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Accounting Policies of Banco Products (India) Ltd. Company

Mar 31, 2016

1. CORPORATE INFORMATION

Banco Products (India) Limited is a Public limited company domiciled in India and incorporated under the Indian Companies Act, 1956. Equity shares of the company are listed on two stock exchanges in India. The Company is engaged in manufacturing and selling of radiators. The company caters to both domestic and international market.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of accounting

The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (‘Indian GAAP’) to comply with the Accounting standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013(“the 2013 Act”)/Companies Act, 1956 (“the 1956 Act”) as applicable. The Financial Statements have been prepared on accrual basis under the historical cost convention except for categories of fixed assets i.e. land which is carried at revalued amounts. The accounting policies adopted in the preparation of the Financial Statements are consistent with those followed in the previous year.

2.2 Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements and reported amounts of Revenue and expenses during the reporting period. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Actual results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known/materialize.

2.3 Classification of Current/Non Current Assets and Liabilities

All other assets and liabilities are presented as Current or Non Current as per the Company’s normal operating cycle and the other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle as 12 months for the purpose of Current/Non Current classification of assets/liabilities.

2.4 Fixed assets

(i) Tangible fixed assets

Tangible fixed assets are carried at the cost of acquisition or construction, less accumulated depreciation/ accumulated impairment losses if any. Acquisition cost of fixed assets comprises of its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use. Expenses directly attributable to new manufacturing facility during its construction period are capitalized. Profit or Loss on disposal of tangible assets is recognized in the statement of profit and loss.

(ii) Intangible fixed assets

Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Acquisition cost of intangible fixed assets comprises of the purchase price and other non-refundable taxes or levies and any attributable cost of bringing the assets to its working condition for its intended use.

(iii) Capital work in progress and capital advances

Cost of Assets not ready for intended use, as on the balance sheet date, is shown as capital work in progress. Advances given towards acquisition of fixed assets outstanding at each balance sheet date are disclosed as long term loans and advances.

2.5 Depreciation and amortization

Depreciation on plant and machinery (except electrical installations), computers, laboratory equipment’s, machine tools and effluent treatment plant purchased on or after 1st October, 1982 has been provided on straight line basis and on other assets on written down value basis over the useful lives of assets as prescribed in Schedule

II of the Companies Act, 2013. Individual items of fixed assets costing up to Rs. 5,000 are fully depreciated in the year of purchase.

Leasehold land and leasehold improvement are amortized over the primary period of lease.

Intangible assets are amortized on a straight line basis over a period of five years. Purchase cost, user license fees and consultancy fees for major software are amortized over the useful lives of assets as specified in schedule II of the Companies Act, 2013.

2.6 Impairment of assets

The carrying amounts of assets are reviewed at balance sheet date to check if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss, if any, recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

2.7 Revenue recognition

(i) Sale of products is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. The amount recognized as sales is exclusive of net of returns and discounts excise duty, sales tax/ VAT and other charges. Sales are stated gross of excise duty as well as net of excise duty (on goods manufactured), excise duty being the amount included in the amount of gross turnover. The excise duty related to the difference between the closing stock and opening stock is recognized separately as part of changes in inventories of finished goods and work-in- progress.

(ii) Interest income is accounted on time proportionate basis at contractual rates.

(iii) Dividend income is recognized when the right to receive payment is established.

(iv) Export incentives in respect of export made under duty drawback and other schemes as per the foreign trade policy are recognized on accrual basis and to the extent of certainty of realization of ultimate collection.

2.8 Inventories

(i) Raw materials, stores and spares, packing materials, work-in-process and finished goods are valued at lower of cost and net realizable value. Damaged, unserviceable and inert stocks are suitably depreciated.

(ii) In determining cost of raw materials, stores and spares and packing materials weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties and taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.

(iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads and excise duty as applicable on the finished goods and other costs incurred in bringing the inventories to their present location and condition.

2.9 Investments

Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.

2.10 Transactions in foreign currency

(i) Initial recognition:

Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss.

(ii) Measurement of foreign currency items at the balance sheet date:

Foreign currency monetary items of the Company are restated at the closing exchange rates. Non-monetary items are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising out of these translations are recognized in the statement of profit and loss.

2.11 Trade receivable

Trade receivable is stated after writing off debts considered as bad. Adequate provision is made for debts considered as doubtful. Discounts due yet to be quantified at the customer level are included under the head other Current Liabilities.

2.12 Borrowing costs

(i) Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

(ii) Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized. All other borrowing costs are expensed in the period they occur.

2.13 Provisions, contingent liabilities and contingent assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent liabilities which are not recognized are disclosed by way of notes. Contingent assets are neither recognized nor disclosed in the financial statements.

2.14 Taxes on Income

(i) Tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period).

(ii) The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the Balance Sheet date.

(iii) Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future however, where there is unabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each Balance Sheet date to reassess realization.

2.15 Research and development

(i) Research and Development expenditure of a revenue nature is expensed out and shown separately as research and development expenses under the respective heads of account in the year in which it is incurred.

(ii) Fixed assets utilized for research and development are capitalized and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets

2.16 Employees benefits

(i) Provident fund is a defined contribution scheme and the contribution as required by the statute paid to government provident fund is charged to the statement of profit and loss.

(ii) Gratuity liability is a defined benefit obligation and is funded through a gratuity fund administered by trustees and managed by the Life Insurance Corporation of India. The Company accounts for liability for future gratuity benefits based on actuarial valuation carried out as at the end of each financial year, using the projected unit credit method.

(iii) The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation carried out as at the end of each financial year, using the projected unit credit method.

(iv) Actuarial gain and losses are recognized in the statement of profit and loss.

2.17 Cash and Cash Equivalents

Cash and cash equivalents for the purpose of cash flow statement comprise cash and cheques in hand, bank balances, demand deposits with banks and other short term highly liquid investments where the original maturity is three months or less.

2.18 Proposed Dividend

Dividend recommended by the board of directors is provided for in the accounts, pending approval at Annual General Meeting.

2.19 Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

2.20 Lease Accounting

Assets given on operating lease:

The Company has provided certain properties to a company on an operating lease basis. Lease rental income is accounted on accrual basis in accordance with the lease agreement. Assets given on operating leases are included in the fixed assets.


Mar 31, 2015

1.1 Basis of accounting

i) The financial statements have been prepared under the historical cost convention (except for certain fixed assets, which have been revalued) in accordance with the generally accepted accounting principles (GAAP) to comply with the applicable Accounting Standards as prescribed under section 133 of the companies act, 2013 (Act) read with rule 7 of the Companies (Accounts) Rules 2014.

The company generally follows the mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

ii) Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of income and expenses during the period.

2.2 Fixed assets and depreciation/amortization

i) Fixed Assets are stated at cost (net of cenvat/service tax credit wherever claimed) less accumulated depreciation and impairment, if any, other than land and building at Bhaili division which are shown at revalued cost. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to its working condition for its intended use including borrowing cost and incidental expenditure incurred up to the date the assets are ready for its intended use.

ii) Depreciation on plant & machinery (except electrical installations), computers, laboratory equipments, machine tools and effluent treatment plant purchased on or after 1st October, 1982 has been provided on straight line basis and on other assets on written down value basis over the useful lives of assets as specified in schedule II of the Companies Act, 2013. Individual items of fixed assets costing upto Rs. 5,000 are fully depreciated in the year of purchase.

iii) Leasehold land is amortized over the period of lease.

iv) Intangible assets are amortized over a period of five years.

v) Purchase cost and user license fees on software are amortized on straight line basis over the useful lives of assets as specified in schedule II of the Companies Act, 2013.

2.3 Impairment of assets

The carrying amounts of assets are reviewed at each balance sheet date to check if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the statement of profit & loss in the year in which an asset is identified as impaired. The impairment loss, if any, recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

2.4 Foreign currency transactions

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Monetary items denominated in foreign currencies at the year-end are translated at the year-end rates. Any exchange differences arising on settlement/transaction are dealt with in the statement of profit and loss except those relating to acquisition of fixed assets, which are adjusted to the cost of the asset.

2.5 Investments

Non-current Investments are stated at cost. No provision for diminution in value, if any, has been made as these are long-term investments and in the opinion of the management any decline is temporary. Current investments are stated at lower of cost and fair value.

2.6 Inventories

i) Raw materials, stores & spares, packing materials, work-in-process and finished goods are valued at lower of cost and net realizable value. Damaged, unserviceable and inert stocks are suitably depreciated.

ii) In determining cost of raw materials, stores & spares and packing materials weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties and taxes other than those subsequently recoverable from tax authorities.

iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads and excise duty as applicable on the finished goods.

2.7 Retirement benefits

The Company has defined contribution plan for its employee's retirement benefits comprising of provident fund. The Company contributes to provident fund for its employees. The Company has defined benefit plan comprising of gratuity fund and leave encashment entitlement. The liability for the gratuity fund and leave encashment has been determined on the basis of an independent actuarial valuation done at the year-end. Actuarial gains and losses comprise adjustments and the effects of changes in the actuarial assumptions are recognised in the statement of profit and loss as income or expense. Contribution in respect of gratuity is paid to the Life Insurance Corporation of India (LIC).

2.8 Research and development

i) Capital expenditure related to scientific research is shown separately under the respective head of fixed assets. In note 45 of the financial statement.

ii) Revenue expenses including depreciation are charged to the statement of profit & loss and shown separately as research and development expenses in note 45 of the financial statement.

2.9 Revenue Recognition

i) Sale of products are recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales are net of returns and discounts and exclude value added tax, excise duty and other charges.

ii) Interest income is accounted on accrual basis/time proportionate basis at contractual rates

iii) Divided income is recognized when the company's right to receive dividend is established.

2.10 Provision for current and deferred tax

i) Provision for current tax is calculated after taking into consideration the deductions allowable under the provisions of the Income-tax Act, 1961.

ii) Deferred tax resulting from 'timing difference' between book and taxable profit is accounted by using the tax rate that have been enacted or substantively enacted as on the balance sheet date. The deferred tax liability is provided in the statement of profit and loss. Deferred tax assets are recognised only if there is reasonable certainty that the assets can be realized in future.

2.11 Borrowing costs

Borrowing costs attributable to the acquisition or construction of a qualifying asset is capitalized as part of the cost of the asset. Other borrowing cost is recognized as an expense in the period in which they are incurred.

2.12 Export Incentives

Export incentives in respect of export made under duty drawback scheme as per the import export policy is recognised on accrual basis and to the extent of certainty of realization of ultimate collection.

2.13 Provisions, contingent liabilities and contingent assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities which are not recognised are disclosed by way of notes. Contingent assets are neither recognised nor disclosed in the financial statements.

2.14 Sundry debtors

Sundry debtors are stated after writing off debts considered as bad. Provision is made for debts considered as doubtful, if any. Discounts due yet to be quantified at the customer level are included under the head "Current Liabilities and provisions'.

2.15 Earning per share

The basic and diluted earning per Share (EPS) is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the year.

2.16 Proposed dividend

Dividend recommended by the board of directors is provided for in the accounts, pending approval at annual general meeting.

2.17 Lease accounting

Lease rental income is accounted on accrual basis in accordance with the lease agreement.


Mar 31, 2014

2.1 Basis of accounting

i) The financial statements have been prepared under the historical cost convention (except for certain fixed assets, which have been revalued) in accordance with the generally accepted accounting principles to comply with the applicable Accounting Standards as prescribed under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

The Company generally follows the mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

ii) Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of income and expenses during the period.

2.2 Fixed assets and depreciation/amortization

i) Fixed Assets are stated at cost (net of cenvat/service tax credit wherever claimed) less accumulated depreciation and impairment, if any, other than land and building at Bhaili division which are shown at revalued cost. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to its working condition for its intended use including borrowing cost and incidental expenditure incurred up to the date the assets are ready for its intended use.

ii) Depreciation on plant & machinery (except electrical installations), computers, laboratory equipments, machine tools and effluent treatment plant purchased on or after 1st October, 1982 has been provided on straight line basis and on other assets on written down value basis at the rates specified in schedule XIV of the Companies Act, 1956. Individual items of fixed assets costing upto Rs. 5,000 are fully depreciated in the year of purchase.

iii) Leasehold land is amortized over the period of lease.

iv) Purchase cost and user license fees on software are amortized on straight line basis on rates of computer.

2.3 Impairment of assets

The carrying amounts of assets are reviewed at each balance sheet date to check if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the statement of profit & loss in the year in which an asset is identified as impaired. The impairment loss, if any, recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

2.4 Foreign currency transactions

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Monetary items denominated in foreign currencies at the year-end are translated at the year-end rates. Any exchange differences arising on settlement/transaction are dealt with in the statement of profit and loss except those relating to acquisition of fixed assets, which are adjusted to the cost of the asset.

2.5 Investments

Non-current Investments are stated at cost. No provision for diminution in value, if any, has been made as these are long-term investments and in the opinion of the management any decline is temporary. Current investments are stated at lower of cost and fair value.

2.6 Inventories

i) Raw materials, stores & spares, packing materials, work-in-process and finished goods are valued at lower of cost and net realizable value. Damaged, unserviceable and inert stocks are suitably depreciated.

ii) In determining cost of raw materials, stores & spares and packing materials weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties and taxes other than those subsequently recoverable from tax authorities.

iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads and excise duty as applicable on the finished goods.

2.7 Retirement benefits

The Company has defined contribution plan for its employee's retirement benefits comprising of provident fund. The Company contributes to provident fund for its employees. The Company has defined benefit plan comprising of gratuity fund and leave encashment entitlement. The liability for the gratuity fund and leave encashment has been determined on the basis of an independent actuarial valuation done at the year-end. Actuarial gains and losses comprise adjustments and the effects of changes in the actuarial assumptions are recognised in the statement of profit and loss as income or expense. Contribution in respect of gratuity is paid to the Life Insurance Corporation of India (LIC).

2.8 Research and development

i) Capital expenditure related to scientific research is shown separately under the respective head of fixed assets.

ii) Revenue expenses including depreciation are charged to the statement of profit & loss.

2.9 Revenue Recognition

i) Sale of products are recognised only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales are net of returns and discounts and exclude sales tax, excise duty and other charges.

ii) Interest income is accounted on accrual basis/time proportionate basis at contractual rates

iii) Divided income is considered on receipt basis.

2.10 Provision for current and deferred tax

i) Provision for current tax is calculated after taking into consideration the deduction allowable under the provisions of the Income-tax Act, 1961.

ii) Deferred tax resulting from 'timing difference' between book and taxable profit is accounted by using the tax rate that have been enacted or substantively enacted as on the balance sheet date. The deferred tax liability is provided in the statement of profit and loss. Deferred tax assets are recognised only if there is reasonable certainty that the assets can be realized in future.

2.11 Borrowing costs

Borrowing costs attributable to the acquisition or construction of a qualifying asset is capitalized as part of the cost of the asset. Other borrowing cost is recognized as an expense in the period in which they are incurred.

2.12 Export Incentives

Export incentives in respect of export made under duty drawback scheme as per the import export policy is recognised on accrual basis and to the extent of certainty of realization of ultimate collection.

2.13 Provisions, contingent liabilities and contingent assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities which are not recognised are disclosed by way of notes. Contingent assets are neither recognised nor disclosed in the financial statements.

2.14 Sundry debtors

Sundry debtors are stated after writing off debts considered as bad. Provision is made for debts considered as doubtful, if any. Discounts due yet to be quantified at the customer level are included under the head "Current Liabilities and provisions".

2.15 Earning per share

The basic and diluted earning per share (EPS) is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the year.

2.16 Proposed dividend

Dividend recommended by the board of directors is provided for in the accounts, pending approval at annual general meeting.

2.17 Lease accounting

Lease rental income is accounted on accrual basis in accordance with the lease agreement.


Mar 31, 2013

A. Basis of accounting

i) The financial statements have been prepared under the historical cost convention (except for certain fixed assets, which have been revalued) in accordance with the generally accepted accounting principles to comply with the applicable Accounting Standards as prescribed under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

The Company generally follows the mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

ii) Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of income and expenses during the period.

b. Fixed assets and depreciation/amortization

i) Fixed Assets are stated at cost (net of cenvat/service tax credit wherever claimed) less accumulated depreciation and impairment, if any, other than land and building at Bhaili division which are shown at revalued cost. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to its working condition for its intended use including borrowing cost and incidental expenditure incurred up to the date the assets are ready for its intended use.

ii) Depreciation on plant & machinery (except electrical installations), computers, laboratory equipments, machine tools and effluent treatment plant purchased on or after 1st October, 1982 has been provided on straight line basis and on other assets on written down value basis at the rates specified in schedule XIV of the Companies Act, 1956. Individual items of fixed assets costing upto Rs. 5,000 are fully depreciated in the year of purchase.

iii) Leasehold land is amortized over the period of lease.

iv) Purchase cost and user license fees on software are amortized on straight line basis on rates of computer.

c. Impairment of assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit & loss in the year in which an asset is identified as impaired. The impairment loss, if any, recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

d. Foreign currency transactions

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Monetary items denominated in foreign currencies at the year-end are translated at the year-end rates. Any exchange differences arising on settlement/transaction are dealt with in the statement of profit and loss except those relating to acquisition of fixed assets, which are adjusted to the cost of the asset.

e. Investments

Non-current Investments are stated at cost. No provision for diminution in value, if any, has been made as these are long-term investments and in the opinion of the management any decline is temporary. Current investments are stated at lower of cost and fair value.

f. Inventories

i) Raw materials, stores & spares, packing materials, work-in-process and finished goods are valued at lower of cost and net realisable value. Damaged, unserviceable and inert stocks are suitably depreciated.

ii) In determining cost of raw materials, stores & spares and packing materials weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties and taxes other than those subsequently recoverable from tax authorities.

iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads and excise duty as applicable on the finished goods. g. Retirement benefits

The Company has defined contribution plan for its employee''s retirement benefits comprising of provident fund. The Company contributes to provident fund for its employees. The Company has defined benefit plan comprising of gratuity fund and leave encashment entitlement. The liability for the gratuity fund and leave encashment has been determined on the basis of an independent actuarial valuation done at the year-end. Actuarial gains and losses comprise adjustments and the effects of changes in the actuarial assumptions are recognised in the statement of profit and loss as income or expense. Contribution in respect of gratuity is paid to the Life Insurance Corporation of India (LIC).

h. Research and development

i) Capital expenditure related to scientific research is shown separately under the respective head of fixed

assets. ii) Revenue expenses including depreciation are charged to the statement of profit and loss. i. Sales

Revenue from sale of goods is recognised only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales are net of returns and discounts and exclude sales tax, excise duty and other charges.

j. Provision for current and deferred tax

i) Provision for current tax is calculated after taking into consideration the deduction allowable under the provisions of the Income-tax Act, 1961.

ii) Deferred tax resulting from ''timing difference'' between book and taxable profit is accounted by using the tax rate that have been enacted or substantively enacted as on the balance sheet date. The deferred tax liability is provided in the statement of profit and loss. Deferred tax assets are recognised only if there is reasonable certainty that the assets can be realised in future.

k. Borrowing costs

Borrowing costs attributable to the acquisition or construction of a qualifying asset is capitalised as part of the cost of the asset. Other borrowing cost is recognised as an expense in the period in which they are incurred.

I. Dividend

Dividend income is considered on receipt basis

m. Provisions, contingent liabilities and contingent assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities which are not recognised are disclosed by way of notes. Contingent assets are neither recognised nor disclosed in the financial statements.

n. Sundry debtors

Sundry debtors are stated after writing off debts considered as bad. Provision is made for debts considered as doubtful, if any. Discounts due yet to be quantified at the customer level are included under the head "Current Liabilities and provisions".

o. Earning per share

The basic and diluted earning per Share (EPS) is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the year.

p. Proposed dividend

Dividend recommended by The Board of Directors is provided for in the accounts, pending approval at annual general meeting.

q. Lease accounting

Lease rental income is accounted on accrual basis in accordance with the lease agreement.


Mar 31, 2012

A. Fixed Assets and Depreciation / Amortisation

i) Fixed Assets are stated at cost (net of cenvat /service tax credit wherever claimed) less accumulated depreciation and impairment, if any, other than land and building at Bhaili division which are shown at revalued cost. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to its working condition for its intended use including borrowing cost and incidental expenditure incurred up to the date the assets are ready for its intended use.

ii) Depreciation on plant & machinery (except electrical installations), computers, laboratory equipments, machine tools and effluent treatment plant purchased on or after 1st October, 1982 has been provided on straight line basis and on other assets on written down value basis at the rates specified in schedule XIV of the Companies Act, 1956. Individual items of fixed assets costing up to Rs 5,000 are fully depreciated in the year of purchase.

iii) Technical know-how recognised as intangible asset was stated at the consideration paid for acquisition and amortised on straight-line basis at plant & machinery rates.

b. Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit & loss account in the year in which an asset is identified as impaired. The impairment loss, if any, recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

c. Foreign Currency Transactions

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Monetary items denominated in foreign currencies at the year-end are translated at the year-end rates. Any exchange differences arising on settlement/transaction are dealt with in the Statement of Profit and Loss except those relating to acquisition of fixed assets, which are adjusted to the cost of the asset.

d. Investments

Non-current Investments are stated at cost. No provision for diminution in value, if any, has been made as these are long-term investments and in the opinion of the management any decline is temporary. Current Investments are stated at lower of cost and fair value.

e. Inventories

i) Raw materials, stores & spares, packing materials, work-in-process and finished goods are valued at lower of cost and net realisable value. Damaged, unserviceable and inert stocks are suitably depreciated.

ii) In determining cost of raw materials, stores & spares and packing materials weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties and taxes other than those subsequently recoverable from tax authorities.

iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads and excise duty as applicable on the finished goods.

f. Retirement Benefits

The Company has defined contribution plan for its employee's retirement benefits comprising of provident fund. The Company contributes to provident fund for its employees. The Company has defined benefit plan comprising of gratuity fund and leave encashment entitlement. The liability for the gratuity fund and leave encashment has been determined on the basis of an independent actuarial valuation done at the year-end. Actuarial gains and losses comprise adjustments and the effect of changes in the actuarial assumptions and are recognised in the Statement of Profit and Loss as income or expense. Contribution in respect of gratuity is paid to the Life Insurance Corporation of India (LIC).

g. Research and Development

i) Capital expenditure related to scientific research is shown separately under the respective head of fixed assets.

ii) Revenue expenses including depreciation are charged to Statement of Profit and Loss.

h. Sales

Revenue from sale of goods is recognised only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales are net of returns and discounts and exclude sales tax, excise duty and other charges.

i. Provision for Current and Deferred Tax

i) Provision for current tax is calculated after taking into consideration the deduction allowable under the provisions of the Income-tax Act, 1961.

ii) Deferred tax resulting from â€Â˜timing difference' between book and taxable profit is accounted by using the tax rate that have been enacted or substantively enacted as on the balance sheet date. The deferred tax liability is provided in the Statement of Profit and Loss. Deferred tax assets are recognised only if there is reasonable certainty that the assets can be realised in future.

j. Borrowing Costs

Borrowing costs attributable to the acquisition or construction of a qualifying asset is capitalised as part of the cost of the asset. Other borrowing cost is recognised as an expense in the period in which they are incurred,

k. Dividend

Dividend income is considered on receipt basis

I. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities which are not recognised are disclosed by way of notes. Contingent assets are neither recognised nor disclosed in the financial statements

m. Trade Receivables

Trade Receivables are stated after writing off debts considered as bad. Provision is made for debts considered as doubtful, if any. Discounts due yet to be quantified at the customer level are included under the head Provisions,

n. Earning Per Share

The Basic and Diluted Earning Per Share (EPS) is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the year.

o. Proposed Dividend

Dividend recommended by The Board of Directors is provided for in the accounts, pending approval at annual general meeting.


Mar 31, 2011

1) Basis of Accounting

i) The financial statements have been prepared under the historical cost convention (except for certain fixed assets, which have been revalued) in accordance with the generally accepted accounting principles to comply with the applicable Accounting Standards as prescribed under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

ii) The Company generally follows the mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

iii) Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements.

2) Fixed Assets and Depreciation

i) Fixed Assets are stated at cost (net of cenvat/service tax credit wherever claimed) less accumulated depreciation and impairment, if any, other than land and building at Bhaili division which are shown at revalued cost. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to its working condition for its intended use including borrowing cost and incidental expenditure incurred up to the date the assets are ready for its intended use.

ii) Depreciation on plant-,& machinery except electrical installations, computers, laboratory equipments, machine tools and effluent treatment plant purchased on or after 1st October, 1982 has been provided on straight line basis and on other assets on written down value basis at the rates specified in schedule XIV of the Companies Act, 1956. Individual items of fixed assets costing upto Rs. 5,000 are fully depreciated in the year of purchase.

iii) Technical know-how recognized as intangible asset is stated at the consideration paid for acquisition and amortised on straight-line basis at plant & machinery rates.

3) Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit & loss account in the year in which an asset is identified as impaired. The impairment loss, if any, recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

4) Foreign Currency Transactions

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Monetary items denominated in foreign currencies at the year-end are translated at the year-end rates. Any exchange differences arising on settlement/transaction are dealt with in the profit and loss account except those relating to acquisition of fixed assets, which are adjusted to the cost of the asset.

5) Investments

Investments are stated at cost. No provision for diminution in value, if any, has been made as these are long-term investments and in the opinion of the management any decline is temporary.

6) Inventories

i) Raw materials, stores & spares, packing materials, work-in-process and finished goods are valued at lower of cost and net realizable value. Damaged, unserviceable and inert stocks are suitably depreciated.

ii) In determining cost of raw materials, stores & spares and packing materials weighted average cost method is used. Cost of inventory comprises all costs of purchase, duties and taxes other than those subsequently recoverable from tax authorities.

iii) Cost of finished products and work-in-process include the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads and excise duty as applicable on the finished goods.

7) Retirement Benefits

The Company has defined contribution plan for its employees' retirement benefits comprising of provident fund. The Company contributes to provident fund for its employees. The Company has defined benefit plan comprising of gratuity fund and leave encashment entitlement. The liability for the gratuity fund and leave encashment has been determined on the basis of an independent actuarial valuation done at the year-end. Actuarial gains and losses comprise adjustments and the effect of changes in the actuarial assumptions and are recognised in the profit and loss account as income or expense. Contribution in respect of gratuity is paid to the Life Insurance Corporation of India (LIC).

8) Research and Development

i) Capital expenditure is shown separately under the respective head of fixed assets. ii) Revenue expenses including depreciation are charged to profit & loss account.

9) Sales

Revenue from sale of goods is recognised only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales are net of returns and discounts and exclude sales tax, excise duty and other charges.

10) Provision for Current and Deferred Tax

i) Provision for current tax is made after taking into consideration the deduction allowable under the provisions of the Income-tax Act, 1961.

ii) Deferred tax resulting from 'timing difference' between book and taxable profit is accounted by using the tax rate that have been enacted or substantively enacted as on the balance sheet date. The deferred tax liability is provided in the profit and loss account. Deferred tax assets are recognised only if there is reasonable certainty that the assets can be realized in future.

11) Borrowing Costs

Borrowing costs attributable to the acquisition or construction of a qualifying asset is capitalized as part of the cost of the asset. Other borrowing cost is recognized as an expense in the period in which they are incurred.

12) Dividend

Dividend income is considered on receipt basis

13) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities which are not recognised are disclosed by way of notes. Contingent assets are neither recognised nor disclosed in the financial statements.

14) Sundry Debtors

Sundry debtors are stated after writing off debts considered as bad. Provision is made for debts considered as doubtful, if any. Discounts due yet to be quantified at the customer level are included under the head "Current Liabilities and provisions'.

15) Earning Per Share

The basic and diluted earning per Share (EPS) is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the year.

16) Proposed Dividend

Dividend recommended by The Board of Directors is provided for in the accounts, pending approval at annual general meeting.


Mar 31, 2010

1) Basis of Accounting:

i) The financial statements have been prepared under the historical cost convention (except for certain fixed assets, which have been revalued) in accordance with the generally accepted accounting principles to comply with the applicable Accounting Standards as prescribed under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

ii) The Company generally follows the mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

iii) Use of Estimates : The preparation of financial statements in conformity with generally accepted accounting principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements.

2) Fixed Assets and Depreciation:

i) Fixed Assets are stated at cost (net of cenvat/service tax credit wherever claimed) less accumulated depreciation less impairment, if any, other than land and building at Bhaili division which are shown at revalued cost. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to its working condition for its intended use including borrowing cost and incidental expenditure incurred up to the date the assets are ready for its intended use.

ii) Depreciation on plant & machinery (except electrical installations), computers, laboratory equipments, machine tools and effluent treatment plant purchased on or after 1st October, 1982 has been provided on straight line basis and on other assets on written down value basis at the rates specified in schedule XIV of the Companies Act, 1956. Individual items of fixed assets costing upto Rs. 5,000 are fully depreciated in the year of purchase.

iii) Technical know-how recognized as intangible asset is stated at the consideration paid for acquisition and amortised on straight-line basis at plant & machinery rates.

3) Impairment of Assets:

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal or external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit & loss account in the year in which an asset is identified as impaired. The impairment loss, if any, recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

4) Foreign Currency Transactions:

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Monetary items denominated in foreign currencies at the year-end are translated at the year-end rates. Any exchange differences arising on settlement/transaction are dealt with in the profit and loss account except those relating to acquisition of fixed assets, which are adjusted to the cost of the asset.

5) Investments:

Investments are stated at cost. No provision for diminution in value, if any, has been made as these are long-term investments and in the opinion of the management any decline is temporary.

6) Inventories:

i) Raw materials, stores & spares and packing materials are valued at cost. Cost is determined on weighted average basis.

ii) Work-in-process is valued at cost.

iii) Finished products are valued at cost or market value whichever is lower. Cost includes cost of raw material, packing materials, an appropriate share of fixed & variable production overheads. Excise duty applicable thereon is included for valuation purpose.

7) Retirement Benefits:

The Company has defined contribution plan for its employees retirement benefits comprising of provident fund. The Company contributes to provident fund for its employees. The Company has defined benefit plan comprising of gratuity fund and leave encashment entitlement. The liability for the gratuity fund and leave encashment has been determined on the basis of an independent actuarial valuation done at the year-end. Actuarial gains and losses comprise adjustments and the effect of changes in the actuarial assumptions and are recognised in the profit and loss account as income or expense. Contribution in respect of gratuity is paid to the Life Insurance Corporation of India (LIC).

8) Research and Development:

i) Capital expenditure is shown separately under the respective head of fixed assets. ii) Revenue expenses including depreciation are charged to profit & loss account.

9) Sales:

Revenue from sale of goods is recognised only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales are net of returns and discounts and exclude sales tax, excise duty and other charges.

10) Provision for Current and Deferred Tax:

i) Provision for current tax is made after taking into consideration the deduction allowable under the provisions of the Income-tax Act, 1961.

ii) Deferred tax resulting from timing difference between book and taxable profit is accounted by using the tax rate that have been enacted or substantively enacted as on the balance sheet date. The deferred tax liability is provided in the profit and loss account. Deferred tax assets are recognised only if there is reasonable certainty that the assets can be realized in future.

11) Borrowing Costs:

Borrowing costs attributable to the acquisition or construction of a qualifying asset is capitalized as part of the cost of the asset. Other borrowing cost is recognized as an expense in the period in which they are incurred.

12) Dividend:

Dividend income is considered on receipt basis

13) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities which are not recognised are disclosed by way of notes. Contingent assets are neither recognised nor disclosed in the financial statements.

14) Sundry Debtors:

Sundry debtors are stated after making adequate provision for debt considered doubtful.

15) Earning Per Share:

The basic and diluted earning per Share (EPS) is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the year.

16) Proposed Dividend:

Dividend recommended by Board of Directors is provided for in the accounts, pending approval at annual general meeting.

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