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Accounting Policies of Elgi Equipments Ltd. Company

Mar 31, 2016

1.1 Basis for preparation of Financial Statements

The Company follows accrual method of Accounting. The financial statements have been prepared under the Historical Cost Convention and on the basis of going concern and in accordance with the Accounting Standards notified under the Companies Act, 1956 ("The Act") read with the general circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013.

1.2 Inventories

Inventories have been valued at lower of cost and net realisable value. The cost of inventories has been assigned using the weighted average cost formula.

a) Purchased items - at FIFO - Net of CENVAT and VAT

b) Work-in-Progress - Purchase cost net of CENVAT and VAT plus proportionate Overheads

c) Manufactured items - at cost excluding selling at Factory overheads and VAT.

d) Traded Items - at cost and net of VAT.

e) Inventory at Branches / - at cost including applicable Foreign Branches taxes and duties.

1.3 Depreciation

Depreciation is charged on Straight line basis for Plant & Machinery, Vehicles and Computers and on Written Down Value basis for other assets. Rates prescribed under Schedule II of the Companies Act, 2013 are adopted.

1.4 Revenue Recognition

Sales : Sales, which includes excise duty, but excludes VAT, is recognised at the time of shipment of goods from plant or from stock points.

Royalty: Royalty is recognised on accrual basis in accordance with the terms of the relevant Agreement.

Rent: Rental income is recognised on accrual basis in accordance with terms of respective rent agreements.

Interest: Interest is recognised on accrual basis taking into account the amount outstanding and the rate applicable.

Dividend : Dividend is recognised and accounted when the right to dividend is established.

1.5 Fixed Assets

a) Fixed assets are recorded at historical cost of acquisition, which includes all taxes, duties and other direct expenses incurred up to the stage of commissioning of the asset, net of CENVAT and VAT, wherever applicable.

b) Capital work-in-progress:

Capital work-in-progress consisting of assets under construction, erection and commissioning are valued at cost incurred up to the date of Balance Sheet.

c) An asset is considered as impaired in accordance with Accounting Standard 28 on "Impairment of Asset", when at Balance Sheet date there are indications of impairment and the carrying amount of the Asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount ( i.e. the higher of the asset''s net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Statement of Profit and Loss.

1.6 Foreign Currency Transactions

Transactions in foreign currency are recorded at exchange rate prevailing on the date of the transaction. For transactions settled within the year, exchange variance is charged to Statement of Profit and Loss. Outstanding liabilities and assets are restated at exchange rate prevailing at the end of the period. The resultant exchange variances are recognized in the Statement of profit and loss prepared for the period on a net off basis.

1.7 Investments

Long term investments are valued at cost. When there is a decline, other than temporary, the carrying amount is reduced to recognise the decline. Short term investments are valued at cost or fair value whichever is lower.

1.8 Employee Benefits

a) Provident Fund: Provident Fund contribution is as per the rates prescribed by the Employees Provident Fund Act 1952 and the same is charged to revenue account.

b) Superannuation: Company has an arrangement with Life Insurance Corporation of India for providing Superannuation benefits to employees eligible as per Company''s Rules. Company''s contribution to the Superannuation Fund is calculated as per agreed terms and provided in the accounts.

c) Leave Salary : Liability in respect of encashment of accumulated leave is provided based on actuarial valuation.

d) Gratuity: The Company operates a defined benefit plan for the payment of post employment benefits for its employees in the form of Gratuity fund scheme managed by Life Insurance Corporation of India. The expenditure are recognized based on the present value of obligation as determined in accordance with AS -15 on "Employee Benefits".

e) Other short term employee benefits: All the other short term employee benefits such as profit share, performance pay, etc are measured and provided on accrual basis.

1.9 Borrowing Cost

Borrowing cost includes:

a) Interest and Commitment charges on bank borrowings and other short term and long term borrowings.

b ) Amortization of ancillary costs incurred in connection with the arrangement of borrowings.

c) Finance charges in respect of assets acquired under finance leases or under other similar arrangements.

d) Exchange difference arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

1.10 Deferred Tax

Deferred Tax liabilities/assets are accounted for in respect of all timing differences, as per (AS)22.

1.11 Research & Development Expenses:

Revenue expenditure on Research and Development are charged off in the year in which they are incurred. Fixed Assets purchased for the purpose of research and development are depreciated as per the Company''s policy stated above.

1.12 Intangible Assets

Intangible Assets are recorded at the cost of acquisition and are amortised over a period of five years or its legal/ useful life whichever is less.

1.13 Provisions, Contingent Liabilities & Contingent Assets:

Provisions are recognized at the best estimate of the expenditure required to settle the present obligation at the balance sheet date.

Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2015

1.1) Basis for preparation of Financial Statements

The Company follows accrual method of Accounting. The financial statements have been prepared under the Historical Cost Convention and on the basis of going concern and in accordance with the Accounting Standards notified under the Companies Act, 1956 ("The Act") read with the general circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act2013.

1.2) Inventories

Inventories have been valued at lower of cost and net realisable value. The cost of inventories has been assigned using the weighted average cost formula.

a) Purchaseditems - atFIFO-NetofCENVAT andVAT

b) Work-in-Progress - Purchasecostnetof CENVAT andVATplus proportionate Overheads

c) Manufactureditems - atcostexcludingselling at Factory overheads and VAT.

d) TradedItems - atcostandnetofVAT.

e) Inventoryat - atcostincluding Branches/ applicable Foreign Branches taxes and duties.

1.3) Depreciation

Depreciation is charged on Straight line basis for Plant & Machinery, Vehicles and Computers and on Written Down Value basis for other assets. Rates prescribed under Schedule II of the Companies Act, 2013 are adopted.

1.4) Revenue Recognition

Sales: Sales, which includes excise duty, but excludes VAT, is recognised at the time of shipment of goods from plantorfromstockpoints.

Royalty: Royalty is recognised on accrual basis in accordance with the terms of the relevant Agreement.

Rent: Rental income is recognised on accrual basis in accordance with terms of respective rent agreements.

Interest: Interest is recognised on accrual basis taking into account the amount outstanding and the rate applicable.

Dividend : Dividend is recognised and accounted when the right to dividend is established.

1.5) Fixed Assets

a) Fixed assets are recorded at historical cost of acquisition, which includes all taxes, duties and other direct expenses incurred up to the stage of commissioning of the asset, net of CENVAT and VAT, wherever applicable.

b) Capital work-in-progress:

Capital work-in-progress consisting of assets under construction, erection and commissioning are valued at cost incurred up to the date of Balance Sheet.

c) An asset is considered as impaired in accordance with Accounting Standard 28 on "Impairment of Asset", when at Balance Sheet date there are indications of impairment and the carrying amount of the Asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset''s net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in theStatementofProfitand Loss.

1.6) ForeignCurrencyTransactions

Transactions in foreign currency are recorded at exchange rate prevailing on the date of the transaction. For transactions settled within the year, exchange variance is charged to Statement of Profit and Loss. Outstanding liabilities and assets are restated at exchange rate prevailing at the end of the year. The resultant exchange variances are recognized in the Statement of profit and loss prepared for the year on a net off basis.

1.7) Investments

Long term investments are valued at cost and short term investments are valued at cost or fair value

whichever is lower.

1.8) Employee Benefits

a) Provident Fund: Provident Fund contribution is as per the rates prescribed by the Employees Provident Fund Act 1952 and the same is charged to revenueaccount.

b) Superannuation: Company has an arrangement with Life Insurance Corporation of India for providing Superannuation benefits to employees eligible as per Company''s Rules. Company''s contribution to the Superannuation Fund is calculated as per agreed terms and provided in the accounts.

c) Leave Salary: Liability in respect of encashment of accumulated leave is provided based on actuarial valuation.

d) Gratuity: The Company operates a defined benefit plan for the payment of post employment benefits for its employees in the form of Gratuity fund scheme managed by Life Insurance Corporation of India. The expenditure are recognized based on the present value of obligation as determined in accordance with AS -15 on "Employee Benefits".

e) Other short term employee benefits: All the other short term employee benefits such as profit share, performance pay, etc are measured and provided on accrual basis.

1.9) Borrowing Cost Borrowing cost includes:

a) Interest and Commitment charges on bank borrowings and other short term and long term borrowings.

b) Amortization of ancillary costs incurred in connection with the arrangement of borrowings.

c) Finance charges in respect of assets acquired under finance leases or under other similar arrangements.

d) Exchange difference arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

1.10) Deferred Tax

Deferred Tax liabilities/assets are accounted for in respect of all timing differences, as per (AS)22.

1.11) Research & Development Expenses:

Revenue expenditure on Research and Development are charged off in the year in which they are incurred. Fixed Assets purchased for the purpose of research and development are depreciated as per the Company''s policy stated above.

1.12) Intangible Assets

Intangible Assets are recorded at the cost of acquisition and are amortised over a year of five years or its legal/useful life whichever is less.

1.13) Provisions, Contingent Liabilities & Contingent Assets:

Provisions are recognized at the best estimate of the expenditure required to settle the present obligation at the balance sheet date.

Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

The Company has one class of equity shares having a par value ofRs. 1/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. During the year ended March 31,2015, the amount of dividend per share recognized as distributions to equity shareholders is Rs.1/- (March 31,2014:Rs. 1/-).

Note:

Depreciation has been charged as per Schedule II of the Companies Act, 2013 with effect from 1st April 2014. Hence Depreciation charge for the year ended 31st March 2015 is higher by Rs.57.30 Million. In the case of assets whose useful lives are NIL as on 01.04.2014, the carrying value is adjusted against retained earnings and is disclosed above as Transition adjustment.


Mar 31, 2014

1.1) Basis for preparation of Financial Statements

The Company follows accrual method of Accounting. The financial statements have been prepared under the Historical Cost Convention and on the basis of going concern and in accordance with the Accounting Standards notified under the Companies Act, 1956 ("The Act").

1.2) Inventories

Inventories have been valued at lower of cost and net realisable value. The cost of inventories has been assigned using the weighted average cost formula.

a) Purchased items

- at FIFO - Net of CENVAT and VAT

b) Work-in-Progress - Purchase cost net of CENVAT and VAT plus proportionate Overheads

c) Manufactured items at Factory

- at cost excluding selling overheads and VAT.

d) Traded Items - at cost and net of VAT.

e) Inventory at Branches/ Foreign Branches

- at cost including applicable taxes and duties.

1.3) Depreciation

Depreciation is charged on Straight line basis for Plant & Machinery, Vehicles and Computers and on Written Down Value basis for other assets. Rates prescribed under Schedule XIV of the Companies Act, 1956 are adopted except for Computers which are depreciated over a period of 3 years at the rate of 33.33% per annum.

1.4) Revenue Recognition

Sales: Sales, which includes excise duty, but excludes VAT, is recognised at the time of shipment of goods I from plant or from stock points.

Royalty: Royalty is recognised on accrual basis in accordance with the terms of the relevant Agreement.

Rent: Rental income is recognised on accrual basis in accordance with terms of respective rent agreements.

Interest: Interest is recognised on accrual basis taking into account the amount outstanding and the rate applicable.

Dividend : Dividend is recognised and accounted when the right to dividend is established.

1.5) Fixed Assets

a) Fixed assets are recorded at historical cost of acquisition, which includes all taxes, duties and other direct expenses incurred up to the stage of commissioning of the asset, net of CENVAT and VAT, wherever applicable.

b) Capital work-in-progress:

Capital work-in-progress consisting of assets under construction, erection and commissioning are valued at cost incurred up to the date of Balance Sheet.

c) An asset is considered as impaired in accordance with Accounting Standard 28 on "Impairment of Asset", when at Balance Sheet date there are indications of impairment and the carrying amount of the Asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset''s net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Statement of Profit and Loss.

1.6) Foreign Currency Transactions

Transactions in foreign currency are recorded at exchange rate prevailing on the date of the transaction. For transactions settled within the year, exchange variance is charged to Statement of Profit and Loss. Outstanding liabilities and assets are restated at exchange rate prevailing at the end of the year. The resultant exchange variances are recognized in the Statement of profit and loss prepared for the year on a net off basis.

1.7) Investments

Long term investments are valued at cost. However, when there is a decline, other than temporary, the carrying amount is reduced to recognise the decline. Short term investments are valued at cost or fair value whichever is lower.

1.8) Employee Benefits

a) Provident Fund: Provident Fund contribution is as per the rates prescribed by the Employees Provident Fund Act 1952 and the same is charged to revenue account.

b) Superannuation: Company has an arrangement with Life Insurance Corporation of India for providing Superannuation benefits to employees eligible as per Company''s Rules. Company''s contribution to the Superannuation Fund is calculated as per agreed terms and provided in the accounts.

c) Leave Salary: Liability in respect of encashment of accumulated leave is provided based on actuarial valuation.

d) Gratuity: The Company operates a defined benefit plan for the payment of post employment benefits for its employees in the form of Gratuity fund scheme managed by Life Insurance Corporation of India. The expenditure are recognized based on the present value of obligation as determined in accordance with AS-15 on "Employee Benefits".

e) Other short term employee benefits: All the other short term employee benefits such as profit share, performance pay, etc are measured and provided on accrual basis.

1.9) Borrowing Cost Borrowing cost includes:

a) Interest and Commitment charges on bank borrowings and other short term and long term borrowings.

b) Amortization of ancillary costs incurred in connection with thearrangementof borrowings.

c) Finance charges in respect of assets acquired under finance leases or under other similar arrangements.

d) Exchange difference arising from foreign currency borrowings to the extent that they are regarded as an adjustmentto interest costs.

1.10) Segment Reporting:

Segment information for reportable segments is prepared in conformity with the accounting policies adopted for preparing the financial statements of the Company as a whole. Costs that are directly attributable to be business segments are charged to the respective segments. Unallocated income/expenditure include general corporate income/expenditure which are not allocable to any business segment.

1.11) Deferred Tax

Deferred Tax liabilities/assets are accounted for in respect of all timing differences, as per (AS)22.

1.12) Research & Development Expenses:

Revenue expenditure on Research and Development are charged offintheyear in which they are incurred.

Fixed Assets purchased for the purpose of research and development are depreciated as per the Company''s policy stated above.

1.13) Intangible Assets

Intangible Assets are recorded at the cost of acquisition and are amortised over a period of five years or its legal/ useful life whichever is less.

1.14) Provisions, Contingent Liabilities & Contingent Assets:

Provisions are recognized at the best estimate of the expenditure required to settle the present obligation at the balance sheet date.

Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote.

Contingent assets are neither recognized nor disclosed in thefinancial statements.

2.1 Terms / Rights attached to Equity Shares

The Company has one class of equity shares having a par value of Rs..1/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. During theyear ended March 31,2014, the amount of dividend per share recognized as distributions to equity shareholders is Rs.1/- (March 31,2013:Rs. 1/-).


Mar 31, 2013

1.1) Basis for preparation of Financial Statements

The Company follows accrual method of Accounting. The financial statements have been prepared under the Historical Cost Convention and on the basis of going concern and in accordance with the Accounting Standards referred to in the Section 211 (3C) of the Companies Act 1956, wherever applicable.

1.2) Inventories

Inventories have been valued at lower of cost and net realisable value. The cost of inventories has been assigned using the weighted average cost formula.

a) Purchased items - at FIFO - Net of CENVAT and VAT

b) Work-in-Progress - Purchase cost net of CENVAT and VAT plus proportionate overheads

c) Manufactured items - at cost excluding selling at Factory overheads and VAT.

d) Traded Items - at cost and net of VAT.

e) Inventory at - at cost including Branches/Foreign applicable Branches taxes and duties.

1.3) Depreciation

Depreciation is charged on Straight line basis for Plant & Machinery, Vehicles and Computers and on Written Down Value basis for other assets. Rates prescribed under Schedule XIV of the Companies Act, 1956 are adopted except for Computers which are depreciated over a period of 3 years at the rate of 33.33% per annum.

1.4) Revenue Recognition

Sales : Sales, which includes excise duty, but excludes VAT, is recognised at the time of shipment of goods from plant or from stock points.

Royalty: Royalty is recognised on accrual basis in accordance with the terms of the relevant Agreement.

Rent: Rental income is recognised on accrual basis in accordance with terms of respective rent agreements.

Interest: Interest is recognised on accrual basis taking into account the amount outstanding and the rate applicable.

Dividend : Dividend is recognised and accounted when the right to dividend is established.

1.5) Fixed Assets

a) Fixed assets are recorded at historical cost of acquisition, which includes all taxes, duties and other direct expenses incurred up to the stage of commissioning of the asset, net of CENVAT and VAT, wherever applicable.

b) Capital work-in-progress:

Capital work-in-progress consisting of assets under construction, erection and commissioning are valued at cost incurred up to the date of Balance Sheet.

c) An asset is considered as impaired in accordance with Accounting Standard 28 on "Impairment of Asset", when at Balance Sheet date there are indications of impairment and the carrying amount of th e Asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount ( i.e. the higher of the asset''s net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Statement of Profit and Loss.

1.6) Foreign Currency Transactions

Transactions in foreign currency are recorded at exchange rate prevailing on the date of the transaction. For transactions settled within the year, exchange variance is charged to Statement of Profit and Loss. Outstanding liabilities and assets are restated at exchange rate prevailing at the end of the year. The resultant exchange variances are recognized in the Statement of profit and loss prepared for the year on a net off basis.

1.7) Investments

Long term investments are valued at cost and short term investments are valued at cost or fair value whichever is lower.

1.8) Employee Benefits

a) Provident Fund: Provident Fund contribution is as per the rates prescribed by the Employees Provident Fund Act 1952 and the same is charged to revenue account.

b) Superannuation: Company has an arrangement with Life Insurance Corporation of India for providing Superannuation benefits to employees eligible as per Company''s Rules. Company''s contribution to the Superannuation Fund is calculated as per agreed terms and provided in the accounts.

c) Leave Salary : Liability in respect of encashment of accumulated leave is provided based on actuarial valuation.

d) Gratuity: The Company operates a defined benefit plan for the payment of post employment benefits for its employees in the form of Gratuity fund scheme managed by Life Insurance Corporation of India. The expenditure are recognized based on the present value of obligation as determined in accordance with AS -15 on "Employee Benefits".

e) Other short term employee benefits: All the other short term employee benefits such as profit share, performance pay, etc are measured and provided on accrual basis.

1.9) Borrowing Cost

Borrowing cost includes:

a) Interest and Commitment charges on bank borrowings and other short term and long term borrowings.

b) Amortization of ancillary costs incurred in connection with the arrangement of borrowings.

c) Finance charges in respect of assets acquired under finance leases or under other similar arrangements.

d) Exchange difference arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

1.10) Segment Reporting:

Segment information for reportable segments is prepared in conformity with the accounting policies adopted for preparing the financial statements of the company as a whole. Costs that are directly attributable to be business segments are charged to the respective segments. Unallocated income/expenditure include general corporate income/expenditure which are not allocable to any business segment.

1.11) Deferred Tax

Deferred Tax liabilities/assets are accounted for in respect of all timing differences, as per (AS)22.

1.12) Research & Development Expenses:

Revenue expenditure on Research and Development are charged off in the year in which they are incurred.

Fixed Assets purchased for the purpose of research and development are depreciated as per the Company''s policy stated above.

1.13) Intangible Assets

Intangible Assets are recorded at the cost of acquisition and are amortised over a period of five years or its legal/ useful life whichever is less.

1.14) Provisions, Contingent Liabilities & Contingent Assets:

Provisions are recognized at the best estimate of the expenditure required to settle the present obligation at the balance sheet date.

Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote.

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


Mar 31, 2012

1.1 Basis for preparation of Financial Statements

The company follows accrual method of Accounting. The Financial Statements have been prepared under the historica cost convention and on the basis of going concern and in accordance with the accounting standards referred to in the section 211 (3C) of the companies Act 1956, wherever applicable.

1.2 Inventories

nventories have been valued at lower of cost and net realizable value. The cost of inventories has been assigned using the weighted average cost formula.

a) Purchased items - at FIFO - Net of CENVAT and VAT

b) Work-in-progress - purchase cost net of CENVAT and

VAT plus proportionate overheads

c) Manufactured items - at cost excluding selling at Factory overheads and VAT

d) Trading items - at cost and net of VAT

e) Inventory items at - at cost including applicable Branches / Foreign taxes and duties Branches

1.3 Depreciation

i. Depreciation is charged as detailed below:

1. Plant & Machinery - Straight Line Method and vehicles

2. Computers - Straight Line Method over a

period of three years

3. R & D Assets - Written Off in the period of

purchase

4. Assets costing - Written Off in the period of less than Rs. 5000 purchase

5. All other assets - Written Down Value Method

ii. Where the historical cost of an existing depreciable asset has undergone a change, the change in the cost is amortized over the residual life of the asset.

1.4 Revenue Recognition

Sales: Sales, which includes excise duty, but excludes VAT, is recognised at the time of shipment of goods from plant or from stock points.

Royalty: Royalty is recognized on accrual basis in accordance with the terms of the relevant agreement.

Rent: Rental income is recognized on accrual basis in accordance with the terms of respective rent agreements.

Interest: Interest is recognized on accrual basis taking into account the amount outstanding and the rate applicable.

Dividend: Dividend is recognized and accounted when the right to dividend is established.

1.5 Fixed Assets

a) Fixed assets are recorded at historical cost of acquisition, which includes all taxes, duties and other direct expenses incurred up to the stage of commissioning of the asset, net of CENVAT and VAT, wherever applicable.

b) Capital work-in-progress:

Capital work in progress consisting of assets under construction, erection and commissioning are valued at cost incurred up to the date of Balance Sheet.

c) An asset is considered as impaired in accordance with Accounting Standard 28 on "Impairment of Asset", when at Balance Sheet date there are indications of impairment and the carrying amount of the Asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount ( i.e. the higher of the asset's net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Profit and Loss Account.

1.6 Foreign Currency Transactions

Transactions in foreign currency are recorded at exchange rate prevailing on the date of the transaction. For transactions settled within the year, exchange variance is charged to Profit and Loss Account. Outstanding liabilities and assets are restated at exchange rate prevailing at the end of the year. The resultant exchange variances are recognized in the profit and oss account prepared for the year on a net off basis.

1.7 Investments:

Long term investments are valued at cost and the short term investments are valued at cost or fair value whichever is lower.

1.8 Employee Benefits

a) Provident Fund : Provident Fund contribution is as per the rates prescribed by the Employees Provident Fund Act 1952 and the same is charged to revenue account.

b) Superannuation: Company has an arrangement with Life Insurance Corporation of India for providing Superannuation benefits to employees eligible as per Company's Rules. Company's contribution to the Superannuation Fund is calculated as per agreed terms and provided in the accounts.

c) Leave Salary : Liability in respect of encashment of accumulated leave has been provided as per actuaria valuation.

d) Gratuity : The Company operates a defined benefit plan for the payment of post employment benefits for its employees in the form of Gratuity fund scheme managed by Life Insurance Corporation of India. The expenditure are recognized based on the present value of obligation as determined in accordance with AS-15 on "Employee Benefits".

e) Other short term employee benefits: All the other short term employee benefits such as performance pay, etc are measured and provided on accrual basis.

1.9 Borrowing Cost

Borrowing cost includes:

a) Interest and commitment charges on bank borrowings and other short term and long term borrowings

b) Amortization of ancillary costs incurred in connection with the arrangement of borrowings

c) Finance charges in respect of assets acquired under finance leases or under other similar arrangements.

d) Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs

1.10 Deferred Tax

Deferred Tax liability/assets are accounted for in respect of all timing differences, as per (AS)22

1.11 Intangible Assets

ntangible Assets are recorded at the cost of acquisition and are amortized over a period of five years or its legal/ useful life whichever is less.


Mar 31, 2011

1) Basis for preparation of Financial Statements

The Company follows accrual method of Accounting. The Financial Statements have been prepared under the Historical Cost Convention and on the basis of going concern and in accordance with the Accounting Standards referred to in the Section 211 (3C) of the Companies Act 1956, wherever applicable.

2) Inventories

nventories have been valued at lower of cost and net realisable value. The cost of inventories has been assigned using the weighted average cost formula.

a) Purchased items - at FIFO - Net of CENVAT and VAT

b) Work-in-Progress - Purchase cost net of CENVAT and VAT plus roportionate overheads

c) Manufactured - at cost excluding items at Factory selling overheads, and VAT.

d) Trading Items - at cost and net of VAT.

e) Inventory items at - at cost including Branches/ Foreign applicable taxes Branches and duties.

3) Depreciation

i. Depreciation is charged as detailed below:

1. Plant & Machinery - Straight Line Method and Vehicles

2. Computers - Straight Line Method

over a period of three years.

3. R & D Assets - Written off in the period

of Purchase

4 Assets costing - Written off in the period less than Rs.5000 of Purchase.

5. All other assets - Written Down Value

method

ii. Where the historical cost of an existing depreciable asset has undergone a change, the change in the cost is amortized over the residua life of the asset.

4) Revenue recognition

Sales : Sales, which includes excise duty, but excludes VAT, is recognised at the time of shipment of goods from plant or from stock points.

Royalty : Royalty is recognised on accrual basis in accordance with the terms of the relevant Agreement.

Rent : Rental income is recognised on accrual basis in accordance with terms of respective rent agreements.

Interest : Interest is recognised on accrual basis taking into account the amount outstanding and the rate applicable.

Dividend : Dividend is recognised and accounted when the right to dividend is established.

5) Fixed Assets

a) Fixed assets are recorded at historical cost of acquisition, which includes all taxes, duties and other direct expenses incurred up to the stage of commissioning of the asset, net of CENVAT and VAT, wherever applicable.

b) Capital work-in-progress:

Capital work in progress consisting of assets under construction, erection and commissioning are valued at cost incurred up to the date of Balance Sheet.

c) An asset is considered as impaired in accordance with Accounting Standard 28 on "Impairment of Asset", when at Balance Sheet date there are indications of impairment and the carrying amount of the Asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount ( i.e. the higher of the assets net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Profit and Loss Account.

6) Foreign Currency Transactions

Transactions in foreign currency are recorded at exchange rate prevailing on the date of the transaction. For transactions settled within the year, exchange variance is charged to Profit and Loss account. Outstanding liabilities and assets are restated at exchange rate prevailing at the end of the year. The resultant exchange variances are recognized in the profit and loss account prepared for the year on a net off basis.

7) Investments

Long term investments are valued at cost and short term investments are valued at cost or fair value whichever is lower.

8) Employee Benefits

a) Provident Fund : Provident Fund contribution is as per the rates prescribed by the Employees Provident Fund Act 1952 and the same is charged to revenue account.

b) Superannuation: Company has an arrangement with Life Insurance Corporation of ndia for providing Superannuation benefits to employees eligible as per Companys Rules. Companys contribution to the Superannuation Fund is calculated as per agreed terms and provided in the accounts.

c) Leave Salary : Liability in respect of encashment of accumulated leave has been provided as per actuarial valuation.

d) Gratuity :The Company operates a defined benefit plan for the payment of post employment benefits for its employees in the form of Gratuity fund scheme managed by Life nsuranceCorporation of India. The expenditure are recognized based on the present value of obligation as determined in accordance with AS-15 on "Employee Benefits".

e) Other short term employee benefits: All the other short term employee benefits such as profit share, performance pay, etc are measured and provided on accrual basis.

9) Borrowing Cost

Borrowing cost includes:

a) Interest and Commitment charges on bank borrowings and other short term and long term borrowings.

b) Amortization of ancillary costs incurred in connection with the arrangement of borrowings.

c) Finance charges in respect of assets acquired under finance leases or under other similar arrangements.

d) Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

10) Deferred Tax

Deferred Tax liability/assets are accounted for in respect of all timing differences, as per (AS)22.

11) Intangible Assets

ntangible Assets are recorded at the cost of acquisition and are amortised over a period of five years or its legal/useful life whichever is less.


Mar 31, 2010

1) Basis for preparation of financial statements The Company follows accrual method of Accounting. The financial statements have been prepared under the Historical cost convention on the basis of a going concern and in accordance with the accounting standards referred to in the Section 211(3C) of the Companies Act 1956, wherever applicable.

2) Inventories

Inventories have been valued at lower of cost and net realisable value. The cost of inventories has been assigned using the weighted average cost formula.

a) Purchased items - at FIFO-Net of

CENVAT and VAT

b) Work-in-Progress- Purchase cost net

of CENVAT and VAT plus proportionate overheads

c) Manufactured - at cost excluding

items at Factory selling overheads

and VAT

d) Trading Items - at cost and net of VAT

e) Inventory items - at cost including

at Branches/ applicable taxes Foregin Branches and duties.

3) Depreciation

i. Depreciation is charged at the rates specified in Schedule XIV of the Companies Act, 1956 asdetailed below:

1. Plant & Machinery - Straight line method and Vehicles

2. Assets costing less - Written off in the than Rs.5000 year of purchase.

3. All other assets - Written down value

method

ii. Where the historical cost of an existing depreciable asset has undergone a change, the change in the cost is amortized over the residual life of the asset.

4) Research and Development

Revenue expenditure is charged off in the period in which it is incurred. Capital expenditure is capitalised to the extent they have alternative economic use.

5) Revenue recognition

Sales : Sales, which includes excise duty,

but excludes VAT, is recognised at the time of shipment of goods from plant or from stock points.

Service income : Service income is recognised on completion of service.

Royalty : Royalty is recognised on accrual

basis in accordance with the terms of the relevant agreement.

Rent : Rental income is recognised on

accrual basis in accordance with terms of respective rent agreements.

Interest : Interest is recognised on accrual

basis taking into account the amount outstanding and the rate applicable.

Dividend : Dividend is recognised and

accounted when the right to dividend is established.

6) Fixed Assets

a) Fixed assets are recorded at historical cost of acquisition, which includes all taxes, duties and other direct expenses incurred up to the stage of commissioning of the asset, net of CENVAT and VAT, wherever applicable.

b) Capital work-in-progress:

Capital work in progress consisting of assets under construction, erection and commissioning are valued at cost incurred up to the date of Balance Sheet.

c) An asset is considered as impaired in accordance with Accounting Standard 28 on "Impairment of Asset", when at Balance Sheet date there are indications of impairment and the carrying amount of the Asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount ( i.e. the higher of the assets net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Profit and Loss Account.

7) Foreign Currency Transactions

Transactions in foreign currency are recorded at exchange rate prevailing on the date of the transaction. For transactions settled within the year, exchange variance is charged to Profit and Loss account. Outstanding liabilities and assets are restated at exchange rate prevailing at the end of the year. The resultant exchange variances are recognized in the profit and loss account prepared for the year on a net off basis.

8) Investments

Long term investments are valued at cost and short term investments are valued at cost or fair value whichever is lower.

9) Retirement Benefits

a. Provident Fund : Provident Fund contribution is as per the rates prescribed by the Employees Provident Fund Act 1952 and the same is charged to revenue account.

b. Superannuation: Company has an arrangement with Life Insurance Corporation of India for providing Superannuation benefits to employees eligible as per Companys Rules.Companys contribution to the Superannuation Fund is calculated as per agreed terms and provided in the accounts.

c. Leave Salary : Liability for leave encashment has been provided as per actuarial valuation.

d. Gratuity :The Company operates a defined benefit plan for the payment of post employment benefits for its employees in the form of Gratuity fund scheme managed by Life Insurance Corporation of India. The expenses is recognized based on the present value of obligation is determined in accordance with AS-15 (R) on "Employee Benefits".

e. Other short term employee benefits: All the other short term employee benefits such as profit sharing, performance pay etc are measured and provided on actual basis.

10) Borrowing Cost

Borrowing cost includes:

a) Interest and Commitment charges on bank borrowings and other short term and long term borrowings.

b) Amortization of ancillary costs incurred in connection with the arrangement of borrowings.

c) Finance charges in respect of assets acquired underfinance leases or under other similar arrangements.

d) Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

11) Deferred Tax

Deferred Tax liability/assets are accounted for in respect of all timing differences, as per (AS) 22.

 
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