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Accounting Policies of Emco Ltd. Company

Mar 31, 2015

The financial statements are prepared to comply in all material aspects with the applicable accounting principles in India and the relevant provisions of the Companies Act, 2013. The Significant accounting policies are as follows

A. Basis of Accounting

The financial statements are prepared in accordance with the historical cost convention.

B. Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent amounts as at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively when revised.

C. Fixed Assets / Capital Work in Progress

Expenditure, which is of capital nature, is capitalised. Such expenditure includes purchase price, import duties, levies, and attributable cost of bringing the asset to its operating condition. The assets acquired on Hire Purchase basis have been capitalised at the gross value and interest thereon is charged to Statement of Profit and loss. Projects under commissioning and other Capital Work-in-Progress are carried at costs, comprising direct cost, related incidental expenses and interest on borrowings.

D. Depreciation / Amortisation:

I Tangible Assets

a. Depreciation is provided from the date the assets are put to use and has been calculated on straight line method as per the useful life prescribed under Schedule II of the Companies Act, 2013, except following assets which are depreciated over period of its estimated useful life

b. For following class of assets where the useful life is estimated based on technical advice and the management believes that such useful lives best represent the period over which the assets will be used.

c. Leasehold Improvements are amortised over the primary lease period.

II. Intangible Assets

a. These are amortised over their useful life, not exceeding five years.

b. Development costs for new design is amortised over a period of 5 years

III. Leasehold land, which are given by Central / State Government authorities are not amortised in view of the long tenure of the lease.

E Investments

Long term investments are stated at cost less permanent diminution in value, if any.

F Valuation of Inventories

Raw Materials, Stock in Process, Stores and Spares are valued at cost and net of credits under the scheme of Cenvat Rules and VAT Rules. Finished goods are valued at cost, or Market Value / Net Realisable Value, whichever is less. Cost is determined on a Moving Weighted Average basis. Excise duty is included in the value of finished goods.

G Revenue Recognition

I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales Tax, Vat, Returns, Trade Discounts and incentives.

II. Revenue from long term contracts are recognized on the percentage of completion method, in proportion that the contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. Contract revenue earned in excess of billing has been reflected under "Other Current Assets" and billing in excess of contract revenue has been reflected under "Current Liabilities" in the balance sheet. Full provision is made for any loss in the year in which it is first foreseen.

III. Dividend Income is recognised when the right to receive dividend is established. Interest Income is recognized on time proportion basis.

H Foreign Exchange Transactions

Foreign Currency transactions are recorded at exchange rates prevailing on the date of respective transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end rates. Non – Monetary foreign currency items are carried at cost. The differences in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the Statement of Profit and loss, except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted in carrying cost of fixed assets.

The Company uses derivative financial instruments such as forward exchange contracts to hedge its risks associated with foreign currency fluctuation.

Gain or loss on restatement of forward exchange contracts for hedging underlying outstanding at the balance sheet date are recognised in the statement of Profit and loss for the year in which it occurs. The premium or discount on such contracts is recognised in the statement of Profit and loss over the period of the contract.

Loss on fair valuation of forward exchange contracts and embedded derivative contracts for hedging highly forecasted transaction are recognised in the statement of Profit and loss for the year in which it occurs.

I Derivative instruments (Commodity derivatives)

In order to hedge its exposure to commodity price risk, the Company enters into non speculative hedges, such as forward, option or swap contracts and other appropriate derivative instruments. These instruments are used only for the purpose of managing the exposure to commodity price risk and not for speculative purposes. The premium and gains / losses arising from settled derivative contracts, and mark to market (MTM) losses in respect of outstanding derivative contracts as at balance sheet date are credited for gains or charged for losses to the raw material consumed in so far as it relates to the derivative instruments taken to hedge risk of movement in price of Raw Material, the net MTM gains in respect of outstanding derivatives contracts are not recognized on conservative basis.

J Export Obligations / Entitlements / Incentives

Benefit / (Obligation) on account of entitlement on export or deemed export orders, to import duty-free raw materials, under the various Exim Schemes are estimated and accounted in the year in which the export / deemed export orders are executed.

K Employee Benefits

Short term employee Benefits are recognised as an expense at un-discounted amount in the statement of Profit and loss of the year in which services are rendered. Provision for gratuity and other long term employee Benefits- leave, defined benefit schemes, are made on the basis of actuarial valuations made at the end of each financial year are charged to the statement of Profit and loss during the year.

Actuarial gains and losses are recognised immediately in the statement of Profit and loss.

L Operating Lease

Leases, where the lessor effectively retains substantially all the risks and Benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the statement of Profit and loss on a straight-line basis over the lease term.

M Stock Based Compensation

In accordance with the Employee Stock Option Scheme (ESOS), the Company recognises the excess, if any, of the market price of the options granted as on the date of the grant over the exercise price of the options, and amortises it on a straight-line basis over the vesting period.

N Taxation

a. Provision for Income Tax is made under the liability method after availing exemptions and deductions at the rates applicable under the Income Tax Act, 1961.

b. Deferred tax resulting from timing difference between book and tax Profits is accounted for using the tax rates and laws that have been enacted as on the Balance Sheet Date.

c. Deferred tax assets arising on the temporary timing differences are recognised only if there is reasonable certainty of realisation.

d. Minimum Alternate Tax ('MAT') credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the company recognises MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit available in respect of Minimum Alternate Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of Profit and loss and shown as "MAT Credit Entitlement". The Company reviews the "MAT Credit Entitlement" asset at each reporting date and writes down the extent the Company does not have convincing evidence that it will be able to utilise the MAT Credit Entitlement within the period specified under the Income-tax Act, 1961.

O Impairment of Assets

The carrying amount of assets is reviewed periodically for any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

P Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalised up to the date when such assets are ready for its intended use and other borrowing costs are charged to the Statement of Profit and loss.

Q Provisions for contingencies

A provision is recognised when:

- The Company has a present obligation as a result of a past event;

- It is probable that an outflow of resources embodying economic Benefits which will be required to settle the obligation; and

- A reliable estimate can be made of the amount of the obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

The Company provides for warranty cost based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

R Research & Development

All revenue expenses pertaining to research are charged to the statement of Profit and loss in the year in which they are incurred and development expenditure of capital nature is capitalised as fixed assets and depreciated as per the company's policy.


Mar 31, 2014

The financial statements are prepared to comply in all material aspects with the applicable accounting principles in India, the Accounting Standards notified by the Companies (Accounting Standard) Rule 2006 and the relevant provisions of the Companies Act, 1956. The significant accounting policies are as follows

A. Basis of Accounting

The financial statements are prepared in accordance with the historical cost convention.

B. Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent amounts as at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively when revised.

C. Fixed Assets / Capital Work in Progress

Expenditure, which is of capital nature, is capitalised. Such expenditure includes purchase price, import duties, levies, and attributable cost of bringing the asset to its operating condition. The assets acquired on Hire Purchase basis have been capitalised at the gross value and interest thereon is charged to Statement of profit and loss. Projects under commissioning and other Capital Work-in-Progress are carried at costs, comprising direct cost, related incidental expenses and interest on borrowings.

D. Depreciation / Amortisation:

I. Tangible Assets

Depreciation has been calculated in accordance with Section 205(2) (b) of the Companies Act, 1956, as under

a. The depreciation is provided from the date the assets are put to use, on straight-line method at the rates prescribed under Schedule XIV of the Companies Act, 1956, except following assets which are depreciated over period of its estimated useful life

b. The Company provides 100% depreciation on fixed assets with value less than or equal to Rs. 0.05 lakhs as per the provisions of Schedule XIV of the Companies Act 1956.

c. Leasehold Improvements are amortised over the primary lease period.

II. Intangible Assets

a. These are amortised over their useful life, not exceeding fve years.

b. Deferred Revenue Expenditure is written off in the year of expenditure.

c. Development costs for new design is amortised over a period of 5 years.

III. Leasehold land, which are given by Central / State Government authorities are not amortised in view of the long tenure of the lease.

E. Investments

Long term investments are stated at cost less permanent diminution in value, if any.

F. Valuation of Inventories

Raw Materials, Stock in Process, Stores and Spares are valued at cost and net of credits under the scheme of Cenvat Rules and VAT Rules. Finished goods are valued at cost, or Market Value / Contract Price, whichever is less. Cost is determined on a weighted average basis. Excise duty is included in the value of finished goods.

G. Revenue Recognition

I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales Tax, Vat, Returns, Trade Discounts and incentives.

II. Revenue from long term contracts are recognized on the percentage of completion method, in proportion that the contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. Contract revenue earned in excess of billing has been reflected under "Other Current Assets" and billing in excess of contract revenue has been reflected under "Current Liabilities" in the balance sheet. Full provision is made for any loss in the year in which it is first foreseen.

III. Dividend Income is recognised when the right to receive dividend is established. Interest Income is recognized on time proportion basis.

H. Foreign Exchange Transactions

Foreign Currency transactions are recorded at exchange rates prevailing on the date of respective transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end rates. Non – Monetory foreign currency items are carried at cost. The differences in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the Statement of profit and loss, except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted in carrying cost of fixed assets.

The Company uses derivative financial instruments such as forward exchange contracts to hedge its risks associated with foreign currency fluctuation.

Gain or loss on restatement of forward exchange contracts for hedging underlying outstanding at the balance sheet date are recognised in the statement of profit and loss for the year in which it occurs. The premium or discount on such contracts is recognised in the statement of profit and loss over the period of the contract.

Loss on fair valuation of forward exchange contracts and embedded derivative contracts for hedging highly forecasted transaction are recognised in the statement of profit and loss for the year in which it occurs.

I. Derivative instruments (Commodity derivatives)

In order to hedge its exposure to commodity price risk, the Company enters into non speculative hedges, such as forward, option or swap contracts and other appropriate derivative instruments. These instruments are used only for the purpose of managing the exposure to commodity price risk and not for speculative purposes. The premium and gains / losses arising from settled derivative contracts, and mark to market (MTM) losses in respect of outstanding derivative contracts as at balance sheet date are credited for gains or charged for losses to the raw material consumed in so far as it relates to the derivative instruments taken to hedge risk of movement in price of Raw Material, the net MTM gains in respect of outstanding derivatives contracts are not recognized on conservative basis.

J. Export Obligations / Entitlements / Incentives

Benefit / (Obligation) on account of entitlement on export or deemed export orders, to import duty-free raw materials, under the various Exam Schemes are estimated and accounted in the year in which the export / deemed export orders are executed.

K. Employee Benefits

Short term employee benefits are recognised as an expense at un-discounted amount in the statement of profit and loss of the year in which services are rendered. Provision for gratuity and other long term employee benefits- leave, defend benefit schemes, are made on the basis of actuarial valuations made at the end of each financial year are charged to the statement of profit and loss during the year.

Actuarial gains and losses are recognised immediately in the statement of profit and loss.

L. Operating Lease

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term.

M. Stock Based Compensation

In accordance with the Employee Stock Option Scheme (ESOS), the Company recognises the excess, if any, of the market price of the options granted as on the date of the grant over the exercise price of the options, and amortises it on a straight-line basis over the vesting period.

N. Taxation

a. Provision for Income Tax is made under the liability method after availing exemptions and deductions at the rates applicable under the Income Tax Act, 1961.

b. Deferred tax resulting from timing difference between book and tax profits is accounted for using the tax rates and laws that have been enacted as on the Balance Sheet Date.

c. Deferred tax assets arising on the temporary timing differences are recognised only if there is reasonable certainty of realisation.

O. Impairment of Assets

The carrying amount of assets is reviewed periodically for any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

P. Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalised up to the date when such assets are ready for its intended use and other borrowing costs are charged to the Statement of profit and loss.

Q. Provisions for contingencies

A provision is recognised when:

- The Company has a present obligation as a result of a past event;

- It is probable that an outflow of resources embodying economic benefits which will be required to settle the obligation; and

- A reliable estimate can be made of the amount of the obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

The Company provides for warranty cost based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

R. Research & Development

All revenue expenses pertaining to research are charged to the statement of profit and loss in the year in which they are incurred and development expenditure of capital nature is capitalised as fixed assets and depreciated as per the company''s policy.

a) Working Capital Term Loan referred in (a) above is secured on first charge basis (pari passu) by way of equitable mortgage on Company''s immovable properties situated at MIDC-Thane and MIDC-Jalgaon both present or future. Further the said working capital term loan is secured on second charge (pari passu) by way of hypothecation on the Company''s movable assets including current assets except assets exclusively financed by other lenders i.e. Wind Mill and Solar farm.

b) Working Capital Loans from banks referred in (b) and (c) above and bank facilities mentioned in Note 26 (I) (a) and (b) are secured on first charge basis (pari passu) by way of hypothecation on current assets of the Company such as raw Materials, stocks-in-process, finished goods, consumable stores and spares, book debts, outstanding and claims, receivable both present and future except book debts and receivables pertaining to wind mill and solar farm which are exclusively financed by other lenders. Further the said working capital facilities are secured on first charge basis (pari passu) by way of registered mortgage on the movable and immovable Properties situated at Vadodara (Gujarat) Silvassa (UT-Dadara and Nagar Haveli) and second charge by way of registered mortgage on the Company''s all movable fixed assets and on immovable properties situated at MIDC-Thane, MIDC-Jalgaon and Umala-Jalgaon.

c) Working capital referred in (c ) above is overdrawn by Rs. 3,356 Lakhs (nil).


Mar 31, 2013

The fi nancial statements are prepared to comply in all material aspects with the applicable accounting principles in India, the Accounting Standards notifi ed by the Companies (Accounting Standard) Rule 2006 and the relevant provisions of the Companies Act, 1956. The signifi cant accounting policies are as follows

A. Basis of Accounting

The fi nancial statements are prepared in accordance with the historical cost convention.

B. Use of Estimates

The preparation of fi nancial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent amounts as at the date of the fi nancial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively when revised.

C. Fixed Assets / Capital Work in Progress

Expenditure, which is of capital nature, is capitalised. Such expenditure includes purchase price, import duties, levies, and attributable cost of bringing the asset to its operating condition. The assets acquired on Hire Purchase basis have been capitalised at the gross value and interest thereon is charged to Statement of profi t and loss. Projects under commissioning and other Capital Work-in-Progress are carried at costs, comprising direct cost, related incidental expenses and interest on borrowings.

D. Depreciation / Amortisation

I. Tangible Assets

Depreciation has been calculated in accordance with Section 205(2) (b) of the Companies Act, 1956, as under

a. The depreciation is provided from the date the assets are put to use, on straight-line method at the rates prescribed under Schedule XIV of the Companies Act, 1956, except following assets which are depreciated over period of its estimated useful life

Asset Estimated Useful Life

Porta Cabin 5 years

Form Box 5 years

Templates 5 years

b. The Company provides 100% depreciation on fi xed assets with value less than or equal toRs. 0.05 lakhs as per the provisions of Schedule XIV of the Companies Act 1956.

c. Leasehold Improvements are amortised over the primary lease period.

II. Intangible Assets

a. These are amortised over their useful life, not exceeding fi ve yea

b. Deferred Revenue Expenditure is written off in the year of expenditure.

III. Leasehold land, which are given by Central / State Government authorities are not amortised in view of the long tenure of the lease.

E. Investments

Long term investments are stated at cost less permanent diminution in value, if any.

F. Valuation of Inventories

Raw Materials, Stock in Process, Stores and Spares are valued at cost and net of credits under the scheme of Cenvat Rules and VAT Rules. Finished goods are valued at cost, or Market Value / Contract Price, whichever is less. Cost is determined on a weighted average basis. Excise duty is included in the value of fi nished goods.

G. Revenue Recognition

I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales Tax, Vat, Returns, Trade Discounts and incentives.

II. Revenue from long term contracts are recognized on the percentage of completion method, in proportion that the contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. Contract revenue earned in excess of billing has been refl ected under "Other Current Assets" and billing in excess of contract revenue has been refl ected under "Current Liabilities" in the balance sheet. Full provision is made for any loss in the year in which it is fi rst foreseen.

III. Dividend Income is recognised when the right to receive dividend is established. Interest Income is recognized on time proportion basis.

H. Foreign Exchange Transactions

Foreign Currency transactions are recorded at exchange rates prevailing on the date of respective transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end rates. Non – Monetory foreign currency items are carried at cost. The differences in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the Statement of profi t and loss, except in case of long term liabilities, where they relate to acquisition of fi xed assets, in which case they are adjusted in carrying cost of fi xed assets.

The Company uses derivative fi nancial instruments such as forward exchange contracts to hedge its risks associated with foreign currency fl uctuation.

Gain or loss on restatement of forward exchange contracts for hedging underlying outstanding at the balance sheet date are recognised in the statement of profi t and loss for the year in which it occu The premium or discount on such contracts is recognised in the statement of profi t and loss over the period of the contract.

Gain or loss on fair valuation of forward exchange contracts and embedded derivative contracts for hedging highly forecasted transaction are recognised in the statement of profi t and loss for the year in which it occu

I. Derivative instruments (Commodity derivatives)

In order to hedge its exposure to commodity price risk, the Company enters into non speculative hedges, such as forward, option or swap contracts and other appropriate derivative instruments. These instruments are used only for the purpose of managing the exposure to commodity price risk and not for speculative purposes. The premium and gains / losses arising from settled derivative contracts, and mark to market (MTM) losses in respect of outstanding derivative contracts as at balance sheet date are credited for gains or charged for losses to the raw material consumed in so far as it relates to the derivative instruments taken to hedge risk of movement in price of Raw Material, the net MTM gains in respect of outstanding derivatives contracts are not recognized on conservative basis.

J. Export Obligations / Entitlements / Incentives

Benefi t / (Obligation) on account of entitlement on export or deemed export orders, to import duty-free raw materials, under the various Exim Schemes are estimated and accounted in the year in which the export / deemed export orders are executed.

K. Employee Benefi ts

Short term employee benefi ts are recognised as an expense at un-discounted amount in the statement of profi t and loss of the year in which services are rendered. Provision for gratuity and other long term employee benefi ts- leave, defi ned benefi t schemes, are made on the basis of actuarial valuations made at the end of each fi nancial year are charged to the statement of profi t and loss during the year.

Actuarial gains and losses are recognised immediately in the statement of profi t and loss.

L. Operating Lease

Leases, where the lessor effectively retains substantially all the risks and benefi ts of ownership of the leased item, are classifi ed as operating leases. Operating lease payments are recognised as an expense in the statement of profi t and loss on a straight-line basis over the lease term.

M. Stock Based Compensation

In accordance with the Employee Stock Option Scheme (ESOS), the Company recognises the excess, if any, of the market price of the options granted as on the date of the grant over the exercise price of the options, and amortises it on a straight- line basis over the vesting period.

N. Taxation

a. Provision for Income Tax is made under the liability method after availing exemptions and deductions at the rates applicable under the Income Tax Act, 1961.

b. Deferred tax resulting from timing difference between book and tax profi ts is accounted for using the tax rates and laws that have been enacted as on the Balance Sheet Date.

c. Deferred tax assets arising on the temporary timing differences are recognised only if there is reasonable certainty of realisation.

O. Impairment of Assets

The carrying amount of assets is reviewed periodically for any indication of impairment based on internal / external facto An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash fl ows are discounted to their present value at the weighted average cost of capital. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

P. Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fi xed assets are capitalised up to the date when such assets are ready for its intended use and other borrowing costs are charged to the Statement of profi t and loss.

Q. Provisions for contingencies

A provision is recognised when:

- The Company has a present obligation as a result of a past event;

- It is probable that an outfl ow of resources embodying economic benefi ts which will be required to settle the obligation; and

- A reliable estimate can be made of the amount of the obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outfl ow of resources. Where there is a possible obligation or a present obligation that the likelihood of outfl ow of resources is remote, no provision or disclosure is made.

The Company provides for warranty cost based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

R. Research & Development

All revenue expenses pertaining to research are charged to the statement of profi t and loss in the year in which they are incurred and development expenditure of capital nature is capitalised as fi xed assets and depreciated as per the company s policy.


Mar 31, 2012

The financial statements are prepared to comply in all material aspects with the applicable accounting principles in India, the Accounting Standards notified by the Companies (Accounting Standard) Rule 2006 and the relevant provisions of the Companies Act, 1956. The significant accounting policies are as follows

A. Basis of Accounting

The financial statements are prepared in accordance with the historical cost convention.

B. Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent amounts as at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively when revised.

C. Fixed Assets / Capital Work in Progress

Expenditure, which is of capital nature, is capitalized. Such expenditure includes purchase price, import duties, levies and attributable cost of bringing the asset to its operating condition. The assets acquired on Hire Purchase basis have been capitalized at the gross value and interest thereon is charged to Statement of profit and loss. Projects under commissioning and other Capital Work-in-Progress are carried at costs; comprising direct cost, related incidental expenses and interest on borrowings.

D. Depreciation / Amortization

I. Tangible Assets

Depreciation has been calculated in accordance with Section 205(2) (b) of the Companies Act, 1956, as under:

a. The depreciation is provided from the date the assets are put to use, on straight-line method at the rates prescribed under Schedule XIV of the Companies Act, 1956, except following assets which are depreciated over period of its estimated useful life:

b. The Company provides 100% depreciation on fixed assets with value less than or equal to Rs. 0.05 lakhs as per the provisions of Schedule XIV of the Companies Act 1956.

c. Leasehold Improvements are amortized over the primary lease period.

II. Intangible Assets

a. These are amortized over their useful life, not exceeding five years.

b. Deferred Revenue Expenditure is written off in the year of expenditure.

III. Leasehold land, which are given by Central / State Government authorities are not amortized in view of the long tenure of the lease.

E. Investments

Long term investments are stated at cost less permanent diminution in value, if any.

F. Valuation of Inventories

Raw Materials, Stock in Process, Stores and Spares are valued at cost and net of credits under the scheme of Cenvat Rules and VAT Rules. Finished goods are valued at cost or Market Value / Contract Price, whichever is less. Cost is determined on a weighted average basis. Excise duty is included in the value of finished goods.

G. Revenue Recognition

I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales Tax, Vat, Returns, Trade Discounts and incentives.

II. Revenue from long term contracts are recognized on the percentage of completion method, in proportion that the contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. Contract revenue earned in excess of billing has been reflected under "Other Current Assets" and billing in excess of contract revenue has been reflected under "Current Liabilities" in the balance sheet. Full provision is made for any loss in the year in which it is first foreseen.

III. Dividend Income is recognized when the right to receive dividend is established. Interest Income is recognized on time proportion basis.

H. Foreign Exchange Transactions

Foreign Currency transactions are recorded at exchange rates prevailing on the date of respective transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end rates. Non-monitory foreign currency items are carried at cost. The differences in translation of monetary assets and liabilities and realized gains and losses on foreign exchange transactions are recognized in the Statement of profit and loss, except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted in carrying cost of fixed assets.

The Company uses derivative financial instruments such as forward exchange contracts to hedge its risks associated with foreign currency fluctuation.

Gain or loss on restatement of forward exchange contracts for hedging underlying outstanding at the balance sheet date are recognized in the statement of profit and loss for the year in which it occurs. The premium or discount on such contracts is recognized in the statement of profit and loss over the period of the contract.

Gain or loss on fair valuation of forward exchange contracts and embedded derivative contracts for hedging highly forecasted transaction are recognized in the statement of profit and loss for the year in which it occurs.

I. Derivative instruments (Commodity derivatives)

In order to hedge its exposure to commodity price risk, the Company enters into non speculative hedges, such as forward, option or swap contracts and other appropriate derivative instruments. These instruments are used only for the purpose of managing the exposure to commodity price risk and not for speculative purposes. The premium and gains / losses arising from settled derivative contracts, and mark to market (MTM) losses in respect of outstanding derivative contracts as at balance sheet date are credited for gains or charged for losses to the raw material consumed in so far as it relates to the derivative instruments taken to hedge risk of movement in price of Raw Material, the net MTM gains in respect of outstanding derivatives contracts are not recognized on conservative basis.

J. Export Obligations / Entitlements / Incentives

Benefit / (Obligation) on account of entitlement on export or deemed export orders, to import duty-free raw materials, under the various Exim Schemes are estimated and accounted in the year in which the export / deemed export orders are executed.

K. Employee Benefits

Short term employee benefits are recognized as an expense at un-discounted amount in the statement of profit and loss of the year in which services are rendered. Provision for gratuity and other long term employee benefits-leave, defined benefit schemes, are made on the basis of actuarial valuations made at the end of each financial year are charged to the statement of profit and loss during the year.

Actuarial gains and losses are recognized immediately in the statement of profit and loss.

L. Operating Lease

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.

M. Stock Based Compensation

In accordance with the Employee Stock Option Scheme (ESOS), the Company recognizes the excess, if any, of the market price of the options granted as on the date of the grant over the exercise price of the options, and amortizes it on a straight-line basis over the vesting period.

N. Taxation

a. Provision for Income Tax is made under the liability method after availing exemptions and deductions at the rates applicable under the Income Tax Act, 1961.

b. Deferred tax resulting from timing difference between book and tax profits is accounted for using the tax rates and laws

that have been enacted as on the Balance Sheet Date.

c. Deferred tax assets arising on the temporary timing differences are recognized only if there is reasonable certainty of realization.

O. Impairment of Assets

The carrying amount of assets is reviewed periodically for any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

P. Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and other borrowing costs are charged to the Statement of Profit and Loss.

Q. Provisions for contingencies

A provision is recognized when:

- The Company has a present obligation as a result of a past event;

- It is probable that an outflow of resources embodying economic benefits which will be required to settle the obligation; and

- A reliable estimate can be made of the amount of the obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

The Company provides for warranty cost based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

R. Research and Development

All revenue expenses pertaining to research are charged to the statement of profit and loss in the year in which they are incurred and development expenditure of capital nature is capitalized as fixed assets and depreciated as per the Company's policy.

In the Extra Ordinary General Meeting of the Members of the Company held on 22nd June 2009, the members had approved the issuance of warrants to the Promoter / Promoter Group, entitling the warrant holders to apply from time to time for equity shares of the company in one or more tranches on preferential basis not exceeding 63,00,000 fully paid-up equity shares of the face value of Rs. 2 each. During the year, One of the Promoter has applied for conversion of balance Nil (32,10,000) warrants applied in previous year into equivalent number of equity shares and the company has allotted Nil (32,10,000) equity shares to One of the Promoter @ Rs. Nil (Rs. 62) per shares (including premium of Rs. Nil (Rs. 60) per share).


Mar 31, 2011

The financial statements are prepared to comply in all material aspects with the applicable accounting principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956. The signifcant accounting policies are as follows:

A. Basis of Accounting:

The financial statements are prepared in accordance with the historical cost convention.

B. Use of Estimates:

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent amounts as at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively when revised.

C. Fixed Assets / Capital Work in Progress:

Expenditure, which is of capital nature, is capitalised. Such expenditure includes purchase price, import duties, levies, and attributable cost of bringing the asset to its operating condition. The assets acquired on Hire Purchase basis have been capitalised at the gross value and interest thereon is charged to Profit and Loss Account. Projects under commissioning and other Capital Work-in-Progress are carried at costs, comprising direct cost, related incidental expenses and interest on borrowings.

D. Depreciation / Amortisation:

I. Tangible Assets

Depreciation has been calculated in accordance with Section 205(2) (b) of the Companies Act, 1956, as under:

a. The depreciation is provided from the date the assets are put to use, on straight-line method at the rates prescribed under Schedule XIV of the Companies Act, 1956, except following Assets which are depreciated over period of its estimated useful life:

Asset Estimated Useful Life

i) Porta Cabin 5 years

ii) Form Box 5 years

iii) Templates 5 years

b. The Company provides 100% depreciation on fxed assets with value less than or equal to ` 5,000 as per the provisions of Schedule XIV of the Companies Act 1956.

c. Leasehold Improvements are amortised over the primary lease period.

II. Intangible Assets

a. These are amortised over their useful life, not exceeding fve years.

b. Deferred Revenue Expenditure is written off in the year of expenditure.

III. Leasehold land, which are given by Central/State Government authorities are not amortised in view of the long tenure of the lease.

E. Investments:

Long term investments are stated at cost less permanent diminution in value, if any.

F. Valuation of Inventories:

Raw Materials, Stock in Process, Stores and Spares are valued at cost and net of credits under the scheme of Cenvat Rules and VAT Rules. Finished goods are valued at cost, or Market Value / Contract Price, whichever is less. Cost is determined on a weighted average basis. Excise duty is included in the value of fnished goods.

G. Revenue Recognition:

I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales Tax, Returns, Trade Discounts and incentives.

II. Revenue from long term contracts are recognized on the percentage of completion method, in proportion that the contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. Contract revenue earned in excess of billing has been refected under “Other Current Assets” and billing in excess of contract revenue has been refected under “Current Liabilities” in the balance sheet. Full provision is made for any loss in the year in which it is frst foreseen.

III. Dividend Income is recognised when the right to receive dividend is established. Interest Income is recognized on time proportion basis.

H. Foreign Exchange Transactions:

Foreign Currency transactions are recorded at exchange rates prevailing on the date of respective transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end rates. The differences in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the Profit and Loss Account.

The Company uses derivative financial instruments such as forward exchange contracts to hedge its risks associated with foreign currency fuctuation.

Gain or loss on restatement of forward exchange contracts for hedging underlying outstanding at the balance sheet date are recognised in the profit and loss account for the year in which it occurs. The premium or discount on such contracts is recognised in the profit and loss account over the period of the contract.

Gain or loss on fair valuation of forward exchange contracts and embedded derivative contracts for hedging highly forecasted transaction are recognised in the profit and loss account for the year in which it occurs.

I. Derivative instruments (Commodity derivatives)

In order to hedge its exposure to commodity price risk, the Company enters into non speculative hedges, such as forward, option or swap contracts and other appropriate derivative instruments. These instruments are used only for the purpose of managing the exposure to commodity price risk and not for speculative purposes. The premium and gains/ losses arising from settled derivative contracts, and mark to market (MTM) losses in respect of outstanding derivative contracts as at balance sheet date are credited for gains or charged for losses to the raw material consumed in so far as it relates to the derivative instruments taken to hedge risk of movement in price of Raw Material, the net MTM gains in respect of outstanding derivatives contracts are not recognized on conservative basis.

J. Export Obligations / Entitlements / Incentives:

Beneft / (Obligation) on account of entitlement on export or deemed export orders, to import duty-free raw materials, under the various Exim Schemes are estimated and accounted in the year in which the export/deemed export orders are executed.

K. Employee Benefts:

Contributions to the recognised Provident Fund/Gratuity Fund and provision for other long term employee benefts- leave, defned beneft schemes, are made on the basis of actuarial valuations made at the end of each financial year are charged to the profit and loss account during the year.

Actuarial gains and losses are recognised immediately in the profit and loss account.

L. Operating Lease:

Leases, where the lessor effectively retains substantially all the risks and benefts of ownership of the leased item, are classifed as operating leases. Operating lease payments are recognised as an expense in the profit and loss account on a straight-line basis over the lease term.

M. Stock Based Compensation:

In accordance with the Employee Stock Option Scheme (ESOS), the Company recognises the excess, if any, of the market price of the options granted as on the date of the grant over the exercise price of the options, and amortises it on a straight-line basis over the vesting period.

N. Taxation:

a. Provision for Income Tax is made under the liability method after availing exemptions and deductions at the rates applicable under the Income Tax Act, 1961.

b. Deferred tax resulting from timing difference between book and tax profits is accounted for using the tax rates and laws that have been enacted as on the Balance Sheet Date.

c. Deferred tax assets arising on the temporary timing differences are recognised only if there is reasonable certainty of realisation.

O. Impairment of Fixed Assets:

The carrying amount of assets is reviewed periodically for any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash fows are discounted to their present value at the weighted average cost of capital. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

P. Borrowing Costs:

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fxed assets are capitalised up to the date when such assets are ready for its intended use and other borrowing costs are charged to the Profit & Loss Account.

Q. Provisions for contingencies:

A provision is recognised when:

- The Company has a present obligation as a result of a past event;

- It is probable that an outfow of resources embodying economic benefts which will be required to settle the obligation; and

- A reliable estimate can be made of the amount of the obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outfow of resources. Where there is a possible obligation or a present obligation that the likelihood of outfow of resources is remote, no provision or disclosure is made.

The Company provides for warranty cost based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

R. Research & Development

All revenue expenses pertaining to research and development are charged to the profit and loss account in the year in which they are incurred and expenditure of capital nature is capitalised as fxed assets and depreciated as per the company's policy.


Mar 31, 2010

The financial statements are prepared to comply in all material aspects with the applicable accounting principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1 956, The significant accounting policies are as follows:

A. Basis of Accounting:

The financial statements are prepared in accordance with the historical cost convention,

B. Use of Estimates:

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent amounts as at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively when revised.

C. Fixed Assets / Capital Work in Progress:

Expenditure, which is of capital nature, is capitalised. Such expenditure includes purchase price, import duties, levies, and attributable cost of bringing the asset to its operating condition. The assets acquired on Hire Purchase basis have been capitalised at the gross value and interest thereon is charged to Profit and Loss Account. Projects under commissioning and other Capital Work-in-Progress are carried at costs, comprising direct cost, related incidental expenses and interest on borrowings.

D. Depreciation/Amortisation:

I. Tangible Assets

Depreciation has been calculated in accordance with Section 205(2) (b) of the Companies Act, 1956, as under:

a. The depreciation is provided from the date the assets are put to use, on straight-line method at the rates prescribed under Schedule XIV of the Companies Act, 1 956, except following Assets which are depreciated over period of its estimated useful life:

b. The Company provides 100% depreciation on fixed assets with value less than or equal to Rs. 5,000 as per the provisions of Schedule XIV of the Companies Act 1956.

II. Intangible Assets

a. These are amortised over their useful life, not exceeding five years,

b. Deferred Revenue Expenditure is written off in the year of expenditure.

III. Leasehold land, which are given by Central/State Government authorities are not amortised in view of the long tenure of the lease.

E. Investments:

Long term investments are stated at cost less permanent diminution in value, if any.

F. Valuation of Inventories:

Raw Materials, Stock in Process, Stores and Spares are valued at cost and net of credits under the scheme of Cenvat Rules and VAT Rules. Finished goods are valued at cost, or Market Value / Contract Price, whichever is less. Cost is determined on a weighted average basis.

G. Revenue Recognition:

I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales Tax, Returns, Trade Discounts and incentives.

II. Excise Duty on manufactured goods is accounted at the time of their clearance from factory.

III. Revenue from long term contracts are recognized on the percentage of completion method, in proportion that the contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. Contract revenue earned in excess of billing has been reflected under "Other Current Assets" and billing in excess of contract revenue has been reflected under "Current Liabilities" in the balance sheet. Full provision is made for any loss in the year in which it is first foreseen.

IV. Dividend Income is recognised when the right to receive dividend is established. Interest Income is recognized on time proportion basis.

H. Foreign Exchange Transactions:

Foreign Currency transactions are recorded at exchange rates prevailing on the date of respective transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end rates. The differences in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the Profit and Loss Account.

The Company uses derivative financial instruments such as forward exchange contracts to hedge its risks associated with foreign currency fluctuation

Gain or loss on restatement of forward exchange contracts for hedging underlying outstanding at the balance sheet date are recognised in the profit and loss account for the year in which it occurs. The premium or discount on such contracts is recognised in the prof it and loss account over the period of the contract.

Gain or loss on fair valuation of forward exchange contracts and embedded derivative contracts for hedging highly forecasted transaction are recognised in the profit and loss account for the year in which it occurs.

I. Derivative instruments (Commodity derivatives):

In order to hedge its exposure to commodity price risk, the Company enters into non speculative hedges, such as forward, option or swap contracts and other appropriate derivative instruments. These instruments are used only for the purpose of managing the exposure to commodity price risk and not for speculative purposes. The premium and gains/losses arising from settled derivative contracts, and mark to market (MTM) losses in respect of outstanding derivative contracts as at balance sheet date are credited for gains or charged for losses to the raw material consumed in so far as it relates to the derivative instruments taken to hedge risk of movement in price of Raw Material, the net MTM gains in respect of outstanding derivatives contracts are not recognized on conservative basis.

J. Export Obligations / Entitlements / Incentives:

Benefit/(Obligation) on account of entitlement on export or deemed export orders, to import duty-free raw materials, under the various Exim Schemes are estimated and accounted in the year in which the export/deemed export orders are executed.

K. Employee Benefits:

Contributions to the recognised Provident Fund/Gratuity Fund and provision for other long term employee benefits-leave, defined benefit schemes, are made on the basis of actuarial valuations made at the end of each financial year are charged to the profit and loss account during the year. Actuarial gains and losses are recognised immediately in the profit and loss account.

L. Operating Lease:

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the profit and loss account on a straight line basis over the lease term,

M. Stock Based Compensation:

In accordance with the Employee Stock Option Scheme (ESOS), the Company recognises the excess, if any, of the market price of the options granted as on the date of the grant over the exercise price of the options, and amortises it on a straight line basis over the vesting period.

N. Taxation:

a. Provision for Income Tax is made under the liability method after availing exemptions and deductions at the rates applicable under the Income Tax Act, 1961.

b. Deferred tax resulting from timing difference between book and tax profits is accounted for using the tax rates and laws that have been enacted as on the Balance Sheet Date.

c. Deferred tax assets arising on the temporary timing differences are recognised only if there is reasonable certainty of realisation.

0. Impairment of Fixed Assets:

The carrying amount of assets is reviewed periodically for any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

P. Borrowing Costs:

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction of qualifying fixed assets are capitalised up to the date when such assets ate ready for its intended use and other borrowing costs are charged to the Profit & Loss Account.

Q. Provisions for contingencies:

A provision is recognised when:

- The Company has a present obligation as a result of a past event;

- It is probable that an outflow of resources embodying economic benefits which will be required to settle the obligation; and

- A reliable estimate can be made of the amount of the obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, requires an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. The Company provides for warranty cost based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

R. Research & Development:

All revenue expenses pertaining to research and development are charged to the profit and loss account in the year in which they are incurred and expenditure of capital nature is capitalised as fixed assets and depreciated as per the Companys policy.