Home  »  Company  »  Emmbi Industries  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Emmbi Industries Ltd. Company

Mar 31, 2015

1. Basis of preparation of Financial Statements

The Financial Statements of the Company have been prepared in accordance with the "Generally Accepted Accounting Principles in India" (Indian GAAP) to comply with Accounting Standards specified under Section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the Act 1956") as applicable. Financial Statements have been prepared on accrual basis under Historical Cost Convention. The Accounting Policies adopted in preparation of Financial Statements are consistent with those followed in the previous year.

2. Use of Estimates

The Preparation of Financial Statements in confirmity with India GAAP requires judgements, estimates and assumption to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities if any on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which results are known and materialised.

3. Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation. The cost is inclusive of interest incidental expenses incurred during construction period and is net of cenvat credit availed and exchange rate difference arising on long term foreign currency monetary items in so far as they relate to the acquisition of depreciable asset. The fixed assets are tested for impairment. There is no impairment loss. Subsequent Expenditure related to tangible fixed asset are added to its book value only if they increase future benfits from the existing asset beyond its previously assessed standard of performance.

4. Depreciation and Amortization

In respect of Fixed Assets (other than Freehold Land) acquired during the year, Depreciation / Amortization is charged on a Straight Line Basis so as to write off the cost of the assets over the useful lives and for the assets acquired prior to 1st April 2014, the carrying amount as on 1st April 2014 is depreciated over remaining useful life based on evaluation.

5. Investments

Non Current investments are valued at cost less provision for dimunition other than temporary dimunition in the carrying value of investment.

6. Valuation of Inventories

Items of inventories are valued at lower of cost or net realisble value. Cost of inventories comprise of all cost of purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Raw materials, Stores and Spares are valued at weighted average cost. Processed stocks and finished goods are valued at material cost plus appropriate value of overheads. Provision for Excise duty on opening and closing inventory of finished goods (domestic stock and wastage) is included under Note No. 10.

7. Revenue Recognition

Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made and after all the risks and rewards of ownership is transferred to the customer.

Interest on Investments is recognised on a time proportion basis taking into account amounts invested and the rate of interest applicable Dividend Income on Investments is recognised for when the right to receive the payment is established.

8. Sales

Sales are recognised on dispatch of material to customers. Sales are net of indirect taxes payable.

9. Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. There are no Contingent Assets.

10. Employee Benefits

a) Gratuity is accounted on the basis of valuation made by the LIC. Company created Trust with LIC for Gratuity. Contribution is paid to LIC Empolyees Group Gratuity Fund.

b) Short Term Employee benefits

The undiscounted amount of Short Term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the services.

c) Bonus and Leave Encashment is paid during the year.

11. Foreign Exchange Transactions

a) Transactions in Foreign Currency are accounted at the exchange rate prevailing on the date of Transactions. Exchange fluctuations between the transaction date and the settlement date in respect of Revenue Transactions are recognized in Profit & Loss A/c.

b) All export proceeds not realised at the year end are restated at the rate prescribed in the month of March by Central Board of Excise and Customs. The exchange difference arising there from has been recognised as income / expenses in the Current Year's Profit & Loss A/c.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss statement except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

12. Borrowing Costs

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

13. Research and Development Expenses

Research and Development Expenses were mainly divided into four main categories viz Raw Material Consumed, Manpower Cost Involved, Energy Cost and various incidental charges. Company is involved in developing special kind of Technical Textile which can be used as a Crop Protection cover from all hailstorms and sudden downpowers. This product has special property that it will allow the sunlight to pass without hurting the crop. Company has to conduct various trials and experiments to develop exact blend to suit and sustain the products in varried indian territory and with varied level of chemical substrate present in atmosphere.

14. Taxes on Income

Tax Expense comprises of Current Tax and Deferred Tax:

a) Current tax is measured at the amount expected to be paid to the tax authorities, after taking into consideration benefits admissible under the provisions of the Income - Tax Act, 1961.

b) Deferred tax liabilities are recognised for future tax consequences attributable to the "timing differences" between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date. Deferred Tax Asset is not recognised unless there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

15. Earning Per Share

Basic Earning per share is calculated by dividing the Net Profit for the period attributable to equity hareholders by the weighted average number of equity shares outstanding during the period.








Mar 31, 2012

1 Basis of preparation of Financial Statements

a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and as per the Accounting Standards referred tc in Section 211 (3C) of the Companies Act,1956.

The Company generally follows mercantile system of accounting and recognises significant items of income and ' expenditure on accrual basis.

2 Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation. The cost is inclusive of interest and incidental expenses incurred during construction period and is net of cenvat credit availed. The fixed assets are tested for impairment. There is no impairment loss.

3 Depreciation

Depreciation on all Tangible assets is provided on Straight Line Method (SLM) as per Section 205(2)(b) of the Companies Act, 1956 at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased or acquired during the year is provided on pro rata basis according to the period each asset was put to use during the year. No depreciation has been provided on Vat, Excise Duty, Education cess and Higher Education Cess which has been claimed as CENVAT/Vat set off.

4 Investments

Long term investments are valued at cost.

5 Valuation of Inventories

Items of inventories are valued at lower of cost or net realisble value. Cost of Inventories comprise of all cost of purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Raw materials, Stores and Spares are valued at weighted average cost.

Processed stocks and finished goods are valued at material cost plus appropriate value of overheads. Provision for Excise duty on opening and closing inventory of finished goods'domestic stock and wastage) is included under Note No. 10

6 Revenue Recognition

Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made. Revenue and Expenses are accounted on accrual basis and at historical cost. Dividend income is accounted when right to receive is established. Interest income is recognised on time proportion basis taking into account the amount outstanding and the rate applicable.

7 Sales

Sales are recognised on dispatch of material to customers. Sales are net of indirect taxes payable. Rebates and discounts are accounted for as and when determined.

8 Expenses

Material known liabilities are provided for on the basis of available information/estimates. Expenses are accounted on accrual basis and at historical cost.

9 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. There are no Contingent Assets.

10 Employee Benefits

a) Provision for Gratuity and leave encashment are accounted on the basis of valuation made by the actuary'. The Company has created a Trust with LIC for Gratuity which is under approval.

b) Short Term Employee benefits The undiscounted amount of Short Term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the services. These benefit includes compensated absences such as paid annual leave and performance Incentives.

11 Foreign Exchange Transactions

a) Transactions in Foreign Currency are accounted at the exchange rate prevailing on the date of Transactions. Exchange fluctuations between the transaction date and the settlement date in respect of Revenue Transactions are recognized in Profit & Loss A/c

b) All export proceeds not realised at the year end are restated at the rate prescribed in the month of March by Central Board of Excise and customs. The exchange difference arising there from has been recognised as income / expenses in the Current Year's Profit & Loss A/c alongwith underlying Transactions.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

12 Borrowing Costs

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

13 Taxes on Income

a) Current tax is measured at the amount expected to be paid to the tax authorities, after taking into consideration benefits admissible under the provisions of the Income - Tax Act, 1961.

b) Minimum Alternate Tax (MAT) paid in accordance with the Income Tax Act, 1961, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset in the Balance Sheet, when it is probable that the future economic benefits associated with it will flow to the company and the asset can be measured.

c) Deferred tax liabilities are recognised for future tax consequences attributable to the "timing differences" between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date. Deferred Tax Asset is not recognised unless there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.


Mar 31, 2010

1 Basis of preparation of Financial Statements :-

(a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and as per the Accounting Standards referred to in Section 211 (3C) of the Companies Act.

(b) The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2 Fixed Assets :-

Fixed Assets are stated at cost less accumulated depreciation. The cost is inclusive of interest and incidental expenses incurred during construction period and is net of cenvet credit availed. The fixed assets are tested for impairment. There is no impairment loss.

3 Depreciation :-

Depreciation on all Tangible assets is provided on Straight Line Method (SLM) as per Section 205(2)(b) of the Companies Act, 1956 at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased or acquired during the year is provided on pro rata basis according to the period each asset was put to use during the year. No depreciation has been provided on Vat, Excise Duty, Education cess and Higher Education Cess which has been claimed as CENVAT

4 Investments :

Long term investments are carried at cost.

5 Valuation of Inventories :-

Items of inventories are valued at lower of cost or net realisble value. Cost of inventories comprise of all cost purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Raw materials , stores and spares are valued at weighted average cost. Processed stocks and finished goods are valued at mateiral cost plus appropriate value of overheads Excise duty related to finished goods(domestic stock) is included under Schedule 15

6 Revenue Recognition :-

Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made. Revenue and Expenses are accounted on an accrual basis and at historical cost. Dividend income is accounted when right to receive is established. Interest income is recognised on time proportion basis taking into account the amount outstanding and the rate applicable.

7 Sales:-

Sales are recognised on despatch of material to customers. Sales are net of trade discount, rebates and indirect taxes payable. Rebates and discounts are accounted for as and when determined.

8 Expenses :-

Material known liabilities are provided for on the basis of available information/estimates. Expenses are accounted on an accrual basis and at historical cost.

B. SIGNIFICANT ACCOUNTING POLICIES :

9 Contingent Liabilities :-

Contingent Liabilities are disclosed by way of Notes on Accounts. Provision is made in the accounts for those liabilities which are likely to materialise after the year end till the Finalisation of accounts and having effect on the position stated in the Balance Sheet as at the year end.

10 Employee benefits :

Provision for Gratuity and leave encashment are accounted on the basis of valuation made by the actuary.

11 Foreign Exchange Transactions :

a) Transactions in Foreign Currency are accounted at the exchange rate prevailing on the date of Transactions. Exchange fluctuations between the transaction date and the settlement date in respect of Revenue Transactions are recognized in Profit & Loss A/c

b) All export proceeds not realised at the year end are restated at the rate prevailing at the year end. The exchange difference arising there from has been recognised as income / expenses in the Current Years Profit & Loss A/c alongwith underlying transaction.

c) The premium or discount arising at the inception of forward exchange contract is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contracts is recognised as income or as expense for the year. None of the forward exchange contracts are taken for trading or speculation purpose.

12 Borrowing Costs :-

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

13 Taxes on Income :-

Tax expense comprises both current and deferred tax.

Current tax is measured at the amount expected to be paid to the tax authorities, after taking into consideration benefits admissible under the provisions of the Income - Tax Act, 1961.

Deferred tax liabilities are recognised for future tax consequences attributable to the timing differences between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date. Deferred Tax Asset is not recognised unless, in the management judgement, there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

14 Earning per Share :

The Company reports basic and diluted Earnings Per Share (EPS) in accordance with Accounting Standard 20 on "Earnings per share".

15 Excise : Excise duty deducted from turnover represents excise duty collected on sale of goods. Excise duty shown under expenditure represents differene between excise duty on opening and closing stocks of finished goods.


Mar 31, 2009

1 Basis of preparation of Financial Statements:

(a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and as per the Accounting Standards referred to in Section 211 (3C) of the Companies Act.

(b) The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2 Fixed Assets:

Fixed Assets are stated at cost less depreciation. The cost is inclusive of interest and incidental expenses incurred during construction period and is net of cenvet credit availed. The fixed assets are tested for impairment. There is no impairment loss.

3 Depreciation:

Depreciation on all Tangible assets is provided on Straight Line Method (SLM) as per Section 205(2)(b)of the Companies Act, 1956 at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased or acquired during the year is provided on pro rata basis according to the period each asset was put to use during the year.

No depreciation has been provided on Vat, Excise Duty, Education cess and Higher e.c. which has been claimed as MODVAT

4 Investments:

Long term investments are carried at cost.

5 Valuation of Inventories:

Items of inventories are valued at lower of cost or net realisble value. Cost of inventories comprise of all cost purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Raw materials are valued at weighted average cost.

Manufactured goods and process stock are valued at lower of cost of production and net realisable value whichever is lower.

Excise duty related to finished goods(domestic stock) is included under Schedule 15

6 Revenue Recognition:

Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made.

Revenue and Expenses are accounted on an accrual basis and at historical cost.

Dividend income is accounted for when right to receive is established.

7 Sales:

Sales are recognised on despatch of material to customers. Sales are not of trade discount, rebates and indirect taxes payable. Rebates and discounts are accounted for as and when determined.

8 Expenses:

Material known liabilities are provided for on the basis of available information/estimates. Expenses are accounted on an accrual basis and at historical cost

9 Contingent Liabilities:

Contingent Liabilities are disclosed by way of Notes on Accounts. Provision is made in the accounts for those liabilities which are likely to materialise after the year end till the Finalisation of accounts and having effect on the position stated in the Balance Sheet as at the year end.

10 Employee benefits:

There is a change in accounting policy with respect of provision for Gratuity and Leave encashement benefits. Provision for Gratuity and leave encashment are accounted on actuarial valuation from current year. Hitherto the company has not provided for Gratuity and Leave encashment benefits till last year. The retirement benefits were debited as and when paid. Due to provision, the profit is decreased to the extent of Rs. 1,683,401.

11 Foreign Exchange Transactions:

(a) Transactions in Foreign Currency are accounted at the exchange rate prevailing on the date of Transactions. Exchange fluctuations between the transaction date and the settlement date in respect of Revenue Transaction are recognized in Profit & Loss A/c.

b) All export proceeds not realised at the year end are restated at the rate prevailing at the year end. The exchange difference arising there from has been recognised as income / expenses in the Current Years Prof it & Loss A/c along with underlying transaction.

c) The premium or discount arising at the inception of forward exchange contract is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellaton or renewal of forward exchange contracts is recognised as income or as expense for the year. None of the forward exchange contracts are taken for trading or speculation purpose.

12 Borrowing Costs:

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

13 Taxes on Income:

Tax expense comprises both current and deferred tax.

Current tax is measured at the amount expected to be paid to the tax authorities, after taking into

consideration benefits admissible under the provisions of the Income - Tax Act, 1961.

Deferred tax liabilities are recognised for future tax consequences attributable to the timing differences

between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax rates and laws that have been enacted or substantively enacted as on the BalanceSheet date. Deferred Tax Asset is not recognised unless, in the management judgement, there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

14 Earning per Share:

The Company reports basic and diluted Earnings Per Share (EPS) in accordance with Accounting Standard 20 on " Earnings per share". Further 5,10,000 shares arealloted on Dt: 31.03.2009

15 Disclosures required by AS 29 "Provisions, Contingent liabilities and contingent Assets."

a) Movement in provisions:

Sr. Particulars of disclosure Provision for Provision for Totals No. Excise duty Others

1 Balance as at 1-4-2008 965,811 77,039 1,042,850

2 Additional provision during the year 402,043 89,870 491,913

3 Provision used during the year 965,811 77,039 1,042,850

4 Provision reversed during the year - - -

5 Balanceasat31-3-2009 402,043 89,870 491,913

b) Nature of Provisions:

i. Provision for Excise duty of Rs. 402,043 on Finished stock at the end of the year.It is expected that the majority of this expenditure will be incurred in the next Financial Year. ii. Other provision includes Provision for Contribution to PF.


Mar 31, 2008

1 Basis of preparation of Financial Statements :-

(a) The financial statements have been prepared under the historical cost convention in accordance with

the generally accepted accounting principles and as per the Accounting Standards referred to in -Section 211 (3C) of the Companies Act.

(b) The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2 Fixed Assets :-

Fixed Assets are stated at cost, net of Modvat. All costs, including financing costs till commencement of commercial production attributable to the fixed assets are capitalised.

3 Depreciation :-

Depreciation on all Tangible assets is provided on Straight Line Method (SLM) as per Section 205(2)(b) of the Companies Act 1956 at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased or acquired during the year is provided on pro rata basis according to the period each asset was put to use during the year. No depreciation has been provided on Excise Duty and Education cess which has been claimed as MODVAT.

4 Valuation of Inventories :-

Item? of inventories are valued at lower of cost or net realisble value. Cost of inventories comprise of all cost purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Raw materials are valued at weighted average cost.

Manufactured goods and process stock are valued at lower of cost of production and net realisable value whichever is lower Excise duty related to finished goods(domestic stock) is included uner Schedule 15

5 Research & Development :-

Revenue expenditure pertaining to Research and Development is charged to revenue under respective heads of accounts in the year in which they are incurred.

6 Revenue Recognition :-

Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made.

7 Sales:-

Sales are net of sales tax/value Added Tax. Excise duty recovered is presented as a reduction from gross sales- -

8 Expenses :-

Material known liabilities are provided for on the basis of available information/estimates. Material items of prior period expenses, non-recurring and extraordinary are disclosed separately.

9 Contingent Liabilities :-

Contingent Liabilities are disclosed by way of Notes on Accounts. Provision is made in the accounts for those liabilities which are likely to materialise after the year end till the Finalisation of accounts and having effect on the position stated in the Balance Sheet as at the year end.

10 Retirement benefits :

Gratuity to staff and leave salary are accounted as and when paid and no provision is made for further payments of gratuity and leave encashment on actuarial basis.

11 Borrowing Costs :-

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

12 Taxes on Income :-

Tax expense comprises both current and deferred tax.

Current tax is measured at the amount expected to be paid to the tax authorities, after taking into consideration benefits admissible under the provisions of the Income - Tax Act, 1961.

Deferred tax liabilities are recognised for future tax consequences attributable to the timing differences between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax rates and laws that have been enacted or substantively enacted as on the BalanceSheet date. Deferred Tax Asset is npt recognised unless, in the management judgement, there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

13 Earning per Share :

The Company reports basic and diluted Earnings Per Share (EPS) in accordance with Accounting Standard 20 on "Earnings per share".


Mar 31, 2007

1 Basis of preparation of Financial Statements :-

(a) The financial statements have been prepared under the historical cost convention in accordance with

the generally accepted accounting principles and as per the Accounting Standards referred to in Section 211(3C) of the Companies Act.

(b) The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2 Fixed Assets :-

Fixed Assets are stated at cost, net of Modvat. All costs, including financing costs till commencement of commercial production attributable to the fixed assets are capitalised.

3 Depreciation :-

Depreciation on all Tangible assets is provided on Straight Line Method (SLM) as per Section 205(2)(b) of the Companies Act, 1956 at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased or acquired during the year is provided on pro rata basis according to the period each asset was put to use during the year. No depreciation has been provided on Excise Duty and Education cess which has been claimed as MODVAT.

4 Valuation of Inventories :-

Items of inventories are valued at lower of cost or net realisble value. Cost of inventories comprise of all cost purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Raw materials are valued at weighted average cost.

Manufactured goods and process stock are valued at lower of cost of production and net realisable value whichever is lower

5 Research & Development :-

Revenue expenditure pertaining to Research and Development is charged to revenue under respective heads of accounts in the year in which they are incurred.

6 Revenue Recognition :-

Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made.

7 Sales:-

Sales are inclusive of excise duty and exclusive of sales tax.

7. Expenses :-

Material known liabilities are provided for on the basis of available information/estimates. Material items of prior period expenses, non-recurring and extraordinary are disclosed separately.

8. Contingent Liabilities :-

Contingent Liabilities are disclosed by way of Notes on Accounts. Provision is made in the accounts for those liabilities which are likely to materialise after the year end till the Finalisation of accounts and having effect on the position stated in the Balance Sheet as at the year end.

9. Retirement benefits :

Gratuity to staff and leave salary are accounted as and when paid and no provision is made for further payments of gratuity and leave encashment on actuarial basis since the same is not ascertained.

11 Borrowing Costs :-

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

12 Taxes on Income :-

Tax expense comprises both current and deferred tax.

Current4ax-is measured at the amount expected to be paid to the tax authorities, after taking into consideration benefits admissible under the provisions of the Income - Tax Act, 1961.

Deferred tax liabilities are recognised for future tax consequences attributable to the timing differences between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax rates and laws that have been enacted Or substantively enacted as on the BalanceSheet date. Deferred Tax Asset is not recognised unless, in the management judgement, there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.


Mar 31, 2006

1 Basis of preparation of Financial Statements :-

(a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and as per the Accounting Standards referred to in Section 21 1 (3C) of the Companies Act.

(b) The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2 fixed Assets :-

Fixed Assets are stated at cost, net of Modvat. All costs, including financing costs till commencement of commercial production attributable to the fixed assets are capitalised.

3 Depreciation :-

Depreciation on all Tangible assets is provided on Straighl Line Method (SLM) as per Section 205(2)(b) of the Companies Act, 1956 at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

Depreciation on assets purchased or acquired during the year is provided on pro rata basis according to the period each asset was put to use during the year.

No depreciation has been provided on Excise Duty and Hducation cess which has been claimed as MODVAT.

4 Valuation of Inventories :-

Items of inventories are valued at lower of cost or net realisble value. Cost of inventories comprise of all cost purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Raw materials are valued at weighted average cost.

Manufactured goods and process stock are valued at lower of cost of production and net realisable value whichever is lower

5 Research & Development :-

Revenue expenditure pertaining to Research and Development is charged to revenue under respective heads of accounts in the year in which they are incurred.

6 Revenue Recognition :.-

Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made.

7 Sales:-

Sales are inclusive of excise duty and exclusive of sales tax.

8 Lxpcnses :-

Material known liabilities are provided for on the basis of available information/estimates. Material items of prior period expenses, non-recurring and extraordinary are disclosed separately.

9 Contingent Liabilities :-

Contingent, Liabilities are disclosed by way of Motes on Accounts. Provision is made in the accounts for those liabilities which are likely to materialise after the year end till the Penalisation of accounts and having effect on the position stated in the Balance Sheet as at the year end.

10 Gratuity :-

Gratuity to staff is accounted as and when paid and no provision is made for further payments of gratuity on actuarial basis since the same is not ascertained.

11 Borrowing Costs :-

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

12 Taxes on Income :-

Tax expense comprises both current and deferred tax.

Current tax is measured at the amount expected to be paid to the tax authorities, after taking into consideration benefits admissible under the provisions of the Income - Tax Act, l961.

Deferred tax liabilities are recognised for future tax consequences attributable to the timing differences between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax-rates and laws that have been enacted or substantively enacted as on the BalanceSheet date. Deferred Tax Asset is not recognised unless, in the management judgement, there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

 
Subscribe now to get personal finance updates in your inbox!