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Accounting Policies of Autopal Industries Ltd. Company

Mar 31, 2015

CORPORATE INFORMATION

Autopal Industries Limited (APIL) incorporated as a public limited company under the provision of Companies Act 1956. The present directors and key management persons are Shri Dharam Pal Gupta, Anup Gupta, Ratan Lal Rawat, Abhishek Gupta, Shailender Kumar and Anubha Gupta.The company is in the production of LED's. Conservation of energy is the need of the hour. Due to limited power resources, the burden of cost on an average person is inflating day by day, which can be addressed by using energy saving product viz. Light Emitting Diode( LED). A trend of power efficient lightening equipments is following on. Urban people are continuously using the LED as they are cost conscious and understanding the benefits of energy efficient measures. The Government started making publicity in semi-urban and rural areas regarding the benefits of usage of LED over traditional incandescent bulbs and it helps the industry to create new demand of the products.The LED is very cost conscious and uses less energy than CFL. The market of LED is on the boom in the current scenario.

A. Basis of Accounting & Preparation of Financial Statements

These financial statements of the Company are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis.GAAP comprises mandatory accounting standards as prescribed under the relevant provisions of the Companies Act, 2013 and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

B. Use of Estimates

The preparation of the financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period.

Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

C. Revenue Recognition

Revenue is primarily derived from manufacturing Light Emitting Diode i.e.LED. Revenue part also comprises of income from trading of Aluminium and CR Coil in Cut. The Income and Expenditure are accounted on accrual basis, except dividend which is accounted for on receipt basis.Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer.

D. Tangible Assets

Fixed assets are stated at their original cost of acquisition less accumulated depreciation and impairment losses if any. Cost comprises of all costs incurred to bring the assets to their location and working condition and includes all expenses incurred up to the date of commercial utilization.

Subsequent expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Gain or losses arising from de-recognition of fixed assets are measured as the difference between net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

E. Intangible Assets

Intangible assets are stated at their original cost of acquisition less accumulated depreciation and impairment losses if any. The cost of an intangible asset comprises its purchase price including import duty and other taxes (other than those subsequently recoverable from taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible assets after its purchase/completion is recognized as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefit in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

F. Depreciation and Amortization

Depreciation on fixed assets is provided to the extent of Depreciable amount on straight-line method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.Salvage Value of the assets has been taken @5% of Original Cost as prescribed in Schedule II except in respect of the following assets:

Particulars Salvage Value (%)

Building 20%

Car 20%

The written down value of Fixed assets whose lives have expired as at 01st April 2014 have been adjusted in the opening balance of Reserves and Surplus amounting to Rs. 38,01,023.

G. Retirement Benefits to Employees

a. Gratuity

In accordance with the Payment of Gratuity Act, 1972, Gratuity has been provided in the books of accounts on accrual basis by HR Department of the company. Gratuity calculation is not made on the basis of Actuarial Report as prescribed in AS-15 Employee Benefits. However, the gratuity calculation is computed by the management based on assumption that such benefits are payable to all eligible employees at the time of retirement and superannuation.

b. Provident Fund/ESI

Company's contribution paid during the year to provident fund and ESIC are charged to Profit & loss Account. There are no other obligations other than contribution payable to the respective authorities.

Eligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee's salary.

c. Bonus

Bonus is eligible to employees on the maximum rate of 20% of Basic Pay as per payment of Bonus Act, 1965 and to other employees at the rate of 8.33% on Basic Pay and shown as Ex-gratia. However payment has been made to the employees till date in respect of previous accounting years but the provision has been made in respect of current accounting period.

H. Foreign Currency Transactions

Cost of imported raw material is converted to Indian currency at the rate prevailing on the date of debiting such transaction by the bank as prescribed in AS -11 Effects of Changes in Foreign Exchange Rates issued by ICAI.

I. Inventories

Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

The stock of Work-in-progress is valued on estimated cost basis and finished goods of the Business have been valued at the lower of cost and net realizable value. The cost has been measured on the actual cost basis and includes cost of materials, custom duty and cost of conversion to its present location and conditions. All other inventories of stores, consumables, raw materials are valued at landed cost. The stock of waste is also valued at realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. Stock - in- Transit is valued at cost.

J. Investments

Investments are classified as long term or current based on intention of the management at the time of purchase. Investments are classified into current and long-term investments.

On initial investment are measured at cost. The cost comprises purchase price and directly attributable acquisition charges. Dividend reinvested in case of mutual funds is added to the value of investment in mutual funds with corresponding credit is made to the profit and loss statement.

Current investments are carried in the financial statements at lower of cost and fair value. Long- term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long-term investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit & loss.

The company has investments of Rs. 3000/- in NSC, Rs. 100/- in 10 Equity shares of Rs. 10 each of PalsoftInfo systems Limited and of Rs. 800000/- in GK Autopal Lighting Solutions LLP which are recorded at cost in the books of accounts.

K. Cash Flow Statement

Cash flows are reported using the indirect method as prescribed by AS - 3 Cash Flow Statement, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregate.

L. Taxation

Income tax payable comprises of current tax and deferred tax charge or credit. Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. The deferred tax assets and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted by the balance sheet date as prescribed by AS - 22 of ICAI.

M. Impairment of Assets

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at balance sheet date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset's net selling price and value in use).

N. Provisions and Contingent Liabilities

A provision is recognized if, as a result of a past event, the company has a present legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

O. Prior Period Items

Prior period items which arise in the current period as a result of 'errors' or 'omissions' in the financial statements prepared in earlier years effects of changes in estimates of which are not treated as omission or error.


Mar 31, 2014

A) Basis of Accounting & Preparation of Financial Statements

These financial statements of the Company are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use

B) Use of Estimate The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period.

Accounting estimates could change from period to period.

Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

C) Revenue Recognition

Revenue is primarily derived from manufacturing Light Emitting Diode i.e. LED. Revenue part also comprises of income from trading of LED and CR Coil in Cut. The Income and Expenditure are accounted on accrual basis, except dividend which is accounted for on receipt basis. Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer.

D) Tangible Assets

Fixed assets are stated at their original cost of acquisition less accumulated depreciation and impairment losses if any. Cost comprises of all costs incurred to bring the assets to their location and working condition and includes all expenses incurred up to the date of commercial utilization.

Subsequent expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Gain or losses arising from derecognition of fixed assets are measured as the difference between net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

E) Intangible Assets

Intangible assets are stated at their original cost of acquisition less accumulated depreciation and impairment losses if any. The cost comprises of an intangible asset comprises its purchase price including import duty and other taxes (other than those subsequently recoverable from taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible assets after its purchase/ completion is recognized as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefit in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

F) Depreciation and Amortization

Depreciation on fixed assets has been provided on a pro-rata basis from the month are put to use at straight-line method at the rate and manner provided in schedule XIV of the companies Act, 1956 except in respect of the following the categories of assets, in whose case the life of the assets has been assessed as under:

Assets costing up to Rs. 5000/- are fully depreciated in the year of acquisition. Leasehold land is not depreciated.

G) Retirement Benefits to Employees

a. Gratuity

In accordance with the Payment of Gratuity Act, 1972, Gratuity has been provided in the books of accounts on accrual basis by HR Department of the company. Gratuity calculation is not made on the basis of Actuarial Report. However, the gratuity calculation is computed by the management based on assumption that such benefits are payable to all eligible employees at the time of retirement and superannuation.

b. Provident Fund/ESI

* Company''s contribution paid/payable during the year to provident fund and ESIC are charged to Profit & loss Account. There are no other obligations other than contribution payable to the respective authorities.

* Eligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee''s salary.

c. Bonus

Bonus is eligible to employees on the maximum rate of 20% of Basic Pay as per payment of Bonus Act, 1965 and to other employees at the rate of 8.33% on Basic Pay and shown as Ex-gratia. However payment has been made to the employees till date in respect of previous accounting years but the provision has been made in respect of current accounting period.

H) Foreign Currency Transactions

Cost of imported raw material is converted to Indian currency at the rate prevailing on the date of debiting such transaction by the bank as prescribed AS - 11 of ICAI.

I) Inventories

* Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

* The stock of Work-in-progress is valued on estimated cost basis and finished goods of the Business have been valued at the lower of cost and net realizable value. The cost has been measured on the actual cost basis and includes cost of materials, custom duty and cost of conversion to its present location and conditions. All other inventories of stores, consumables, raw materials are valued at landed cost. The stock of waste is also valued at realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. Stock - in- Transit is valued at cost.

J) lnvestments

Investments are classified as long term or current based on intention of the management at the time of purchase. Investments are classified into current and long-term investments.

On initial investment are measured at cost. The cost comprises purchase price and directly attributable acquisition charges. Dividend reinvested in case of mutual funds is added to the value of investment in mutual funds with corresponding credit is made to the profit and loss statement.

Current investments are carried in the financial statements at lower of cost and fair value. Long-term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long-term investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit & loss.

The company has investments of Rs. 3000/- in NSC and Rs. 100/- in 10 Equity shares of Rs. 10 each of Palsoft Info systems Limited which are recorded at cost in the books of accounts.

K) Cash Flow Statement

Cash flows are reported using the indirect method as prescribed by AS - 3, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregate.

L) Taxation

Income tax payable comprises of current tax and deferred tax charge or credit. Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. The deferred tax assets and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted by the balance sheet date as prescribed by AS - 22 of ICAI.

However, company has not recognized deferred tax assets/liabilities during the year in view of negative reserve & surplus , unabsorbed depreciation and carry forward losses as there is no convincing evidence to support that sufficient future taxable income will be available against which deferred tax assets can be realized. The company has sufficient carry forward losses from previous year hence does not give effect of deferred tax in the books of accounts.

M) Impairment of Assets

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at balance sheet date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset''s net selling price and value in use).

N) Provisions and Contingent Liabilities

A provision is recognized if, as a result of a past event, the company has a present legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

O) Prior Period Items

Prior period items which arise in the current period as a result of ''errors'' or ''omissions'' in the financial statements prepared in earlier years effects of changes in estimates of which are not treated as omission or error.


Mar 31, 2013

CORPORATE INFORMATION

Autopal Industries Limited (AIL) incorporated as a public limited company under the provision of Companies Act 1956. The present directors and key management persons are Shri Dharam Pal Gupta, Anup Gupta, Ram Ratan Rawat, Shailender Kumar and Mata Deen Sharma. The company is in the production of LED''s. Conservation of energy is the need of the hour. Due to limited power resources, the burden of cost on an average person is inflating day by day, which can be addressed by using energy saving product viz. Compact Fluorescent Lamps (CFL)/ LED. A trend of power efficient lightening equipments is following on. Urban people are continuously using the CFL as they are cost conscious and understanding the benefits of energy efficient measures. The Government started making publicity in semi-urban and rural areas regarding the benefits of usage of LED/CFL over traditional incandescent bulbs and it helps the industry to create new demand of the products. The LED is very cost conscious and uses less energy. The market of LED is on the boom in the current scenario.

1.1 Basis of preparation of financial statements

A. Basis of Accounting & Preparation of Financial Statements

These financial statements of the Company are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

B. Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period.

Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

C. Revenue Recognition

Revenue is primarily derived from manufacturing LED. Revenue part also comprises of income from trading of CR Coil in Cut, fans, LED and down liters. The Income and Expenditure are accounted on accrual basis, except dividend which is accounted for on receipt basis. Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer.

D. Tangible Assets

Fixed assets are stated at their original cost of acquisition less accumulated depreciation and impairment losses if any. Cost comprises of all costs incurred to bring the assets to their location and working condition and includes all expenses incurred up to the date of commercial utilization.

Subsequent expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Gain or losses arising from derecognition of fixed assets are measured as the difference between net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

Capital Work-in-Progress

Projects under which assets are not ready for their intended use and other Capital work-in- progress are carried at cost comprising direct cost and related incidental expenses.

E. Intangible Assets

Intangible assets are stated at their original cost of acquisition less accumulated depreciation and impairment losses if any. The cost comprises of an intangible asset comprises its purchase price including import duty and other taxes (other than those subsequently recoverable from taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible assets after its purchase/ completion is recognized as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefit in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

F. Depreciation and Amortization

Depreciation on fixed assets has been provided on the straight-line method at the rate and manner provided in schedule XIV of the companies Act, 1956 over the useful lives of assets estimated by management keeping 5% of Residual value of assets in books of accounts. Depreciation for assets purchased/sold during a period is proportionally charged.

Leasehold land is not depreciated.

G. Retirement Benefits to Employees

a. Gratuity

In accordance with the Payment of Gratuity Act, 1972, Gratuity has been provided in the books of accounts on accrual basis. Gratuity calculation is not made on the basis of Actuarial Report. However, the gratuity calculation is computed by the management based on assumption that such benefits are payable to all eligible employees at the time of retirement and superannuation.

b. Provident Fund/ESI

Companys contribution paid/payable during the year to provident fund and ESIC are charged to Profit & loss Account.

There are no other obligations other than contribution payable to the respective authorities.

Eligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employees salary.

c. Bonus

Bonus is eligible to employees on the maximum rate of 20% of Basic Pay as per payment of Bonus Act, 1965 and to other employees at the rate of 8.33% on Basic Pay and shown as Ex-gratia. However, no payment has been made to the employees till date in respect of previous accounting years but the provision has been made in respect of current accounting period.

H. Foreign Currency Transactions

Cost of imported raw material is converted to Indian currency at the rate prevailing on the date of debiting such transaction by the bank as prescribed AS - 11 of ICAI.

I. Inventories

Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

The stock of Work-in-progress is valued on estimated cost basis and finished goods of the Business have been valued at the lower of cost

and net realizable value. The cost has been measured on the actual cost basis and includes cost of materials, custom duty and cost of conversion to its present location and conditions. All other inventories of stores, consumables, raw materials are valued at landed cost. The stock of waste is also valued at realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. Stock – in – Transit is valued at cost.

J. Investments

Investments are classified as long term or current based on intention of the management at the time of purchase. Investments are classified into current and long-term investments.

On initial investment are measured at cost. The cost comprises purchase price and directly attributable acquisition charges. Dividend reinvested in case of mutual funds is added to the value of investment in mutual funds with corresponding credit is made to the profit and loss statement.

Current investments are carried in the financial statements at lower of cost and fair value. Long- term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long-term investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit & loss.

The company has investments of Rs. 3000/- in NSC and Rs. 100/- in 10 Equity shares of Rs. 10 each of Palsoft Info systems Limited which are recorded at cost in the books of accounts.

K. Cash Flow Statement

Cash flows are reported using the indirect method as prescribed by AS - 3, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregate.

L. Taxation

Income tax payable comprises of current tax and deferred tax charge or credit. Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. The deferred tax assets and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted by the balance sheet date as prescribed by AS - 22 of ICAI.

However, deferred tax assets/liabilities are not recognized on account of unabsorbed depreciation and carry forward losses as there is no convincing evidence to support that sufficient future taxable income will be available against which deferred tax assets can be realized. The company has sufficient carry forward losses from previous year hence does not give effect of current and deferred tax in the books of accounts.

M. Impairment of Assets

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at balance sheet date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset''s net selling price and value in use).

N. Provisions and Contingent Liabilities

A provision is recognized if, as a result of a past event, the company has a present legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

O. Prior Period Items

Prior period items which arise in the current period as a result of''errors'' or ''omissions'' in the financial statements prepared in earlier years effects of changes in estimates of which are not treated as omission or error.


Mar 31, 2012

1.1 Basis of preparation of financial statements

(a) Basis of Accounting & Preparation

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, die provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India . (SEBI). The financial statements are also in accordance with the guidelines of Sick Industrial Companies Act (SICA). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

(b) Use of estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period.

Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

1.2 Change in basis of presentation and disclosure of financial statements

During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become mandatory to the company, for preparation and presentation of its financial statements. The adoption of Revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also regrouped, rearranged and reclassified the previous year figures in accordance with the BIFR order and requirements applicable in the current year.

1.3 Revenue recognition

Revenue is primarily derived from manufacturing of CFL, LED and services of Technical know - how. Revenue part also comprises of income from trading of fans, LED and down liters. The Income and Expenditure are accounted on accrual basis, except dividend which is accounted for on receipt basis. Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer.

1.4 Provisions and Contingent Liabilities

A provision is recognized if, as a result of a past event, the company has a present legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

1.5 Prior Period Items

Prior period items which arise in the current period as a result of ''errors'' or ''omissions'' in the financial statements prepared in earlier years effects of changes in estimates of which are not treated as omission or error.

1.6 Fixed assets

Fixed assets are stated at their original cost of acquisition less accumulated depreciation and impairment losses if any. Cost comprises of all costs incurred to bring the assets to their location and working condition and includes all expenses incurred up to the date of commercial utilization.

Subsequent expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance of performance. All other expenses on existing fixed assets, including day- to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Gain or losses arising from derecognition of fixed assets are measured as the difference between net disposal proceeds and the carrying amount of the asset and are recognized in me statement of profit and loss when the asset is derecognized.

1.7 Depreciation and amortization

Depreciation on fixed assets is provided on the straight-line method at the rate and manner provided in schedule XIV of the companies Act, 1956 over the useful lives of assets estimated by the Management keeping 5% of the Residual Value of assets in the books of accounts. Depreciation for assets purchased / sold during a period is proportionately charged.

Leasehold land is not depreciated.

1.8 Retirement benefits to employees

a. Gratuity

In accordance with the Payment of Gratuity Act, 1972, Gratuity has been provided in the books of accounts on accrual basis. The gratuity calculation is computed by the management and based on assumption that such benefits are payable to all eligible employees at the time of retirement and superannuation.

b. Provident fund/ESI

Company''s contribution paid/payable during the year to provident fund and ESIC are charged to Profit & loss Account. There are no other obligations other than contribution payable to the respective authorities.

Eligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee''s salary.

c. Bonus

Bonus is eligible to employees on the maximum rate of 20% of Basic Pay as per payment of Bonus Act, 1965 and to other employees at the rate of 8.33% on Basic Pay and shown as Ex-gratia. However, no payment has been made to the employees till date in respect of previous accounting years but the provision has been made in respect of current accounting period.

1.9 Foreign currency transactions

Cost of imported raw material is converted to Indian currency at the rate prevailing on the - date of debiting such transaction by the bank as prescribed AS - 11 of 1CAI.

1.10 Inventories

Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. The stock of Work-in-progress is valued on estimated cost basis and finished goods of the Business has been valued at the lower of cost and net realizable value. The cost has been measured on the actual cost basis and includes cost of materials, custom duty and cost of conversion to its present location and conditions. All other inventories of stores, consumables, raw materials are valued at landed cost. The stock of waste is also valued at realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. Stock-in-Transit is valued at cost.

1.11 Earnings per share

As per AS-20 issued by ICAI Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period.

1.12 Investments

The company has investments of Rs. 3000/- in NSC and Rs. 100/- in 10 Equity shares of Rs. 10 each of Pal soft Info systems Limited which are recorded at cost in the books of accounts.

1.13 Cash flow statement

Cash flows are reported using the indirect method as prescribed by AS - 3, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregate.

1.14 Taxation

Income tax payable comprises of current tax and deferred tax charge or credit. Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. The deferred tax assets and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted by the balance sheet date as prescribed by AS-2 of 1CAI.

However, deferred tax assets/liabilities are not recognized on account of unabsorbed depreciation and carry forward losses as there is no convincing evidence to support that sufficient future taxable income will be available against which deferred tax assets can be realized. The company has sufficient carry forward losses from previous year hence does not give effect of current and deferred tax in the books of accounts,

1.15 Impairment of Assets

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at balance sheet date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset''s net selling price and value in use). The carrying amount of dies and tools is reduced to the recoverable amount and the reduction of Rs. 12000/- is recognized as an impairment loss in the profit and loss account.


Mar 31, 2010

(a) Basis of Accounting

The accounts are prepared under historical cost convention on a going concern basis and follows the mercantile system of accounting generally, except non accounting of Deferred Tax.

(b) Fixed Assets

All Fixed assets are stated in the Balance Sheet at cost. The company capitalized all direct cost relating to Fixed assets acquisitions and installations.

(c) Depreciation

(1) The Company provides depreciation on straight line method at the rates and manner provided in Schedule XIV of the Companies Act, 1956.

(2) Lease hold land is not depreciated.

(3) Depreciation on Dies & Tools and vehicles not provided during the year to maintain NET BLOCK to the extent of 5% of GROSS BLOCK.

(d) Inventories

(1) Raw Material, Stores & Spares, are valued at cost or net realizable value which ever is lower. The work in progress is valued at estimated cost.

(2) Finished goods are valued at cost or net realizable value which ever is lower.

(3) The cost of Imported Raw Material includes custom duties and other direct expenditures.

(e) Revenue Recognition

The Income and Expenditure are accounted on accrual basis, except dividend which is accounted for on receipt basis.

(f) Sales

Local sales are inclusive of excise duty but exclusive of Sales Tax and Trade discount.

(g) Foreign Currency Transaction Cost of Imported raw material is converted to Indian Currency at the rate prevailing on the date of debiting such transaction by the Bank.

(h) Employees Benefits

(i) Provident Fund/ESI

Companys contribution paid/payable during the year to provident fund and E.S.I.C. are charged to Profit & Loss Account. There are no other obligations other than contribution payable to the respective authorities. (ii) Gratuity

Gratuity has been provided in the books of accounts on accrual basis. The gratuity calculation is based on assumption that benefits are payable to all eligible employees at the end of accouting year.

(i) Taxation

Income Tax expenses comprise current tax and deferred tax charge or credit. Provision for current tax is made of the assessable income at the tax rate applicable to the relevant assessment year. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted by the balance sheet date.

(j) Provisions, Contingent Liabilities and Contingent Assets

The Company recognizes a provision where there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amout of the obligation. A disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made contingent assets are neither recognized nor disclosed, provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

(k) Investment

The Investment are stated at cost.

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