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

Accounting Policies of GKB Ophthalmics Ltd. Company

Mar 31, 2015

1 Basis of preparation of Financial Statements:

The financial statements are prepared and presented under the historical cost convention, on the accrual basis of accounting and in accordance with the provisions of the Companies Act, 2013 ('the Act'), and the accounting principles generally accepted in India and comply with the accounting standards ('AS') specified under section 133 of the Act read with rule 7 of the Companies (Accounts) Rules, 2014.

2 Use of estimates :

The preparation of the financial statements in conformity with generally accepted accounting principles ('GAAP') in India requires management to make estimates and assumptions that affect the reported amount of assets, liabilities and the disclosure of contingent liabilities on the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based on management's evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results could differ from those estimates. Any revision to the accounting estimates is recognised prospectively in current and future periods.

3 Fixed Assets:

a) Tangible assets:

i) Fixed assets are stated at cost net of tax/duty credit availed, if any, including directly attributable costs such as freight, insurance, specific installation charges, etc. for bringing the assets to working condition for use.

ii) Expenditure relating to existing fixed assets is added to the cost of the assets, where it increases the performance / life of the asset as assessed earlier.

iii) Fixed assets are eliminated from financial statements on disposal or when retired from active use.

iv) Preoperative expenses, including interest on borrowings for a project is capitalised till the project is ready for commercial production.

v) Capital work-in-progress includes cost of fixed assets under installation/ under development as at the Balance Sheet date.

vi) The assets acquired under hire-purchase agreement are included in the fixed assets of the Company, where the terms of the agreement provide that the assets shall eventually become the property of the hirer or confer on him an option to purchase the assets.

b) Intangible assets:

Intangible assets are recognized as per the criteria specified in Accounting Standard (AS) 26 on "Intangible Assets".

4 Depreciation :

a) Tangible assets :

Owned assets :

Depreciation is provided on the Straight line method over the estimated useful life of the asset in the manner specified in Schedule II of the Companies Act, 2013.Fixed assets which are added/ disposed off in the year are depreciated on pro rata basis with reference to the date of addition/ deletion.

Leased assets :

Leasehold land is amortised over the period of lease.

b) Intangible assets :

Intangible assets are amortised on a straight line method basis over the best estimate of useful life.

5 Impairment of Assets :

As at each Balance Sheet date, the carrying amount of assets (other than inventory) is tested for impairment, so as to determine :

i) the provision for impairment loss, if any.

ii) the reversal of impairment loss recognised in previous periods, if any.

Impairment loss is recognised when the carrying amount of an asset or a cash generating unit exceeds its recoverable amount.

The recoverable amount of the asset (or where applicable that of the cash generating unit to which the asset belongs) is determined at the higher of the net selling price and the value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

6 Inventories:

i) Raw materials, stores, spares and consumable tools, packing materials, work-in-process and finished goods are valued at lower of cost or net realisable value.

ii) In case of raw materials, stores, spares, consumable tools and packing materials, cost represents purchase price and other costs incurred for bringing the inventories to their present location and conditions and is determined on "weighted average" basis.

iii) In case of work-in-process and finished goods, cost represents cost of raw material, cost of conversion such as direct labour, direct expenses, etc. and production overheads which are based on normal level of production.

iv) Finished goods at lower of weighted average cost or net realisable value, cost includes related overheads and excise duty paid/ payable on such goods.

7 Employee Benefits

i) All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Short term employee benefits at the balance sheet date, are recognised as an expense as per the Company's scheme based on expected obligations on undiscounted basis.

Defined Contribution Plan

a) Provident Fund

The Company contributes to the government administered provident fund. The fixed contributions to these funds are charged to Statement of Profit and Loss.

b) Superannuation

Contributions to the superannuation fund, which is administered by Life Insurance Corporation of India, are charged to the Statement of Profit and Loss.

Defined Benefit Plan Leave Encashment:

The employees of the company are entitled to encashment of un-availed leave. The employees can carry forward a portion of the unutilised leave and receive cash compensation at retirement or termination of employment. The Company records an obligation for encashment of un-availed leave in the period in which the employee renders the services, based on an actuarial valuation at the balance sheet date, carried out by an independent actuary. Actuarial gain or loss is recognised in the Statement of Profit or Loss as income or expense.

Gratuity

The Company's contribution towards gratuity made under Group Gratuity Scheme with Life Insurance Corporation of India ( LIC ) is determined based on the amount recommended by LIC as per Actuarial valuation. The whole time Directors of the Company are not covered by the gratuity trust created under Group Gratuity Fund. Provision for their gratuity liability has been provided for according to the actuarial valuation carried out by the independent Actuary.

8 Borrowing Costs:

Borrowing costs that are attributable to the acquisition, construction or Production of a Qualifying asset are capitalised as part of cost of such Asset till such time as the asset is ready for its intended use or sale.

A Qualifying Asset is an Asset that necessarily requires a substantial period of time to get ready for its intended use or sale.

All other borrowing costs are recognised as an expense in the period in which they are incurred.

9 Foreign Currency Transactions:

i) Foreign Currency transactions are recorded on initial recognition in the reporting currency , using the exchange rate at the date of the transaction. At each balance sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

Exchange differences that arise on settlement of monetary items or on reporting at each balance sheet date of the company's monetary items at the closing rate are :

a) adjusted in the cost of Fixed Assets specifically financed by borrowing contracted up to 31st March, 2007 and to which the exchange differences relate, provided the assets are acquired from outside India.

b) recognised as income or expense in the period in which they arise, in cases other than (a) above.

10 Research & Development:

a) Revenue expenditure on research and development is charged under the respective heads of account.

b) Capital expenditure on research and development is included as part of fixed assets and depreciated on the same basis as other fixed assets.

11 Investments:

Long term investments are valued at cost. A provision for diminution in value is made only if such decline is other than temporary.

12 Taxes on Income:

a) Tax on income for the current period is determined on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961, and based on the expected outcome of assessments / appeals.

b) Deferred tax is recognized on timing differences between the accounting income and taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

c) Deferred tax assets (other than on account of brought forward business losses and unabsorbed depreciation) are recognized and carried forward only to the extent that there is reasonable certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.Deferred tax assets relating to brought forward business losses and unabsorbed depreciation are recognized and carried forward only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

13 Revenue Recognition:

i) Revenue from Sale of product is recognised on dispatch or appropriation of goods in accordance with the terms of sale and is inclusive of excise duty, cess and insurance charges and freight recoverable from the customers but net of Vat, Sales Tax and Sales returns.

ii) Revenue from services is recognised in accordance with the specific terms of contract or performance.

14 Earning Per Share:

Basic earning per share is calculated by dividing net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

15 Cash flow statement:

Cash flows are reported using the indirect method, whereby profit/ (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

16 Cash and cash equivalents:

(i) Cash comprises of cash on hand and demand deposits with banks.

(ii) Cash equivalents are short-term, highly liquid investments that are readily convertible into known amount of cash and which are subject to an insignificant risk of change in value.

17 Provisions, Contingent liabilities, Contingent assets and Commitments:

(a) Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if:

(i) The Company has a present obligation as a result of past a event;

(ii) A probable outflow of resources is expected to settle the obligation; and

(iii) The amount of the obligation can be reliably estimated.

(b) Reimbursement by another party, expected in respect of expenditure required to settle a provision, is recognised when it is virtually certain that reimbursement will be received if the obligation is settled.

(c) Contingent liability is disclosed in case of:

(i) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

(ii) a present obligation when no reliable estimate is possible;

(iii) a possible obligation arising from past events, unless the probability of outflow of resources is remote.

(d) Contingent assets are neither recognised nor disclosed.

(e) Commitments include the amount of purchase order (net of advance) issued to parties for completion of assets.

(f) Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.




Mar 31, 2014

1 Basis of preparation of Financial Statements:

The financial statements are prepared and presented under the historical cost convention, on the accrual basis of accounting and in accordance with the provisions of the Companies Act, 1956 (''the Act''), and the accounting principles generally accepted in India and comply with the accounting standards (''AS'') prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standard (''NACAS'') to the extent applicable.

2 Use of estimates:

The preparation of the financial statements in conformity with generally accepted accounting principles (''GAAP'') in India requires management to make estimates and assumptions that affect the reported amount of assets, liabilities and the disclosure of contingent liabilities on the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based on management''s evaluation of the relevant facts and circumstances as of the date of the financial statements.Actual results could differ from those estimates. Any revision to the accounting estimates is recognised prospectively in current and future periods.

3 Fixed Assets:

i) Fixed assets are capitalised at acquisition cost (net of duty / tax credits availed, if any) including directly attributable costs such as freight, insurance and specific installation charges for bringing the assets to working condition for use.

ii) Administrative & other general overhead expenses that are specifically attributable to construction or acquisition of fixed assets or bringing the fixed assets to working condition are allocated and capitalised as a part of fixed assets.

iii) The assets acquired under hire-purchase agreement are included in the fixed assets of the Company, where the terms of the agreement provide that the assets shall eventually become the property of the hirer or confer on him an option to purchase the assets.

4 Depreciation :

i) Depreciation on fixed assets is provided on straight-line method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956, except for leasehold land which is amortised over the period of the lease.

ii) Fixed Assets individually costing Rs. 5,000/- or less, are depreciated fully in the year of purchase.

5 Impairment ofAssets :

As at each Balance Sheet date, the carrying amount of assets (other than inventory) is tested for impairment, so as to determine :

i) the provision for impairment loss, if any.

ii) the reversal of impairment loss recognised in previous periods, if any.

Impairment loss is recognised when the carrying amount of an asset or a cash generating unit exceeds its recoverable amount.

The recoverable amount of the asset (or where applicable that of the cash generating unit to which the asset belongs) is determined at the higher of the net selling price and the value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

6 Inventories:

i) Raw materials, stores, spares and consumable tools, packing materials, work-in-process and finished goods are valued at lower of cost or net realisable value.

ii) In case of raw materials, stores, spares, consumable tools and packing materials, cost represents purchase price and other costs incurred for bringing the inventories to their present location and conditions and is determined on "weighted average" basis.

iii) In case of work-in-process and finished goods, cost represents cost of raw material,cost of conversion such as direct labour, direct expenses, etc. and production overheads which are based on normal level of production.

iv) Finished goods at lower of weighted average cost or net realisable value, cost includes related overheads and excise duty paid/ payable on such goods.

7 Employee Benefits:

i) All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Short term employee benefits at the balance sheet date, are recognised as an expense as per the Company''s scheme based on expected obligations on undiscounted basis.

Defined Contribution Plan

a) Provident Fund

The Company contributes to the government administered provident fund. The fixed contributions to these funds are charged to Statement of Profit and Loss.

b) Superannuation

Contributions to the superannuation fund, which is administered by Life Insurance Corporation of India, are charged to the Statement of Profit and Loss.

Defined Benefit Plan Leave Encashment:

The employees of the company are entitled to encashment of un-availed leave. The employees can carry forward a portion of the unutilised leave and receive cash compensation at retirement or termination of employment. The Company records an obligation for encashment of un-availed leave in the period in which the employee renders the services, based on an actuarial valuation at the balance sheet date, carried out by an independent actuary. Actuarial gain or loss is recognised in the Statement of Profit or Loss as income or expense.

Gratuity

The Company''s contribution towards gratuity made under Group Gratuity Scheme with Life Insurance Corporation of India ( LIC ) is determined based on the amount recommended by LIC as per Actuarial valuation. The whole time Directors of the Company are not covered by the gratuity trust created under Group Gratuity Fund. Provision for their gratuity liability has been provided for according to the actuarial valuation carried out by the independent Actuary.

8 Borrowing Costs:

Borrowing costs that are attributable to the acquisition, construction or Production of a Qualifying asset are capitalise as part of cost of such Asset till such time as the asset is ready for its intended use or sale.

A Qualifying Asset is an Asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

9 Foreign Currency Transactions:

i) Foreign Currency transactions are recorded on initial recognition in the reporting currency , using the exchange rate at the date of the transaction. At each balance sheet date, foreign currency monetary items are reported using the closing rate.

Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

Exchange differences that arise on settlement of monetary items or on reporting at each balance sheet date of the company''s monetary items at the closing rate are :

a) adjusted in the cost of Fixed Assets specifically financed by borrowing contracted up to 31st March, 2007 and to which the exchange differences relate, provided the assets are acquired from outside India.

b) recognised as income or expense in the period in which they arise, in cases other than (a) above.

10 Research & Development:

a) Revenue expenditure on research and development is charged under the respective heads of account.

b) Capital expenditure on research and development is included as part of fixed assets and depreciated on the same basis as other fixed assets.

11 Investments:

Long term investments are valued at cost. A provision for diminution in value is made only if such decline is other than temporary.

12 Deferred Taxation:

Deferred tax is recognised, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses.

13 Revenue Recognition:

i) Revenue from Sale of product is recognised on dispatch or appropriation of goods in accordance with the terms of sale and is inclusive of excise duty, cess and insurance charges and freight recoverable from the customers but net of Vat, Sales Tax and Sales returns.

ii) Revenue from services is recognised in accordance with the specific terms of contract or performance.

14 Accounting for interest in joint ventures:

Interest in jointly controlled entities: a) Incorporated jointly controlled entities:

i) Income on investments in incorporated jointly controlled entities is recognized when the right to receive the same is established.

ii) Investment in such joint ventures is carried at cost after providing for any diminution in value which is other than temporary in nature.

15 Cash flow statement:

Cash flows are reported using the indirect method, whereby profit/ (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

16 Cash and cash equivalents:

(i) Cash comprises of cash on hand and demand deposits with banks.

(ii) Cash equivalents are short-term, highly liquid investments that are readily convertible into known amount of cash and which are subject to an insignificant risk of change in value.

17 Provisions, Contingent liabilities, Contingent assets and Commitments:

a) Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if:

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

ii) A probable outflow of resources is expected to settle the obligation; and

iii) The amount of the obligation can be reliably estimated.

b) Reimbursement by another party, expected in respect of expenditure required to settle a provision, is recognised when it is virtually certain that reimbursement will be received if the obligation is settled.

c) Contingent liability is disclosed in case of:

i) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

ii) a present obligation when no reliable estimate is possible:

iii) a possible obligation arising from past events, unless the probability of outflow of resources is remote.

d) Contingent assets are neither recognised nor disclosed.

e) Commitments include the amount of purchase order (net of advance) issued to parties for completion of assets. f ) Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

Rights, preferences and restrictions attached to shares

The company has one class of equity shares having a par value of Rs . 10 per share. Each shareholder is eligible for one per share held. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company in proportion to their shareholding.

Nature of security :

The above short term borrowings from banks are secured by hypothecation of the inventories, book debts receivable and other current assets, and personal guarantees of three directors and corporate guarantee of GKB Vision Limited, an associate company.


Mar 31, 2013

1 Basis of preparation of Financial Statements:

The financial statements are prepared and presented under the historical cost convention, on the accrual basis of accounting and in accordance with the provisions of the Companies Act, 1956 (‘the Act''), and the accounting principles generally accepted in India and comply with the accounting standards (''AS'') prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards (''NACAS'') to the extent applicable.

2 Use of estimates :

The preparation of the financial statements in conformity with generally accepted accounting principles (''GAAP'') in India requires management to make estimates and assumptions that affect the reported amount of assets, liabilities and the disclosure of contingent liabilities on the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based on management''s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results could differ from those estimates. Any revision to the accounting estimates is recognised prospectively in current and future periods.

3 Fixed Assets:

i) Fixed assets are capitalised at acquisition cost (net of duty / tax credits availed, if any) including directly attributable costs such as freight, insurance and specific installation charges for bringing the assets to working condition for use

ii) Administrative & other general overhead expenses that are specifically attributable to construction or acquisition of fixed assets or bringing the fixed assets to working condition are allocated and capitalised as a part of fixed assets.

iii)The assets acquired under hire-purchase agreement are included in the fixed assets of the Company, where the terms of the agreement provide that the assets shall eventually become the property of the hirer or confer on him an option to purchase the assets.

4 Depreciation :

i) Depreciation on fixed assets is provided on straight-line method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956, except for leasehold land which is amortised over the period of the lease. ii) Fixed Assets individually costing Rs. 5,000/- or less, are depreciated fully in the year of purchase.

5 Impairment of Assets : As at each Balance Sheet date, the carrying amount of assets (other than inventory) is tested for impairment, so as to determine

i) the provision for impairment loss, if any.

ii) the reversal of impairment loss recognised in previous periods, if any.

Impairment loss is recognised when the carrying amount of an asset or a cash generating unit exceeds its recoverable amount.

The recoverable amount of the asset (or where applicable that of the cash generating unit to which the asset belongs) is determined at the higher of the net selling price and the value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

6 Inventories:

i) Raw materials, stores, spares and consumable tools, packing materials, work-in-process and finished goods are valued at

lower of cost or net realisable value. ii) In case of raw materials, stores, spares, consumable tools and packing materials, cost represents purchase price and other costs incurred for bringing the inventories to their present location and conditions and is determined on "weighted average" basis. iii) In case of work-in-process and finished goods, cost represents cost of raw material, cost of conversion such as direct labour, direct expenses, etc. and production overheads which are based on normal level of production.

iv) Finished goods at lower of weighted average cost or net realisable value, cost includes related overheads and excise duty paid/ payable on such goods.

7 Employee Benefits:

i) All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Short term employee benefits at the balance sheet date, are recognised as an expense as per the Company''s scheme based on expected obligations on undiscounted basis.

Defined Contribution Plan

a) Provident Fund

The Company contributes to the government administered provident fund. The fixed contributions to these funds are charged to Statement of Profit and Loss.

b) Superannuation

Contributions to the superannuation fund, which is administered by Life Insurance Corporation of India, are charged to the Statement of Profit and Loss.

Defined Benefit Plan

Leave Encashment:

The employees of the company are entitled to encashment of un-availed leave. The employees can carry forward a portion of the unutilised leave and receive cash compensation at retirement or termination of employment. The Company records an obligation for encashment of un-availed leave in the period in which the employee renders the services, based on an actuarial valuation at the balance sheet date, carried out by an independent actuary. Actuarial gain or loss is recognised in the Statement of Profit or Loss as income or expense. Gratuity

The Company''s contribution towards gratuity made under Group Gratuity Scheme with Life Insurance Corporation of India ( LIC ) is determined based on the amount recommended by LIC as per Actuarial valuation. The whole time Directors of the Company are not covered by the gratuity trust created under Group Gratuity Fund. Provision for their gratuity liability has been provided for according to the actuarial valuation carried out by the independent Actuary.

8 Borrowing Costs:

Borrowing costs that are attributable to the acquisition, construction or Production of a Qualifying asset are capitalised as part of cost of such Asset till such time as the asset is ready for its intended use or sale.

A Qualifying Asset is an Asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

9 Foreign Currency Transactions:

i) Foreign Currency transactions are recorded on initial recognition in the reporting currency , using the exchange rate at the date of the transaction. At each balance sheet date, foreign currency monetary items are reported using the closing rate.

Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

Exchange differences that arise on settlement of monetary items or on reporting at each balance sheet date of the company''s monetary items at the closing rate are :

a) adjusted in the cost of Fixed Assets specifically financed by borrowing contracted up to 31st March, 2007 and to which the exchange differences relate, provided the assets are acquired from outside India.

b) recognised as income or expense in the period in which they arise, in cases other than (a) above.

10 Research & Development:

a) Revenue expenditure on research and development is charged under the respective heads of account.

b) Capital expenditure on research and development is included as part of fixed assets and depreciated on the same basis as other fixed assets.

11 Investments:

Long term investments are valued at cost. A provision for diminution in value is made only if such decline is other than temporary.

12 Deferred Taxation:

Deferred tax is recognised, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses.

13 Revenue Recognition:

i) Revenue from Sale of product is recognised on dispatch or appropriation of goods in accordance with the terms of sale and is inclusive of excise duty, cess and insurance charges and freight recoverable from the customers but net of Vat, Sales Tax and Sales returns. ii)Revenue from services is recognised in accordance with the specific terms of contract or performance.

14 Accounting for interest in joint ventures:

Interest in jointly controlled entities: (a) Incorporated jointly controlled entities: (i) Income on investments in incorporated jointly controlled entities is recognized when the right to receive the sameis established.

(ii) Investment in such joint ventures is carried at cost after providing for any diminution in value which is other than temporary in nature.

15 Cash flow statement:

Cash flows are reported using the indirect method, whereby profit/ (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

16 Cash and cash equivalents:

(i) Cash comprises of cash on hand and demand deposits with banks.

(ii) Cash equivalents are short-term, highly liquid investments that are readily convertible into known amount of cash and which are subject to an insignificant risk of change in value.

17 Provisions, Contingent liabilities, Contingent assets and Commitments:

(a) Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if:

(i) The Company has a present obligation as a result of past a event;

(ii) A probable outflow of resources is expected to settle the obligation; and

(iii) The amount of the obligation can be reliably estimated.

(b) Reimbursement by another party, expected in respect of expenditure required to settle a provision, is recognised when it is virtually certain that reimbursement will be received if the obligation is settled.

(c) Contingent liability is disclosed in case of:

(i) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

(ii) a present obligation when no reliable estimate is possible; (iii) a possible obligation arising from past events, unless the probability of outflow of resources is remote.

(d) Contingent assets are neither recognised nor disclosed.

(e) Commitments include the amount of purchase order (net of advance) issued to parties for completion of assets.

(f) Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.


Mar 31, 2012

1 Basis of preparation of Financial Statements:

The financial statements are prepared and presented under the historical cost convention, on the accrual basis of accounting and in accordance with the provisions of the Companies Act, 1956 ('the Act'), and the accounting principles generally accepted in India and comply with the accounting standards ('AS') prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards ('NACAS') to the extent applicable.

2 Use of estimates:

The preparation of the financial statements in conformity with generally accepted accounting principles ('GAAP') in India requires management to make estimates and assumptions that affect the reported amount of assets, liabilities and the disclosure of contingent liabilities on the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based on management's evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results could differ from those estimates. Any revision to the accounting estimates is recognised prospectively in current and future periods.

3 Fixed Assets:

i) Fixed assets are capitalised at acquisition cost (net of duty / tax credits availed, if any) including directly attributable costs such as freight, insurance and specific installation charges for bringing the assets to working condition for use.

ii) Administrative & other general overhead expenses that are specifically attributable to construction or acquisition of fixed assets or bringing the fixed assets to working condition are allocated and capitalised as a part of fixed assets.

iii) The assets acquired under hire-purchase agreement are included in the fixed assets of the Company, where the terms of the agreement provide that the assets shall eventually become the property of the hirer or confer on him an option to purchase the assets.

4 Depreciation:

i) Depreciation on fixed assets is provided on straight-line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, except for leasehold land which is amortised over the period of the lease.

ii) Fixed Assets individually costing Rs. 5,000/- or less, are depreciated fully in the year of purchase.

5 Impairment of Assets:

As at each Balance Sheet date, the carrying amount of assets (other than inventory) is tested for impairment, so as to determine:

i) the provision for impairment loss, if any.

ii) the reversal of impairment loss recognised in previous periods, if any. Impairment loss is recognised when the carrying amount of an asset or a cash generating unit exceeds its recoverable amount.

The recoverable amount of the asset (or where applicable that of the cash generating unit to which the asset belongs) is determined at the higher of the Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

6 Inventories:

i) Raw materials, stores, spares and consumable tools, packing materials, work-in-process and finished goods are valued at lower of cost or net realisable value.

ii) In case of raw materials, stores, spares, consumable tools and packing materials, cost represents purchase price and other costs incurred for bringing the inventories to their present location and conditions and is determined on "weighted average" basis. iii) In case of work-in-process and finished goods, cost represents cost of raw material, cost of conversion such as direct labour, direct expenses, etc. and production overheads which are based on normal level of production.

iv) Finished goods at lower of weighted average cost or net realisable value, cost includes related overheads and excise duty paid/payable on such goods.

7 Employee Benefts:

i) All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Short term employee benefits at the balance sheet date, are recognised as an expense as per the Company's scheme based on expected obligations on undiscounted basis.

Defined Contribution Plan

a) Provident Fund

The Company contributes to the government administered provident fund. The fixed contributions to these funds are charged to Profit and Loss Account.

b) Superannuation

Contributions to the superannuation fund, which is administered by Life Insurance Corporation of India, are charged to the Profit and Loss Account.

Defined Benefit Plan Leave Encashment:

The employees of the company are entitled to encashment of un-availed leave. The employees can carry forward a portion of the unutilised leave and receive cash compensation at retirement or termination of employment. The Company records an obligation for encashment of un-availed leave in the period in which the employee renders the services, based on an actuarial valuation at the balance sheet date, carried out by an independent actuary. Actuarial gain or loss recognised in the statement of profit or loss as income or expense.

Gratuity

The Company's contribution towards gratuity made under Group Gratuity Scheme with Life Insurance Corporation of India (LIC) is determined based on the amount recommended by LIC as per Actuarial valuation.

The whole time Directors of the Company are not covered by the gratuity trust created under Group Gratuity Fund. Provision for their gratuity liability has been provided for according to the actuarial valuation carried out by the independent Actuary.

8 Borrowing Costs:

Borrowing costs that are attributable to the acquisition, construction or Production of a Qualifying asset are capitalised as part of cost of such Asset till such time as the asset is ready for its intended use or sale. A Qualifying Asset is an Asset that necessarily requires a substantial period of time to get ready for its intended use or sale.

All other borrowing costs are recognised as an expense in the period in which they are incurred.

9 Foreign Currency Transactions:

i) Foreign Currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate at the date of the transaction. At each balance sheet date, foreign currency monetary items are reported using the closing rate.

Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

Exchange differences that arise on settlement of monetary items or on reporting at each balance sheet date of the company's monetary items at the closing rate are:

a) adjusted in the cost of Fixed Assets specifically financed by borrowing contracted up to 31st March, 2007 and to which the exchange differences relate, provided the assets are acquired from outside India.

b) recognised as income or expense in the period in which they arise, in cases other than (a) above.

10 Research & Development:

a) Revenue expenditure on research and development is charged under the respective heads of account.

b) Capital expenditure on research and development is included as part of fixed assets and depreciated on the same basis as other fixed assets.

11 Investments:

Long term investments are valued at cost. A provision for diminution in value is made only if such decline is other than temporary.

12 Deferred Taxation:

Deferred tax is recognised, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses.

13 Revenue Recognition:

i) Revenue from Sale of product is recognised on dispatch or appropriation of goods in accordance with the terms of sale and is inclusive of excise duty, cess and insurance charges and freight recoverable from the customers but net of Vat, Sales Tax and Sales returns.

ii) Revenue from services is recognised in accordance with the specific terms of contract or performance.

14 Accounting for interest in joint ventures:

Interest in jointly controlled entities:

(a) Incorporated jointly controlled entities:

(i) Income on investments in incorporated jointly controlled entities is recognized when the right to receive the same is established.

(ii) Investment in such joint ventures is carried at cost after providing for any diminution in value which is other than temporary in nature.


Mar 31, 2010

A) Basis of preparation of Financial Statements:

i) Financial statements are prepared under historical cost convention in accordance with the generally accepted accounting principles and provisions of Companies Act 1956, subject to what is stated herein below, as adopted consistently by the Company.

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

b) Fixed Assets:

i) All fixed assets are valued at cost. The cost of fixed assets comprises of purchase price and all other attributable costs of bringing the assets to working conditions for intended use. ii) The assets acquired under hire-purchase agreement are included in the fixed assets of the Company, where the terms of the agreement provide that the assets shall eventually become the property of the hirer or confer on him an option to purchase the assets.

c) Depreciation:

i) Depreciation on fixed assets is provided on straight-line method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956, except for leasehold land which is amortised over the period of the lease.

ii) Fixed Assets individually costing Rs. 5,000/- or less, are depreciated fully in the year of purchase.

d) Inventories:

i) Raw materials, stores, spares & consumables tools & packing materials, work-in-process and finished goods are valued at lower of cost or net realisable value.

ii) In case of raw materials, stores, consumables tools, & spares and packing materials, cost represents purchase price and other costs incurred for bringing the inventories to their present location and conditions and is determined on "First-in-first-out" basis.

iii) In case of work-in-process and finished goods, cost represents cost of raw material, cost of conversion such as direct labour, direct expenses, etc. and production overheads which are based on normal level of production.

e) Employee Benefits:

i) All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Short term employee benefits at the balance sheet date, are recognised as an expense as per the Companys scheme based on expected obligations on undiscounted basis.

Defined Contribution Plan

a) Provident Fund

The Company contributes to the government administered provident fund. The fixed contributions to these funds are charged to Profit and Loss Account.

b) Superannuation

Contributions to the superannuation fund, which is administered by Life Insurance Corporation of lndia,are charged to the Profit and Loss Account.

Defined Benefit Plan

Leave Encashment:

The employees of the company are entitled to encashment of unavailed leave. The employees can carry forward a portion of the unutilised leave and receive cash compensation at retirement or termination of employment. The Company records an obligation for encashment of unavailed leave in the period in which the employee renders the services, based on an actuarial valuation at the balance sheet date, earned out by an independent actuary. Actuarial gain or loss recognised in the statement of profit or loss as income or expense

Gratuity

Companys contribution towards gratuity made under Group Gratuity Scheme with Life Insurance Corporation Of India (LIC) is dertmined based on the amount recommended by LIC as per Actuarial valuation. The whole time Directors of the Company are not covered by the gratuity trust created under Group Gratuity Fund. Provision for their gratuity liability has been provided for according to the actuarial valuation carried out by the independent Actuary.

f) Foreign Currency Transactions:

i) Foreign Currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate at the date of the transaction. At each balance Sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

Exchange differences that arise on settlement of monetary items or on reporting at each balance Sheet date of the companys monetary items at the closing rate are :

a) adjusted in the cost of Fixed Assets specifically financed by borrowing contracted up to 31 st March, 2007 and to which the exchange differences relate, provided the assets are acquired from outside India.

b) recognised as Income or expense in the period in which they arise, in cases other than (a) above.

g) Research & Development

a) Revenue expenditure on research and development is charged under the respective heads of account.

b) Capital expenditure on research and development is included as part of fixed assets and depreciated on the same basis as other fixed assets

h) Investments:

Long term investments are valued at cost. A provision for diminution in value is made only if such decline is other than temporary.

i) Deferred Taxation:

Deferred tax is recognised, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses.

j) Impairment of Assets :

At each Balance sheet date, the company assesses whether there is any indiction that an asset may be impaired. If any such indiction exists, the company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognised in the profit & loss account to the extent the carrying amount exceeds the recoverable amount.

k) Sales:

i) Sales are net of VAT , Sales tax & sales returns.

ii) Sales include excise duty, cess and insurance charges and freight recoverable from the customers.

iii) Sales of goods is recognised on transfer of property in goods, as per agreed terms.


Mar 31, 2009

A) Basis of preparation of Financial Statements;

i) Financial statements are prepared under historical cost convention in accordance with the generally accepted accounting principles and provisions of Companies Act 1956, subject to what is stated herein below, as adopted consistently by the Company.

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

b) Fixed Assets:

i) All fixed assets are valued at cost. The cost of fixed assets comprises of purchase price and all other attributable costs of bringing the assets to working conditions for intended use.

ii) The assets acquired under hire-purchase agreement are included in the fixed assets of the Company, where the terms of the agreement provide that the assets shall eventually become the property of the hirer or confer on him an option to purchase the assets.

c) Depreciation:

i) Depredation on fixed assets is provided on straight-line method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956, except for leasehold land which is amortised over the period of the lease.

ii) Fixed Assets individually costing Rs, 5,000/- or less, are depreciated fully in the year of purchase.

d) Inventories:

i) Raw materials, stores & spares, packing materials, work-in-process and finished goods are valued at lower of cost or net lealisable value.

ii) In case of raw materials, stores & spares and packing materials, cost represents purchase price and other costs incurred for bringing the inventories to their present location and conditions and is determined on "First-in-first-out" basis,

iii) In case of work-in-process and finished goods, cost represents cost of raw material, cost of conversion such as direct labour, direct expenses,etc. and production over heads which are based on normal level of production.

e) Employee Benefits:

i) All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Short term employee benefits at the balance sheet date, are recognised as an expense as per the Companys scheme based on expected obligations on undiscounted basis.

Defined Contribution Plan

a> Provident Fund

The Company contributes to the government administered provident fund. The fixed contributions to these funds are charged to Profit and Loss Account

b) Superannuation

Contributions to the superannuation fund, which is administered by Life Insurance Corporation of lndia,ate charged to the Profit and Loss Account.

Defined Benefit Plan

Leave Encashment:

The employees of the company are entitled to encashment of unavailed leave. The employees can carry forward a portion of the unutilised leave and receive cash compensation at retirement or termination of employment. The Company records an obligation for encashment of unavailed leave in the period in which the employee renders the services, based on an actuarial valuation at the balance sheet date, carried out by an independent actuary. Actuarial gain or loss recognised in the statement of profit or loss as income or expense

Gratuity

Companys contribution towards gratuity made under Group Gratuity Scheme with Life Insurance Corporation Of India (LIC) is dertmined based on the amount recommended by LIC as per Actuarial valuation. The whole time Directors of the Company are not covered by the gratuity trust created under Group Gratuity Fund. Provision for their gratuity liability has been provided for according to the actuarial valuation carried out by the independent Actuary.

f) Foreign Currency Transactions:

i) Foreign Currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate at the date of the transaction. At each balance Sheet date, foreign currency monetary items are reported using the closing rate, Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

Exchange differences that arise on settlement of monetary items or on reporting at each balance Sheet date of the companys monetary items at the closing rate are :

a) adjusted in the cost of Fixed Assets specifically financed by borrowing contracted up to 31 st March, 2007 and to which the exchange differences relate, provided the assets are acquired from outside India.

b) recognised as Income or expense in the period in which they arise, in cases other than (a) above.

g) Investments:

Long term investments are valued at cost. A provision for diminution in value is made only if such decline is other than temporary.

h) Deferred Taxation:

Deferred tax is recognised, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses.

l) Impairment of Assets :

At each Balance sheet date, the company assesses whether there is any indicfion that an asset may be impaired, if any such indiction exists, the company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognised in the profit & loss account to the extent the carrying amount exceeds the recoverable amount.

m) Sales:

i) Sales are net of VAT, Sales tax & sales returns.

ii) Sales include excise duty, cess and insurance charges and freight recoverable from the customers.

iii) Sales of goods is recognised on transfer of property in goods, as per agreed terms.



 
Subscribe now to get personal finance updates in your inbox!