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Accounting Policies of DHP India Ltd. Company

Mar 31, 2015

1.1 Basis of 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 relevant provisions of the Companies Act, 2013 ("the 2013 Act") as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except for the change of depreciation rate as per the useful life on written down method prescribed under Schedule II to the Companies Act, 2013, on going concern.

1.2 Use of Estimates :

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 Inventories :

In accordance with the Accounting Standards 2 (AS-2)" Valuation of Inventories" issued by the Institute of Chartered Accountants of India, the valuation of inventories are summarised as follows :-

a) Stock of Raw Materials (inclusive of various components), Stores, Spares & Consumables are valued at cost on FIFO (First In First Out) basis (excluding the amount of Cenvat & State VAT credit allowable). A separate ledger for Cenvat & State VAT credit allowable has been maintained for proper utilisation of Cenvat & State VAT credit and the same adjusted against the payment of Excise duty & Output CST & VAT liability on account of any Sales. Rebate of excise duty on exported goods, if any realised or receivable has been adjusted against such payment of Excise duty liability on exported goods.

b) Stock of Finished Goods are valued at lower of cost (excluding of the amount of Cenvat & State VAT credit allowable) or net realisable value.

c) Stock of Scrap Materials such as Brass Scrap & Zinc Ash/Dross & M. S. Scrap are valued at net realisable value.

d) There is no deviation in method of valuation of stock as prescribed under section 142A of the Income Tax Act, 1961. Similarly there are no change of method of accounting since previous year.

1.4 Cash and Cash equivalents (for purposes of Cash Flow Statement) :

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisitions), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk or changes in value.

1.5 Cash Flow Statement :

Cash flows are reported using the indirect method, where profit before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.6 Depreciation and amortisation :

Depreciation on tangible fixed assets have been provided on the written down value method as per the useful life prescribed in Schedule II to the Companies Act, 2013. The assets expired their useful life and full amount of their balance written down value provided as depreciation and similarly their cost block & depreciation block removed from fixed assets.

1.7 Revenue Recognisation :

In accordance with the Accounting Standards - 9 (AS-9) "Revenue Recognisation " issued by the Institute of Chartered Accountants of India, the revenue and expenditures are recognised as follows:-

a) Sale of Manufactured Goods : Export Sales in foreign currencies are recognised on the prevailing exchange rate on the date of transaction of sales invoice recognised less any export return of goods & payment for any discount etc. related to sales. The fluctuation of foreign currencies on ths date of transaction and the date of actual realisation etc. are recognised to the Statement of Profit & Loss in a separate Account Head. The Excise duty payment of exported goods, if any are claimed as rebate after the sucessful export. However there are no amount of Excise duty on Export Sales are reflected through Statement of Profit & Loss.

b) Sale of Scrap : Scrap sales are recognised on actual sales basis. The recovery of Excise Duty and State VAT & CST elements on domestic sales credited to separate ledger and adjusted against its payment. However no amount of Excise Duty and State VAT & CST are reflected through Statement of Profit & Loss.

c) Income from Other Sales : Income from Sale of SHIS Licence is recognised on cash basis.

d) Income from Other Govt. Grants : Income from Duty Drawback & Export Incentive (Refund of Service Tax) is recognised on cash basis.

1.8 Other Income :

Profit / Loss on fluctuation of Forex rate is recognised on the difference of exchange rate of actual realisation/ payment of foreign currencies transaction and the date of transaction of foreign currencies. Interest income is accounted on accrual basis. The other heads of income & expenditure items having a material bearing on the financial statements are recognised on mercantile and accrual basis.

1.9 Tangible Fixed Assets :

The entire Company's Fixed assets are Tangible assets. In accordance with the Accounting Standards- 10 (AS-10) "Accounting for Fixed Assets" issued by the Institute of Chartered Accountants of India, the accounting of fixed assets are as follows :-

a) Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes cost of acquisition, creation cost and other relative expenses but excludes the excise duty and value added tax, in which the cenvat and vat credit allowable.

b) Fixed assets acquired and put to use are capitalised and depreciation charged thereon.

c) Fixed assets retire from active use and impaired and expired their useful life as prescribed as per Schedule II to the Companies Act, 2013, are disposed off.

1.10 Foreign currency transactions and translations :

In accordance with the Accounting Standards-11 (AS-11) "The Effects of Changes in Foreign Exchange Rates" issued by the Institute of Chartered Accountants of India, the foreign currency transactions are recognised as follows :-

a) Initial recognisation : Transaction in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at the rates that closely approximate the rate at the date of transaction.

b) Measurement of foreign currency monetary items at the Balance Sheet date : Foreign currency monetary items (other than derivative contracts) of the Company outstanding at the Balance Sheet date are restated at the year-end rates. Revenue and expenses are translated at the average exchange rates prevailing during the year. Exchange differences arises out of these transaction are charged to the Statement of Profit and Loss.

c) Treatment of exchange differences : Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of the Company related to any transactions are recognised as income or expense in the Statement of Profit and Loss.

d) Accounting of forward contracts : Premium / discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortised over the period of the contracts if such contracts relate to monetary items as at the Balance Sheet date. The MTM (Marked to Market) losses of outstanding forward exchange contracts are recognised in the Statement of Profit and Loss. In case of MTM (Marked to Market) profit arises of outstanding forward exchange contracts, the same was not to be provided.

1.11 Government grants, subsidies and export incentives :

In accordance with the Accounting Standards -12 (AS-12) "Accounting for Government Grants & Subsidies" issued by the Institute of Chartered Accountants of India, the Export benefits like Sale of SHIS Licence, Duty Drawback and Export Incentive (Refund of Service Tax) are covered as export subsidies and the same are accounted for in the year of such benefits actually materialised.

1.12 Employee benefits :

Employee benefits include employees provident fund, group gratuity fund.

a) Defined contribution plans

The Company's contribution to provident fund are considered as defined contribution plans and are charged as an expenses as they fall due based on the amount of contribution required to be made. The Company makes regular contribution to Recognised Provident Fund (EPFO) which are fully funded and administered by the Central Government.

b) Defined benefit plans

For defined benefit plans in the form of group gratuity fund, the cost of providing benefits is determined using with the actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. The retirement benefit obligation recognised in the balance Sheet represents the present value of defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any assets resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes. The Company contributes to the Group Gratuity Fund under a Group Gratuity Cash Accumulated Scheme with Life Insurance Corporation of India (LIC) for future payment of gratuity liability to its employees.

c) Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits includes leave encashment benefit of unutilised leave and bonus/exgratia are charged to Profit & Loss Account on each year on accrual basis. There are no rules for carried forward unutilised leave benefits.

1.13 Borrowing costs :

In accordance with the Accounting Standards - 16 (AS - 16) "Accounting for Borrowing Costs" issued by the Institute of Chartered Accountants of India, the accounting for borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

1.14 Segment reporting :

In accordance with the Accounting Standards - 17 (AS - 17) "Segment Reporting" issued by the Institute of Chartered Accountants of India, the Company has only one primary segment i.e. manufacturing of engineering goods like Liquified Petroleum Gas Regulator (LP Gas Regulator), accessories and parts thereof. The secondary segment of its geographical markets like domestic (within India) and exports (outside India) are reported regularly.

1.15 Earning per share :

In accordance with the Accounting Standards - 20 (AS-20) "Earning Per Share" issued by the Institute of Chartered Accountants of India, the Basic earning per share is computed by dividing the profit / (loss) after tax (including the post tax effects of extraordinary items, it any) by the weighted average number of equity shares outstanding during the year. Diluted earning per share is computed by dividing the profit / (loss) after tax (including the post tax effects of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive poential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. The company has not issued any shares during the year and no any extraordinary expenses incurred, hence the basic and diluted earning per shares of before and after extraordinary items are same.

1.16 Taxes on income :

In accordance with the Accounting Standards - 22 (AS-22) "Accounting for Taxes" issued by the Institute of Chartered Accountants of India, the provision for current income tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised.

1.17 Impairment of assets :

In accordance with the Accounting Standards - 28 (AS-28) "Impairment of Assets" issued by the Institute of Chartered Accountants of India, the carrying amount of the fixed assets are reviewed at each Balance Sheet date. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised. An impairment loss is charged to the Statement of Profit and Loss in the year in which the assets is identified as impaired.

1.18 Provisions and contingencies :

In accordance with the Accounting Standards - 29 (AS-29) "Provisions and contingencies" issued by the Institute of Chartered Accountants of India, a provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

1.19 Hedge accounting :

In accordance with the Accounting Standards - 30 (AS-30) "Financial Instruments: Recognisation and Measurement" issued by the Institute of Chartered Accountants of India, the company used foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to highly probable forecast transactions. The Company designates such forward exchange contracts in a cash flow hedging relationship by applying the hedge accounting principles set out in AS-30. These forward exchange contracts are stated at fair value of each reporting date. The MTM (marked to market) losses are provided on the Statement of Profit & Loss and the MTM (marked to market) profit, if any are disclosed in the Notes.

1.20 Derivative contracts :

The Company enters into derivative contracts in the nature of forward exchange contracts with an intention to hedge its existing assets and liabilities and highly probable transactions. Derivative contracts which are closely linked to the existing assets and liabilities are accounted as per the policy stated for Foreign Currency Transactions and Translations.

Derivative contracts designated as a hedging instrument for highly probable forecast transactions are accounted as per the policy stated for Hedge Accounting.

The MTM (marked-to market) and losses are recognised in the Statement of Profit and Loss. Gain arising on the same are not recognised, until realised, on grounds of prudence.

1.21 Cenvat & VAT input credit :

Central excise duty payment elements and Service tax payment elements, both covered and allowable as Cenvat credit and State value added tax payment elements allowable as VAT credit are accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing/utilising the Cenvat and VAT credits.

1.22 Dividend :

Dividend payment including tax thereon is appropriated from profits for the year and provisions is made for proposed final dividend and tax thereon is subject to consent of the shareholders at the Annual General Meeting.

1.23 Operating Cycle :

Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non- current.


Mar 31, 2014

1.1 Basis of 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 notified under the Companies (Accounting Standards) Rules, 2006 (As Amended) under section 211(3C) (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year on going concern.

2.2 Use of Estimates :

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

2.3 Inventories :

In accordance with the Accounting Standards 2 (AS-2)" Valuation of Inventories" issued by the Institute of Chartered Accountants of India, the valuation of inventories are summarised as follows :- a) Stock of Raw Materials (inclusive of various components), Stores, Spares & Consumables are valued at cost on FIFO (First In First Out) basis (excluding the amount of cenvat & state vat credit allowable). A separate ledger for Cenvat & State VAT credit allowable has been maintained for proper utilisation of Cenvat & State VAT credit and the same adjusted against the payment of Excise duty & Output CST & VAT liability on account of any Sales. Rebate of excise duty on exported goods, if any realised or receivable has been adjusted against such payment of Excise duty liability on exported goods.

b) Stock of Finished Goods are valued at lower of cost (excluding of the amount of Cenvat & State VAT credit allowable) or net realisable value.

c) Stock of Scrap Materials such as Brass Scrap & Zinc Ash/Dross & M.S.Scrap are valued at net realisable value.

d) There is no deviation in method of valuation of stock as prescribed under section 142A of the Income Tax Act, 1961. Similarly there are no change of method of accounting since previous year.

2.4 Cash and Cash equivalents (for purposes of Cash Flow Statement) :

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisitions), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk or changes in value.

2.5 Cash Flow Statement :

Cash flows are reported using the indirect method, where profit before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.6 Depreciation and amortisation :

Depreciation has been provided on written down value method as per rates prescribed in Schedule XIV to the Companies Act, 1956 on pro-rata basis except the following situation :-

a) Assets costing less than ^ 5,000 each are fully depreciated in the year of capitalisation.

b) When, the net written down value of the assets is less than 5 % of its original costs, then each are fully depreciated in the year end.

2.7 Revenue Recognisation :

In accordance with the Accounting Standards - 9 (AS-9) "Revenue Recognisation" issued by the Institute of Chartered Accountants of India, the revenue and expenditures are recognised as follows :-

a) Sale of Manufactured Goods : Export Sales in foreign currencies are recognised on the prevailing exchange rate on the date of transaction of sales invoice recognised less any export return of goods & payment for any discount etc. related to sales. The fluctuation of foreign currencies on the date of transaction and the date of actual realisation etc. are recognised to the Statement of Profit & Loss in a separate Account Head. The Excise duty payment of exported goods, if any are claimed as rebate after the successful export. However, there are no amount of Excise duty on Export Sales are reflected through Statement of Profit & Loss.

b) Sale of Traded Goods : Export Sales in foreign currencies are recognised on the prevailing exchange rate on the date of transaction of sales invoice recognised.

c) Sale of Scrap : Scrap sales are recognised on actual sales basis. The recovery of Excise Duty and State VAT & CST elements on domestic sales credited to separate ledger and adjusted against its payment. However no amount of Excise Duty and State VAT & CST are reflected through Statement of Profit & Loss.

d) Income from Other Sales : Income from Sale of SHIS Licence & Duty Entitlement Pass Book (DEPB) is recognised on cash basis.

e) Income from Other Govt. Grants : Income from Duty Drawback & Export Incentive (Refund of Service Tax) is recognised on cash basis.

2.8 Other Income :

Profit/Loss on fluctuation of Forex rate is recognised on the difference of exchange rate of actual realisation/payment of foreign currencies transaction and the date of transaction of foreign currecies transaction. Interest income is accounted on accrual basis. The other heads of income & expenditure items having a material bearing on the financial statements are recognised on mercantile and accrual basis.

2.9 Tangible Fixed Assets :

The entire Company''s Fixed assets are Tangible assets. In accordance with the Accounting Standards - 10 (AS-10) "Accounting for Fixed Assets" issued by the Institute of Chartered Accountants of India, the accounting of fixed assets are as follows :- a) Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes cost of acquisition, creation cost and other relative expenses but excludes the excise duty and value added tax, in which the cenvat and vat credit allowable.

b) Fixed assets acquired and put to use are capitalised and depreciation charged thereon.

c) Fixed assets retire from active use and impaired are disposed off.

2.10 Foreign currency transactions and translations :

In accordance with the Accounting Standards - 11 (AS-11) "The Effects of Changes in Foreign Exchange Rates" issued by the Institute of Chartered Accountants of India, the foreign currency transactions are recognised as follows :- a) Initial recognisation : Transaction in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at the rates that closely approximate the rate at the date of transaction.

b) Measurement of foreign currency monetary items at the Balance Sheet date: Foreign currency monetary items (other than derivative contracts) of the Company outstanding at the Balance Sheet date are restated at the year-end rates. Revenue and expenses are translated at the average exchange rates prevailing during the year. Exchange differences arises out of these transaction are charged to the Statement of Profit and Loss.

c) Treatment of exchange differences : Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of the Company related to any transactions are recognised as income or expense in the Statement of Profit and Loss.

d) Accounting of forward contracts : Premium / discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortised over the period of the contracts if such contracts relate to moneytory items as at the Balance Sheet date. The MTM (Marked to Market) losses of outstanding forward exchange contracts are recognised in the Statement of Profit and Loss. In case of MTM (Marked to Market) profit arises of outstanding forward exchange contracts, the same was not to be provided.

2.11 Government grants, subsidies and export incentives :

In accordance with the Accounting Standards - 12 (AS-12) "Accounting for Government Grants & Subsidies" issued by the Institute of Chartered Accountants of India, the Export benefits like Sale of SHIH Licence, Duty Drawback, Export Incentive (Refund of Service Tax) & Duty Entitlement Pass Book (DEPB) are covered as export subsidies and the same are accounted for in the year of such benefits actually materialised.

2.12 Employee benefits :

Employee benefits include employees provident fund, group gratuity fund.

a) Defined contribution plans

The Company''s contribution to provident fund are considered as defined contribution plans and are charged as an expenses as they fall due based on the amount of contribution required to be made. The Company makes regular contribution to Recognised Provident Fund (EPFO) which are fully funded and administered by the Central Government.

b) Defined benefit plans

For defined benefit plans in the form of group gratuity fund, the cost of providing benefits is determined using with the actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. The retirement benefit obligation recognised in the balance Sheet represents the present value of defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any assets resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes. The Company contributes to the Group Gratuity Fund under a Group Gratuity Cash Accumulated Scheme with Life Insurance Corporation of India (LIC) for future payment of gratuity liability to its employees.

c) Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits includes leave encashment benefit of unutilised leave and bonus/ exgratia are charged to Profit & Loss Account on each year on accrual basis. There are no rules for carried forward unutilised leave benefits.

2.13 Borrowing costs :

In accordance with the Accounting Standards - 16 (AS-16) "Accounting for Borrowing Costs" issued by the Institute of Chartered Accountants of India, the accounting for borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

2.14 Segment reporting :

In accordance with the Accounting Standards - 17 (AS-17) "Segment Reporting" issued by the Institute of Chartered Accountants of India, the Company has only one primary segment i.e. manufacturing of engineering goods like Liquified Petroleum Gas Regulator (LP Gas Regulator), accessories and parts thereof. The secondary segment of its geographical markets like domestic (within India) and exports (outside India) are reported regularly.

2.15 Earning per share :

In accordance with the Accounting Standards - 20 (AS-20) "Earning Per Share" issued by the Institute of Chartered Accountants of India, the Basic earning per share is computed by dividing the profit / (loss) after tax (including the post tax effects of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earning per share is computed by dividing the profit / (loss) after tax (including the post tax effects of extraordinary 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 considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. The company has not issued any shares during the year and no any extraordinary expenses incurred, hence the basic and diluted earning per shares of before and after extraordinary items are same.

2.16 Taxes on income :

In accordance with the Accounting Standards - 22 (AS-22) "Accounting for Taxes" issued by the Institute of Chartered Accountants of India, the provision for current income tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax is recognised on timing differences, being the differences between

the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised.

2.17 Impairment of assets :

In accordance with the Accounting Standards - 28 (AS-28) "Impairment of Assets" issued by the Institute of Chartered Accountants of India, the carrying amount of the fixed assets are reviewed at each Balance Sheet date. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised. An impairment loss is charged to the Statement of Profit and Loss in the year in which the assets is identified as impaired.

2.18 Provisions and contingencies :

In accordance with the Accounting Standards - 29 (AS-29) "Provisions and contingencies" issued by the Institute of Chartered Accountants of India, a provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

2.19 Hedge accounting :

In accordance with the Accounting Standards - 30 (AS-30) "Financial Instruments: Recognisation and Measurement" issued by the Institute of Chartered Accountants of India, the company used foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to highly probable forecast transactions. The Company designates such forward exchange contracts in a cash flow hedging relationship by applying the hedge accounting principles set out in AS-30. These forward exchange contracts are stated at fair value of each reporting date. The MTM (marked to market) losses are provided on the Statement of Profit & Loss and the MTM (marked to market) profit, if any are disclosed in the Notes.

2.20 Derivative contracts :

The Company enters into derivative contracts in the nature of forward exchange contracts with an intention to hedge its existing assets and liabilities and highly probable transactions. Derivative contracts which are closely linked to the existing assets and liabilities are accounted as per the policy stated for Foreign Currency Transactions and Translations.

Derivative contracts designated as a hedging instrument for highly probable forecast transactions are accounted as per the policy stated for Hedge Accounting.

The MTM (marked-to market) and losses are recognised in the Statement of Profit and Loss. Gain arising on the same are not recognised, until realised, on grounds of prudence.

2.21 Cenvat & VAT input credit :

Central excise duty payment elements and Service tax payment elements, both covered and allowable as Cenvat credit and State value added tax payment elements allowable as VAT credit are accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing/utilising the Cenvat and VAT credits.


Mar 31, 2013

1.1 Basis of 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 notified under the Companies (Accounting Standards) Rules, 2006 (As Amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year on going concern.

1.2 Use of Estimates :

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 Inventories :

In accordance with the Accounting Standards 2 (AS-2)” Valuation of Inventories” issued by the Institute of Chartered Accountants of India, the valuation of inventories are summarised as follows :- a) Stock of Raw Materials (inclusive of various components), Stores, Spares & Consumables are valued at cost on FIFO (First In First Out) basis (excluding the amount of cenvat & state vat credit allowable). A separate ledger for Cenvat & State VAT credit allowable has been maintained for proper utilisation of Cenvat & State VAT credit and the same adjusted against the payment of Excise duty & Output CST & VAT liability on account of any Sales. Rebate of excise duty on exported goods, if any realised or receivable has been adjusted against such payment of Excise duty liability on exported goods.

b) Stock of Finished Goods are valued at lower of cost (excluding of the amount of Cenvat & State VAT credit allowable) or net realisable value.

c) Stock of Scrap Materials such as Brass Scrap & Zinc Ash/Dross & M.S.Scrap are valued at net realisable value.

d) There is no deviation in method of valuation of stock as prescribed under section 142A of the Income Tax Act, 1961. Similarly there are no change of method of accounting since previous year.

1.4 Cash and Cash equivalents (for purposes of Cash Flow Statement) :

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisitions), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk or changes in value.

1.5 Cash Flow Statement :

Cash flows are reported using the indirect method, where profit before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.6 Depreciation and amortisation :

Depreciation has been provided on written down value method as per rates prescribed in Schedule XIV to the Companies Act, 1956 on pro-rata basis except the following situation :-

a) Assets costing less than Rs. 5,000 each are fully depreciated in the year of capitalisation.

b) When, the net written down value of the assets is less than 5 % of its original costs, then each are fully depreciated in the year end.

1.7 Revenue Recognisation :

In accordance with the Accounting Standards - 9 (AS-9) ''Revenue Recognisation” issued by the Institute of Chartered Accountants of India, the revenue and expenditures are recognised as follows :-

a) Sale of Manufactured Goods : Export Sales in foreign currencies are recognised on the prevailing exchange rate on the date of transaction of sales invoice recognised less any export return of goods & payment for any discount etc. related to sales. The fluctuation of foreign currencies on the date of transaction and the date of actual realisation etc. are recognised to the Statement of Profit & Loss in a separate Account Head. The Excise duty payment of exported goods, if any are claimed as rebate after the successful export. However, there are no amount of Excise duty on Export Sales are reflected through Statement of Profit & Loss.

b) Sale of Scrap : Scrap sales are recognised on actual sales basis. The recovery of Excise Duty and State VAT & CST elements on domestic sales credited to separate ledger and adjusted against its payment. However no amount of Excise Duty and State VAT & CST are reflected through Statement of Profit & Loss.

c) Income from Other Sales : Income from Sale of Duty Entitlement Pass Book (DEPB) is recognised on cash basis.

1.8 Other Income :

Interest income is accounted on accrual basis. The other heads of income & expenditure items having a material bearing on the financial statements are recognised on mercantile and accrual basis.

1.9 Tangible Fixed Assets :

The entire Company''s Fixed assets are Tangible assets. In accordance with the Accounting Standards - 10 (AS-10) ''Accounting for Fixed Assets” issued by the Institute of Chartered Accountants of India, the accounting of fixed assets are as follows :- a) Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes cost of acquisition, creation cost and other relative expenses but excludes the excise duty and value added tax, in which the cenvat and vat credit allowable.

b) Fixed assets acquired and put to use are capitalised and depreciation charged thereon.

c) Fixed assets retire from active use and impaired are disposed off.

1.10 Foreign currency transactions and translations :

In accordance with the Accounting Standards - 11 (AS-11) ''The Effects of Changes in Foreign Exchange Rates” issued by the Institute of Chartered Accountants of India, the foreign currency transactions are recognised as follows :- a) Initial recognisation : Transaction in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at the rates that closely approximate the rate at the date of transaction.

b) Measurement of foreign currency monetary items at the Balance Sheet date: Foreign currency monetary items (other than derivative contracts) of the Company outstanding at the Balance Sheet date are restated at the year-end rates. Revenue and expenses are translated at the average exchange rates prevailing during the year. Exchange differences arises out of these transaction are charged to the Statement of Profit and Loss.

c) Treatment of exchange differences : Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of the Company related to any transactions are recognised as income or expense in the Statement of Profit and Loss.

d) Accounting of forward contracts : Premium / discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortised over the period of the contracts if such contracts relate to moneytory items as at the Balance Sheet date. The MTM (Marked to Market) losses of outstanding forward exchange contracts are recognised in the Statement of Profit and Loss. In case of MTM (Marked to Market) profit arises of outstanding forward exchange contracts, the same was not to be provided.

1.11 Government grants, subsidies and export incentives :

In accordance with the Accounting Standards - 12 (AS-12) ''Accounting for Government Grants & Subsidies” issued by the Institute of Chartered Accountants of India, the Export benefits like Duty Entitlement Pass Book (DEPB) are covered as export subsidies and the same are accounted for in the year of such benefits actually materialised.

1.12 Employee benefits :

Employee benefits include employees provident fund, group gratuity fund.

a) Defined contribution plans

The Company''s contribution to provident fund are considered as defined contribution plans and are charged as an expenses as they fall due based on the amount of contribution required to be made. The Company makes regular contribution to Recognised Provident Fund (EPFO) which are fully funded and administered by the Central Government.

b) Defined benefit plans

For defined benefit plans in the form of group gratuity fund, the cost of providing benefits is determined using with the actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. The retirement benefit obligation recognised in the balance Sheet represents the present value of defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any assets resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes. The Company contributes to the Group Gratuity Fund under a Group Gratuity Cash Accumulated Scheme with Life Insurance Corporation of India (LIC) for future payment of gratuity liability to its employees.

c) Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits includes leave encashment benefit of unutilised leave and bonus/ exgratia are charged to Profit & Loss Account on each year on accrual basis. There are no rules for carried forward unutilised leave benefits.

1.13 Borrowing costs :

In accordance with the Accounting Standards - 16 (AS-16) ''Accounting for Borrowing Costs” issued by the Institute of Chartered Accountants of India, the accounting for borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

1.14 Segment reporting :

In accordance with the Accounting Standards - 17 (AS-17) ''Segment Reporting” issued by the Institute of Chartered Accountants of India, the Company has only one primary segment i.e. manufacturing of engineering goods like Liquified Petroleum Gas Regulator (LP Gas Regulator), accessories and parts thereof. The secondary segment of its geographical markets like domestic (within India) and exports (outside India) are reported regularly.

1.15 Earning per share :

In accordance with the Accounting Standards - 20 (AS-20) ''Earning Per Share” issued by the Institute of Chartered Accountants of India, the Basic earning per share is computed by dividing the profit / (loss) after tax (including the post tax effects of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earning per share is computed by dividing the profit / (loss) after tax (including the post tax effects of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive poential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. The company has not issued any shares during the year and no any extraordinary expenses incurred, hence the basic and diluted earning per shares of before and after extraordinary items are same.

1.16 Taxes on income :

In accordance with the Accounting Standards - 22 (AS-22) ''Accounting for Taxes” issued by the Institute of Chartered Accountants of India, the provision for current income tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Dererred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised.

1.17 Impairment of assets :

In accordance with the Accounting Standards - 28 (AS-28) ''Impairment of Assets” issued by the Institute of Chartered Accountants of India, the carrying amount of the fixed assets are reviewed at each Balance Sheet date. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised. An impairment loss is charged to the Statement of Profit and Loss in the year in which the assets is identified as impaired.

1.18 Provisions and contingencies :

In accordance with the Accounting Standards - 29 (AS-29) ''Provisions and contingencies” issued by the Institute of Chartered Accountants of India, a provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

1.19 Hedge accounting :

In accordance with the Accounting Standards - 30 (AS-30) ''Financial Instruments: Recognisation and Measurement” issued by the Institute of Chartered Accountants of India, the company used foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to highly probable forecast transactions. The Company designates such forward exchange contracts in a cash flow hedging relationship by applying the hedge accounting principles set out in AS-30. These forward exchange contracts are stated at fair value of each reporting date. The MTM (marked to market) losses are provided on the Statement of Profit & Loss and the MTM (marked to market) profit, if any are disclosed in the Notes.

1.20 Derivative contracts :

The Company enters into derivative contracts in the nature of forward exchange contracts with an intention to hedge its existing assets and liabilities and highly probable transactions. Derivative contracts which are closely linked to the existing assets and liabilities are accounted as per the policy stated for Foreign Currency Transactions and Translations.

Derivative contracts designated as a hedging instrument for highly probable forecast transactions are accounted as per the policy stated for Hedge Accounting.

The MTM (marked-to market) and losses are recognised in the Statement of Profit and Loss. Gain arising on the same are not recognised, until realised, on grounds of prudence.

1.21 Cenvat & VAT input credit :

Central excise duty payment elements and Service tax payment elements, both covered and allowable as Cenvat credit and State value added tax payment elements allowable as VAT credit are accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing/utilising the Cenvat and VAT credits.


Mar 31, 2012

1.1 Basis of 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 notified under the Companies (Accounting Standards) Rules, 2006 (As Amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year on going concern.

1.2 Use of Estimates :

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 Inventories:

In accordance with the Accounting Standards 2 (AS-2) "Valuation of Inventories" issued by the Institute of Chartered Accountants of India, the valuation of inventories are summarised as follows :-

a) Stock of Raw Materials (inclusive of various components), Stores, Spares & Consumables, Work-in-process of Zinc Alloys are valued at cost on FIFO (First In First Out) basis (excluding the amount of Cenvat & state VAT credit allowable). A separate ledger for Cenvat & state VAT credit allowable has been maintained for proper utilisation of Cenvat & state VAT credit and the same adjusted against the payment of Excise duty & Output vat liability on account of any Sales. Rebate of excise duty on exported goods, if any realised or receivable has been adjusted against such payment of Excise duty liability on exported goods.

b) Stock of Finished Goods are valued at lower of cost (excluding of the amount of Cenvat & state VAT credit allowable) or net realisable value.

c) Stock of Scrap Materials such as Brass Scrap & Zinc Ash are valued at net realisable value,

d) Goods-in-transit of purchase of raw materials & capital goods are valued at cost as above (a).

e) There is no deviation in method of valuation of stock as prescribed under section 142A of the Income Tax Act, 1961. Similarly there are no change of method of accounting since previous year.

1.4 Cash and Cash equivalents (for purposes of Cash Flow Statement):

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisitions), highly liquid investments, that are readily convertible into known amounts of cash and which are subject to insignificant risk or changes in value.

1.5 Cash Flow Statement:

Cash flows are reported using the indirect method, where profit before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.6 Depreciation and amortisation :

Depreciation has been provided on written down value method as per rates prescribed in Schedule XIV to the Companies Act, 1956 on pro-rata basis except the following situation

a) Assets costing less than Rs 5,000 each are fully depreciated in the year of capitalisation.

b) When , the net written down value of the assets is less than 5 % of its original costs, then each are fully depreciated in the year end.

1.7 Revenue Recognisation :

In accordance with the Accounting Standards - 9 (AS-9) "Revenue Recognisation" issued by the Institute of Chartered Accountants of India, the revenue and expenditures are recognised as follows

a) Sale of Manufactured Goods : Export Sales in foreign currencies are recognised, net of returns, free samples & free replacements and inclusive of premium or discount on their forward exchange contracts materialised, if any. The entire amount of export sales has been realised in India as per prevailing exchange rate.

b) Sale of Scrap : Scrap sales are recognised inclusive of excise duty but exclude the sales tax and Value Added Tax. The recovery of sales tax and Value Added Tax elements on domestic sales credited to separate ledger and adjusted against its payment. However no amount of sales tax and Value Added Tax on domestic sales are reflected through profit & Loss Account.

c) Income from Other Sales: Income from Sale of Duty Entitlement Pass Book (DEPB) is recognised on cash basis.

1.8 Other Income:

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established. The other heads of income & expenditure items having a material bearing on the financial statements are recognised on mercantile and accrual basis.

1.9 Tangible Fixed Assets :

The entire Company's Fixed assets are Tangible assets. In accordance with the Accounting Standards -10 (AS-10) "Accounting for Fixed Assets" issued by the Institute of Chartered Accountants of India, the accounting of fixed assets are as follows

a) Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes cost of acquisition, creation cost and other relative expenses but excludes the excise duty and Value Added Tax, in which the Cenvat and VAT credit allowable.

b) Fixed assets acquired and put to use are capitalised and depreciation charged thereon.

c) Fixed assets retire from active use and impaired are disposed off.

d) Projects under which assets are not ready for their intend use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

1.10 Foreign currency transactions and translations :

In accordance with the Accounting Standards - 11 (AS-11) "The Effects of Changes in Foreign Exchange Rates" issued by the Institute of Chartered Accountants of India, the foreign currency transactions are recognised as follows :-

a) Initial recognisation: Transaction in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at the rates that closely approximate the rate at the date of transaction.

b) Measurement of foreign currency monetary items at the Balance Sheet date: Foreign currency monetary items (other than derivative contracts) of the Company outstanding at the Balance Sheet date are restated at the year end rates. Revenue and expenses are translated at the average exchange rates prevailing during the year. Exchange differences arises out of these transaction are charged to the Statement of Profit and Loss.

c) Treatment of exchange differences: Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of the Company related to current year transactions are recognised as income or expense in the Statement of Profit and Loss under the same head of accounts. The exchange difference arising on settlement / restatement of long-term foreign monetry items and related to earlier year items are recognised as a separate head of income or expense in the Statement of Profit and Loss.

d) Accounting of forward contracts : Premium / discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortised over the period of the contracts if such contracts relate to monetry items as at the Balance Sheet date. The MTM (Marked to Market) losses of outstanding forward exchange contracts are recognised in the Statement of Profit and Loss Account. In case of MTM (Marked to Market) profit arises of outstanding toward exchange contracts, the same was not to be provided.

1.11 Government grants, subsidies and export incentives :

In accordance with the Accounting Standards -12 (AS-12) "Accounting for Government Grants & Subsidies" issued by the Institute of Chartered Accountants of India, the Export benefits like Duty Entitlement Pass Book (DEPB) are covered as export subsidies and the same are accounted for in the year of such benefits actually materialised.

1.12 Employee benefits :

Employee benefits include employees provident fund, group gratuity fund.

a) Defined contribution plans

The Company's contribution to provident fund are considered as defined contribution plans and are charged as an expenses as they fall due based on the amount of contribution required to be made. The Company makes regular contribution to Recognised Provident Fund (EPFO) which are fully funded and administered by the Central Government.

b) Defined benefit plans

For defined benefit plans in the form of group gratuity fund, the cost of providing benefits is determined using with the actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. The retirement benefit obligation recognised in the balance Sheet represents the present value of defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any assets resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes. The Company contributes to the Group Gratuity Fund under a Group Gratuity Cash Accumulated Scheme with Life insurance Corporation of India (LIC) for future payment of gratuity liability to its employees.

c) Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits includes leave encashment benefit of unutilised leave and bonus/exgratia are charged to Profit & Loss Account on each year on accrual basis. There are no rules for carried forward unutilised leave benefits.

1.13 Borrowing costs:

In accordance with the Accounting Standards -16 (AS-16) "Accounting for Borrowing Costs" issued by the Institute of Chartered Accountants of India, the accounting for borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

1.14 Segment reporting:

In accordance with the Accounting Standards -17 (AS-17) "Segment Reporting" issued by the Institute of Chartered Accountants of India, the Company has only one primary segment i.e. manufacturing of engineering goods like Liquified Petroleum Gas Regulator (LP Gas Regulator), accessories and parts thereof. The secondary segment of its geographical markets like domestic (within India) and exports (outside India) are reported regularly.

1.15 Earning per share :

In accordance with the Accounting Standards - 20 (AS-20) "Earning Per Share" issued by the Institute of Chartered Accountants of India, the Basic earning per share is computed by dividing the profit / (loss) after tax (including the post tax effects of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earning per share is computed by dividing the profit / (loss) after tax (including the post tax effects of extraordinary 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 considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. The company has not issued any shares during the year and no any extraordinary expenses incurred, hence the basic and diluted earning per shares of before and after extraordinary items are same.

1.16 Taxes on income :

In accordance with the Accounting Standards - 22 (AS-22) "Accounting for Taxes" issued by the Institute of Chartered Accountants of India, the provision for current income tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised.

1.17 Impairment of assets :

In accordance with the Accounting Standards - 28 (AS-28) "Impairment of Assets" issued by the Institute of Chartered Accountants of India, the carrying amount of the fixed assets are reviewed at each Balance Sheet date. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised. An impairment loss is charged to the Statement of Profit and Loss in the year in which the assets is identified as impaired.

1.18 Provisions and contingencies :

In accordance with the Accounting Standards - 29 (AS-29) "Provisions and contingencies" issued by the Institute of Chartered Accountants of India, a provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based of the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

1.19 Hedge accounting:

In accordance with the Accounting Standards - 30 (AS-30) "Financial Instruments: Recognisation and Measurement" issued by the Institute of Chartered Accountants of India, the company used foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to highly probable forecast transactions. The Company designates such forward exchange contracts in a cash flow hedging relationship by applying the hedge accounting principles set out in AS-30. These forward exchange contracts are stated at fair value of each reporting date. The MTM (marked to market) losses are provided on the Statement of Profit & Loss and the MTM (marked to market) profit, if any are disclosed in the Notes.

1.20 Derivative contracts :

The Company enters into derivative contracts in the nature of forward exchange contracts with an intention to hedge its existing assets and liabilities and highly probable transactions. Derivative contracts which are closely linked to the existing assets and liabilities are accounted as per the policy stated for Foreign Currency Transactions and Translations.

Derivative contracts designated as a hedging instrument for highly probable forecast transactions are accounted as per the policy stated for Hedge Accounting.

The marked to market and losses are recognised in the Statement of Profit and Loss. Gain arising on the same are not recognised, until realised, on grounds of prudence.

1.21 Cenvat & VAT input credit:

Central excise duty payment elements and Service tax payment elements, both covered and allowable as Cenvat credit and state Value Added Tax payment elements allowable as VAT credit are accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing/utilising the Cenvat and VAT credits.


Mar 31, 2011

1. Basis of Preparation of Financial Statements :

The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting following generally accepted accounting principles in India ("Indian GAAP") and relevant provisions of the Companies Act, 1956 with the Accounting Standards prescribed in Companies (Accounting Standards) Rules, 2006, issued by the Central Government in consultation with the National Advisory Committee on Accounting Standards, to the extent applicable. The fundamental accounting assumptions based on going concern and consistency.

2. Use of Estimates :

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure relating to contingent liabilities and assets as at the Balance Sheet date and reported amounts of income and expenses during the year. Actual results could differ from those estimates. Difference between the actual results and the estimates are recognized in the year in which the results are known/materialized.

3. Fixed Assets and Depreciations :

The entire Company's Fixed Assets are Tangible Assets. In accordance with the Accounting Standard 10 (AS - 10) "Accounting for Fixed Assets" issued by the Institute of Chartered Accountants of India, the accounting of fixed assets & depreciation computed as follows :-

a) Fixed Assets are stated at their original cost of acquisition as reduced by sale/loss of any fixed assets, and accumulated depreciation thereof on such fixed assets.

b) Addition to Fixed Assets are stated at cost of equipment, creation cost and other relative expenses and excludes Excise Duty, Education Cess, Higher & Secondary Education Cess and Input Service Tax payment elements for availing Cenvat Credit on Capital Goods, and allowable West Bengal Value Added Tax elements etc. for availing West Bengal VAT Credit on Capital Goods of such assets.

c) Depreciation on fixed assets is calculated on pro-rata basis with reference to the date of addition/disposal at the written down value rates prescribed in the Schedule XIV of the Companies Act, 1956.

4. Impairment of Fixed Assets :

The carrying amounts of fixed assets are reviewed at each balance sheet date in accordance with Accounting Standards 28 on "Impairment of Assets" prescribed by Companies (Accounting Standards) Rules,2006, to determine whether there is any indication of impairment. An assets 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 assets is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

5. Investments:

In accordance with the Accounting Standard 13 (AS - 13) "Accounting for Investments" issued by the Institute of Chartered Accountants of India, the investments are classified as current investments and long-term investments. As on date the all investments of the company are classified as current investments. The accounting treatments are as below :-

a) Current investments in shares of various domestic companies are valued at cost on First- in-First-Out (Fl FO) basis. The Profit & Loss on sale of shares are also calculated on the basis of First-in-First-Out (FIFO) method. Provisions for diminution in value of current investments are also provided on each investment.

b) Long term investments in shares of various domestic companies and units of mutual funds are valued at cost and/or Net Assets Value (NAV) cost on First-in-First-Out (FIFO) basis. The Profit & Loss on sale of shares and redemption of mutual funds are also calculated on the basis of First-in-First-Out (FIFO) method. Provision for diminution in value of such long term investments are also provided on each investment.

c) The moment of current and long term investment made during the year are also disclosed.

6. Accounting for Foreign Currency Transaction :

In accordance with the Accounting Standard 11 (AS - 11) "The Effects of Changes in Foreign Exchange Rates" issued by the Institute of Chartered Accountants of India, the Transaction in Foreign Currencies are accounted for at the exchange rate prevailing on the date of transaction. Foreign Currency monetary assets at the year end are translated using closing transaction rates. Fluctuations, if any, due to change in exchange rates between the dates of transactions and date of realisation within the same financial year are adjusted against the same account heads. The un-hedged closing outstanding/advances etc. in Foreign Currencies transactions are valued at closing exchange rate as on the year end. The hedged closing outstanding in Foreign Currencies transactions are valued at their respective forward contract rates. Any difference arises on the valuation of forward contract rates and booking rates as well as closing rates & booking rates etc. are recognized in Profit & Loss Account on respective account head. Exchange differences arising on settlements/transactions related to earlier year or succeeding year are recognized separately in the Profit & Loss Account.

7. Employee Benefits :

The Company has Defined Contribution Plan for its employees Retirement Benefits comprising of Recognized Provident Fund & Pension Fund. The Company makes regular contribution to Recognized Provident Fund & Pension Fund which are fully funded and administered by the Government. Contributions are recognized in Profit and Loss Account on accrual basis. The Company has Defined Benefit Plan of Retirement Gratuity schemes. The Company contributes to the Group Gratuity Fund under the Group Gratuity Cash Accumulated Scheme with Life Insurance Corporation of India (LIC) for future payment of gratuity liability to its employees. Consequent to the adoption of Accounting Standard 15 (AS-15 Revised) on "Employee Benefits", the liability for the Gratuity as at the year end has been determined on the basis of an independent actuarial valuation made by LIC with the method stated in AS-15 (Revised) and such liability/ assets has been adjusted and provided in these Accounts.

Other Benefits like Leave Encashment benefit for any unutilized leave are charged to Profit and Loss Account on each year on accrual basis of actual payment made to employee. There are no rules for carried forward unutilized leave benefit.

8. Forward contracts in foreign currencies :

The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign currency rates. The use of these foreign exchange forward contracts reduces the risk or cost to the Company and the Company does not use the foreign exchange forward contracts for trading or speculation purposes. The premium or discount on all such contracts arising at the inception of each contract is amortised as income or expenses of these particulars contracts.

9. Provision for Current and Deferred Tax :

In accordance with the Accounting Standard 22 (AS - 22) "Accounting for Taxes" issued by the Institute of Chartered Accountants of India, the provision for current income tax and current fringe benefit tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing differences" between taxable income (inclusive of allowable carried forward losses as per Income Tax Act, 1961) and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The Deferred Tax Assets is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future. Such assets are reviewed as at each balance sheet date to reassess realisation.

10. Prior period adjustments, extra-ordinary items and changes in Accounting Policy:

Prior period adjustments, extra-ordinary items and changes in accounting policies having material impact on the financial affairs of the Company are disc'osed.

11. Provision, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past 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.

12. Earning Per Share:

In accordance with the Accounting Standard 20 (AS - 20) "Earning Per Share" issued by the Institute of Chartered Accountants of India, basic earning per share is computed using the weighted average number of shares outstanding during the period.

13. Revenue Recognisation:

In accordance with the Accounting Standard 9 (AS - 9) "Revenue Recognisation" issued by the Institute of Chartered Accountants of India, the Revenue and expenditures are recognized as below :-

a) Export Sales in Foreign Currencies represent the Export Sales less if any Export Returns, Sample/Replacement etc. (inclusive of premium or discount on their forward contracts in foreign currencies materialized, if any) and the entire amount has been realized in India as per prevailing exchange rate.

b) Domestic Sales represents Basic plus Excise Duty & Cess on invoice value of goods supplied and are recorded net of deduction on the any sample/replacement bills etc.

c) Scrap Sales represents Basic plus Excise Duty & Cess on invoice value of scrap material.

d) The recovery of Central Sales Taxes and West Bengal Value Added Taxes etc. in Domestic Sales credited to separate account and no amount of Central Sales Tax & West Bengal Value Added Taxes etc. payment is reflected through Profit & Loss Account.

e) Consumption of Raw Materials and Components, Stores & Spares, Imported Goods & Traded Goods etc. include invoiced value of goods purchased less trade discount, rebate, Cenvat, and West Bengal VAT Credit allowable on such purchase etc.

f) The other heads of income & all expenditure items having a material bearing on the financial statements are recognised on mercantile & accrual basis.

14. Inventories:

In accordance with the Accounting Standard 2 (AS - 2) "Valuation of Inventories" issued by the Institute of Chartered Accountants of India, the valuation of stock summarized as below :-

a) Stock of Raw Materials, Components & Paints, Stores & Spares and Consumables, Work- in-process Zinc Alloys are valued at cost on Fl FO basis (excluding of the amount of Cenvat & West Bengal VAT Credit allowable). A separate ledger for Cenvat & West Bengal VAT Credit allowable has been maintained for proper utilization of Cenvat & West Bengal VAT Credit and the same adjusted against payment of Excise Duty and Output VAT liability on account of any Sales. Rebate of Excise Duty if any realized or receivable has been adjusted against the payment of Excise Duty.

b) Stocks on Finished Goods & Semi-Finished Goods are valued at lower of cost (excluding of the amount of Cenvat & West Bengal VAT Credit allowable) or net realisable value.

c) Stocks of Scrap Materials are valued at net realisable value.

d) Goods-in-transit of purchase material are valued at purchase price.

e) There is no deviation in method of valuation of stock as prescribed U/s.145Aof the Income Tax Act, 1961.

 
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