Mar 31, 2010
1. BASIS OF PREPARATION:
The financial statements have been prepared to comply in all respects with the notified accounting standards by Companies Accounting Standards Rules,2006 and the relevant provision of the Companies Act, 1956(Ãthe Act").
The financial statements have been prepared under the historical cost convention on an accrual basis in accordance with accounting principles generally accepted in India. The accounting policies have been consistently applied by the Company and are consistent with those used in previous year.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingents liabilities at the date of the financial statements and the results of operation during the reporting period end. Although these estimates are based upon nnanagementQs best knowledge of current events and actions, actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively.
3. FIXED ASSETS AND DEPRECIATION:
3.1 FIXED ASSETS:
Fixed Assets are stated at Cost of Acquisition inclusive of all incidental expenses incurred towards acquisition and installation thereof.
Depreciation on fixed assets is provided on Written down value method at the rates and in the manner prescribed under schedule -XIV of the Companies Act, 1956. Depreciation on fixed assets acquired during the year is provided from date the said Assets have been put to use as certified by the management.
4 IMPAIRMENT OF ASSETS:
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit and Loss Account in the current accounting year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount as specified in Accounting Standard (AS-28) on "Impairment of Assets".
5.1 Long Term
All other investments are classified as long-term investments are carried at lower of cost and fair value determined on an individual basis. Long-term investments are carried at cost.
5.2 Short Term
Investments that are readily realizable and intended to be held for not more than a year are classified as Short term investments.
Inventories are valued as follows:
(I) Inventories of raw materials, work-in-process, finished goods, and stores & spares are valued at lower of cost and net realizable value.
(ii) Cost of Imported raw material and stock in bond include custom duty thereon. Cost of Stock in transit include cost incurred up to the date of Balance Sheet.
(iii) Cost of WIP & finished goods includes materials, labour and manufacturing overheads and other costs incurred in bringing the inventories to their present location.
7. BORROWING COSTS:
Borrowing cost relating to acquisition/construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets fortheir intended use are complete. A qualifying asset is one that necessary takes substantial period of time to get ready for its intended use/sale. All other borrowing costs not eligible for inventorisation/captalisation are charged to revenue.
8. RECOGNITION OF INCOME:
The Company generally follows the mercantile system of accounting
a. Sales are accounted for exclusive of sales tax.
b. Revenue is recognised when the property and all significant risks and rewards of ownership are transferred to the buyer or no significant uncertainty exists regarding the amount of consideration that is derived from the sale of goods.
c. Purchases are accounted net of vat/cenvat availed thereon.
d. Maintenance & Services are accounted inclusive of service tax.
e. Interest income is recognized on time proportion basis.
9. EMPLOYEE BENEFITS:-
(I) Short Term Employee Benefits:
The employees of the company are entitled to leave encashment as per the leave policy of the company. The liability in respect of leave encashment which is expected to be encashed / utilised within twelve months after balance sheet date is considered to be of short term nature. The same is provided, based on an actuarial valuation carried out by an independent actuary as atthe year end.
(ii) Long Term Employee Benefits:
Defined Contribution Plans
The Company has defined contribution plansfor post employment benefits namely providentfund.
Under the provident fund plan, the company contributes to a Government administered provident fund on behalf of its employees and has no further obligation beyond making its contribution.
The company contributes to state plans namely employees pension scheme, 1995 and has no further obligation beyond making its contribution
The Company contribution to the above funds are charged to revenue every year.
Defined Benefits Plans
The Company has a defined benefits plan namely Gratuity and leave encashment for all its employees.
Long Term leave encashment includes provision for leave which is expected to be encashed / utilised after twelve months from balance sheet date.
Liability for defined benefit plan is provided on the basis of valuations, as at balance sheet date, carried out by an independent actuary. The actuarial valuation used by independent actuary for measuring the liability is the projected unit credit method.
(iii) Termination benefits are recognised as an expenses as and when incurred.
(iv) Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised immediately in the profit and loss account as income or expenses.
10. FOREIGN CURRENCY TRANSACTIONS:
Foreign currency transactions are accounted at the rates prevailing on the date of the transaction. Transactions are not covered by forward exchange contract. Current assets and liabilities are translated at the exchange rate ruling on the date of balance sheet. Any income or expenses on account of exchange difference either on payment or on translation are recognized in the profit and loss account except in cases where these relate to acquisition of fixed assets, the same are adjusted in the cost of the fixed assets.
11. TAXES ON INCOME:
Income tax provision based on the present tax laws in respect of taxable income for the year and the deferred tax is treated in the accounts based on the Accounting Standard (AS-22) on "Accounting for Taxes on Income." The deferred tax assets and liabilities for the year, arising out of timing difference, are reflected in the profit and loss account. The cumulative effect thereof is shown in the Balance sheet. The deferred tax assets are recognized only if there is a reasonable certainty that the assets will be realized in future. Deferred Tax is recognized, subject to the consideration of prudence of, on timing differences, being the difference between taxable incomes and accounting income that originated in one period and are capable of reversal in one or more subsequent periods.
12. PROVISIONS, CONTINGENTS LIABILITIES & CONTINGENT ASSETS:,
A provision is recognized when an enterprise has a present obligation as a result of past even; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not provided for in this account, and if any, the same is reflected in notes on account. Contingent Assets are neither recognized nor disclosed in the financial statements.
13. SEGMENT REPORTING:
The main business of the Company is Manufacture, supply, installation, commissioning and servicing of all types of weighing systems, and all other related activities which the Company revolve around the main business and as such there are no separate reportable segments as specified in Accounting Standard (AS-17) pm "Segment Reporting."
14. EARNINGS PER SHARE:
Basic earnings per share are calculated by dividing the net profit / (loss) for the period attributable to equity shareholders (after deducting attributable taxes) by average number of equity shares outstanding during the period. The average number of equity shares outstanding during the period is adjusted for the event of fresh issue of shares to the public. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.