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Accounting Policies of Commercial Engineers & Body Builders Co Ltd. Company

Mar 31, 2015

(a) Basis of accounting and preparation of financial statements:

The financial statements of the Company have been prepared in accordance with the 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 1956Act"), as applicable.

(b) Use of Estimates :

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported period. Differences between the actual results and estimates are recognized in the year in which the results are known/materialize.

(c) Fixed Assets:

Tangible assets :

Fixed assets are stated at cost net of Cenvat. Costs includes all cost incurred to bring the assets to their working condition and location.

Intangible assets :

The Company capitalizes software and related implementation costs, where it is reasonably estimated that the software has an enduring useful life.

(d) Depreciation and Amortization :

i) Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

Depreciation on tangible fixed assets is provided over their useful life and in the manner prescribed in Schedule II to the Companies Act, 2013.

Leasehold land is amortized over the period of lease on pro rata basis.

Computer Software is amortized over the period of three years.

ii) Depreciation on assets acquired/purchased during the year is provided on pro-rata basis from the date of each addition.

iii) Assets having value of Rs. 5000/- or less are charged off fully in the year of purchase.

(e) Impairment of Assets :

At the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on 'Impairment of Assets'. Where the recoverable amount of any fixed asset is lower than its carrying amount, a provision for impairment loss on fixed assets is made for the difference.

(f) Revenue recognition :

Sales are stated net of returns and sales tax/value added tax. Excise duty related to sales turnover is presented as a reduction from gross sales. Revenue from sale of built bodies and other components are recognised when products are despatched and all significant risks and rewards of ownership of the products are transferred to the customers.

Revenue from service contract is recognized when the services are completed. Dividend from investments is recognized as and when a right to receive payment is established.

Revenue is recognised when no significant uncertainty as to its determination or realisation exists.

(g) Inventories :

Inventories are valued at lower of cost and net realisable value. The cost of inventories is arrived at on the following basis:

Raw materials : On FIFO basis (net of Cenvat)

Work-in-progress : On weighted average basis including Appropriate proportion of direct factory overheads.

Finished goods : On weighted average basis including appropriate proportion of direct factory overheads and Excise duty

Stores and spares : On FIFO basis.

(h) Foreign currency transactions:

a. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the time of the transactions.

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

c. Non-monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss account.

(i) Derivative Contracts :

Pursuant to the announcement on accounting for derivatives issued by the Institute of Chartered Accountants of India (ICAI), the Company in accordance with the principle of prudence as enunciated in Accounting Standard 1 on 'Disclosure of Accounting Policies' provides for losses in respect of all outstanding derivative contracts at the Balance Sheet date by marking them to market. Any gains arising on such mark to market are not recognized as income.

(j) Employee Benefits :

(a) Post-Employment Benefits and Other Long Term Benefit:

i) Defined contribution Plan :

Contributions under Defined Contribution Plans in the form of Provident Fund are recognized in the Statement of Profit and Loss Account in the period in which the employee has rendered the service.

ii) Defined Benefit Plan :

The Company's Liability towards Defined Benefit Plan in the form of Gratuity is funded through schemes administered by the Life Insurance Corporation of India (LIC). The liability determined on the basis of actuarial valuation being carried out at each Balance Sheet date using the Projected Unit Credit Method. The retirement benefit obligation recognized in the Balance Sheet represents the total of present value of the defined benefit obligation as reduced by unrecognized past service cost and the fair value of plan assets as at the balance sheet date. Any asset resulting from this calculation is restricted the present value of available refunds from the plan or reductions in future contributions to the plan.

Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss Account in the period of occurrence of such gains and losses. Past service cost is recognized as an expense on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits are already vested immediately following the introduction of, or changes to, a defined benefit plan, past service cost is recognized immediately.

(b) Short Term Employee Benefits :

Short-term employee benefits are recognized as expenses at the undiscounted amount in the Statement of Profit and Loss Account of the period in which the related services are rendered.

Leave encashment is provided for on the basis of actual costs the Company expects to pay for the compensated absences.

(k) Borrowing costs :

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

(l) Income tax :

a. Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to/ recovered from the tax authorities, using the applicable tax rates.

b. Deferred income tax reflect the current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realise the same.

c. Tax on distributed profits payable in accordance with the provisions of Section 115- O of the Income-tax Act,1961, is disclosed in accordance with the Guidance Note on Accounting for Corporate Dividend Tax issued by the Institute of Chartered Accountants of India (ICAI).

d. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

(m) Investments :

Investments classified as long-term (non-current) investments are stated at costs. Provision is made to recognize a diminution, other than temporary, in the value of such investments. Investments classified as current investments are stated at lower of cost and fair value.

(n) Operating Leases

Assets taken on Lease under which all significant risks and rewards of ownership are effectively retained by the lesser are classified as Operating Leases. Lease payments under Operating Leases are recognized as expenses as incurred in accordance with the respective Lease Agreements.

(o) Provisions and contingencies :

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.




Mar 31, 2014

(a) Basis of accounting and preparation of financial statements:

The financial statements have been prepared to comply with accounting principles generally accepted in India, the Accounting Standards (AS) notified under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act, 1956.

(b) Use of Estimates:

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported period. Differences between the actual results and estimates are recognized in the year in which the results are known/materialize.

(c) Fixed Assets:

Tangible assets:

Fixed assets are stated at cost net of Cenvat. Costs includes all cost incurred to bring the assets to their working condition and location.

Intangible assets:

The Company capitalizes software and related implementation costs, where it is reasonably estimated that the software has an enduring useful life.

(d) Depreciation and Amortization:

i) Depreciation is provided using the written-down method based on the management''s estimate of useful life of the assets acquired prior to 1st January, 2011. The depreciation rates for such assets are as under:

Assets Depreciation rate

Factory Building 10%

Non-Factory Building 10%

Residential Flat 5%

Plant and Machinery 15% - 100%

Office Equipment 15%

Computers 60%

Vehicles 25.89%

Electrical Installations 20%

Furniture and Fixtures 18.10%

Depreciation on assets acquired/purchased after 1st January, 2011 is provided using the straight line method based on the management''s estimate of useful life of the assets, which is as under:

Assets Estimated useful life

Factory Building 25 Years

Non-Factory Building 40 Years

Residential Flat 40 Years

Plant and Machinery 10 Years

Office Equipment 4 Years

Computers 3 years

Vehicles 5 Years

Electrical Installations 5 Years

Furniture and Fixtures 5 Years

ii) Leasehold land is amortized over the period of lease on pro rata basis.

iii) Depreciation on assets acquired/purchased during the year is provided on pro-rata basis from the date of each addition.

iv) Assets having value of Rs. 5000/- or less are charged off fully in the year of purchase.

v) Computer Software is amortized over the period of three years.

(e) Impairment of Assets:

At the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on ''Impairment of Assets''. Where the recoverable amount of any fixed asset is lower than its carrying amount, a provision for impairment loss on fixed assets is made for the difference.

(f) Revenue recognition:

Sales are stated net of returns and sales tax/value added tax. Excise duty related to sales turnover is presented as a reduction from gross sales. Revenue from sale of built bodies and other components are recognised when products are despatched and all significant risks and rewards of ownership of the products are transferred to the customers.

Revenue from service contract is recognized when the services are completed.

Dividend from investments is recognized as and when a right to receive payment is established.

Revenue is recognized when no significant uncertainty as to its determination or realization exists.

(g) Inventories:

Inventories are valued at lower of cost and net realisable value. The cost of inventories is arrived at on the following basis:

Raw materials : On FIFO basis (net of Cenvat)

Work-in-progress : On weighted average basis including Appropriate proportion of direct factory overheads

Finished goods : On weighted average basis including appropriate proportion of direct factory overheads and Excise duty

Stores and spares : On FIFO basis

(h) Foreign currency transactions:

a. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the time of the transactions.

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

c. Non-monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account.

(i) Derivative Contracts:

Pursuant to the announcement on accounting for derivatives issued by the Institute of Chartered Accountants of India (ICAI), the Company in accordance with the principle of prudence as enunciated in Accounting Standard 1 on ''Disclosure of Accounting Policies'' provides for losses in respect of all outstanding derivative contracts at the Balance Sheet date by marking them to market. Any gains arising on such mark to market are not recognized as income.

(j) Employee Benefits:

(a) Post-Employment Benefits and Other Long Term Benefit:

i) Defined contribution Plan:

Contributions under Defined Contribution Plans in the form of Provident Fund are recognized in the Statement of Profit and Loss Account in the period in which the employee has rendered the service.

ii) Defined Benefit Plan :

The Company''s Liability towards Defined Benefit Plan in the form of Gratuity is funded through schemes administered by the Life Insurance Corporation of India (LIC). The liability determined on the basis of actuarial valuation being carried out at each Balance Sheet date using the Projected Unit Credit Method. The retirement benefit obligation recognized in the Balance Sheet represents the total of present value of the defined benefit obligation as reduced by unrecognized past service cost and the fair value of plan assets as at the balance sheet date. Any asset resulting from this calculation is restricted the present value of available refunds from the plan or reductions in future contributions to the plan.

Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss Account in the period of occurrence of such gains and losses. Past service cost is recognized as an expense on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits are already vested immediately following the introduction of, or changes to, a defined benefit plan, past service cost is recognized immediately.

(b) Short Term Employee Benefits:

Short-term employee benefits are recognized as expenses at the undiscounted amount in the Statement of Profit and Loss Account of the period in which the related services are rendered.

Leave encashment is provided for on the basis of actual costs the Company expects to pay for the compensated absences.

(k) Borrowing costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

(l) Income tax:

a. Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to/ recovered from the tax authorities, using the applicable tax rates.

b. Deferred income tax reflect the current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same

c. Tax on distributed profits payable in accordance with the provisions of Section 115-O of the Income-tax Act,1961, is disclosed in accordance with the Guidance Note on Accounting for Corporate Dividend Tax issued by the Institute of Chartered Accountants of India (ICAI).

d. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

(m) Investments:

Investments classified as long-term (non-current) investments are stated at costs. Provision is made to recognize a diminution, other than temporary, in the value of such investments. Investments classified as current investments are stated at lower of cost and fair value.

(n) Operating Leases

Assets taken on Lease under which all significant risks and rewards of ownership are effectively retained by the lesser are classified as Operating Leases. Lease payments under Operating Leases are recognized as expenses as incurred in accordance with the respective Lease Agreements.

(o) Provisions and contingencies:

Provision is recognized in the accounts when there is a present obligation as a result of past event/s and it is probable that an outflow of resources will be required to settle the obligation. Contingent liabilities, if any, are disclosed in the notes to the financial statements.


Mar 31, 2013

Notes forming part of the financial statements

(j) Employee Benefits :

(a) Post-Employment Benefits and Other Long Term Benefit:

(i) Defined contribution Plan:

Contributions under Defined Contribution Plans in the form of Provident Fund are recognized in the Statement of Profit and Loss Account in the period in which the employee has rendered the service.

(ii) Defined Benefit Plan :

The Company''s Liability towards Defined Benefit Plan in the form of Gratuity is funded through schemes administered by the Life Insurance Corporation of India (LIC). The liability determined on the basis of actuarial valuation being carried out at each Balance Sheet date using the Projected Unit Credit Method. The retirement benefit obligation recognised in the Balance Sheet represents the total of present value of the defined benefit obligation as reduced by unrecognised past service cost and the fair value of plan assets as at the balance sheet date. Any asset resulting from this calculation is restricted the present value of available refunds from the plan or reductions in future contributions to the plan Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss Account in the period of occurrence of such gains and losses. Past service cost is recognized as an expense on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits are already vested immediately following the introduction of, or changes to, a defined benefit plan, past service cost is recognised immediately

(b) Short Term Employee Benefits:

Short-term employee benefits are recognized as expenses at the undiscounted amount in the Statement of Profit and Loss Account of the period in which the related services are rendered.

Leave encashment is provided for on the basis of actual costs the Company expects to pay for the compensated absences.

(k) Borrowing costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

(I) Income tax:

a .Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to/ recovered from the tax authorities, using the applicable tax rates.

b. Deferred income tax reflect the current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax assets are recognized only to the extent that there is reasonable certaintythat sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realise the same.

Commercial Engineers & Body Builders Co Limited

Notes forming part of the financial statements

c. Tax on distributed profits payable in accordance with the provisions of Section 115-O of the Income-tax Act,1961, is disclosed in accordance with the Guidance Note on Accounting for Corporate Dividend Tax issued by the Institute of Chartered Accountants of India (ICAI).

(m) Investments:

Investments classified as long term (non-current) investments are stated at costs. Provision is made to recognize a diminution, other than temporary, in the value of such investments. Investments classified as current investments are stated at lower of cost and fair value.

(n) Operating Leases

Assets taken on Lease under which all significant risks and rewards of ownership are effectively retained by the lesser are classified as Operating Leases. Lease payments under Operating Leases are recognized as expenses as incurred in accordance with the respective Lease Agreements.

(o) Provisions and contingencies:

Provision is recognized in the accounts when there is a present obligation as a result of past event/s and it is probable that an outflow of resources will be required to settle the obligation. Contingent liabilities, if any, are disclosed in the notes to the financial statements.


Mar 31, 2012

(a) Basis of accounting and preparation of financial statements:

The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles in India and the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006. The financial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act, 1956.

(b) use of Estimates:

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported period. Differences between the actual results and estimates are recognized in the year in which the results are known/materialized.

(c) Fixed Assets:

Tangible assets:

Fixed assets are stated at cost net of Cenvat. Costs includes all cost incurred to bring the assets to their working condition and location.

Intangible assets:

The Company capitalizes software and related implementation costs, where it is reasonably estimated that the software has an enduring useful life.

Depreciation on assets acquired/purchased after 1st January, 2011 is provided using the straight line method based on the management's estimate of useful life of the assets, which is as under:

Depreciation on assets acquired/purchased during the year is provided on pro-rata basis from the date of each addition.

iv) Assets having value of Rs. 5000/- or less are charged off fully in the year of purchase.

v) Computer Software is amortized over the period of three years.

(e) Impairment of Assets:

At the end of each year, the company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on ''Impairment of Assets''. Where the recoverable amount of any fixed asset is lower than its carrying amount, a provision for impairment loss on fixed assets is made for the difference.

(f) Revenue recognition:

Revenue from sale of built bodies is recognised when products are despatched and all significant risks and rewards of ownership of the products are transferred to the customers.

Revenue from service contract is recognized when the services are completed.

Dividend from investments is recognized as and when a right to receive payment is established.

(g) Inventories:

Inventories are valued at lower of cost and net realisable value. The cost of inventories is arrived at on the following basis:

Raw materials : On FIFO basis (net of Cenvat)

Work-in-progress : On weighted average basis including direct factory overheads

Finished goods : On weighted average basis, attributable overheads and Excise duty

Stores and spares : On FIFO basis

(h) Foreign currency transactions:

a. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the time of the transactions.

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

c. Non-monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and loss account.

(i) Derivative Contracts:

Pursuant to the announcement on accounting for derivatives issued by the Institute of Chartered Accountants of India (ICAI), the Company in accordance with the principle of prudence as enunciated in Accounting Standard 1 on 'Disclosure of Accounting Policies' provides for losses in respect of all outstanding derivative contracts at the Balance Sheet date by marking them to market. Any gains arising on such mark to market are not recognized as income.

(j) Employee Benefits:

(a) Post-Employment Benefits and Other Long Term Benefit:

i) defined contribution Plan:

Contributions under Defined Contribution Plans in the form of Provident Fund are recognized in the

Statement of Profit and Loss Account in the period in which the employee has rendered the service.

ii) Defined Benefit Plan :

The Company's Liability towards Defined Benefit Plan in the form of Gratuity is funded through schemes administered by the Life Insurance Corporation of India (LIC). The liability determined on the basis of actuarial valuation being carried out at each Balance Sheet date using the Projected unit Credit Method. The retirement benefit obligation recognised in the Balance Sheet represents the total of present value of the Defined benefit obligation as reduced by unrecognised past service cost and the fair value of plan assets as at the balance sheet date. Any asset resulting from this calculation is restricted the present value of available refunds from the plan or reductions in future contributions to the plan.

Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss Account in the period of occurrence of such gains and losses. Past service cost is recognized as an expense on a straight- line basis over the average period until the benefits become vested. To the extent that the benefits are already vested immediately following the introduction of, or changes to, a Defined benefit plan, past service cost is recognised immediately

(b) Short Term Employee Benefits:

Short-term employee benefits are recognized as expenses at the undiscounted amount in the Statement of Profit and Loss Account of the period in which the related services are rendered.

Leave encashment is provided for on the basis of actual costs the Company expects to pay for the compensated absences.

(k) Borrowing costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

(l) Income tax:

a. Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to/ recovered from the tax authorities, using the applicable tax rates.

b. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/ period. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realise the same

(m) Investments:

Investments classified as long term (non-current) investments are stated at costs. Provision is made to recognize a diminution, other than temporary, in the value of such investments. Investments classified as current investments are stated at lower of cost and fair value.

(n) Operating Leases

Assets taken on Lease under which all significant risks and rewards of ownership are effectively retained by the lesser are classified as Operating Leases. Lease payments under Operating Leases are recognized as expenses as incurred in accordance with the respective Lease Agreements.

(o) Contingent Liabilities:

These, if any, are disclosed in the notes. Provision is made in the accounts if it becomes probable that any outflow of resources embodying economic benefits will be required to settle the obligation.

Nature of Security

a) Term Loan is secured by: -

Primary Security- Equitable Mortgage of land admeasuring 8062 sq. ft. bearing plot no 2(new), 14(old) part of banglow No 37D block No: 36 situated at Civil Line Ward, Civil Station, Pachpedi, jabalpur.

Collateral Security - Personal Guarantee of two directors of the company and their relatives.

b) Vehicle Loans are secured by: - Hypothecation of vehicles.

c) ECB Loan is secured by: -

Primary Security: - First charge on the entire fixed assets of the company, except on the Factory Land and Building situated at Richhai, jabalpur.

Collateral Security: - Pari Passu second charge on the entire current assets of the company.

Terms of Repayment

a) Term Loan: -

Term Loan is repayable in 84 monthly equal installments commencing 30/04/2006.

b) Vehicle Loans: -

Vehicle Loan from State Bank of India is repayable in 36 monthly equal installments from the date of disbursement i.e. 29/07/2010.

Vehicle Loan from Tata Capital Limited is repayable in 36 monthly equal installments from the date of disbursement i.e. 25/03/2010.

c) ECB Loan: -

Repayable in quarterly 20 equal installments starting from 21st month from the date of 1st disbursement i.e 17/02/2012.

Nature of Security

Cash Credit Facilities, Working Capital Loans and Short Term Loans are secured by either one or more of the following as per terms of Arrangement with respective banks:

Primary Security:

First charge on Pari -passu basis on entire current assets of the company.

Collateral Security:

a. First Pari-Passu charge by way of extension of Equitable Mortgage of factory land and building and hypothecation of plant and machineries situated at Plot Nos. 21, 22, 33 and 34 at Industrial Estate, Richhai, jabalpur

b. First Pasi-Passu charge on movable fixed assets of the Company

c. Equitable Mortgage of fat no. 14,5,2,3,6,7,9,10,8 Mouza Hathital, Gorakhpur, jabalpur.

d. Equitable Mortgage of Property situated at Block No.36, Plot No.2/29, Pachpedi, South Civil Lines, jabalpur standing in the name of Shri Arun Gupta

e. First and exclusive charge on the following Fixed assets of the Company situated at lease hold / free hold land by way of Hypothecation of :-

- Plot Nos. (Nos. to be allotted) at Industrial Estate, Richhai, area- 105000 sq.feet, jabalpur (lease hold)

- Plot No.133/2 (New no.169) at udaipura, area- 15.92 acres, Dist: - Mandla.(free hold)

- Sector -3, Plot no. 690-693, 751-756 at MPAKVN Growth Centre, Phase-III, area 8.67 acres, Pithampur, Distt-Dhar. (lease hold)

f. First and exclusive charge on Fixed Assets of the propsed Railway Project of the Company at Imlai, jabalpur.

g. Personal guarantees of two directors and their relatives.

h. Corporate Guarantee of group concerns


Mar 31, 2011

(a) Basis for preparation of accounts:

The accompanying financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles in India and the Accounting Standards notified underthe Companies (Accounting Standards) Rules, 2006.

(b) Use of Estimates:

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported period. Differences between the actual results and estimates are recognised in the year in which the results are known/materialised.

(c) Fixed Assets:

Fixed assets are stated at cost net of Cenvat. Costs includes all cost incurred to bring the assets to their working condition and location.

The company capitalises software and related implementation costs, where it is reasonably estimated that the software has an enduring useful life.

(d) Depreciation and amortisation: (Refer Note No. 5 below)

i) Depreciation is provided using the written-down method based on the management's estimate of useful life of the assets acquired prior to 1st January, 2011. The depreciation rates for such assets are as under:

Assets Depreciation rate

Factory Building 10%

Non-Factory Building 10%

Residential Flat 5%

Plant and Machinery 15% -100%

Office Equipments 15%

Computers 60%

Vehicles 25.89%

Electrical Installations 20%

Furniture and Fixtures 18.10%

Depreciation on assets acquired/purchased after 1 st January, 2011 is provided using the straight line method based on the management's estimate of useful life of the assets, which is as under:

Assets Estimated useful life

Factory Building 25 Years

Non-Factory Building 40 Years

Residential Flat 40 Years

Plant and Machinery 10 Years

Office Equipments 4 Years

Computers 3 years

Vehicles 5 Years

Electrical Installations 5 Years

Furniture and Fixtures 5Years

ii) Leasehold land is amortised over the period of lease on pro rata basis.

iii) Depreciation on assets acquired/purchased during the year is provided on pro-rata basis from the date of each addition.

iv) Assets having value ofRs. 5,000/-or less are charged off fully in the year of purchase.

v) Computer Software is amortised over the period of three years.

(e) Impairment of Assets:

At the end of each year, the company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on "Impairment of Assets". Where the recoverable amount of any fixed asset is lower than its carrying amount, a provision for impairment loss on fixed assets is made for the difference.

(f) Revenue recognition:

Revenue from sale of built bodies is recognised when products are despatched and all significant risks and rewards of ownership of the products are transferred to the customers.

Revenue from service contract is recognised when the services are completed.

Dividend from investments is recognised as and when a right to receive payment is established.

(g) Inventories:

Inventories are valued at lower of cost and net realisable value. The cost of inventories is arrived at on the following basis:

Raw materials : On FIFO basis (net of Cenvat)

Work-in-progress : On weighted average basis including direct factory overheads

Finished goods : On weighted average basis, attributable overheads and Excise duty

Stores and spares : On FIFO basis

(h) Foreign currency transactions:

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Monetary items are translated at the year-end rates. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement as also on translation of monetary items at the end of the year is recognised as income or expense, as the case may be.

(i) Employee Benefits:

(a) Post-Employment Benefits and Other Long Term Benefit:

i) Defined contribution Plan:

Contributions under Defined Contribution Plans in the form of Provident Fund are recognised in the Profit and Loss Account in the period in which the employee has rendered the service.

ii) Defined Benefit Plan :

The Company's Liability towards Defined Benefit Plan in the form of Gratuity is funded through schemes administered by the Life Insurance Corporation of India (LIC). The liability determined on the basis of actuarial valuation being carried out at each Balance Sheet date using the Projected Unit Credit Method. The retirement benefit obligation recognised in the Balance Sheet represents the total of present value of the defined benefit obligation as reduced by unrecognised past service cost and the fair value of plan assets as at the balance sheet date. Any asset resulting from this calculation is restricted to the present value of available refunds from the plan or reductions in future contributions to the plan.

Actuarial gains and losses are recognised immediately in the Profit and Loss Account in the period of occurrence of such gains and losses. Past service cost is recognised as an expense on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits are already vested immediately following the introduction of, or changes to, a defined benefit plan, past service cost is recognised immediately

(b) Short Term Employee Benefits:

Short-term employee benefits are recognised as expenses at the undiscounted amount in the Profit and Loss Account of the period in which the related services are rendered.

Leave encashment is provided for on the basis of actual costs the Company expects to pay for the compensated absences.

(j) Borrowing costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

(k) Income tax:

a. Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to/ recovered from the tax authorities, using the applicable tax rates.

b. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/ period. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognised if there is virtual certainty that sufficient future taxable income will be available to realise the same

(I) Investments:

Investments classified as long-term investments are stated at costs. Provision is made to recognise a diminution, other than temporary, in the value of such investments. Investments classified as current investments are stated at lower of cost and fair value.

(m) Operating Leases

Assets taken on Lease under which all significant risks and rewards of ownership are effectively retained by the lesser are classified as Operating Leases. Lease payments under Operating Leases are recognised as expenses as incurred in accordance with the respective Lease Agreements.

(n) Contingent Liabilities:

These, if any, are disclosed in the notes and accounts. Provision is made in the accounts if it becomes probable that any outflow of resources embodying economic benefits will be required to settle the obligation.

 
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