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Accounting Policies of Flex Foods Ltd. Company

Mar 31, 2015

1.1 BASIS OF PREPARATION

The financial statements of the Company have been prepared and presented in accordance with the generally accepted accounting principles in India (Indian GAAP) under the historical cost convention on accrual basis, and comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The accounting policies adopted by the Company are consistent with those used in previous year.

All Assets and Liabilities have been classified as Current or Non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III of the Companies Act, 2013.

2.2 CLASSIFICATION OF EXPENDITURE/INCOME Except Otherwise Indicated:

(i) All expenditure and income are accounted for under the natural heads of account.

(ii) All expenditure and income are accounted for on accrual basis except when realisation of income is uncertain.

2.3 USE Of Estimates AND Judgements

The preparation of the financial statements is in conformity with Indian Accounting Standards and requires Management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about the carrying values of assets and liabilities that are readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on a going basis.

Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, in the period of the revision and future periods if the revision affects both current and future period.

2.4 VALUATION

(i) Fixed Assets

a) Tangible

Fixed Assets are stated at cost and other incidental expenses, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost such as duties (net of CENVAT), freight, borrowing cost, adjustment on account of foreign exchange fluctuations, erection and commissioning expenses incurred in bringing the asset to its working condition for its intended use.

b) Intangible

Fixed Assets are stated at cost and other incidental expenses, less accumulated depreciation and impairment losses. Cost comprises license fees and costs of implementation / system integration services.

(ii) Raw Material & Packing Material

Raw material and packing material are valued at lower of cost, based on First in First Out (FIFO) method arrived at after including freight inward directly attributable to acquisition or net realizable value.

(iii) Finished Goods

Finished Goods are valued at lower of cost, based on First in First Out (FIFO) method, arrived after including depreciation on Plant & Machinery, Electrical Installation and Factory Building, Repair & Maintenance on Factory Building, specific Manufacturing expenses including Excise Duty and specific Payments and Benefits to Employees or net realizable value.

(iv) Work-in-Progress

Work-in-Progress is valued at lower of cost based on First in First Out (FIFO) method, arrived after including depreciation on Plant & Machinery, Electrical Installation and Factory Building, Repair & Maintenance on Factory Building, specific Manufacturing expenses and specific Payments and Benefits to Employees or net realizable value.

(v) Cost of Consumable Stores & Spares

Spares & Consumables are valued at lower of cost based on First in First Out (FIFO) method or net realizable value.

2.5 FOREIGN CURRENCY TRANSACTIONS

(i) Foreign Currency monetary items remaining unsettled at the year-end, are translated at year-end rates.Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(ii) Exchange differences on settled/translated monetary items are adjusted as income/expense through the Exchange Fluctuation Account in the year they arise.

(iii) Difference between the forward and exchange rate on the date of transactions are adjusted over the period of the contract as an income / expense through the Exchange Fluctuation Account.

(iv) Profit or loss on cancellation of forward contracts for transactions is adjusted as income / expense through Exchange Fluctuation Account in the year they arise

2.6 DEPRECIATION

(i) Normal depreciation on all Fixed Assets except Land & Intangible Assets are provided on Straight Line Method as per the Schedule-II of The Companies Act, 2013 and after providing for the residual value with (maximum to the extent of 5%) of the Fixed Assets as determined by the Management

(ii) Intangible assets are written off over a period of five years from the date of put to use.

(iii) Depreciation/Amortization on addition/deletions to Fixed Assets is provided on pro-rata basis from/to the date of addition/ deletions.

(iv) Depreciation/Amortization on additions/deletions to the fixed assets due to exchange fluctuation rate is provided on pro-rata basis since inception.

2.7 IMPAIRMENTS

The carrying amount of assets are periodically assessed by the Management, using internal & external sources, to determine whether there is any indication that assets of concerned cash generating unit may be impaired. Impairment loss, if any is provided to the extent the carrying amount of assets of concerned cash generating unit exceeds their recoverable amount. The recoverable amount is higher of net selling price of assets of concerned cash generating unit and their present value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of assets of concerned cash generating unit and from their disposal at the end of their useful life.

2.8 GOVERNMENT GRANTS

(i) Capital Subsidy received from Government as contribution towards Capital Outlay for setting up the fixed assets is treated as Capital Grants which is recognized as Income in the Statement of Profit & Loss over the period and in the proportion in which depreciation is charged.

(ii) Revenue Grants are recognized in Statement of Profit & Loss.

2.9 SALES

(i) Export Sales are accounted for on C & F / F.O.B basis.

(ii) Sales Returns are adjusted from the sales of the year in which the returns take place.

2.10 purchases

(i) Purchase returns are adjusted from the purchases of the year in which the returns take place

(ii) Purchases are accounted for "Net of VAT Credit availed on eligible inputs" .

2.11 employees benefits

(i) Defined long term benefit is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefits are charged to Statement of Profit & Loss.

(ii) Defined Contribution Plans are charged to Statement of Profit & Loss based on the contribution made to the specified fund.

(iii) Short term employee benefits are charged to Statement of Profit & Loss at the undiscounted amount in the year in which the related service is rendered.

2.12 PROVISION FOR INCOME TAX

Income tax expenses are accrued in accordance with Accounting Standard-22 "Accounting for Taxes on Income" as notified by the Companies Accounting Standard (Rules) 2006, which include Current Tax and Deferred Tax. Provision for current tax is made after taking into considerations benefits admissible under the provision of the Income - Tax Act 1961.Deferred Tax Assets & Liabiities are measured using the current tax rates.Deferred income tax reflects the impact of current year timing difference between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax assets are recognized only to the extent, there is a reasonable certainty that sufficient future taxable income will be available.Such deferred tax assets & other unrecognized deferred tax assets are re-assessed at each balance Sheet date and the carrying value of the same are adjusted recognizing the change in the value of each such deferred tax assets.

2.13 CLAIMS BY/AGAINST THE COMPANY

Claims by/ against the Company arising on any account is provided in the accounts on receipts/acceptances.

2.14 RESEARCH & DEVELOPMENT EXPENSES

(i) All revenue expenditures on Research & Development activities are accounted for under the separate accounting head.

(ii) All capital expenditures on Research & Development activities are accounted for under the natural heads of Fixed Assets Account.

2.15 BORROWING COST

borrowing cost attributable to the acquisition or construction of qualifying / eligible assets are capitalized as part of the cost of such assets. A qualifying / eligible asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are recognized as an expense and are charged to revenue in the year in which they are incurred.

2.16 EARNING PER SHARE

In accordance with the Accounting Standard-20 (AS-20) "Earning Per Share" as notified by the Companies Accounting Standard (Rules) 2006, basic & Diluted Earning Per Share is computed using the weighted average number of Shares outstanding during the period.

2.17 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

In accordance with the Accounting Standard-29 (AS-29) as notified by the Companies Accounting Standard (Rules) 2006

a) Provisions are made for the present obligations where amount can be estimated reliably, and

b) Contingent liabilities are disclosed for possible obligations arising out of uncertain events not wholly in control of the company. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2014

1.1. Classification of expenditure/income

Except Otherwise Indicated:-

(i) All expenditure and income are accounted for under the natural heads of account.

(ii) All expenditure and income are accounted for on accrual basis.

1.2. USE OF ESTIMATES AND JUDGEMENTS

The preparation of the financial statements is in conformity with Indian Accounting Standards and requires Management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about the carrying values of assets and liabilities that are readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on a going basis.

Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, in the period of the revision and future periods if the revision affects both current and future period.

1.3 VALUATION

(i) Fixed Assets

a) Tangible

Fixed Assets are stated at cost and other incidental expenses, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost such as duties (net of CENVAT), freight, borrowing cost, adjustment on account of foreign exchange fluctuations, erection and commissioning expenses incurred in bringing the asset to its working condition for its intended use.

b) Intangible

Fixed Assets are stated at cost and other incidental expenses, less accumulated depreciation and impairment losses. Cost comprises license fees and costs of implementation / system integration services.

(ii) Raw Material & Packing Material

Raw material and packing material are valued at lower of cost, based on First in First Out (FIFO) method arrived at after including freight inward directly attributable to acquisition or net realizable value.

(iii) Finished Goods

Finished Goods are valued at lower of cost, based on First in First Out (FIFO) method, arrived after including depreciation on Plant & Machinery, Electrical Installation and Factory Building, Repair & Maintenance on Factory Building, specific Manufacturing Expenses including Excise Duty and specific Payments and Benefits to Employees or net realizable value.

(iv) Work-in-Progress

Work-in-Progress is valued at lower of cost based on First in First Out (FIFO) method, arrived after including depreciation on Plant & Machinery, Electrical Installation and Factory Building, Repair & Maintenance on Factory Building, specific Manufacturing expenses and specific Payments and Benefits to Employees or net realizable value.

(v) Cost of Consumable Stores & Spares

Spares & Consumables are valued at lower of cost based on First in First Out (FIFO) method or net realizable value.

1.4. FOREIGN CURRENCY TRANSACTIONS

(i) Foreign Currency monetary items remaining unsettled at the year-end, are translated at year-end rates.Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(ii) Exchange differences on settled/translated monetary items are adjusted as income/expense through the Exchange Fluctuation Account in the year they arise.

(iii) Difference between the forward and exchange rate on the date of transactions are adjusted over the period of the contract as an income / expense through the Exchange Fluctuation Account.

(iv) Profit or loss on cancellation of forward contracts for transactions is adjusted as income / expense through Exchange Fluctuation Account in the year they arise.

1.5. DEPRECIATION

(i) Normal depreciation on all Fixed Assets except Land & Software are provided on Straight Line Method at the rates prescribed in Schedule-XIV of the Companies Act, 1956.

(ii) Intangible Assets are written-off over a period of five years from the date of put to use.

(iii) Depreciation/Amortization on addition /deletions to Fixed Assets is provided on pro-rata basis from/to the date of addition / deletions.

(iv) Depreciation/Amortization on additions/deletions to the fixed assets due to exchange fluctuation rate is provided on pro-rata basis since inception.

1.6. IMPAIRMENTS

The carrying amount of assets are periodically assessed by the Management, using internal & external sources, to determine whether there is any indication that assets of concerned cash generating unit may be impaired. Impairment loss, if any is provided to the extent the carrying amount of assets of concerned cash generating unit exceeds their recoverable amount. The recoverable amount is higher of net selling price of assets of concerned cash generating unit and their present value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of assets of concerned cash generating unit and from their disposal at the end of their useful life.

1.7. GOVERNMENT GRANTS

(i) Capital Subsidy received from Government as contribution towards Capital Outlay for setting up the fixed assets is treated as Capital Grants which is recognized as Income in the Statement of Profit & Loss over the period and in the proportion in which depreciation is charged.

(ii) Revenue Grants are recognized in Statement of Profit & Loss.

1.8 SALES

(i) Export Sales are accounted for on C & F / F.O.B basis.

(ii) Sales Returns are adjusted from the sales of the year in which the returns take place.

1.9. PURCHASES

(i) Purchases are accounted for "Net of VAT Credit availed on eligible inputs"

(ii) Purchase returns are adjusted from the purchases of the year in which the returns take place.

1.10. EMPLOYEES BENEFITS

(i) Defined long term benefit is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefits are charged to Statement of Profit & Loss.

(ii) Defined Contribution Plans are charged to Statement of Profit & Loss based on the contribution made to the specified fund.

(iii) Short term employee benefits are charged to Statement of Profit & Loss at the undiscounted amount in the year in which the related service is rendered.

1.11. PROVISION FOR INCOME TAX

Income tax expenses are accrued in accordance with Accounting Standard-22 "Accounting for Taxes on Income" as notified by the Companies Accounting Standard (Rules) 2006, which include Current Tax and Deferred Tax. Provision for current tax is made after taking into considerations benefits admissible under the provision of the Income- Tax Act 1961. Deferred income tax reflects the impact of current year timing difference between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax assets are recognized only to the extent, there is a reasonable certainty that sufficient future taxable income will be available.

1.12. CLAIMS BY/AGAINST THE COMPANY

Claims by/ against the Company arising on any account is provided in the accounts on receipts/acceptances.

1.13. RESEARCH & DEVELOPMENT EXPENSES

(i) All revenue expenditures on Research & Development activities are accounted for under the separate accounting head.

(ii) All capital expenditures on Research & Development activities are accounted for under the natural heads of Fixed Assets Account.

1.14. BORROWING COST

Borrowing cost attributable to the acquisition or construction of qualifying / eligible assets are capitalized as part of the cost of such assets. A qualifying / eligible asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are recognized as an expense and are charged to revenue in the year in which they are incurred.

1.15. EARNING PER SHARE

In accordance with the Accounting Standard-20 (AS-20) "Earning Per Share" as notified by the Companies Accounting Standard (Rules) 2006, Basic & Diluted Earning Per Share is computed using the weighted average number of Shares outstanding during the period.

1.16. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

In accordance with the Accounting Standard-29 (AS-29) as notified by the Companies Accounting Standard (Rules) 2006

a) Provisions are made for the present obligations where amount can be estimated reliably, and

b) Contingent liabilities are disclosed for possible obligations arising out of uncertain events not wholly in control of the company. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2013

1.1 CLASSIFICATION OF EXPENDITURE/INCOME

Except Otherwise Indicated:-

(i) All expenditure and income are accounted for under the natural heads of account.

ii) All expenditure and income are accounted for on accrual basis.

1.2 VALUATION

(i) Fixed Assets

a) Tangible

Fixed assets are stated at cost and other incidental expenses, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost such as duties (net of CENVAT), freight, borrowing cost, adjustment on account of foreign exchange fluctuations, erection and commissioning expenses incurred in bringing the asset to its working condition for its intended use

b) Intangible

Fixed assets are stated at cost and other incidental expenses, less accumulated depreciation and impairment losses. Cost comprises license fees and costs of implementation / system integration services.

(ii) Raw Materials & Packing Materials.

Raw material and packing material are valued at lower of cost, based on First in First Out (FIFO) method or net realizable value.

(iii) Finished Goods

Finished Goods are valued at lower of cost, based on First in First Out (FIFO) method, arrived after including depreciation on Plant & Machinery, Electrical Installation and Factory Building, Repair & Maintenance on Factory Building, specific Manufacturing expenses including Excise Duty and specific Payments and Benefits to Employees or net realizable value.

(iv) Work-in-Progress

Work-in-Progress is valued at lower of cost based on First in First Out (FIFO) method, arrived after including depreciation on Plant & Machinery, Electrical Installation and Factory Building, Repair & Maintenance on Factory Building , specific Manufacturing expenses and specific Payments and Benefits to Employees or net realizable value.

(v) Cost of Consumable Stores

Spares & Consumables are valued at lower of cost based on First in First Out (FIFO) method or net realizable value

1.3 FOREIGN CURRENCY TRANSACTIONS

(i) Foreign Currency monetary items remaining unsettled at the year-end, are translated at year-end rates. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(ii) Exchange differences on settled/translated monetary items are adjusted as income/expense through the Exchange Fluctuation Account in the year they arise.

(iii) Difference between the forward and exchange rate on the date of transactions are adjusted over the period of the contract as an income / expense through the Exchange Fluctuation Account.

(iv) Profit or Loss on cancellation of forward contracts for transactions is adjusted as income / expense through Exchange Fluctuation Account in the year they arise.

1.4 DEPRECIATION

(i) Normal depreciation on all Fixed Assets except Land & Software are provided on Straight Line Method at the rates prescribed in Schedule-XIV of The Companies Act, 1956.

(ii) Intangible assets are written-off over a period of five years from the date of put to use.

(iii) Depreciation/Amortization on addition/deletions to Fixed Assets is provided on pro-rata basis from/to the date of addition/ deletions.

(iv) Depreciation/Amortization on additions/deletions to the fixed assets due to exchange fluctuation rate is provided on pro-rata basis since inception.

1.5 IMPAIRMENTS

The carrying amount of assets are periodically assessed by the Management, using internal & external sources, to determine whether there is any indication that assets of concerned cash generating unit may be impaired. Impairment loss, if any is provided to the extent the carrying amount of assets of concerned cash generating unit exceeds their recoverable amount. The recoverable amount is higher of net selling price of assets of concerned cash generating unit and their present value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of assets of concerned cash generating unit and from their disposal at the end of their useful life.

1.6 GOVERNMENT GRANTS

(i) Capital Subsidy received from Government as contribution towards Capital Outlay for setting up the fixed assets is treated as Capital Grants which is recognized as Income in the Statement of Profit & Loss over the period and in the proportion in which depreciation is charged.

(ii) Revenue Grants are recognized in Statement of Profit & Loss.

1.7 SALES

(i) Export Sales are accounted for on C & F / F.O.B basis.

(ii) Sales Returns are adjusted from the sales of the year in which the returns take place.

1.8 PURCHASES

(i) Purchase returns are adjusted from the purchases of the year in which the returns take place.

(ii) Purchases are accounted for "Net of VAT Credit availed on eligible inputs"

1.9 EMPLOYEES BENEFITS

(i) Defined long term benefit is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefits are charged to Statement of Profit & Loss.

(ii) Defined Contribution Plans are charged to Statement of Profit & Loss based on the contribution made to the specified fund.

(iii) Short term employee benefits are charged to Statement of Profit & Loss at the undiscounted amount in the year in which the related service is rendered.

1.10 PROVISION FOR INCOME TAX

Income tax expenses are accrued in accordance with Accounting Standard-22 "Accounting for Taxes on Income" as notified by the Companies Accounting Standard (Rules) 2006, which include Current Tax and Deferred Tax. Provision for current tax is made after taking into considerations benefits admissible under the provision of the Income - Tax Act 1961. Deferred income tax reflects the impact of current year timing difference between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax assets are recognized only to the extent, there is a reasonable certainty that sufficient future taxable income will be available.

1.11 CLAIMS BY / AGAINST THE COMPANY

Claims by/ against the Company arising on any account is provided in the accounts on receipts/acceptances.

1.12 RESEARCH & DEVELOPMENT EXPENSES

(i) All revenue expenditures on Research & Development activities are accounted for under the separate accounting head.

(ii) All capital expenditures on Research & Development activities are accounted for under the natural heads of Fixed Assets Account.

1.13 BORROWING COST

Borrowing cost attributable to the acquisition or construction of qualifying / eligible assets are capitalized as part of the cost of such assets. A qualifying / eligible asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are recognized as an expense and are charged to revenue in the year in which they are incurred.

1.14 EARNING PER SHARE

In accordance with the Accounting Standard-20 (AS-20) "Earning Per Share" as notified by the Companies Accounting Standard (Rules) 2006, Basic & Diluted Earning Per Share is computed using the weighted average number of Shares outstanding during the period.

1.15 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

In accordance with the Accounting Standard-29 (AS-29) as notified by the Companies Accounting Standard (Rules) 2006

a) Provisions are made for the present obligations where amount can be estimated reliably, and

b) Contingent liabilities are disclosed for possible obligations arising out of uncertain events not wholly in control of the Company. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2012

1.1 CLASSIFICATION OF EXPENDITURE/INCOME

Except Otherwise Indicated:-

(i) All expenditure and income are accounted for under the natural heads of account.

(ii) All expenditure and income are accounted for on accrual basis.

1.2 VALUATION

(i) Fixed Assets

a) Tangible

Fixed assets are stated at cost and other incidental expenses, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost such as duties (net of CENVAT), freight, borrowing cost, adjustment on account of foreign exchange fluctuations, erection and commissioning expenses incurred in bringing the asset to its working condition for its intended use

b) Intangible

Fixed assets are stated at cost and other incidental expenses, less accumulated depreciation and impairment losses. Cost comprises license fees and costs of implementation / system integration services.

(ii) Raw Materials & Packing Materials.

Raw material and packing material are valued at lower of cost, based on First in First Out (FIFO) method or net realizable value.

(iii) Finished Goods

Finished Goods are valued at lower of cost, based on First in First Out (FIFO) method, arrived after including depreciation on Plant & Machinery, Electrical Installation and Factory Building, Repair & Maintenance on Factory Building, specific Manufacturing expenses including Excise Duty and specific Payments and Benefits to Employees or net realizable value.

(iv) Work-in-Progress

Work-in-Progress is valued at lower of cost based on First in First Out (FIFO) method, arrived after including depreciation on Plant & Machinery, Electrical Installation and Factory Building, Repair & Maintenance on Factory Building , specific Manufacturing expenses and specific Payments and Benefits to Employees or net realizable value.

(v) Cost of Consumable Stores

Spares & Consumables are valued at lower of cost based on First in First Out (FIFO) method or net realizable value

1.3 FOREIGN CURRENCY TRANSACTIONS

(i) Foreign Currency monetary items remaining unsettled at the year-end, are translated at year-end rates. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(ii) Exchange differences on settled/translated monetary items are adjusted as income/expense through the Exchange Fluctuation Account in the year they arise.

(iii) Difference between the forward and exchange rate on the date of transactions are adjusted over the period of the contract as an income / expense through the Exchange Fluctuation Account.

(iv) Profit or loss on cancellation of forward contracts for transactions is adjusted as income / expense through Exchange Fluctuation Account in the year they arise.

1.4 DEPRECIATION

(i) Normal depreciation on all Fixed Assets except Land & Software are provided on Straight Line Method at the rates prescribed in Schedule-XIV of The Companies Act, 1956.

(ii) Intangible assets are written-off over a period of five years from the date of put to use.

(iii) Depreciation/Amortization on deletions to Fixed Assets is provided on pro-rata basis from/to the date of addition/ deletions.

(iv) Depreciation/Amortization on additions/deletions to the fixed assets due to exchange fluctuation rate is provided on pro-rata basis since inception.

1.5 IMPAIRMENTS

The carrying amount of assets are periodically assessed by the Management, using internal & external sources, to determine whether there is any indication that assets of concerned cash generating unit may be impaired. Impairment loss, if any is provided to the extent the carrying amount of assets of concerned cash generating unit exceeds their recoverable amount. The recoverable amount is higher of net selling price of assets of concerned cash generating unit and their present value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of assets of concerned cash generating unit and from their disposal at the end of their useful life.

1.6 GOVERNMENT GRANTS

(i) Capital Subsidy received from Government as contribution towards Capital Outlay for setting up the fixed assets is treated as Capital Grants which is recognized as Income in the Statement of Profit & Loss over the period and in the proportion in which depreciation is charged.

(ii) Revenue Grants are recognized in Statement of Profit & Loss.

1.7 SALES

(i) Export Sales are accounted for on C & F / F.O.B basis.

(ii) Sales Returns are adjusted from the sales of the year in which the returns take place.

1.8 PURCHASES

(i) Purchase returns are adjusted from the purchases of the year in which the returns take place.

(ii) Purchases are accounted for "Net of VAT Credit availed on eligible inputs

1.9 EMPLOYEES BENEFITS

(i) Defined long term benefit (other than leave encashment) is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefits are charged to Statement of Profit & Loss.

(ii) Defined long term benefits in respect of leave encashment is charged to profit & loss account based on the leave entitlement of employees remaining unutilised at the end of the year, at the undiscounted amount.

(iii) Defined Contribution Plans are charged to Statement of Profit & Loss based on the contribution made to the specified fund.

(iv) Short term employee benefits are charged to Statement of Profit & Loss at the undiscounted amount in the year in which the related service is rendered.

1.10 PROVISION FOR INCOME TAX

Income tax expenses are accrued in accordance with Accounting Standard-22 "Accounting for Taxes on Income" as notified by the Companies Accounting Standard (Rules) 2006, which include Current Tax and Deferred Tax. Provision for current tax is made after taking into considerations benefits admissible under the provision of the Income Tax Act 1961. Deferred income tax reflects the impact of current year timing difference between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax assets are recognised only to the extent, there is a reasonable certainty that sufficient future taxable income will be available.

1.11 CLAIMS BY/AGAINST THE COMPANY

Claims by/ against the Company arising on any account is provided in the accounts on receipts/acceptances.

1.12 RESEARCH & DEVELOPMENT EXPENSES

(i) All revenue expenditures on Research & Development activities are accounted for under the separate accounting head.

(ii) All capital expenditures on Research & Development activities are accounted for under the natural heads of Fixed Assets Account.

1.13 BORROWING COST

Borrowing cost attributable to the acquisition or construction of qualifying / eligible assets are capitalized as part of the cost of such assets. A qualifying / eligible asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are recognized as an expense and are charged to revenue in the year in which they are incurred.

1.14 EARNING PER SHARE

In accordance with the Accounting Standard-20 (AS-20) "Earning Per Share" as notified by the Companies Accounting Standard (Rules) 2006, Basic & Diluted Earning Per Share is computed using the weighted average number of Shares outstanding during the period.

1.15 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

In accordance with the Accounting Standard-29 (AS-29) as notified by the Companies Accounting Standard (Rules) 2006

a) Provisions are made for the present obligations where amount can be estimated reliably, and

b) Contingent liabilities are disclosed for possible obligations arising out of uncertain events not wholly in control of the company. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2010

1) CLASSIFICATION OF EXPENDITURE/INCOME

Except otherwise Indicated

(i) All expenditure and income are accounted for under the natural heads of account.

(li) All expenditure and income are accounted on accrual basis.

2) VALUATION

(i) Fixed Assets

Fixed assets are stated 3t cost and other incidental expenses, less accumuJated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost such as duties (net of CENVAT), freight, borrowing cost, adjustment on account of foreign exchange fluctuations, erection and commissioning expenses incurred in bringing the asset to its working condition for its intended use.

(ii) Raw Materials and Packing Materials

Raw materials and packing materials are valued at tower of cost, based on First in First Out (FIFO) method or net realizable value.

(iii) Finished Goods

Finished Goods are valued at lower of cost, based on Firs! in First Out (FIFO) method, arrived after including depreciation on Plant & Machinery, Electrical Installation and Factory Building, Repair & Maintenance on Factory Building, specific Manufacturing Expenses including Excise Duty and specific Payments and Benefits to Employees or net realizable value.

(iv) Work-in-Progress

Work-in-Progress is valued at lower of cost based on First In First Out (FIFO) method arrived after including depreciation on Plant & Machinery, Electrical Installation and Factory Building, Repair & Maintenance on Factory Building, specific Manufacturing Expenses and specific Payments and Benefits to Employees or net realizable -. value, *

(v) Cost of Consumable Stores

Spares & Consumables are valued at tower of cost based on First in First Out (FIFO) method or net realizable value

<3> FOREIGN CURRENCY TRANSACTIONS

(i) Foreign Currency monetary items remaining unsettled at the year-end, are translated at year-end rates. Non- monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(ii) Exchange differences on settled/translated monetary items are adjusted as income/expense through the Exchange Fluctuation Account in the year they arise

(iii) Difference between the forward and exchange rate on the date of transactions are adjusted over the period of the contract as an income / expense through the Exchange Fluctuation Account

(Iv) Profit or loss on cancellation of forward contracts for transactions are adjusted as income / expense through Exchange Fluctuation Account in the year they arise.

4) DEPRECIATION

(i) Normal depreciation on all Fixed Assets except Land are provided on Straight Line Method at the rates prescribedm Schedule-XIV to The Companies Act, 1956.

(ii) Depreciation on additions/deletions to Fixed Assets are provided on pro-rata basis from/to the date of addition/ deletions.

(iii) Depreciation on additions/deletions to the Fixed Assets due to exchange fluctuation rate are provided on pro-rata basis since inception.

5) IMPAIRMENTS

The carrying amount of assets are periodically assessed by the Management, using internal & external sources, to determine whether there is any indication that assets of concerned cash generating unit may be impaired impairment loss, if any is provided to the extent the carrying amount of assets of concerned cash generating unit exceeds their recoverable amount. The recoverable amount is higher of net selling price of assets of concerned cash generating unit and their present value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of assets of concerned cash generating unit and from their disposal at the end of their useful life.

6) GOVERNMENT GRANTS

(i) Capital Subsidy received from Government as contribution towards capital outlay for setting up the fixed assets is treated as Capital Grants which is recognized as Income in the Profil & Loss account over the period and in the proportion in which depreciation is charged

(ii) Revenue Grants are recognized in Profit & Loss Account.

7) SALES

(i) Export Sales are accounted for on C S F I F.O.B basis.

(ii) Sales Returns are adjusted from the sales of the year in which the returns take place.

8} PURCHASES

(i) Purchase returns are adjusted from the purchases of the year in which the returns take place.

(ii) Purchases are accounted for "Net of VAT Credit availed on eligible inputs".

9) EMPLOYEE BENEFITS

(i) Defined Long Term benefit (other than leave encashment) is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses In respect of post employment and other long term benefits are charged to Profit & Loss Account.

(ii) Defined long term benefits in respect of leave encashment is charged to profit & loss account based on the leave entillement of employees remaining unulilised at the end of the year, at the undiscounted amount.

(iii) Defined Contribution Plans are charged to profit & loss account based on the contribution made to Ihe specified fund.

(iv) Short term employee benefits are charged to Profit & Loss Account at the undiscounted amount in the year in which Ihe related service is rendered

10) INCOME TAX

Income lax expenses are accrued in accordance with Accounting Standard-22 "Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India, which inciude Current Tax and Deferred Tax. Deferred income tax reflects the impact of current year timing difference between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax assets are recognised only to the extent, there is a reasonable certainty that sufficient future taxable income will be available.

11) CLAIMS BY/AGAINST THE COMPANY

Claims by/ against the Company arising on any account is provided In the accounts on receipts/acceptances.

12) RESEARCH & DEVELOPMENT EXPENSES

(i) All revenue expenditures on Research & Development activities are accounted for under the separate accounting head

(ii) All capital expenditures on Research & Development activities are accounted for under the natural heads of Fixed Assets Account

13) BORROWING COST

Borrowing cost attributable to the acquisition or construction of qualifying / eligible assets are capitalized as part of the cost of such assets. A qualifying / eligible asset is an asset that necessarily takes a substantial penod of time to get . ready for intended use All other borrowing costs are recognized as an expense and are charged to revenue in the year in which they are incurred.

14) EARNING PER SHARE

In accordance with the Accounting Standard-20 (AS-20) "Earning Per Share" issued by The Institute of Chartered Accountants of India. Baste & Diluted Earning Per Share Is computed using the weighted average number of Shares outstanding during the period.

15) PROVISIONS. CONTINGENT LIABILITIES AND CONTINGENT ASSETS

In accordance with the Accounting Standard-29 (AS-29) issued by The Institute of Chartered Accountants of India *

a) Provisions are made for the present obligations where amount can be estimated reliably, and

b) Contingent liabilities are disclosed for possible obligations arising out of uncertain events not wholly in control of the Company. Contingent assets ana neither recognized nor disclosed in the financial statements

 
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