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Accounting Policies of Delton Cables Ltd. Company

Mar 31, 2015

A. Uses of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

b. Fixed Assets

Fixed assets, except land, building,Computers and Plant and Machinery which were revalued on 30th June 1985, are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

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

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

c. Intangible Assets

Intangible 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.

Intangible assets are amortized on a straight line basis over the estimated useful economic life. The company uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years in case of Goodwill and trademark and four years in case of software from the date when the asset is available for use.

The amortization period is reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly.

A summary of amortization policies applied to the company's intangible assets is as below:

Goodwill 10%

Brands/trademarks 10%

Computer software 25%

d. Depreciation on tangible fixed assets

Depreciation on tangible assets is provided on the straight-line method over the useful lives of assets estimated by the Management. Depreciation for assets purchased / sold during a period is proportionately charged. The Management estimates the useful lives for the tangible fixed assets as follows:

Buildings 30 years

Plant and machinery 15 years

Office equipment 5 years

Computer equipment 3-6 years

Furniture and fixtures 10 years

Electrical installations 10 years

Vehicles 8-10 years

Till March 31,2014, in accordance with the option given in the Guidance Note on Accounting for Depreciation in Companies, the Company recoups additional depreciation out of Revaluation reserve. However during the year, as per Schedule II of the Companies Act,2013 read with para 36 of "Application Guide on the Provisions of Schedule II to the Companies Act,2013 issued by Institute of Chartered Accountants of India, the depreciation on revalued amount has been charged to statement of the profit and loss and the amount of depreciation which relates to the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on its original cost has been transferred from the revaluation reserve to the general reserves of the company.

Depreciation and amortization methods, useful lives and residual values are reviewed periodically, including at each financial year end (Refer Note 12)

e. Inventories

Raw Materials, Stores & Spare Parts, [except store & spares items costing less than Rs.100/- per unit which are charged to Profit and Loss Account in the year of purchase], Loose tools and Goods in transit are valued at lower of cost or net realisable value. However strategic items of store & spares costing less than Rs. 100/- per unit has been valued and included in the value of stocks at lower of cost or net realisable value. Cost includes cost of purchase, non-refundable duties & taxes and all other costs incurred in bringing the inventories to their present location. Cost is determined on Moving Weighted Average basis.

Work-in-progress and finished Goods are valued at lower of cost or net relisable value. Cost of finished goods includes related overheads and excise duty payable on such goods.

Scrap is valued at net realisable value.

Other inventories are valued at lower of net realisable value or cost(*).

(*) Cost includes an appropriate portion of allocable overheads where applicable & cost of material is arrived at on Moving Weighted Average basis.

Net Realisable value is the estimated selling price in the ordinary course of business,less estimated costs of completion and estimated costs necessary to make the sale.

f. Revenue Recognition

Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, depending upon the terms of Contract with the customer. The company collects sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year. Sale is recognized in the books net off trade discount. Export sale is recognised on the basis of date of Airway Bill/Bill of Lading.

Interest

Interest is recognized on time proportion basis.

Dividend income

Dividend Income on Investment is recognized when right to receive the payment is established.

Export incentives

Export incentives are recognised on accrual basis.

g. Employees Benefits

Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit or loss of the year in which related service is rendered.

Retirement benefit in the form of provident fund,superannuation fund and Employees state insurance scheme are defined contribution schemes. The contributions to the provident fund, superannuation fund and Employees state insurance are charged to the statement of profit and loss for the year when the contributions are due. The company has no obligation, other than the contribution payable to these funds.

The company has defined benefit plans for its employees, ie. gratuity fund. The costs of providing benefits under this plan is determined on the basis of actuarial valuation at each year-end. Separate actuarial valuation is carried out for each plan using the projected unit credit method. Actuarial gains and losses for defined benefit plans is recognized in full in the period in which they occur in the statement of profit and loss.

The company treats accumulated leave as both long-term and short term employee benefit for measurement purposes. Such long-term and short term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred.

h. Foreign Currency Transactions

Initial Recognition : Transactions denominated in Foreign Currencies are recorded at the exchange rate prevailing at the time of the transaction.

Conversion : Items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling on the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract.

Exchange differences : Any income or expense on account of exchange difference either on settlement or on translation is recognised in the statement of profit and loss.

Forward Contracts: In case of forward exchange contracts, the premium or discount arising at the inception of such contracts, is amortized as income or expense over the life of the contract as well as exchange difference on such contracts i.e. difference between the exchange rates at the reporting/settlement date and the exchange rate on the date of inception of contract / the reporting date, is recognized as income / expense for the period.

i. Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

j. Research and Development Cost (other than capital cost)

Research and Developments expenditures are charged to revenue in the year in which they are incurred.

k. Taxes on Income

Tax expense comprises current and deferred tax.

Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred income taxes (asset/ liability) reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

l. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

m. Excise Duty

Excise Duty is accounted on the basis of, both, payments made in respect of goods cleared as also provision made for goods lying in bonded warehouses.

n. Purchase

Purchases are recognised in the books of account at the time of receipt of material at the factory gate.

o. Borrowing Costs

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

p. Provision, Contingent Liabilities and Contingent Assets

Provisions are recognized in the accounts in respect of present probable obligations arising as a result of past events and it is probable that there will be an outflow of resources, 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.

Contingent Assets are neither recognized nor disclosed in the financial statements.

q. Leases

Operating Lease -Lease arrangements where the risks and rewards incident to the ownership of assets substantially vests with the lessor, are recognized as operating leases Lease rentals in respect of such assets taken are charged to statement of profit & Loss as per the terms of the lease agreement.

Finance Lease - Lease arrangements where all risks and rewards incident to the ownership of assets substantially transferred to the lessee. The lower of the fair value of the assets and present value of the minimum lease rentals is capitalised as fixed assets with corresponding amount shown as lease liability. The principal component in the lease rental is adjusted against the lease liability and the interest component is charged to profit and loss account.

r. Segment Reporting

Identification of segments:

The Company's operating business are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the company operate.

Unallocated items:

Unallocated items include general corporate income and expense items which are not allocated to any business segment.

s. Cash Flow

Cash Flow Statement has been prepared as per the indirect method prescribed in the Accounting standard '3' notified by Companies (Accounting Standard) Rules,2006.


Mar 31, 2014

A. Uses of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

b. Fixed Assets

Fixed assets, except land, building,Computers and Plant and Machinery which were revalued on 30th June 1985, are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

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

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

c. Intangible Assets

Intangible 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.

Intangible assets are amortized on a straight line basis over the estimated useful economic life. The company uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years in case of Goodwill and trademark and four years in case of software from the date when the asset is available for use.

The amortization period is reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly.

A summary of amortization policies applied to the company's intangible assets is as

Rates(SLM)

Goodwill 10%

Brands/trademarks 10%

Computer software 25%

d. Depreciation on tangible fixed assets

Depreciation on assets is provided at the rates and in the manner as specified in Schedule XIV of the Companies Act, 1956 using the straight line method.

Depreciation on assets costing Rs. 5,000 or less have been charged fully in the year of purchase.

Additions, consequent to the revaluation are depreciated with reference to the remaining useful life of each assets. Depreciation on revalued assets are recouped against transfer of equivalent amount from revaluation reserve to Profit & Loss Account.

Assets purchased for Research & Development are fully depreciated in the year of purchase.

The company has used the following rates to provide depreciation on its fixed assets:

Rates(SLM)

Factory Building 3.34%

Plant and equipment

-Double Shift 7.42%

-Single Shift 4.75%

Furniture and fixtures 6.33%

Vehicles 9.50%

Office Equipments 4.75%

Others-Computers 16.21%

e. Inventories

Raw Materials, Stores & Spare Parts, [except store & spares items costing less than Rs. 100/- per unit which are charged to Profit and Loss Account in the year of purchase], Loose tools and Goods in transit are valued at lower of cost or net realisable value. However strategic items of store & spares costing less than Rs. 100/- per unit has been valued and included in the value of stocks at lower of cost or net realisable value. Cost includes cost of purchase, non-refundable duties & taxes and all other costs incurred in bringing the inventories to their present location. Cost is determined on Moving Weighted Average basis.

Work-in-progress and finished Goods are valued at lower of cost or net relisable value. Cost of finished goods includes related overheads and excise duty payable on such goods.

Scrap is valued at net realisable value.

Other inventories are valued at lower of net realisable value or cost(*).

(*) Cost includes an appropriate portion of allocable overheads where applicable & cost of material is arrived at on Moving Weighted Average basis.

Net Realisable value is the estimated selling price in the ordinary course of business,less estimated costs of completion and estimated costs necessary to make the sale.

f. Revenue Recognition

Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, depending upon the terms of Contract with the customer. The company collects sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year. Sale is recognized in the books net off trade discount.

Export sale is recognised on the basis of date of Airway Bill/Bill of Lading.

Interest

Interest is recognized on time proportion basis.

Dividend income

Dividend Income on Investment is recognized when right to receive the payment is established.

Export incentives

Export incentives are recognised on accrual basis.

g. Employees Benefits

Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit or loss of the year in which related service is rendered.

Retirement benefit in the form of provident fund,superannuation fund and Employees state insurance scheme are defined contribution schemes. The contributions to the provident fund, superannuation fund and Employees state insurance are charged to the statement of profit and loss for the year when the contributions are due. The company has no obligation, other than the contribution payable to these funds.

The company has defined benefit plans for its employees, ie. gratuity fund. The costs of providing benefits under this plan is determined on the basis of actuarial valuation at each year-end. Separate actuarial valuation is carried out for each plan using the projected unit credit method. Actuarial gains and losses for defined benefit plans is recognized in full in the period in which they occur in the statement of profit and loss.

The company treats accumulated leave as both long-term and short term employee benefit for measurement purposes. Such long-term and short term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred.

h. Foreign Currency Transactions

Initial Recognition : Transactions denominated in Foreign Currencies are recorded at the exchange rate prevailing at the time of the transaction.

Conversion : Items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling on the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract.

Exchange differences : Any income or expense on account of exchange difference either on settlement or on translation is recognised in the statement of profit and loss.

Forward Contracts: In case of forward exchange contracts, the premium or discount arising at the inception of such contracts, is amortized as income or expense over the life of the contract as well as exchange difference on such contracts i.e. difference between the exchange rates at the reporting/settlement date and the exchange rate on the date of inception of contract / the reporting date, is recognized as income / expense for the period.

j. Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

i. Research and Development Cost (other than capital cost)

Research and Developments expenditures are charged to revenue in the year in which they are incurred.

j. Taxes on Income

Tax expense comprises current and deferred tax.

Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income- tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred income taxes (asset/ liability) reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

k. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

l. Excise Duty

Excise Duty is accounted on the basis of, both, payments made in respect of goods cleared as also provision made for goods lying in bonded warehouses.

m. Purchase

Purchases are recognised in the books of account at the time of receipt of material at the factory gate.

n. Borrowing Costs

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

o. Provision, Contingent Liabilities and Contingent Assets

Provisions are recognized in the accounts in respect of present probable obligations arising as a result of past events and it is probable that there will be an outflow of resources, 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.

Contingent Assets are neither recognized nor disclosed in the financial statements.

p. Leases

Operating Lease -Lease arrangements where the risks and rewards incident to the ownership of assets substantially vests with the lessor, are recognized as operating leases Lease rentals in respect of such assets taken are charged to statement of profit & Loss as per the terms of the lease agreement.

Finance Lease - Lease arrangements where all risks and rewards incident to the ownership of assets substantially transferred to the lessee. The lower of the fair value of the assets and present value of the minimum lease rentals is capitalised as fixed assets with corresponding amount shown as lease liability. The principal component in the lease rental is adjusted against the lease liability and the interest component is charged to profit and loss account.

q. Segment Reporting

Identification of segments:

The Company's operating business are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the company operate.

Unallocated items:

Unallocated items include general corporate income and expense items which are not allocated to any business segment.

r. Cash Flow

Cash Flow Statement has been prepared as per the indirect method prescribed in the Accounting standard '3' notified by Companies (Accounting Standard) Rules,2006.


Mar 31, 2011

1 Basis of Preparation of Financial Statements:

The Financial Statements have been prepared on accrual basis under historical cost convention except for certain fixed assets which have been revalued. These statements are prepared in accordance with the generally accepted accounting principles, Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions thereof.

2 Uses of Estimates

The financial statements are prepared using estimates and assumptions that effect the reported balances of the assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of balance sheet and the profit and loss account during the year. Contingencies are recorded when it is probable that a liability has been incurred and amount can be reasonably estimated. Actual results could differ from these estimates. The actual results are recognized in the year in which the results are known/materialised.

3 Fixed Assets

Fixed Assets are stated at cost except Land, Building,Computers and Plant & Machinery which were revalued on 30th June 1985 and hence stated at revalued cost. Cost is net of recoverable taxes and inclusive of freight, duties, taxes and other directly attributable costs incurred to bring the assets to their working condition for intended use.

4 Intangible Assets

Intangible Assets are stated at cost of acquisition less accumulated amortisation. Software having future economic benefits are considered as intangible assets and amortised over a period of 4 years. Goodwill and Trade mark are amortised over a period of 10 year.

5 Depreciation

a) Depreciation on assets is provided at the rates and in the manner as specified in Schedule XIV of the Companies Act, 1956 using the straight line method.

b) Depreciation on assets costing Rs. 5,000 or less have been charged fully in the year of purchase.

c) Additions, consequent to the revaluation are depreciated with reference to the remaining useful life of each assets. Depreciation on revalued assets are recouped against transfer of equivalent amount from revaluation reserve to Profit & Loss Account.

d) Assets purchased for Research & Development are fully depreciated in the year of purchase.

6 Inventories

a) Raw Materials, Stores & Spare Parts, [except store & spares items costing less than Rs. 100/- per unit which are charged to Profit and Loss Account in the year of purchase], Loose tools and Goods in transit are valued at lower of cost or net realisable value. However strategic items of store & spares costing less than Rs. 100/- per unit has been valued and included in the value of stocks at lower of cost or net realisable value.

Cost includes cost of purchase, non-refundable duties & taxes and all other costs incurred in bringing the inventories to their present location. Cost is determined on First In First Out (FIFO) basis.

b) Scrap is valued at net realisable value.

c) Finished Goods are valued at lower of cost or net relisable value. Cost (*) includes related overheads and excise duty payable on such goods.

d) Other inventories are valued at lower of net realisable value or cost(*).

(*) Cost includes an appropriate portion of allocable overheads where applicable & cost of material is arrived at on FIFO basis.

7 Revenue Recognition

a) Domestic sales are recognised at the time of despatch of goods to the customers and export sale is recognized on the basis of date of Airway Bill/Bill of Lading.

b) Sales are shown inclusive of excise duty and net of sales return, sales tax and trade discounts.

c) Dividend Income on Investment is recognized when right to receive the payment is established.

d) Interest is recognized on time proportion basis.

e) Export incentives are recognised on accrual basis.

8 Employees Benefits

a) Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit or loss account of the year in which related service is rendered.

b) The company has defined contribution plans for the post employment benefits' namely provident fund,superannuation fund and employee state insurance scheme. The company contributions in the above plans are charged to revenue every year.

c) The company has defined benefit plans namely leave encashment /compensated absence and gratuity for employees. Gratuity liability is a defined benefit obligation and is provided for on the basis of the actuarial valuation made at the end of each year. However, the company through its trust has taken a policy with LIC to cover the gratuity liability of the employees.

d) Terminal benefits are recognized as an expense immediately.

9 Foreign Currency Transactions

a) Transactions denominated in Foreign Currencies are recorded at the exchange rate prevailing at the time of the transaction.

b) Items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling on the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss account.

d) In case of forward exchange contracts, the premium or discount arising at the inception of such contracts, is amortized as income or expense over the life of the contract as well as exchange difference on such contracts i.e. difference between the exchange rates at the reporting/settlement date and the exchange rate on the date of inception of contract/the reporting date, is recognized as income/expense for the period.

10 Investments

a) Long term investments are stated at cost except those investments which in the management's opinion have suffered a permanent diminution and thus valued at nominal rate.

b) Current investments are valued at cost or fair market value whichever is less.

11 Research and Development Cost (other than capital cost)

Research and Developments expenditures are charged to revenue in the year in which they are incurred.

12 Taxes on Income

(a) Current Tax

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of Income Tax Act, 1961.

(b) Deferred Tax

The company recognises deferred tax assets or deferred tax liability based on the tax effect for timing differences i.e the differences that originates in one accounting period and capable of reversal in subsequent period(s). The deferred tax assets are recognised only to the extent there is a reasonable certainity of realisation in future.The tax effect is calculated based on the prevailing enacted or substantially enacted regulations. The deferred tax assets/liabilities are reviewed as at each balance sheet based on developments during the year.

13 Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

14 Excise Duty

Excise Duty is accounted on the basis of, both, payments made in respect of goods cleared as also provision made for goods lying in bonded warehouses.

15 Purchase

Purchases are recognised in the books of account at the time of receipt of material at the factory gate.

16 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 sustantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

17 Provision, Contingent Liabilities and Contingent Assets

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liablilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

18 Leases

(a) Operating Lease - Lease rentals in respect of assets taken are charged to profit & Loss Account as per the terms of the lease agreement.

(b) Finance Lease - The lower of the fair value of the assets and present value of the minimum lease rentals is capitalised as fixed assets with corresponding amount shown as lease liability. The principal component in the lease rental is adjusted against the lease liability and the interest component is charged to profit and loss account.

19 Segment Reporting

i) Identification of segments:

The Company's operating business are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products and serves different markets.

ii) Unallocated items:

Common unallocable costs and corporate income and expenses are considered as a part of un-allocable income and expense, which are not identifiable to any business segment.

20 Cash Flow

Cash Flow Statement has been prepared as per the indirect method prescribed in the Accounting standard '3' notified by Companies (Accounting Standard) Rules, 2006.


Mar 31, 2010

1 Basis of Preparation of Financial Statements:

The Financial Statements have been prepared on accrual basis under historical cost convention except for certain fixed assets which have been revalued. These statements are prepared in accordance with the generally accepted accounting principles and as per the provisions of the Companies Act, 1956.

2 Uses of Estimates

The financial statements are prepared using estimates and assumptions that effect the reported balances of the assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of balance sheet and the profit and loss account during the year. Contingencies are recorded when it is probable that a liability has been incurred and amount can be reasonably estimated. Actual results could differ from these estimates. The actual results are recognized in the year in which the results are known/materialised.

3 Fixed Assets

Fixed Assets are stated at cost except Land, Building.Computers and Plant & Machinery which were revalued on 30th June 1985 and hence stated at revalued cost. Cost is net of CENVAT and inclusive of freight, duties, taxes and other directly attributable costs incurred to bring the assets to their working condition for intended use.

4 Intangible Assets

Intangible Assets are stated at cost of acquisition less accumulated amortisation. Software having future economic benefits are considered as intangible assets and amortised over a period of 4 years.

Goodwill and Trade mark are amortised over a period of 10 year.

5 Depreciation

a) Depreciation on assets is provided at the rates and in the manner as specified in Schedule XIV of the Companies Act, 1956 by using the straight line method.

b) Depreciation on assets costing Rs. 5000/-or less have been charged fully in the year of purchase.

c) Additions, consequent to the revaluation are depreciated with reference to the remaining useful life of each assets. Such depreciation is recouped against transfer of equivalent amount from revaluation reserve to Profit & Loss Account.

d) Assets purchased for Research & Development are fully depreciated in the year of purchase.

6 Inventories

a) Raw Materials, Stores & Spare Parts, [except store & spares items costing less than Rs. 100/- per unit which are charged to Profit and Loss Account in the year of purchase], Loose tools and Goods in transit are valued at lower of cost or net realisable value.However strategic items of store & spares costing less than Rs. 100/- per unit has been valued and included in the value of stocks at lower of cost or net realisable value.

Cost includes cost of purchase, duties, taxes and all other costs incurred in"bringing the inventories to their present location. Cost is determined on First In First Out (FIFO) basis.

b) Scrap is valued at net realisable value.

c) Finished Goods are valued at lower of cost or net retisable value. Cost (*) includes related overheads and excise duty payable on such goods.

d) Other inventories are valued at lower of net realisable value or cost(*).

(*) Cost includes an appropriate portion of allocable overheads where applicable & cost of material is arrived at on FIFO basis.

7 Revenue Recognition

a) Sales includes excise duty but excludes sales tax .adjusted for trade discounts and sales returns.

b) Domestic sales are recognised at the time of despatch of goods to the customers and export sale is recognized on the basis of date of Airway Bill/Bill of Lading.

c) Dividend Income on Investment is recognized when right to receive the payment is established.

d) Export incentives are recognised on accrual basis.

8 Employees Benefits

Expenses and Liabilities in respect of employee benefits are recorded in accordance with Revised Accounting Standard 15 - Employees Benefits (Revised 2005) notified by Companies (Accounting Standard) Rules,2006.

(i) Payments to Defined Contribution Retirements Benefit Schemes are charged as an expense as they fall due.

For Defined Benefit Schemes: the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuation being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the profit and loss account for the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, plus the present value of available refunds and reductions in future contributions to the scheme.

(ii) Short Term Employee Benefits.

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service.

9 Foreign Currency Transactions

a) Transactions denominated in Foreign Currencies are recorded at the exchange rate prevailing at the time of the transaction.

b) Items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling on the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss account.

d) In case of forward exchange contracts, the premium or discount arising at the inception of such contracts.is amortized as income or expense over the life of the contract as well as exchange difference on such contracts i.e. difference between the exchange rates at the reporting/settlement date and the exchange rate on the date of inception of contract/ the reporting date, is recognized as income / expense for the period.

10 Investments

a) Long term investments are stated at cost except those investments which in the managements opinion have suffered a permanent diminution and thus valued at nominal rate.

b) Current investments are valued at cost or fair market value whichever is less.

11 Research and Development Cost (other than capital cost)

Research and Developments expenditures are charged to revenue in the year in which they are incurred.

12 Taxes on Income

(a) Current Tax

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of Income TaxAct, 1961.

(b) Deferred Tax

L The company recognises deferred tax assets or deferred tax liability based on the tax effect for timing differences i.e the differences that originates in one accounting period and capable of reversal in subsequent period(s). The deferred tax assets are recognised only to the extent there is a reasonable certainity of realisation in future.The tax effect is calculated based on the prevailing enacted or substantially enacted regulations. The deferred tax assets/liabilities are reviewed as at each balance sheet based on developments during the year.

13 Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is. reversed if there has been a change in the estimate of recoverable amount.

14 Excise Duty

Excise Duty is accounted on the basis of, both, payments made in respect of goods cleared as also provision made for goods lying in bonded warehouses.

15 Purchase

Purchases are recognised in the books of account at the time of receipt of material at the factory gate.

16 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 sustantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

17 Provision, Contingent Liabilities and Contingent Assets

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

18 Leases

(a) Operating Lease - Lease rentals in respect of assets taken are charged to profit & Loss Account as per the terms of the lease agreement.

(b) Finance Lease - The lower of the fair value of the assets and present value of the minimum lease rentals is capitalised as fixed assets with corresponding amount shown as lease liability. The principal component in the lease rental is adjusted against the lease liability and the interest component is charged to profit and loss account.

19 Segment Reporting

i) Identification of segments:

The Companys operating business are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products and serves different markets.

ii) Unallocated items;

Common unallocable costs and corporate income and expenses are considered as a part of un-allocable income and expense, which are not identifiable to any business segment.

20 Cash Flow

Cash Flow Statement has been prepared as per the indirect method prescribed in the Accounting standard 3 notified by Companies (Accounting Standard) Rules,2006.

 
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