are recognized on a straight line basis over a term of the lease, and in respect of Immovable Equipments are recognized as per the terms of the Lease agreement.

VIII. 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 long - term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long - term investments are carried at cost.

IX. INVENTORIES:

i) Raw materials and packing materials are valued at landed cost determined on FIFO Basis net off VAT/CENVAT, wherever applicable.

ii) The finished and trading goods have been valued at cost or net realizable value whichever is less. iii) Semi finished goods have been valued at estimated cost, as certified by the management. iv) Stores & Spares have been valued at cost or market price whichever is lower.

X. FINANCIAL DERIVATIVES AND COMMODITY HEDGING TRANSACTIONS:

In respect of derivative contract, premium paid, gains/losses on settlement and losses on restatement are recognized in the Statement of Profit and Loss.

XI. RETIREMENT AND OTHER EMPLOYEE BENEFITS:

Post -Employment Benefit Plans:

i. Defined Contribution Plan: Contribution for provident fund are accrued in accordance with applicable statutes and deposited with the Regional Provident Fund Commissioner.

ii. Defined Benefit Plan : The liabilities in respect of gratuity and leave encashment are determined using Projected Unit Credit Method with actuarial valuation carried out at the Balance Sheet date. Actuarial gains and losses are recognized in full in the Profit & Loss Account for the period in which they occur.

Contribution in respect gratuity are made to the Group Gratuity Scheme with Life Insurance Corporation of India. Employee benefits recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost and as reduced by the fair value of respective fund.

iii. Short Term Employee Benefits: The undiscounted amount of short - term employee benefits expected to be paid in exchange for services rendered by employees is recognized during the period when the employee renders the service.

XII. BORROWING COSTS:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized, as applicable. Other borrowing costs are recognized as an expense in the period in which they are incurred.

XIII. TAXES ON INCOME:

Tax expense comprises of Current and Deferred Tax. Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with the provisions of The Income Tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets is reviewed at each balance sheet date. The company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

XIV EARNINGS PER SHARE:

Basic Earnings per Share is computed by dividing the net profit attributable to Equity Shareholders for the year, by weighted average number of Equity Shares outstanding during the year. Diluted earning per share is computed using the weighted average number of Equity and dilutive Equity equivalent share outstanding at year-end.

XV PROVISIONS AND CONTINGENT LIABILITIES:

Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

XVI. ACCOUNTING POLICIES:

Accounting Policies not specifically referred to, are consistent and in consonance with generally accepted Accounting principles.


Mar 31, 2013

I. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

These Financial Statements are prepared under historical cost convention on an accrual basis in accordance with the Generally Accepted Accounting Principles in India and the Accounting Standards (AS) as notified under Companies (Accounting Standards) Rules, 2006.

II. USE OF ESTIMATES:

The preparation of Financial Statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amount of income and expenses of the period, the reported balances of the Assets and Liabilities and the disclosures relating to contingent liabilities as of the date of the Financial Statements. Examples of such estimates include the useful life of tangible and intangible Fixed Assets, Provision for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Difference, if any, between the actual results and estimates is recognized in the period in which the results are known.

III. FIXED ASSETS AND DEPRECIATION/ AMORTIZATION:

(i) Gross Fixed Assets are stated at historical cost of acquisition / construction net of Cenvat credit/Input Credit under VAT on Capital Goods.

Depreciation on Tangible Assets is provided on Straight Line Method at the rates specified in Schedule XIV to The Companies Act, 1956.

Lease hold land is amortised over the period of lease.

(ii) Fixed Assets are eliminated from Financial Statements either on disposal or when retired from active use. The Retired Assets are disposed off or discarded immediately.

(iii) Depreciation is provided on pro-rata basis from the month in which assets have been put to use and up to the month on which Assets have been used by the Company.

IV. IMPAIRMENT OF ASSETS:

The Company assesses at each Balance Sheet date whether there is any indication that an Asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the Asset. If such recoverable amount of the Asset or the recoverable amount of the cash generating unit to which the Asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment Loss no longer exists, the recoverable amount is reassessed and the Asset is reflected at the recoverable amount.

V. FOREIGN CURRENCY TRANSACTIONS:

a) Transactions denominated in Foreign Currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

b) Monetary items denominated in Foreign Currencies at the year end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract its recognized as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss.

VI. REVENUE RECOGNITION:

Revenue is recognized to the extent that it is probable that the Economic benefits will flow to the Company and the revenue can be reliably measured.

Revenue from sale of goods is recognized when the significant risk and reward of ownership of the goods have passed to the buyer which normally coincides with the despatch of goods from the Factory of the Company. Sales are disclosed net off trade discount, Sales returns.

Revenue in respect of Insurance, Interest, Cash subsidy and other claims is recognized only when it is reasonably certain that the ultimate collection will be made.

VII. OPERATING LEASES:

Lease arrangements where risk and rewards incidental to ownership of an Asset, substantially vests with the Lessor, are classified as operating leases.

Rental Expenses on Assets (Land) obtained under operating lease arrangement are recognized on a straight line basis over a term of the lease, and in respect of Immovable Equipments are recognized as per the terms of the Lease agreement.

VIII. 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 long - term investments. Current Investments are carried at lower of cost and fair value determined on an individual investment basis. Long - term investments are carried at cost.

IX. INVENTORIES:

i) Raw Materials and Packing Materials are valued at landed cost determined on FIFO Basis net off VAT/CENVAT, wherever applicable.

ii) The Finished and Trading Goods have been valued at cost or net realizable value whichever is less.

iii) Semi Finished Goods have been valued at estimated cost, as certified by the management.

iv) Stores & Spares have been valued at cost or market price whichever is lower.

X. FINANCIAL DERIVATIVES AND COMMODITY HEDGING TRANSACTIONS:

In respect of Derivative Contract, Premium paid, Gains/Losses on settlement and losses on restatement are recognized in the Statement of Profit and Loss.

XI. RETIREMENT AND OTHER EMPLOYEE BENEFITS:

Post -Employment Benefit Plans:

i. Defined Contribution Plan: Contribution for provident fund are accrued in accordance with applicable statutes and deposited with the Regional Provident Fund Commissioner.

ii. Defined Benefit Plan: The Liability in respect of Gratuity is determined on the basis of the actuarial valuation carried out at the Balance Sheet date by Life Insurance Corporation of India under Death cum Retirement Gratuity Scheme and Actuarial Gains and Losses are recognized in full in the Statement of Profit & Loss for the period in which they occur. In respect of Gratuity the Company has approved Gratuity trust linked with Life Insurance Corporation of India and Company every year provides towards differential Liability on the basis of actuarial valuation.

iii. Other long term Employee Benefits: Other long term employee benefits are recognized as an expense in the Statement of Profit & Loss and are valued as per Company''s Policy.

XII. BORROWING COSTS:

Borrowing costs that are attributable to the acquisition or construction of qualifying Assets are Capitalized, as applicable. Other borrowing costs are recognized as an expense in the period in which they are incurred.

XIII. TAXES ON INCOME:

Tax expense comprises of Current and Deferred Tax. Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance with the provisions of The Income Tax Act, 1961. Deferred Income Taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred Tax Assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such Deferred Tax Assets can be realized.

The carrying amount of Deferred Tax Assets is reviewed at each balance sheet date. The Company writes down the carrying amount of a Deferred Tax Asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which Deferred Tax Asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

XIV EARNINGS PER SHARE:

Basic Earnings Per Share is computed by dividing the Net Profit attributable to Equity Shareholders for the year, by weighted average number of Equity Shares outstanding during the year. Diluted earning per share is computed using the weighted average number of Equity and dilutive Equity equivalent share outstanding at year-end.

XV PROVISIONS AND CONTINGENT LIABILITIES:

Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent Liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

XVI. ACCOUNTING POLICIES:

Accounting Policies not specifically referred to, are consistent and in consonance with generally accepted Accounting principles.


Mar 31, 2012

I. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

These financial statements are prepared under historical cost convention on an accrual basis in accordance with the Generally Accepted Accounting Principles in India and the Accounting Standards (AS) as notified under Companies (Accounting Standards) Rules, 2006.

II. USE OF ESTIMATES: The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amount of income and expenses of the period, the reported balances of the assets and liabilities and the disclosures relating to contingent liabilities as at the date of the financial statements. Examples of such estimates include the useful life of tangible and intangible fixed assets, provision for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Difference, if any, between the actual results and estimates is recognized in the period in which the results are known.

III. FIXED ASSETS AND DEPRECIATION/ AMORTIZATION:

(i) Gross Fixed Assets are stated at historical cost of acquisition / construction net of Cenvat Credit/Input Credit under VAT on capital goods.

Depreciation on tangible assets is provided on Straight Line Method at the rates specified in Schedule XIV to The Companies Act, 1956.

Lease hold land is amortized over the period of lease.

(ii) Fixed assets are eliminated from financial statements either on disposal or when retired from active use. The retired assets are disposed off or discarded immediately.

(iii) Depreciation is provided on pro-rata basis from the month in which assets have been put to use and up to the month in which assets have been used by the company.

IV. IMPAIRMENT OF ASSETS:

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

V. FOREIGN CURRENCY TRANSACTIONS:

a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

b) Monetary items denominated in foreign currencies at the yearend are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the yearend rate and rate on the date of the contract its recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss.

VI. REVENUE RECOGNITION:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

Revenue from sale of goods is recognized when the significant risk and reward of ownership of the goods have passed to the buyer which normally coincides with the dispatch of goods from the factory of the company. Sales are disclosed net off trade discount and Sales returns.

Revenue in respect of insurance, interest, cash subsidy and other claims is recognized only when it is reasonably certain that the ultimate collection will be made.

VII. OPERATING LEASES:

Lease arrangements where risk and rewards incidental to ownership of an asset, substantially vests with the Less or, are classified as operating leases.

Rental expenses on assets (land) obtained under operating lease arrangement are recognized on a straight line basis over a term of the lease, and in respect of Immovable Equipments are recognized as per the terms of the Lease agreement.

VIII. 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 long - term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long - term investments are carried at cost.

IX. INVENTORIES:

i) Raw materials and packing materials are valued at landed cost determined on FIFO Basis net off VAT/CENVAT, wherever applicable.

ii) The finished and trading goods have been valued at cost or net realizable value whichever is less.

iii) Semi finished goods have been valued at estimated cost, as certified by the management.

iv) Stores & Spares have been valued at cost or market price whichever is lower.

X. FINANCIAL DERIVATIVES AND COMMODITY HEDGING TRANSACTIONS:

In respect of derivative contract, premium paid, gains/losses on settlement and losses on restatement are recognized in the Statement of Profit and Loss.

XI. RETIREMENT AND OTHER EMPLOYEE BENEFITS:

Post -Employment Benefit Plans:

i. Defined Contribution Plan: Contribution for provident fund are accrued in accordance with applicable statutes and deposited with the Regional Provident Fund Commissioner.

ii. Defined Benefit Plan : The liability in respect of gratuity is determined on the basis of the actuarial valuation carried out at the Balance Sheet date by Life Insurance Corporation of India under Death cum Retirement Gratuity Scheme, as the Company has opted for the said scheme during the year under review, and Actuarial gains and losses are recognized in full in the Statement of Profit and Loss for the period in which they occur. In respect of gratuity the Company has approved Gratuity trust linked with Life Insurance Corporation of India and Company every year provides towards differential liability on the basis of actuarial valuation.

iii. Other long term Employee Benefits: Other long term employee benefits are recognized as an expense in the Statement of Profit and Loss and are valued as per company's policy.

XII. BORROWING COSTS:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized, as applicable. Other borrowing costs are recognized as an expense in the period in which they are incurred.

XIII. TAXES ON INCOME:

Tax expense comprises of Current and Deferred Tax. Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with the provisions of The Income Tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets is reviewed at each balance sheet date. The company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

XIV. EARNINGS PER SHARE:

Basic Earnings per Share is computed by dividing the net profit attributable to Equity Shareholders for the year, by weighted average number of Equity Shares outstanding during the year. Diluted earning per share is computed using the weighted average number of Equity and dilutive Equity equivalent shares outstanding at year-end.

XV. PROVISIONS AND CONTINGENT LIABILITIES:

Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

XVI. CASH AND CASH EQUIVALENTS:

Cash and Cash Equivalents in the Balance sheet comprise cash at bank and in hand and Short Term deposits with an original maturity of 3 months or less.

XVII. ACCOUNTING POLICIES:

Accounting Policies not specifically referred to, are consistent and in consonance with generally accepted Accounting principles.

(a) The company has only one class of shares referred to as Equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share.

(b) There is no change in Issued and Subscribed share capital during the year.


Mar 31, 2010

I. BASIS OF ACCOUNTING:

These financial statements are prepared under historical cost convention on an accrual basis in accordance with the Generally Accepted Accounting Principles in India and the Accounting Standards (AS) as notified under Companies (Accounting Standards) Rules, 2006. as modified to include the revaluation of certain assets.

II. USE OF ESTIMATES:

The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amount of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful life of tangible and intangible fixed assets, provision for doubtful debts / advances, future obligations in respect of retirement benefit plans, etc. Difference , if any, between the actual results and estimates is recognized in the period in which the results are known.

III. FIXED ASSETS AND DEPRECIATION/ AMORTIZATION:

(i) Gross Fixed Assets are stated at historical cost of acquisition / construction net of cenvat credit / Input Credit under VAT on capital goods.

Depreciation on tangible assets is provided on Straight Line Method at the rates specified in Schedule XIV to The Companies Act, 1956.

Lease hold land is amortised over the period of lease.

(ii) Fixed assets are eliminated from financial statements either on disposal or when retired from active use. The retired assets are disposed off or discarded immediately.

(iii) Depreciation is provided on pro-rata basis from the date on which assets have been put to use and upto the date on which assets have been used for the company.

(iv) The assets of the company consisting of land, building, plant and machineries which were revalued during accounting year 1993-94 on the basis of the valuation report of an approved valuer. Consequent to the said revaluation, there is charge of depreciation of Rs. 32,09,658 in F. Y. 2009-10 (Previous Year Rs. 32.09.658). The equivalent amount has been withdrawn from the Revaluation Reserve and credited to the Profit and Loss Account.

IV. IMPAIRMENT OF ASSETS:

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

V. REVENUE RECOGNITION:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

Revenue from sale of goods is recognized when the significant risk and reward of ownership of the goods have passed to the buyer which normally coincides with the despatch of goods from the factory of the company. Sales are disclosed net off trade discount, Sales returns .

Revenue in respect of insurance, interest, cash subsidy and other claims is recognized only when it is reasonably certain that the ultimate collection will be made.

VI. INVESTMENTS:

Investments are classified into Current and Long Term Investments.

(a) Long term investments are carried at cost after providing for any diminution in value, if such diminution is of other than temporary nature.

(b) Current investments are carried at the lower of cost and market value. The determination of carrying costs of such investments is done on the basis of specific identification.

VII. INVENTORIES:

i) Raw materials and packing materials are valued at landed cost determined on FIFO Basis net off VAT/CENVAT, wherever applicable.

ii) The finished goods have been valued at cost or net realizable value whichever is less.

iii) Semi finished goods have been valued at estimated cost, as certified by the management.

iv) Stores & Spares have been valued at cost or market price whichever is lower.

VIII. EMPLOYEE BENEFITS:

Post -Employment Benefit Plans

i. Defined Contribution Plan : Contribution for provident fund are accrued in accordance with applicable statutes and deposited with the Regional Provident Fund Commissioner.

ii. Defined Benefit Plan : The liabilities in respect of gratuity and leave encashment are determined using Projected Unit Credit Method with actuarial valuation carried out at the Balance Sheet date. Actuarial gains and losses are recognized in full in the Profit & Loss Account for the period in which they occur.

In respect of gratuity, the Company has created approved Gratuity trust and Company every year provides towards differential liability on the basis of actuarial valuation,. Provision for leave encashment is accounted for on the basis of actuarial valuation.

Short-term Employee Benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for services rendered by employees is recognized during the period when the employee renders the service.

IX. BORROWING COSTS:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized. Other borrowing costs are recognized as an expense in the period in which they are incurred.

X. SALES:

Sales excludes Excise Duty, VAT, Trade discount and Foreign Exchange loss.

XI. EXCISE DUTY :

Excise Duty payable on finished goods is accounted on the production thereof.

XII. CENVAT CREDIT :

Cenvat Credit is accounted at the time of purchase on accrual basis and is appropriated as payment of Excise Duty payable on clearance of finished goods.

Cenvat credit availed on Input services is accrued on the basis of payment made for such services and is appropriated as payment of Excise Duty payable on clearance of Finished Goods.

XIII. PRE-OPERATIVE EXPENDITURE :

All expenses including funds borrowed specifically for the acquisition, construction and commissioning of new project / assets are carried forward to be capitalized and apportioned to various assets on commissioning of the project.

XIV. TAXES ON INCOME:

Tax expense comprises of Current and Deferred Tax. Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

XV. EARNING PER SHARE:

Basic earning per Share is computed by dividing the net profit attributable to Equity Shareholders for the year, by weighted average number of Equity Shares outstanding during the year. Diluted earning per share is computed using the weighted average number of Equity and dilutive Equity equivalent share outstanding at year-end

XVI. PROVISIONS AND CONTINGENT LIABILITIES :

Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation can not be made.

XVII. ACCOUNTING POLICIES :

Accounting Policies not specifically referred to are consistent and in consonance with generally accepted Accounting principles.

 
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