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Accounting Policies of Gajra Bevel Gears Ltd. Company

Mar 31, 2015

1.1. Basis of preparation of financial statements

(a) Basis of Accounting:

The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India (''Indian GAAP'') and comply with the Accounting standards prescribed in Companies (Accounting Standards) Rules, 2006 which continue to apply under Section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2014, and other relevant provisions of the Companies Act, 1956, to the extent applicable.

(b) Use of Estimates:

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgment, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities on the date of Financial Statements. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amount of assets or liabilities in future periods.

1.2 Tangible and Intangible Assets:

(a) Tangible Fixed Assets

Tangible Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

(b) Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible asset are carried at cost less accumulated amortization and accumulated impairment loss, if any. Profit or loss on disposal of intangible asset is recognized in the Statement of Profit and Loss.

(c) Capital Work in Progress and Capital Advances

Cost of Assets not ready for intended use, as on the balance sheet date, is shown as capital work in progress.

(d) Depreciation and Amortization

Depreciation on tangible fixed assets is provided using the Straight-Line Method using the rates arrived at based on the useful lives estimated by the management. Due to the seizer of factory premises by the Provident Fund Authorities the management of the Company was unable to access to the asset register of Company to do the exercise to charge depreciation based on revised remaining useful life of the assets as per the revised schedule II of Company''s Act 2013 and therefore, the amount of depreciation for the year is calculated on the basis of rates applied in the earlier years.

Intangible assets are amortized on a straight line basis over the estimated useful economic life. The company uses a rebuttable presumption that the useful life of an intangible asset will not exceed five years from the date when the asset is available for use. If the persuasive evidence existence to the affect that useful life of an intangible asset exceed five years, the company amortizes the intangible asset over the best estimate of its useful life.

1.3 Revenue Recognition

There has not been any sale of goods and services during the period. Although revenue is recognized to the extent that is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:

Sale of Goods:

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The company collects the sales tax and VAT on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the period.

Dividends:

Dividend income is recognized when the company''s right to receive dividend is established.

1.4 Inventories

(a) Inventories are valued at the lower of cost and net realizable value except in the case of tools in stores and spares which are valued at cost and tools in tool crib which are valued at the book value.

(b) The cost of purchase material is determined on the FIFO method. Cost of inventory comprises all cost of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other cost incurred in bringing the inventory to their present location and condition.

(c) Work-in-progress and manufacturing goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

1.5 Investments:

Investments, which are readily realizable and indented to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued.

1.6 Retirement and other employee benefits:

Retirement benefit in the form of provident fund is a defined contribution scheme. The contribution to the provided fund is charged to the statement of profit and loss for the period when the contributions are due. Owing to the financial sickness, the Company has been irregular in depositing the provided contribution with the appropriate authorities. Any settlement/ dues of provident fund shall be paid as per order of competent authority.

The company operates gratuity plan for the benefit of its employees. The cost of providing benefit under gratuity is determined on the basis of actuarial valuation at each year end. Actuarial gains and losses for gratuity plan are recognized in full in the period in which they occur in the statement of profit and loss.

Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

1.7 Provisions:

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date adjusted to reflect the current best estimates.

1.8 Contingent Liability:

A contingent Liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.

1.9 Earnings per share:

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average no. of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a right issue, share split, and reserve share split (consolidation of shares) that have changed the no. of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted EPS, the net profit or loss for the year attributable to equity shareholders and the weighted average no. of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.10 Cash and Cash Equivalents:

Cash and Cash Equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short term investments (if any) with an original maturity of three months or less.

1.11 Income Tax:

a) Deferred Taxes: The Company has carry forward losses and unabsorbed depreciation available for set-off under the Income Tax Act, 1961. However, in view of present uncertainty regarding generation of sufficient future income, net deferred tax assets at the year end including related credit / charges for the year have not been recognized in these accounts on prudent basis.

b) Current Taxes: In view of carry forward losses, unabsorbed deprecation and having the status of a SICK INDUSTRIAL COMPANY declared by the BIFR, the Company does not expect any current tax liability for the Financial Years 2007-08 to 2014-15 (Assessment Years 2008-09 to 2015-16 and hence no provision has been made for current taxes for these years.

1.12 Measurement of EBITDA:

The company has opted to present earnings before interest(finance cost), tax, depreciation and amortization(EBITDA) as a separate line item on the face of the statement of Profit & Loss for the year. The Company measures EBITDA on the basis of profit/(loss) from continuing operations.


Mar 31, 2014

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and in accordance with the standards on accounting issued by the Institute of Chartered Accountants of India and referred to in Section 211 (3C) of the Companies Act, 1956. The significant accounting policies are as follows:

(i) Estimates:

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgment, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

(ii) Tangible Fixed Assets:

Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Depreciation on tangible fixed assets is calculated on straight-line basis using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the schedule XIV to the Companies Act, 1956, whichever is higher.

(iii)Intangible Fixed Assets:

Intangible assets are amortized on a straight line basis over the estimated useful economic life. The company uses a rebuttable presumption that the useful life of an intangible asset will not exceed five years from the date when the asset is available for use. If the persuasive evidence existence to the affect that useful life of an intangible asset exceed five years, the company amortizes the intangible asset over the best estimate of its useful life.

The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from the previous estimates, the amortization period is changed accordingly.

Research and Development:

Amortization of the asset begins when development is complete and the asset is available for use. It is amortized on a straight-line basis over the period of expected future benefit from the related project, i.e., the estimated useful life of five years. Amortization is reorganized in the statement of profit and loss. Expenditure of capital nature is added to the fixed assets.

Expenditure of deferred revenue nature incurred on Research and development of products which are expected to be technically/commercially viable are written off over a period of 5 years from the year of commencement of its commercial production. As certified by the company Rs 1287059/- on account of amortization of such expenditure have been charged to profit and loss account

Technical Know-how/Exhibition Expenses:

Technical Know-how fees/ expenses on exhibition of proto-type of a product under development which is expected to be technically/ commercially viable will be written off over a period of five years from the year of commencement of its commercial production.

(iv)Investments:

Investments, which are readily realizable and indented to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued.

v) Inventories:

Inventories are valued at the lower of cost and net releasable value except in the case of tools in stores and spares which are valued at cost and tools in tool crib which are valued at the book value.

The cost of purchase material is determined on the FIFO method.

Work-in-progress and manufacturing goods are valued at lower of cost and net realizable value. Cost includes direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty.

The cost of tools in tool crib is amortized over useful life of tools. Consumables are charged to the statement of profit and loss in the year of purchase.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(vi)Revenue Recognition:

There has not been any sale of goods and services during the period. Although revenue is recognized to the extent that is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:

Sale of Goods:

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The company collects the sales tax and VAT on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the period.

Income from Services:

Revenues from maintenance contracts are recognized pro-rata over the period of the contract as and when services are rendered. The company collects service tax on behalf of the government and, therefore, it is not an economic benefit flowing to the company. Hence, it is excluded from revenue.

Dividends:

Dividend income is recognized when the company''s right to receive dividend is established by the reporting date.

(vii) Retirement and other employee benefits:

Retirement benefit in the form of provident fund is a defined contribution scheme. The contribution to the provided fund is charged to the statement of profit and loss for the period when the contributions are due. Owing to the financial sickness, the Company has been irregular in depositing the provided contribution with the appropriate authorities

The company operates gratuity plan for the benefit of its employees. The cost of providing benefit under gratuity is determined on the basis of actuarial valuation at each year end. Actuarial gains and losses for gratuity plan are recognized in full in the period in which they occur in the statement of profit and loss.

Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The company treats its accumulated leave expected to be carried forward beyond 12 months, as long term employee benefit for measurement purpose. Such long term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year end.

(viii) Earnings per share:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average no. of equity shares outstanding during the period. The weighted average no. of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a right issue, share split, and reserve share split (consolidation of shares) that have changed the no. of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted EPS, the net profit or loss for the period attributable to equity shareholders and the weighted average no. of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

Earning per Share

Particular 31.03.2014 30.06.2013

Net profit available for equity shareholders (88067965) (2482195) Basic and Diluted EPS of face value of Rs.10/- (9.37) (0.26) each

(ix) Provisions:

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date adjusted to reflect the current best estimates.

(x) Contingent Liability:

A contingent Liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.


Jun 30, 2013

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and in accordance with the standards on accounting issued by the Institute of Chartered Accountants of India and referred to in Section 211 (3C) of the Companies Act, 1956. The significant accounting policies are as follows:

(i) Estimates:

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgment, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

(ii) Tangible Fixed Assets:

Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Depreciation on tangible fixed assets is calculated on straight-line basis using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the schedule XIV to the Companies Act, 1956, whichever is higher.

(iii) Intangible Fixed Assets:

Intangible assets are amortized on a straight line basis over the estimated useful economic life. The company uses a rebuttable presumption that the useful life of an intangible asset will not exceed five years from the date when the asset is available for use. If the persuasive evidence existence to the affect that useful life of an intangible asset exceed five years, the company amortizes the intangible asset over the best estimate of its useful life.

The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from the previous estimates, the amortization period is changed accordingly.

Research and Development:

Amortization of the asset begins when development is complete and the asset is available for use. It is amortized on a straight-line basis over the period of expected future benefit from the related project, i.e., the estimated useful life of five years. Amortization is reorganized in the statement of profit and loss. Expenditure of capital nature is added to the fixed assets.

Expenditure of deferred revenue nature incurred on Research and development of products which are expected to be technically/commercially viable are written off over a period of 5 years from the year of commencement of its commercial production. As certified by the company Rs 1287059/- on account of amortization of such expenditure have been charged to profit and loss account

Technical Know-how/Exhibition Expenses:

Technical Know-how fees/ expenses on exhibition of proto-type of a product under development which is expected to be technically/ commercially viable will be written off over a period of five years from the year of commencement of its commercial production.

(iv) Investments:

Investments, which are readily realizable and indented to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued.

(v) Inventories:

Inventories are valued at the lower of cost and net releasable value except in the case of tools in stores and spares which are valued at cost and tools in tool crib which are valued at the book value.

The cost of purchase material is determined on the FIFO method.

Work-in-progress and manufacturing goods are valued at lower of cost and net realizable value. Cost includes direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty.

The cost of tools in tool crib is amortized over useful life of tools. Consumables are charged to the statement of profit and loss in the year of purchase.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(vi) Revenue Recognition:

There has not been any sale of goods and services during the period. Although revenue is recognized to the extent that is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:

Sale of Goods:

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The company collects the sales tax and VAT on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the period.

Income from Services:

Revenues from maintenance contracts are recognized pro-rata over the period of the contract as and when services are rendered. The company collects service tax on behalf of the government and, therefore, it is not an economic benefit flowing to the company. Hence, it is excluded from revenue.

Dividends:

Dividend income is recognized when the company''s right to receive dividend is established by the reporting date.

(vii) Retirement and other employee benefits: .

Retirement benefit in the form of provident fund is a defined contribution scheme. The contribution to the provided fund is charged to the statement of profit and loss for the period when the contributions are due. Owing to the financial sickness, the Company has been irregular in depositing the provided contribution with the appropriate authorities

The company operates gratuity plan for the benefit of its employees. The cost of providing benefit under gratuity is determined on the basis of actuarial valuation at each year end. Actuarial gains and losses for gratuity plan are recognized in full in the period in which they occur in the statement of profit and loss.

Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The company treats its accumulated leave expected to be carried forward beyond 12 months, as long term employee benefit for measurement purpose. Such long term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year end.

(viii) Earnings per share:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders, (after deducting preference dividends and attributable taxes) by the weighted average no. of equity shares outstanding during the period. The weighted average no. of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a right issue, share split, and reserve share split (consolidation of shares) that have changed the no. of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted EPS, the net profit or loss for the period attributable to equity shareholders and the weighted average no. of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(ix) Provisions:

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date adjusted to reflect the current best estimates.

(x) Contingent Liability:

A contingent Liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.

b) (i) Contingent liabilities that may arise due to delayed/noncompliance of certain fiscal statues and claims lodged by the ex-employees- amounts are unascertainable.

(ii) The financial liabilities on the account of legal cases pending against the company amounts are unascertainable.

c) Estimated amount of the contract remaining to be executed on capital account and not provided for Rs. 4593589/-

(xi) Cash and Cash Equivalents:

Cash and Cash Equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short term investments (if any) with an original maturity of three months or less.

(xii) Income Tax:

a) Deferred Taxes: The Company has carry forward losses and unabsorbed depreciation available for set-off under the Income Tax Act, 1961. However, in view of present uncertainty regarding generation of sufficient future income, net deferred tax assets at the yearend including related credit / charges for the year have not been recognized in these accounts on prudent basis.

b) Current Taxes: In view of carry forward losses and unabsorbed deprecation, the Company does not expect any current tax liability for the Financial Years 2007-08 to 2012-13 (Assessment Years 2008-09 to 2013-14) and hence no provision has been made for current taxes for these years.

(xiii) Trade Receivables:

a) Trade Receivables includes Rs. 22848088 due from a concern of which a Director was the proprietor till 06.11.1999. Maximum amount due at any time during the period from the said concerns is Rs.22848088.

b) Trade Receivables include Rs.4824150 due from some of the ex-distributors/customers of the company. The company is of the opinion that the amount is fully recoverable on completion of final settlement which is in progress. The company is confident of recovering the amounts.

(xiv) Related Parties:

Associate of the Company and concern in which Key Management Personnel have significant influence are as follows:

a) M/s. Garha Gears Ltd.

b) M/s. Garha Utilbrocce Tools Ltd.

c) M/s. S&H Gears Pvt. Ltd.

d) M/s. Garha Auto Distributors

e) M/s. Gajra Marketing

f) M/s. Kshipra Gears

g) M/s. Garha Tours& Travles

h) M/s. Abhimanyu Agro Pvt. Ltd.

i) M/s. Rani Agro Pvt. Ltd.

Key management personnel

a) Shri Surendra Singh : Managing Director

b) Shri Ranveer Singh : Director

Amount due to related parties (Associate Concerns) on balance sheet date is Rs.253103934.

(xv) The Company does not possess information as to which of its suppliers are ancillary industrial undertakings/ small scale industrial undertakings holding permanent registration certificate issued by the Directorate of Industries of a State or Union territory. Consequently, the liability, if any, of interest which would be payable under The Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1992 cannot be ascertained. However, the Company has not received any claims in respect of interest.

The Company does not possess information as to which of suppliers are Small Scale Industrial Undertakings. Accordingly, the information regarding total outstanding dues to Small Scale Industrial Undertakings as at the year end and that regarding the names of Small Scale Industrial undertakings to whom the Company owes more than Rs. 1.00 lakh and outstanding for more than 30 days has not been compiled and hence not disclosed by the Company.

(xvi) The writ petition filed by the Company and admitted by the Honorable High Court, Mumbai for the payment of minimum remuneration of Rs. 1,27,307/- to the Late Managing Director for the period 01.04.1979 to 30.09.1981 (being the date of expiry of the terms of appointment of the Managing Director) has not come up for hearing. The Company has applied for the approval of the Department of Company Affairs, Ministry of Law, Justice and Company Affairs, for the re-appointment of the Managing Director for the period from 01.10.1981 to 30.09.1986, on the terms and conditions approved by the shareholders in the General Meeting of the Company. The total remuneration of Rs.6,05,207 for the period from 01.04.1979 to 30.09.1986 has not been paid.

(xvii) Loans and Advance includes amounts due from private limited company in which some of the Directors are members Rs.41252. Maximum amount due at any time during the year from the said company is Rs.41252.

(xviii) The net worth of the Company has been eroded on account of the losses of year ended on 30.09.08. Based on the ABS as on 30.09.08 the company has filed the reference U/s 15(1) of SIC (SP)Act, 1985 before BIFR, and the same has been registered as case No. 27/2009 on 13.07.2009. The BIFR vide its order of hearing held on 06.01.2011 declared the Company a SICK INDUSTRIAL COMPANY in terms of section 3(1) (o) of Sick Industrial Companies (Special Provisions) Act 1985 and appointed IDBI as the Operating Agency (OA).The Operating Agency is in process to formulate a rehabilitation scheme for revival of the Company. Meantime, the promoters of the Company are putting best of their efforts for One Time Settlement (OTS) of loans from the Secured Lenders and have succeeded in OTS with SBI, IDBI.MPAVN and MPSIDC. Considered due to full & final payment of OTS Amount is still pending.

(xx) The unsecured loans are received from the companies of the promoters group to start the operation of the company.

The interest rate on the said loans are not decided yet and hence no provisions for any interest payable, if any, is made in the accounts.

(xxii) Measurement of EBITDA:

As permitted by the guidance note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of the profit and loss. The company measures EBITDA on the basis of profit/(loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expenses, finance costs and tax expense.

(xxiii) Previous year figures have been regrouped and rearranged wherever necessary.

(xxiv) Change in Accounting Year.

During the year under review, the Company has changed its accounting year from 12 months to £ months resulting the present accounting is for 9 months only commencing from 1st Oct.'' 12 to 30th June''13 and therefore figure of previous year are not comparable.


Sep 30, 2012

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and in accordance with the standards on accounting issued by the Institute of Chartered Accountants of India and referred to in Section 211 (3C) of the Companies Act, 1956. The significant accounting policies are as follows:

(i) Estimates:

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgment, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

(ii) Tangible Fixed Assets:

Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Depreciation on tangible fixed assets is calculated on straight-line basis using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the schedule XIV to the Companies Act, 1956, whichever is higher.

(iii) Intangible Fixed Assets:

Intangible assets are amortized on a straight line basis over the estimated useful economic life. The company uses a rebuttable presumption that the useful life of an intangible asset will not exceed five years from the date when the asset is available for use. If the persuasive evidence existence to the affect that useful life of an intangible asset exceed five years, the company amortizes the intangible asset over the best estimate of its useful life.

The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from the previous estimates, the amortization period is changed accordingly.

Research and Development:

Amortization of the asset begins when development is complete and the asset is available for use. It is amortized on a straight-line basis over the period of expected future benefit from the related project, i.e., the estimated useful life of five years. Amortization is reorganized in the statement of profit and loss. Expenditure of capital nature is added to the fixed assets.

Expenditure of deferred revenue nature incurred on Research and development of products which are expected to be technically/commercially viable are written off over a period of 5 years from the year of commencement of its commercial production. As certified by the company Rs 1716078/- on account of amortization of such expenditure have been charged to profit and loss account

Technical Know-how/Exhibition Expenses:

Technical Know-how fees/ expenses on exhibition of proto-type of a product under development which is expected to be technically/ commercially viable will be written off over a period of five years from the year of commencement of its commercial production.

(iv) Investments:

Investments, which are readily realizable and indented to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges as brokerage, fees and duties. If an investment is.acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued

(v) Inventories:

Inventories are valued at the lower of cost and net realisable value except in the case of tools in stores and spares which are valued at cost and tools in tool crib which are valued at the book value.

The cost of purchase material is determined on the FIFO method.

Work-in-progress and manufacturing goods are valued at lower of cost and net realizable value.

Cost includes direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty.

The cost of tools in tool crib is amortized over useful life of tools. Consumables are charged to the statement of profit and loss in the year of purchase.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(vi) Revenue Recognition:

There has not been any sale of goods and services during the year. Although revenue is recognized to the extent that is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:

Sale of Goods:

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The company collects the sales tax and VAT on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.

Income from Services:

Revenues from maintenance contracts are recognized pro-rata over the period of the contract as and when services are rendered. The company collects service tax on behalf of the government and, therefore, it is not an economic benefit flowing to the company. Hence, it is excluded from revenue.

Dividends:

Dividend income is recognized when the company''s right to receive dividend is established by the reporting date.

(vii) Retirement and other employee benefits:

Retirement benefit in the form of provident fund is a defined contribution scheme. The contribution to the provided fund is charged to the statement of profit and loss for the year when the contributions are due. Owing to the financial sickness, the Company has been irregular in depositing the provided contribution with the appropriate authorities

The company operates gratuity plan for the benefit of its employees. The cost of providing benefit under gratuity is determined on the basis of actuarial valuation at each year end. Actuarial gains and losses for gratuity plan are recognized in full in the period in which they occur in the statement of profit and loss.

Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short- term employee benefit. The company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The company treats its accumulated leave expected to be carried forward beyond 12 months, as long term employee benefit for measurement purpose. Such long term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year end.

(viii) Earnings per share:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average no. of equity shares outstanding during the period. The weighted average no. of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a right issue, share split, and reserve share split (consolidation of shares) that have changed the no. of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted EPS, the net profit or loss for the period attributable to equity shareholders and the weighted average no. of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(ix) Provisions:

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date adjusted to reflect the current best estimates.

(x) Contingent Liability:

A contingent Liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.


Sep 30, 2011

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and in accordance with the standards on accounting issued by the Institute of Chartered Accountants of India and referred to in Section 211 (3C) of the Companies Act, 1956. The significant accounting policies are as follows

i) Fixed assets: - Fixed assets are stated at cost less accumulated depreciation. Cost of plant and machinery includes interest on borrowings till the date of commissioning of the assets.

Depreciation is provided on the "Straight line basis" at the rates and in the manner prescribed in Schedule XIV to the Companies Act,1956, except in the case of lease hold land which is amortised over the period of the lease.

ii) Inventories: - Inventories are valued at the lower of cost and net realisable value except in the case of tools in stores and spares which are valued at cost and tools in Tool Crib which are valued at book value. The cost of purchased materials is determined on the basis of first in first out method. The cost of work-in-process and manufactured goods includes direct material cost, direct labour cost and appropriate factory overheads computed on the basis of normal utilisation of the production capacity. The cost of tools in Tool Crib is amortised over useful life of the tools. Consumables are charged to the Profit and Loss Account in the year of purchase.

iii) Current Investments are carried at fair value.

iv) Excise Duty paid/payable on production is charged to profit and loss account in the year of manufacture and accordingly included while valuing closing stock

v) Specific debts and loans and advances, identified as irrecoverable or doubtful are written off or provided for respectively. All the debts and loans and advances though shown recoverable and considered good have become time barred and no provision has been made in accounts for their bad and doubtfulness.

vi) Conversion/translation of foreign currency transactions:- There has not been any conversion / translation of foreign currency transaction.

Current assets and current liabilities outstanding on balance sheet date are translated on the dated exchange rates and the resulting gains/losses are recognised in the profit and loss account.

vii) Revenue Recognition : - There has not been any sale of goods and services during the year.

viii) Research & Development Expenditure :- Expenditure of revenue nature incurred on research and development of products which are expected to be technically/commercially viable is written off over a period of five years, starting with the year of commencement of commercial production. Expenditure of a capital nature is added to fixed assets.

ix) Deferred Revenue Expenditure :- Technical know-how fees/expenditure on exhibition of proto-type of a product under development which is expected to be technically/commercially viable will be written off over a period of 5 years from the year of commencement of its commercial production,

(x) Retirement benefits: - Retirement benefits to employees are provided for by way of provident fund, gratuity and leave encashment. The monthly contributions to provident fund are charged to revenue account. Provision for gratuity is made on the basis of an actuarial valuation for all employees done on the balance sheet date. Provision for leave encashment is based on an actuarial valuation as on the balance sheet date of the liability arising on cessation/termination of services of the employees.


Sep 30, 2010

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and in accordance with the standards on accounting issued by the Institute of Chartered Accountants of India and referred to in Section 211 (3C) of the Companies Act, 1956. "The significant accounting policies are as follows :

i) Fixed assets: - Fixed assets are stated at cost less accumulated depreciation. Cost of plant and machinery includes interest on borrowings till the date of commissioning of the assets,

Depreciation is provided on the "Straight line basis" at the rates and in the manner prescribed in Schedule XIV (o the Companies Act, 1956, except in the case of lease a held land which is amortised over the period of the lease.

ii) Inventories: - Inventories are valued at the lower of cost and net realisable value except in the ease of tools in stores and spares which are valued at cost and tools in Tool Crib which are valued at book value. The cost of purchased materials is determined on the basis of first in first out method. The cost of work-in-process and manufactured goods includes direct material cost, direct labour cost and appropriate factory overheads computed on the basis of normal utilisation of the production capacity. The cost of tools in Tool Crib is amortised over useful life of the tools.Consumables are charged to the Profit and Loss Account in the year of purchase.

iii) Current Investments are carried at fair value.

vi) Excise Duty paid/payable on production is charged to profit and Joss account in the year of manufacture and accordingly Included while valuing closing slock.

v) Specific debts and loans and advances, identified as irrecoverable or doubtful are written offer provided for respetively. All the debts and loans and advances though shown recovevable and considered good have become time barred and no provision has been made in accounts for their bad and doubtfulness.

vi) Conversion/translation of foreign currency transactions:- There has not been any conversion /Translation of foreign currency transaction.

Current, assets and current liabilities outstanding on balance sheet date are translated on The dated exchange rates and the resulting gains/losses are recognised in the profit and loss account,

vii) Revenue Recognition : - There has not been any sale of goods and services during the year.

viii) Research & Development Expenditure :- Expenditure of revenue nature incurred on research and development of products which are expected to be technically/commcrcially viable is written off over a period of five years. starting with the year of commencement of commercial product ion Expenditure of a capital nature is added of fixed assets.

ix.) Deferred Revenue Expenditure :-

Technical know-how fees/expenditure on exhibition of proto-type of a product under development which is expected to be technically/commercially viable will be written off over a period of 5 years from the year of commencement of its commercial production.

(x) Retirement benefits: - Retirement benefits to employees are provided for by way of provident fund, gratuity and leave encashment. The monthly contributions to provident fund are charged to revenue account. Provision for gratuity is made on the basis of an actuarial valuation for all employees done on the balance sheet date. Provision tor leave encashment is based on an actuarial valuation as on the balance sheet date of the liability arising on cessation/terminal ion of services of the employees.




Sep 30, 2009

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and in accordance with the standards on accounting issued by the Institute of Chartered Accountants of India and referred to in Section 211 (3C) of the Companies Act, 1956. The significant accounting policies are as follows :

i) Fixed assets: - Fixed assets are stated at cost less accumulated depreciation. Cost of plant and machinery includes interest on borrowings till the date of commissioning of the assets. Depreciation is provided on the "Straight line basis" at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956, except in the case of lease hold land which is amortised over the period of the lease.

ii) Inventories: - Inventories are valued at the lower of cost and net realisable value except in the case of tools in stores and spares which are valued at cost and tools in Tool Crib which are valued at book value. The cost of purchased materials is determined on the basis of first in first out method. The cost of work-in-process and manufactured goods includes direct material cost, direct labour cost and appropriate factory overheads computed on the basis of normal utilisation of the production capacity. The cost of tools in Tool Crib is amortised over useful life of the tools. Consumables are charged to the Profit and Loss Account in the year of purchase.

iii) Current Investments are carried at fair value.

iv) Excise Duty paid/payable on production is charged to profit and loss account in the year of manufacture and accordingly included while valuing closing stock.

v) Specific debts and loans and advances, identified as irrecoverable or doubtful are written off or provided for respectively. All the debts and loans and advances though shown recoverable and considered good have become time barred and no provision has been made in accounts for their bad and doubtfulness.

vi) Conversion/translation of foreign currency transactions:- There has not been any conversion / translation of foreign currency transaction.

Current assets and current liabilities outstanding on balance sheet date are translated on the dated exchange rates and the resulting gains/losses are recognised in the profit and loss account.

vii) Revenue Recognition : - There has not been any sale of goods and services during the year.

viii) Research & Development Expenditure :- Expenditure of revenue nature incurred on research and development of products which are expected to be technically/commercially viable is written off over a period of five years, starting with the year of commencement of commercial production. Expenditure of a capital nature is added to fixed assets.

ix) Deferred Revenue Expenditure :- Technical know-how fees/expenditure on exhibition of proto- type of a product under development which is expected to be technically/commercially viable will be written off over a period of 5 years from the year of commencement of its commercial production.

(x) Retirement benefits: - Retirement benefits to employees are provided for by way of provident fund, gratuity and leave encashment. The monthly contributions to provident fund are charged to revenue account. Provision for gratuity is made on the basis of an actuarial valuation for all employees done on the balance sheet date. Provision for leave encashment is based on an actuarial valuation as on the balance sheet date of the liability arising on cessation/termination of services of the employees.

 
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