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Accounting Policies of Bemco Hydraulics Ltd. Company

Mar 31, 2015

A) Basis of Preparation of Financial Statements

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain fixed assets which are stated at revalued amounts. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act,2013 ('Act')read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) 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.

All the Assets and Liabilities have been classified as Current and Non-Current as per the Company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of activities, the Company has ascertained its operating cycle as 12 months for the purpose of Current and Non Current classification of Assets and Liabilities.

b) Use of Estimates

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

The estimates and assumptions used in the accompanying financial statements are based upon management's evaluation of relevant facts and circumstances as of the date of financial statement. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

c) Tangible Fixed Assets and Capital Work in Progress (i) Recognition

Tangible assets are stated at their original cost net of recoverable taxes, duties, trade discounts and rebates less accumulated depreciation and impairment, if any except in case of certain fixed assets which have been revalued and stated at revalued amounts less accumulated depreciation. The cost of fixed asset comprises its purchase price, borrowing costs and any directly attributable cost of bringing the asset to its working condition for its intended use. Capital work-in-progress comprises the cost of fixed assets that are not yet ready for their intended use as at the reporting date. (ii) Depreciation

Depreciation on tangible fixed assets is charged on straight line method over the useful life/remaining useful life of the asset as per Schedule II of the Companies Act 2013. Depreciation on assets purchased / acquired during the year is charged from the date of addition/ purchase of the asset. Similarly, depreciation on assets sold/ discarded during the year is charged up on the sale/ discard of the assets.

Where depreciable assets are disposed of, discarded, demolished or destroyed, the net surplus or deficiency, if material, is disclosed separately.

d) Intangible Fixed Assets (i) Recognition

Intangible fixed assets acquired separately are measured on initial recognition at cost. Following initial recognition, Intangible Assets are carried at cost less accumulated amortization and accumulated impairment losses, if any.

(ii) Amortization

Intangible assets are amortized on straight line basis over the estimated useful economic life of the asset. The company presumes that the useful economic life of Technical Knowhow and Computer Software is five years from the year in which it is acquired and is ready to use and therefore, Technical Knowhow and Computer Software is amortized on straight line basis over a period of five years from the year in which it is acquired and is ready to use. The amortization charge for each period is recognized as an expense.

e) Non-Current/Long Term Investment

Non- Current/ Long-term investments are stated at cost. Provision is made for diminution in the value of investments, if the same is considered to be other than temporary in nature. The carrying amount of long-term investments is determined on an individual investment basis.

f) Inventories

Inventories are valued at the lower of cost and net realizable value. The cost of inventories comprises of costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Estimates of net realizable value are based on the most reliable evidence available at the time the estimates are made as to the amount the inventories are expected to realize. The cost of inventories are arrived at by applying the weighted average cost formula. Scrap is valued at net realizable value. Excise duty payable on finished goods lying in the factory is provided for and included in closing stock of finished goods.

g) Employee Benefits

1 Short term employee benefits :

Short-term employee benefits are employee benefits (other than termination benefits) such as salary, wages and performance incentive which fall due wholly within twelve months after the end of the period in which the employees render the related service and are recognized as expense in the period in which the related service is rendered.

2 Post- employment Benefits

Post-employment benefits are employee benefits (other than termination benefits) which are payable after the completion of employment.

a. Defined Contribution Plans

The Company has Defined Contribution Plans for Post employment benefits in the form of Superannuation Fund and Provident & Pension Fund for all employees which are administered by Life Insurance Corporation (LIC) and Regional Provident Fund Commissioner respectively. Superannuation Fund and Provident Fund are classified as defined contribution plans as the Company pays fixed contributions into a separate entity (a fund) and has no further obligation beyond making contributions. The Company's contributions to Defined Contribution plans are charged to the Statement of Profit and Loss as and when incurred.

b. Defined Benefit Plans

Funded Plan: The Company has a defined benefit plan for Post-employment benefit in the form of Gratuity, which is administered through Life Insurance Corporation (LIC).

Liability for the above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method.

c. Other Long-term Employee Benefit

Liability for Compensated Absences is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The Actuarial valuation method used for measuring the liability is the Projected Unit Credit method.

3 Termination benefits are recognized as an expense as and when incurred.

4 The Actuarial gains and losses arising during the year are recognized in the Statement of Profit and Loss.

h) Research and Development:

No intangible asset arising from research (or from the research phase of an internal project) is recognized. Revenue expenditure on research (or on the research phase of an internal project) is recognized as an expense when it is incurred.

Development costs of products are charged to the Statement of Profit and Loss unless a product's technological feasibility has been established, in which case such expenditure is capitalized.

i) Revenue Recognition

Sale of goods

Sales are recognized net of returns, trade discounts and rebates when the seller has transferred the property in the goods to the buyer for a consideration. The transfer of property in goods, in most cases, results in or coincides with the transfer of significant risks and rewards of ownership to the buyer. However, there may be situations where transfer of property in goods does not coincide with the transfer of significant risks and rewards of ownership. Revenue in such situations is recognized at the time of transfer of significant risks and rewards of ownership to the buyer. Sales include excise duty but excludes value added tax and central sales tax collected. Rendering of services

Revenue from maintenance contracts are recognized pro-rata over the period of contract. Revenue from other service contracts are recognized when services are rendered and related costs are incurred. Other income

Interest accrues on the time basis determined by the amount outstanding and the rate applicable. Dividend income is recognized in the Statement of Profit and Loss when the right to receive dividend is established. Other items of income are recognized on accrual basis.

j) Borrowing Cost.

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

k) Foreign Currency Transactions.

Initial recognition

A foreign currency transaction is recorded on initial recognition in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. Measurement of foreign currency monetary items at Balance Sheet date

Foreign currency monetary items are reported using the closing rate. However, in certain circumstances, where the closing rate may not reflect with reasonable accuracy the amount in reporting currency that is likely to be realized or where the closing rate is unrealistic and it is not possible to effect an exchange of currencies at that rate at the balance sheet date, the relevant monetary item is reported in the reporting currency at the amount which is likely to be realized from, or required to disburse, such item at the balance sheet date. Exchange difference

Exchange differences arising on the settlement of monetary items or on reporting an enterprise's monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, are recognized as income or as expenses in the period in which they arise (except Net Investment in a Non-integral Foreign Operation.

I) Earnings Per Share:

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The net profit or loss for the period attributable to equity shareholders is the net profit or loss for the period after deducting preference dividends and any attributable tax thereto for the period. The weighted average number of equity shares is the number of equity shares outstanding at the beginning of the period, adjusted by the number of equity shares bought back or issued during the period multiplied by the time-weighing factor.

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 are adjusted for the effects of all dilutive potential equity shares. The number of equity shares is the aggregate of the weighted average number of equity shares and the weighted average number of equity shares which would be issued on the conversion of all the dilutive potential equity shares into equity shares. Dilutive potential equity shares are deemed to have been converted into equity shares at the beginning of the period or, if issued later, the date of the issue of the potential equity shares. Potential equity shares are treated as dilutive when, and only when, their conversion to equity shares would decrease net profit per share from continuing ordinary operations.

m) Taxation:

Tax expense for the period, comprising current tax and deferred tax, is included in the determination of the net profit or loss for the period. Provision is made for current tax based on tax liability computed in accordance with relevant tax rates and tax laws.

Provision is made for deferred tax for all the timing differences arising between taxable income and accounting income at currently or substantively enacted tax rates, subject to the consideration of prudence in respect of deferred tax assets. Whenever there exists any unabsorbed depreciation or carry forward of losses under tax laws, deferred tax assets are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet Date.

n) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

A contingent liability is a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the enterprise; or a present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or a reliable estimate of the amount of the obligation cannot be made. A contingent liability is disclosed, unless the possibility of an outflow of resources embodying economic benefits is remote.

Contingent Assets are neither recognized nor disclosed in the Financial Statements.

o) Impairment of Assets:

Impairment is ascertained at each Balance Sheet date in respect of cash generating units. An impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is the higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

p) Leases

Leases which effectively transfer to the Company substantially all the risks and benefits incidental to the ownership of the leased item are classified as 'Finance Lease'. Assets acquired on Finance Lease which substantially transfer all the risks and rewards of ownership to the Company are capitalized as assets by the Company at the lower of the fair value and the present value of the minimum lease payment and a liability is created for an equivalent amount. Amortization of capitalized Leased asset is computed on Straight Line Method over the useful life of the asset. Lease rentals payable is apportioned between the liability and finance charge so as to obtain a constant periodic rate of interest on the outstanding liability for each year. Lease arrangements where the risks and rewards incidental to the ownership of an asset substantially vest with the less or are recognized as operating leases. Lease rentals under operating leases are recognized in the Statement of Profit and Loss on a straight line basis.

q) Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. An investment normally qualifies as a cash equivalent only when it has a short maturity of three months or less from the date of acquisition.

r) Cash Flow Statement

The cash flow statement reports cash flows during the period classified by operating, investing and financing activities. Cash flows from operating activities are reported using the indirect method, whereby net profit or loss 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 items of income or expense associated with investing or financing cash flows. s) Post-sales client support and warranties

The Company provides its clients with a fixed-period warranty for corrections of errors and support on all its fixed-price, fixed- time frame contracts. Costs associated with such support services are accrued at the time when related revenues are recorded and included in statement of profit and loss. The Company estimates such costs based on historical experience and the estimates are reviewed annually for any material changes in assumptions.


Mar 31, 2014

A) Basis of Preparation of Financial Statements

The financial statements have been prepared in accordance with the applicable Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and under historical cost convention on accural basis except for certain fixed assets which are carried at revalued amounts. All the Assets and Liabilities have been classified as Current and Non-Current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act 1956. Based on the nature of activities, the Company has ascertained its operating cycle as 12 months for the purpose of Current and Non Current classification of Assets and Liabilities.

b) Use of Estimates

The preparation of the financial statements is in conformity with Generally Accepted Accounting Principles (GAAP) and 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. The estimates and assumptions used in the accompanying financial statements are based upon management''s evaluation of relevant facts and circumstances as of the date of financial statement. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

c) Tangible Fixed Assets

(i) Recognition

Tangible Fixed Assets are stated at cost of acquisition or construction (net of Cenvat credits) less accumulated depreciation except in case of certain fixed assets which have been revalued are stated at revalued amount less accumulated depreciation. All costs relating to the acquisition and installation of fixed asset are capitalised and include borrowing costs directly attributable to construction or acquisition of qualifying fixed assets.

(ii) Depreciation

Depreciation on tangible fixed assets is charged on straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased / acquired during the year is charged from the date of addition / purchase of the asset. Similarly, depreciation on assets sold / discarded during the year is charged up on the sale / discard of the assets. Depreciation on addition on account of revaluation is recouped from Revaluation Reserve.

d) Intangible Fixed Assets

(i) Recognition

Intangible fixed assets acquired separately are measured on initial recognition at cost. Following initial recognition, Intangible Assets are carried at cost less accumulated ammortisation and accumulated impairment losses, if any.

(ii) Amortization

Intangible assets are amortized on straight line basis over the estimated useful economic life of the asset. The company presumes that the useful economic life of Technical Knowhow is five years from the year in which it is acquired and is ready to use and therefore, Technical Knowhow is amortized on straight line basis over a period of five years from the year in which it is acquired and is ready to use.

e) Non-Current/Long Term Investment

Non-Current/Long Term Investments are stated at cost. Provision is made for diminution in value, if the same is considered to be other than temporary in nature.

f) Inventories

Inventories are valued at lower of cost or net realizable value. Cost is arrived at on weighted average method. Scrap is valued at estimated realizable value. Excise duty payable on finished goods lying in the factory is provided for and included in closing stock of inventory.

g) Employee Benefits

1 Short term employee benefits :

All employee benefits falling due wholly within twelve months of rendering the services are classified as short term employee benefits, which include benefits like Salary, wages and Performance incentives, and are recognized as expenses in the period in which the related service is rendered.

2 Post- employment Benefits

a. Defined Contribution Plans

The Company has Defined Contribution Plans for Post employment benefits in the form of Superannuation Fund and Provident Fund for all employees which are administered by Life Insurance Corporation (LIC) and Regional Provident Fund Commissioner respectively. Superannuation Fund and Provident Fund are classified as defined contribution plans as the Company has no further obligation beyond making the contributions. The Company''s contributions to Defined Contribution plans are charged to the Statement of Profit and Loss as and when incurred.

b. Defined Benefit Plans

Funded Plan: The Company has a defined benefit plan for Post-employment benefit in the form of Gratuity, which is administered through Life Insurance Corporation (LIC).

Liability for the above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method.

c. Other Long-term Employee Benefit

Liability for Compensated Absences is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The Actuarial valuation method used for measuring the liability is the Projected Unit Credit method.

3 Termination benefits are recognised as an expense as and when incurred.

4 The Actuarial gains and losses arising during the year are recognised in the Statement of Profit and Loss.

h) Research and Development:

Revenue expenditure on Research and Development is charged against the profit for the year in which it is incurred. Capital expenditure on Research and Development is shown as an addition to fixed assets and depreciated accordingly.

i) Revenue Recognition

Sale of goods

Sales are recognized, net of returns, on transfer of significant risks and reward of ownership to the customer, which generally concides with the delivery of the goods to the customer. Sales includes excise duty but excludes value added tax and central sales tax collected.

Rendering of services

Revenue from maintenance contracts are recognized pro-rata over the period of contract.

Revenue from other service contracts are recognized when services are rendered and related costs are incurred.

Other income

"Interest income is accounted for on accural basis. Dividend income is accounted for when the right to receive dividend is established. Other items of income are recognized on accrual basis."

j) Borrowing Cost.

Interest on borrowings directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of the assets up to the date the asset is ready for use. Other borrowing costs are charged to the Statement of Profit & Loss in the year in which they are incurred.

k) Foreign Currency Transactions.

Initial recognition

Transactions in foreign currency are accounted for at exchange rates prevailing on the date of the transaction or that approximates the actual rate at the date of transaction.

Measurement of foreign currency monetary items at Balance Sheet date.

Foreign currency monetary items (other than derivative contracts) as at Balance Sheet date are restated at the year end rates

Exchange difference

"Exchange differences arising on settlement of monetary items are recognised as income or expense in the period in which they arise. Exchange difference arising on restatement of foreign currency monetary items as at the year end being difference between exchange rate prevailing on initial recognition/subsequent restatement on reporting date and as at current reporting date is adjusted in the Statement of Profit & Loss for the respective year. "

l) Earnings Per Share:

"The earnings in ascertaining the Company''s EPS comprises the net profit/loss after tax attributable to equity shareholders and includes the post tax effect of any extraordinary items. The number of shares used in computing Basic - EPS is the weighted average number of shares outstanding during the year.

Diluted earnings per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extra ordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dulitive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period."

m) Taxation:

Tax expense for the year, comprising, current tax and deferred tax are included in determining the net profit for the year. A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws. A provision is made for deferred tax for all timing differences arising between taxable incomes and accounting income at currently or substantively enacted tax rates. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

n) Provisions and Contingent Liabilities:

Provisions: Provisions are recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the balance sheet date and are not discounted to its present value.

Contingent Assets: Contingent Assets are neither recognised nor disclosed in the Financial Statements.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of obligation cannot be made.

o) Impairment of Assets:

Impairment is ascertained at each balance sheet date in respect of cash generating units. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

p) Segment Reporting Identification of a segment

The Company identifies primary segment based on the dominant source, nature of risk and returns associated.

Segment Accounting

The accounting policies applicable to the reportable segment are the same as those used in the preparation of the financial statements as set out above. Segment revenue and expenses include amounts which can be directly identifiable to the segment or allocable on a reasonable basis. Segment assets include all assets directly identifiable to the segment. Segment liabilities include all liabilities directly identifiable to the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis are included under unallocated revenue, unallocated expenses, unallocated assets and unallocated liabilities.

q) Leases

"Assets leased by the company in its capacity as a lessee where substantially all the risks and rewards of ownership vest in the company are classified as the finance leases. Such leases are capitalized at the inception of the lease at the lower of the fair value and the present value of the minimum lease payment and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year. Lease arrangements where the risks and rewards incidental to the ownership of an asset substantially vest with the lessor are recognized as operating leases. Lease rentals under operating leases are recognized in the Statement of Profit and Loss on a straight line basis."


Mar 31, 2013

A) Accounting Convention

The financial statements have been prepared in accordance with the applicable Accounting Standards notified under the Companies (Accounting Standards ) Rules, 2006 and under historical cost convention on accural basis except for certain fixed assets which are carried at revalued amounts.

b) Use of Estimates

The preparation of the financial statements is in conformity with Generally Accepted Accounting Principles (GAAP) and 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. The estimates and assumptions used in the accompanying financial statements are based upon management''s evaluation of relevant facts and circumstances as of the date of financial statement. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods

c) Tangible Fixed Assets

(i) Recognition

Tangible Fixed Assets are stated at cost of acquisition or construction (net of Cenvat credits) less accumulated depreciation except in case of certain fixed assets which have been revalued are stated at revalued amount less accumulated depreciation. All costs relating to the acquisition and installation of fixed asset are capitalised and include borrowing costs directly attributable to construction or acquisition of qualifying fixed assets.

(ii) Depreciation

Depreciation on tangible fixed assets is charged on straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased / acquired during the year is charged from the date of addition / purchase of the asset. Similarly, depreciation on assets sold / discarded during the year is charged up on the sale / discard of the assets. Depreciation on addition on account of revaluation is recouped from Revaluation Reserve.

d) Intangible Fixed Assets

(i) Recognition

Intangible fixed assets acquired separately are measured on initial recognition at cost.

(ii) Amortization

Intangible assets are amortized on straight line basis over the estimated useful economic life of the asset. The company presumes that the useful economic life of Technical Knowhow is five years from the year in which it is acquired and is ready to use and therefore, Technical Knowhow is amortized on straight line basis over a period of five years from the year in which it is acquired and is ready to use.

e) Non-Current/Long Term Investment

Non-Current/Long Term Investments are stated at cost. Provision is made for diminution in value, if the same is considered to be other than temporary in nature.

f) Inventories

Inventories are valued at lower of cost or net realizable value. Cost is arrived at on weighted average method. Scrap is valued at estimated realizable value. Excise duty payable on finished goods lying in the factory is provided for and included in closing stock of inventory.

g) Employee Benefits

1 Short term employee benefits :

All employee benefits falling due wholly within twelve months of rendering the services are classified as short term employee benefits, which include benefits like Salary, wages and Performance incentives, and are recognized as expenses in the period in which the employee renders the related service.

2 Post- employment Benefits

a. Defined Contribution Plans

The Company has Defined Contribution Plans for Post employment benefits in the form of Superannuation Fund and Provident Fund for all employees which are administered by Life Insurance Corporation (LIC) and Regional Provident Fund Commissioner respectively. Superannuation Fund and Provident Fund are classified as defined contribution plans as the Company has no further obligation beyond making the contributions. The Company''s contributions to Defined Contribution plans are charged to the Profit and Loss Account as and when incurred.

b. Defined Benefit Plans

Funded Plan: The Company has a defined benefit plan for Post-employment benefit in the form of Gratuity, which is administered through Life Insurance Corporation (LIC).

Liability for the above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method.

c. Other Long-term Employee Benefit

Liability for Compensated Absences is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The Actuarial valuation method used for measuring the liability is the Projected Unit Credit method.

3 Termination benefits are recognised as an expense as and when incurred.

4 The Actuarial gains and losses arising during the year are recognised in the Profit and Loss Account.

h) Research and Development:

Revenue expenditure on Research and Development is charged against the profit for the year in which it is incurred. Capital expenditure on Research and Development is shown as an addition to fixed assets and depreciated accordingly.

i) Revenue Recognition

Sale of goods

Sales are recognized, net of returns, on transfer of significant risks and reward of ownership to the cutomer, which generally concides with the delivery of the goods to the customer. Sales includes excise duty but excludes value added tax and central sales tax collected.

Rendering of services

Revenue from maintenance contracts are recognized pro-rata over the period of contract.

Revenue from other service contracts are recognized when services are rendered and related costs are incurred.

Other income

"Interest income is accounted for on accural basis."Dividend income is accounted for when the right to receive dividend is established."Other items of income are recognized on accrual basis."

j) Borrowing Cost.

Interest on borrowings directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of the assets up to the date the asset is ready for use. Other borrowing costs are charged to the Profit & Loss Account in the year in which they are incurred.

k) Foreign Currency Transactions.

Initial recognition

Transactions in foreign currency are accounted for at exchange rates prevailing on the date of the transaction.

Measurement of foreign currency monetary items at Balance Sheet date

Foreign currency monetary items (other than derivative contracts) as at Balance Sheet date are restated at the year end rates

Exchange difference

"Exchange differences arising on settlement of monetary items are recognised as income or expense in the period in which they arise."Exchange difference arising on restatement of foreign currency monetary items as at the year end being difference between exchange rate prevailing on initial recognition/subsequent restatement on reporting date and as at current reporting date is adjusted in the Profit & Loss Statement for the respective year. "

l) Earnings Per Share:

"The earnings in ascertaining the Company''s EPS comprises the net profit/loss after tax attributable to equity shareholders and includes the post tax effect of any extraordinary items. The number of shares used in computing Basic - EPS is the weighted average number of shares outstanding during the year."Diluted earnings per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extra ordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. Potential equity shares are deemd to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dulitive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date.Dilutive potential equity shares are determined independently for each period."

m) Taxation:

Tax expense for the year, comprising, current tax and deferred tax are included in determining the net profit for the year. A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws. A provision is made for deferred tax for all timing differences arising between taxable incomes and accounting income at currently or substantively enacted tax rates. Deferred tax assets are recognised only if there is reasonable certainty that they will be realised and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

n) Provisions and Contingent Liabilities:

Provisions: Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the balance sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

o) Impairment of Assets:

Impairment is ascertained at each balance sheet date in respect of cash generating units. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

p) Segment Reporting

Identification of a segement

The Company identifies primary segment based on the dominant source, nature of risk and returns associated.

Segment Accounting

The accounting policies applicable to the reportable segment are the same as those used in the preparation of the financial statements as set out above. Segment revenue and expenses include amounts which can be directly identifiable to the segment or allocable on a reasonable basis. Segment assets include all assets directly identifiable to the segment. Segment liabilities include all liabilities directly identifiable to the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis are included under unallocated revenue, unallocated expenses, unallocated assets and unallocated liabilities

q) Leases

"Assets leased by the company in its capacity as a lessee where substantially all the risks and rewards of ownership vest in the company are classified as the finance leases. Such leases are capitalized at the inception of the lease at the lower of the fair value and the present value of the minimum lease payment and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year."Lease arrangements where the risks and rewards incidental to the ownership of an asset substantially vest with the lessor are recognized as operating leases. Lease rentals under operating leases are recognized in the Statement of Profit and Loss on a straight line basis."


Mar 31, 2012

A) Accounting Convention

The financial statements have been prepared in accordance with the applicable Accounting Standards notified under the Companies (Accounting Standards ) Rules, 2006 and under historical cost convention on accrual basis except for certain fixed assets which are carried at revalued amounts.

b) Use of Estimates

The preparation of the financial statements is in conformity with Generally Accepted Accounting Principles (GAAP) and 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. The estimates and assumptions used in the accompanying the financial statements are based upon management's evaluation of relevant facts and circumstances as of the date of financial statement. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods

c) Tangible Fixed Assets

(i) Recognition

Tangible Fixed Assets are stated at cost of acquisition or construction (net of Cenvat credits) less accumulated depreciation except in case of certain fixed assets which have been revalued are stated at revalued amount less accumulated depreciation. All costs relating to the acquisition and installation of fixed asset are capitalized and include borrowing costs directly attributable to construction or acquisition of qualifying fixed assets.

(ii) Depreciation

Depreciation on tangible fixed assets is charged on straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased / acquired during the year is charged from the date of addition / purchase of the asset. Similarly, depreciation on assets sold / discarded during the year is charged up on the sale / discard of the assets. Depreciation on addition on account of revaluation is recouped from Revaluation Reserve.

d) Intangible Fixed Assets

(i) Recognition

Intangible fixed assets acquired separately are measured on initial recognition at cost.

(ii) Amortization

Intangible assets are amortized on straight line basis over the estimated useful economic life of the asset. The company presumes that the useful economic life of Technical Know how is five years from the year in which it is acquired and is ready to use and therefore, Technical Know how is amortized on straight line basis over a period of five years from the year in which it is acquired and is ready to use.

e) Non-Current/Long Term Investment

Non-Current/Long Term Investments are stated at cost. Provision is made for diminution in value, if the same is considered to be other than temporary in nature.

f) Inventories

Inventories are valued at lower of cost or net realizable value. Cost is arrived at on weighted average method. Scrap is valued at estimated realizable value. Excise duty payable on finished goods lying in the factory is provided for and included in closing stock of inventory.

g) Employee Benefits

1 Short term employee benefits :

All employee benefits falling due wholly within twelve months of rendering the services are classified as short term employee benefits, which include benefits like Salary, wages and Performance incentives, and are recognized as expenses in the period in which the employee renders the related service.

2 Post- employment Benefits

a. Defined Contribution Plans

The Company has Defined Contribution Plans for Post employment benefits in the form of Superannuation Fund and Provident Fund for all employees which are administered by Life Insurance Corporation (LIC) and Regional Provident Fund Commissioner respectively. Superannuation Fund and Provident Fund are classified as a defined contribution plans as the Company has no further obligation beyond making the contributions. The Company's contributions to Defined Contribution plans are charged to the Profit and Loss Account as and when incurred.

b. Defined Benefit Plans

Funded Plan: The Company has a defined benefit plan for Post-employment benefit in the form of Gratuity, which is administered through Life Insurance Corporation (LIC).

Liability for the above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method.

c. Other Long-term Employee Benefit

Liability for Compensated Absences is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The Actuarial valuation method used for measuring the liability is the Projected Unit Credit method.

3 Termination benefits are recognized as an expense as and when incurred.

4 The Actuarial gains and losses arising during the year are recognized in the Profit and Loss Account.

h) Research and Development:

Capital expenditure on research and development is treated in the same way as expenditure on fixed assets. The revenue expenditure on research and development is charged to Profit & Loss Account.

i) Revenue Recognition Sale of goods

Sales are recognized, net of returns, on transfer of significant risks and reward of ownership to the customer, which generally concedes with the delivery of the goods to the customer. Sales includes excise duty but excludes value added tax and sales tax collected.

Rendering of services

Revenue from maintenance contracts are recognized pro-rata over the period of contract.

Revenue from other service contracts are recognized when services are rendered and related costs are incurred.

Other income

Interest income is accounted for on accrual basis. Dividend income is accounted for when the right to receive is established. Other items of income are recognized on accrual basis.

j) Borrowing Cost.

Interest on borrowings directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of the assets up to the date the asset is put to use. Other borrowing costs are charged to the Profit & Loss Account in the year in which they are incurred.

k) Foreign Currency Transactions.

Initial recognition

Transactions in foreign currency are accounted for at exchange rates prevailing on the date of, the transaction.

Measurement of foreign currency monetary items at Balance Sheet date

Foreign currency monetary items (other than derivative contracts) as at Balance Sheet date are restated at the year end rates.

Exchange difference

Exchange differences arising on settlement of monetary items are recognized as income or expense in the period in which they arise. Exchange difference arising on restatement of foreign currency monetary items as at the year end being difference between exchange rate prevailing on initial recognition/subsequent restatement on reporting date and as at current reporting date is adjusted in the Profit & Loss Statement for the respective year.

I) Earnings Per Share:

The earnings in ascertaining the Company's EPS comprises the net profit/loss after tax attributable to equity shareholders and includes the post tax effect of any extraordinary items. The number of shares used in computing Basic - EPS is the weighted average number of shares outstanding during the year. Diluted earnings per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extra ordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. Potential equity shares are deemd to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period.

m) Taxation:

Tax expense for the year, comprising, current tax and deferred tax are included in determining the net profit for the year. A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws. A provision is made for deferred tax for all timing differences arising between taxable incomes and accounting income at currently or substantively enacted tax rates. Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

n) Provisions and Contingent Liabilities:

Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated.

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

o) Impairment of Assets:

Impairment is ascertained at each balance sheet date in respect of cash generating units. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

p) Segment Reporting

Identification of a segment

The Company identifies primary segment based on the dominant source, nature of risk and returns associated.

Segment Accounting

The accounting policies applicable to the reportable segment are the same as those used in the preparation of the financial statements as set out above. Segment revenue and expenses include amounts which can be directly identifiable to the segment or allocable on a reasonable basis. Segment assets include all assets directly identifiable to the segment. Segment liabilities include all liabilities directly identifiable to the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis are included under unallocated revenue, unallocated expenses, unallocated assets and unallocated liabilities

q) Leases

Assets leased by the company in its capacity as a lessee where substantially all the risks and rewards of ownership vest in the company are classified as the finance leases. Such leases are capitalized at the inception of the lease at the lower of the fair value and the present value of the minimum lease payment and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year. Lease arrangements where the risks and rewards incidental to the ownership of an asset substantially vest with the lessor are recognized as operating leases. Lease rentals under operating leases are recognized in the Statement of Profit and Loss on a straight line basis.


Mar 31, 2011

A) Accounting Convention:

The Financial Statements have been prepared in accordance with the applicable Accounting Standards in India and in accordance with Historical Cost Convention except at revalued amounts for certain fixed assets.

b) Fixed Assets:

Fixed Assets are stated at cost of acquisition or construction (net of Cenvat credits) except, in case of certain fixed assets, which have been revalued, at revalued amount, less accumulated depreciation. All costs relating to the acquisition and installation of fixed asset are capitalised and include borrowing costs directly attributable to construction or acquisition of qualifying fixed assets.

c) Intangible Asset:

Cost relating to acquisition of Technical Know - How is capitalized and amortized on a straight line basis, over a period of five years from the year in which it is acquired and is ready for use.

d) Depreciation

Depreciation on fixed assets is charged on straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased / acquired during the year is charged from the date of addition / purchase of the asset. Similarly, depreciation on assets sold / discarded during the year is charged up on the sale / discard of the assets. Depreciation on addition on account of revaluation is recouped from Revaluation Reserve.

e) Investment

Long Term Investments are stated at cost. Provision is made for diminution in value, if the same is considered to be other than temporary in nature.

f) Inventories

Inventories are valued at lower of cost or net realizable value. Cost is arrived at on weighted average method. Scrap is valued at estimated realizable value. Excise duty payable on finished goods lying in the factory is provided for and included in closing stock of inventory.

g) Employee Benefits

1.Short term employee benefits :

All employee benefits falling due wholly within twelve months of rendering the services are classified as short term employee benefits, which include benefits like Salary, wages and Performance incentives, and are recognized as expenses in the period in which the employee renders the related service.

2. Post-employment Benefits

a. Defined Contribution Plans

The Company has Defined Contribution Plans for Post employment benefits in the form of Superannuation Fund and Provident Fund for all employees which are administered by Life Insurance Corporation (LIC) and Regional Provident Fund

Commissioner respectively. Superannuation Fund and Provident Fund are classified as a defined contribution plans as the Company has no further obligation beyond making the contributions. The Companys contributions to Defined Contribution plans are charged to the Profit and Loss Account as and when incurred.

b. Defined Benefit Plans

Funded Plan: The Company has a defined benefit plan for Post-employment benefit in the form of Gratuity, which is administered through Life Insurance Corporation (LIC).

Liability for the above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method.

c. Other Long-term Employee Benefit

Liability for Compensated Absences is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The Actuarial valuation method used for measuring the liability is the Projected Unit Credit method.

3.Termination benefits are recognised as an expense as and when incurred.

4.The Actuarial gains and losses arising during the year are recognised in the Profit and Loss Account.

h) Research and Development:

Capital expenditure on research and development is treated in the same way as expenditure on fixed assets. The revenue expenditure on research and development is charged to Profit & Loss Account.

i) Sales & Services:

Sales includes excise duty but excludes VAT/sales tax collected.

j) Borrowing Cost.

Interest on borrowings directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of the assets, up to the date the asset is put to use. Other borrowing costs are charged to the Profit & Loss Account in the year in which they are incurred.

k) Foreign Currency Transactions.

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. Foreign Currency Assets and Liabilities are stated at the exchange rates prevailing at the date of Balance Sheet and at forward contract rates wherever so covered. Exchange difference relating to Fixed Assets & any other exchange difference is dealt in the Profit & Loss Account.

l) Earnings Per Share:

The earnings in ascertaining the Companys EPS comprises the net profit/loss after tax attributable to equity shareholders and includes the post tax effect of any extraordinary items. The number of shares used in computing Basic - EPS is the weighted average number of shares outstanding during the year.

m) Taxation:

Tax expense for the year, comprising, current tax and deferred tax are included in determining the net profit for the year. A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tax laws. A provision is made for deferred tax for all timing differences arising between taxable incomes and

accounting income at currently or substantively enacted tax rates. Deferred tax assets are recognised only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

n) Provisions and Contingent Liabilities:

Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated.

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

o) Impairment of Assets:

Impairment is ascertained at each balance sheet date in respect of cash generating units. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.


Mar 31, 2010

A) Accounting Convention:

The Financial Statements have been prepared in accordance with the applicable Accounting Standards in India and in accordance with Historical Cost Convention except at revalued amounts for certain fixed assets.

b) Fixed Assets:

Fixed Assets are stated at cost of acquisition or construction (net of Cenvat credits) except, in case of certain fixed assets, which have been revalued, at revalued amount, less accumulated depreciation. All costs relating to the acquisition and installation of fixed asset are capitalised and include borrowing costs directly attributable to construction or acquisition of qualifying fixed assets.

c) Intangible Asset:

Cost relating to acquisition of Technical Know - How is capitalized and amortised on a straight line basis, over a period of five years from the year in which it is acquired and is ready for use.

d) Depreciation

Depreciation on fixed assets is charged on straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased / acquired during the year is charged from the date of addition / purchase of the asset. Similarly, depreciation on assets sold / discarded during the year is charged up on the sale / discard of the assets. Depreciation on addition on account of revaluation is recouped from Revaluation Reserve.

e) Investment

Long Term Investments are stated at cost. Provision is made for diminution in value, if the same is considered to be other than temporary in nature.

f) Inventories

Inventories are valued at lower of cost or net realizable value. Cost is arrived at on weighted average method. Scrap is valued at estimated realizable value. Excise duty payable on finished goods lying in the factory is provided for and included in closing stock of inventory.

g) Employee Benefits

1.Short term employee benefits :

All employee benefits falling due wholly within twelve months of rendering the services are classified as short term employee benefits, which include benefits like Salary, wages and Performance incentives, and are recognized as expenses in the period in which the employee renders the related service.

2.Post- employijqerrt Benefits

a.The fined Contribution Plans

The Company has Defined Contribution Plans for Post employment benefits in the form of Superannuation Fund and Provident Fund for all employees which are administered by Life Insurance Corporation (LIC) and Regional Provident Fund Commissioner respectively. Superannuation Fund and Provident Fund are classified as a defined contribution plans as the Company has no further obligation beyond making the contributions. The Companys contributions to Defined Contribution plans are charged to the Profit and Loss Account as and when incurred.

b. Defined Benefit Plans

Funded Plan: The Company has a defined benefit plan for Post-emptoyment benefit in the form of Gratuity, which is administered through Life Insurance Corporation (LIC).

Liability for the above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method.

c. Other Long-term Employee Benefit

Liability for Compensated Absences is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The Actuarial valuation method used for measuring the liability is the Projected Unit Credit method.

3.Termination benefits are recognised as an expense as and when incurred.

4.The Actuarial gains and losses arising during the year are recognised in the Profit and Loss Account.

h) Research and Development:

Capital expenditure on research and development is treated in the same way as expenditure on fixed assets. The revenue expenditure on research and development is charged to Profit & Loss Account.

i) Sales & Services:

Sales includes excise duty but excludes VAT/sales tax collected.

j) Borrowing Cost.

Interest on borrowings directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of the assets, up to the date the asset is put to use. Other borrowing costs are charged to the Profit & Loss Account in the year in which they are incurred.

k) Foreign Currency Transactions.

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. Foreign Currency Assets and Liabilities are stated at the exchange rates prevailing at the date of Balance Sheet and at forward contract rates wherever so covered. Exchange difference relating to Fixed Assets & any other exchange difference is dealt in the Profit & Loss Account.

i) Earnings Per Share:

The earnings in ascertaining the Companys EPS comprises the net profit/loss after tax attributable to equity shareholders and includes the post tax effect of any extraordinary items. The number of shares used in computing Basic - EPS is the weighted average number of shares outstanding during the year.

m) Taxation:

Tax expense for the year, comprtsing current tax and deferred tax are included in determining the net profit for the year: A provision is made for the current tax based on tax liability computed in acccordance with relevant tax rates and tax laws.

A provision is made for deferred tax for all timing differences arising between taxable incomes and accounting income at currently enacted tax rates. Deferred tax assets are recognised only if there is reasonable certainty that they will be realised and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

n) Provisions and Contingent Liabilities:

Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated.

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

o) Impairment of Assets:

Impairment is ascertained at each balance sheet date in respect of cash generating units. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

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