Home  »  Company  »  Gokul Refoils & Solv  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Gokul Refoils & Solvent Ltd. Company

Mar 31, 2015

(A) Basis of preparation of financial statements and revenue recognition:-

i) The financial statements have been prepared under the historical cost convention on an accrual basis in accordance with Generally Accepted Accounting Principles in India including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.

ii) Accounting policies not specifically referred to otherwise are consistent with Generally Accepted Accounting Principles followed by the company.

iii) Sale of goods is recognized on transfer of significant risk and rewards of ownership which is generally on shipment and dispatch to customers. Sale is inclusive of excise duty but exclusive of VAT. Sales include income/loss on bargain settlements. Revenue/ Loss from bargain settlement of goods is recognized at the time of settlement of transactions. Export benefits/Value added tax benefits are recognized as Income when the right to receive credit as per the terms of the scheme is established and there is no significant uncertainty regarding the claim. Other revenue/ cost arerecognized on accrual basis. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable. Share of profit and loss from partnership firm is recognized when company's right/obligation to receive/pay is established.

(B) Fixed Assets & Depreciation / Amortization: -

i) Fixed assets tangible and intangible are stated at cost of acquisition or construction net of recoverable taxes less accumulated depreciation and impairment losses if any. All cost including finance Cost, till commencement of commercial production is capitalized. Application software expenses for internal use are treated as intangible assets.

ii) Depreciation on tangible assets is systematically allocated over the useful life of tangible assets as specified in Part C of Schedule II of the Companies Act 2013. Intangible assets are amortized equally over five years.

iii) Pursuant to Accounting standard 28 " Impairment of Assets" issued by the ICAI, the Company has a system to review the carrying cost of all the assets vis-à-vis recoverable value and impairment loss, if any is charged to Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in estimate of recoverable amount.

iv) Lease hold assets are amortized over the period of lease from the date of start of commercial production.

(C) Investments:-

i) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made only if such decline is other than temporary in the opinion of the management.

ii) Current Investments, if any, are stated at lower of cost and fair value determined on individual investment basis.

iii) Investments in shares of foreign subsidiaries are expressed at the rates of exchange prevailing at the time when original investments were made.

(D) Foreign Currency Transactions: -

Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of the transactions. Monetary items denominated in foreign currency remaining unsettled at the year-end are restated at the exchange rate prevailing at the end of the year. Gains and losses on foreign exchange transactions other than those relating to Fixed Assets are charged to profit & loss account. Premium paid on forward contract has been recognized over the life of the contract. Any profit or loss on cancellation or renewal of such forward exchange contract is recognized as income or expenditure for the period. Non-monetary foreign currency items are considered at cost.

(E) Inventories:-

Inventories are valued at lower of cost and net realizable value except by products which are valued at estimated net realizable value. In determining the cost of raw material, stores, spares, and other material the first in first out (FIFO) method is used. Finished goods and work in progress include material cost, labour and factory overheads and excise duty, if applicable.

(F) Employee Retirement Benefit:-

i) Company makes contributions in respect of provident fund to Government authorities and the liability is limited to the extent of contributions. The employees of the company are entitled to leave as per leave policy of the company. The liability in respect of unutilized leave balances is provided based on an actuarial valuation carried out by an independent actuary as at the year end and charged to the Statement of Profit and Loss.

ii) The company has created a trust and has taken group gratuity policy with the Life Insurance Corporation of India for the future payments of retiring gratuities. The liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valuation by an independent actuary at the year end which is calculated using Projected Unit Credit Method. Actuarial gains and losses which comprise experience adjustment and the effect of changes in actuarial assumptions are recognized in the Statement of Profit and Loss.

(G) Lease Rent:-

Lease rentals are expensed with reference to lease terms and other considerations.

(H) Liquidated Damages:-

Liquidated damages / Penalties, if any are provided whenever there is a claim from party and when the same is accepted by the company.

(I) Custom Duty:-

The year-end inventory is inclusive of custom duty.

(J) Taxation:-

Taxation expense comprises current tax and deferred tax charge or credit. Provision for income tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. Advance tax and tax deducted at source are adjusted against provision for taxation and balance, if any, are shown in the balance sheet under respective heads.

(K) Deferred Taxation:-

Deferred tax resulting from timing differences between book and tax profit is accounted for under the liability method at the current rate of Income tax to the extent that the timing differences are expected to crystallize as deferred tax charge/benefit in the Statement of Profit and Loss and as deferred tax Assets/Liability in the Balance-Sheet.

(L) Insurance Claim:-

Insurance and other claims to the extent considered recoverable are accounted for in the year of claim based on the amount assessed by the surveyor. However, claims and refund whose recovery cannot be ascertained with reasonable certainly, are accounted for on acceptance/actual receipts basis.

(M) Borrowing Cost:-

Borrowing cost that is attributable to the acquisition or construction of qualifying assets is capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to Statement of Profit and Loss.

(N) Excise Duty:-

Excise duty has been accounted on the basis of both payment made in respect of goods cleared and provision for goods lying in bonded area.

(O) Use of Estimates:-

In preparing Company's financial statements in conformity with accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from those estimates. Difference between the actual results and estimates are recognized in the period in which results are known /materialized.

(P) Commodity Hedging Transactions:-

The commodity hedging contracts are accounted on the date of their settlement and realized gain/loss in respects of settled contracts are recognized in the Statement of Profit and Loss, along with the underlying transactions. Pursuant to announcement on accounting for the derivatives issued by the Institute of Chartered Accountants of India (ICAI), in accordance with the principle of prudence as enunciated in Accounting Standard -1 (AS-1) " Disclosure of Accounting Policies" the company provides for losses in respect of all outstanding derivatives contracts at the balance sheet date by marking them mark to market. Any net unrealized gains arising on such Mark to Market are not recognized as income.

(Q) Provision, Contingent Liabilities and Contingent Assets:-

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed at their estimated amount in the notes forming part the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

(R) Related Party Transaction:-

Parties are considered to be related if at any time during the year; one party has the ability to control the other party or to exercise significant influence over the other party in making financial and / or operating decision.

(S) Earnings per Share (EPS):-

The earning considered in ascertaining the company's EPS comprises the net profit for the period after tax attributed to equity shareholders' The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

(T) Government Grants:-

Grants received against specific fixed assets are adjusted to the cost of the assets and those in the nature of promoter's contribution are credited to capital reserve. Revenue grants are recognized in the Statement of Profit and Loss in accordance with the related schemes and in the period in which these are accrued and it is reasonably certain that the ultimate collection will be made.

(U) Share Issue Expenses:-

Share Issue expenses are adjusted against security premium account.


Mar 31, 2014

(A) Basis of preparation of financial statements and revenue recognition

i) The financial statements have been prepared under the historical cost convention on an accrual basis in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 as adopted consistently by the company, including the accounting standards notified by the Central Government of India under section 211(3C) of the Companies Act, 1956.

ii) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the company.

iii) Sale of goods is recognized on transfer of significant risk and rewards of ownership which is generally on shipment and dispatch to customers. Sale is inclusive of excise duty but exclusive of VAT. Sales include income/loss on bargain settlements. Revenue/ Loss from bargain settlement of goods is recongnised at the time of settlement of transactions. Export benefits / Value added tax benefits are recognized as Income when the right to receive credit as per the terms of the scheme is established and there is no significant uncertainty regarding the claim. Other revenue / cost are recognized on accrual basis. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable. Share of profit and loss from partnership firm is recognized when company''s right / obligation to receive / pay is established.

(B) Fixed Assets & Depreciation / Amortization

i) Fixed assets tangible and intangible are stated at cost of acquisition or construction net of recoverable taxes less accumulated depreciation and impairment losses if any. All cost including finance Cost, till commencement of commercial production is capitalized. Application software expenses for internal use are treated as intangible assets.

ii) Depreciation on fixed assets is provided on the straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act 1956. Intangible assets are amortized equally over five years.

iii) Pursuant to Accounting standard 28 " Impairment of Assets" issued by the ICAI, the Company has a system to review the carrying cost of all the assets vis-à-vis recoverable value and impairment loss, if any is charged to Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in estimate of recoverable amount.

iv) Lease hold assets are amortized over the period of lease from the date of start of commercial production.

(C) Investments

i) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made only if such decline is other than temporary in the opinion of the management.

ii) Current Investments, if any, are stated at lower of cost and fair value determined on individual investment basis.

iii) Investments in shares of foreign subsidiaries are expressed at the rates of exchange prevailing at the time when original investments were made.

(D) Foreign Currency Transactions

Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of the transactions. Monetary items denominated in foreign currency remaining unsettled at the year-end are restated at the exchange rate prevailing at the end of the year. Gains and losses on foreign exchange transactions other than those relating to fixed assets are charged to profit & loss account. Premium paid on forward contract has been recognized over the life of the contract. Any profit or loss on cancellation or renewal of such forward exchange contract is recognized as income or expenditure for the period. Non-monetary foreign currency items are considered at cost.

(E) Inventories

Inventories are valued at lower of cost and net realizable value except by products which are valued at estimated net realizable value. In determining the cost of raw material, stores, spares, and other material the first in first out (FIFO) method is used. Finished goods and work in progress include material cost, labour and factory overheads and excise duty, if applicable.

(F) Employee Retirement Benefit

i) Company makes contributions in respect of provident fund to Government authorities and the liability is limited to the extent of contributions. The employees of the company are entitled to leave as per leave policy of the company. The liability in respect of unutilized leave balances is provided based on an actuarial valuation carried out by an independent actuary as at the year end and charged to the Profit and Loss Account.

ii) The company has created a trust and has taken group gratuity policy with The Life Insurance Corporation of India for the future payments of retiring gratuities. The liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valuation by an independent actuary at the yearend which is calculated using Projected Unit Credit Method. Actuarial gains and losses which comprise experience adjustment and the effect of changes in actuarial assumptions are recognized in the Profit and Loss Account.

(G) Lease Rent

Lease rentals are expensed with reference to lease terms and other considerations.

(H) Liquidated Damages

Liquidated damages / Penalties, if any are provided whenever there is a claim from party and when the same is accepted by the company.

(I) Custom Duty

The year-end inventory is inclusive of custom duty.

(J) Taxation

Taxation expense comprises current tax and deferred tax charge or credit. Provision for income tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. Advance tax and tax deducted at source are adjusted against provision for taxation and balance, if any, are shown in the balance sheet under respective heads.

(K) Deferred Taxation

Deferred tax resulting from timing differences between book and tax profit is accounted for under the liability method at the current rate of Income tax to the extent that the timing differences are expected to crystallize as deferred tax charge / benefit in the profit and loss account and as deferred tax Assets / Liability in the Balance-Sheet.

(L) Insurance Claim

Insurance and other claims to the extent considered recoverable are accounted for in the year of claim based on the amount assessed by the surveyor. However, claims and refund whose recovery cannot be ascertained with reasonable certainly, are accounted for on acceptance / actual receipts basis.

(M) Borrowing Cost

Borrowing cost that is attributable to the acquisition or construction of qualifying assets is capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to profit and loss account.

(N) Excise Duty

Excise duty has been accounted on the basis of both payment made in respect of goods cleared and provision for goods lying in bonded area.

(O) Use of Estimates

In preparing Company''s financial statements in conformity with accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from those estimates. Difference between the actual results and estimates are recognized in the period in which results are known / materialized.

(P) Commodity Hedging Transactions

The commodity hedging contracts are accounted on the date of their settlement and realized gain / loss in respects of settled contracts are recognized in the profit and loss account, along with the underlying transactions. Pursuant to announcement on accounting for the derivatives issued by the Institute of Chartered Accountants of India (ICAI), in accordance with the principle of prudence as enunciated in Accounting Standard -1 (AS-1) " Disclosure of Accounting Policies" the company provides for losses in respect of all outstanding derivatives contracts at the balance sheet date by marking them mark to market. Any net unrealized gains arising on such Mark to Market are not recognized as income.

(Q) Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

(R) Related Party Transaction

Parties are considered to be related if at any time during the year; one party has the ability to control the other party or to exercise significant influence over the other party in making financial and / or operating decision.

(S) Earnings per Share (EPS)

The earning considered in ascertaining the company''s EPS comprises the net profit for the period after tax attributed to equity shareholders. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

(T) Government Grants

Grants received against specific fixed assets are adjusted to the cost of the assets and those in the nature of promoter''s contribution are credited to capital reserve. Revenue grants are recognized in the profit and loss account in accordance with the related schemes and in the period in which these are accrued and it is reasonably certain that the ultimate collection will be made.

(U) Share Issue Expenses

Share Issue expenses are adjusted against security premium account.


Mar 31, 2013

(A) Basis of preparation of financial statements ard revenue recognition:-

i.) The financial statements have been prepared under the historical cost convention on an accrual basis in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 as adopted consistently by the Company, including the accounting standards notified by the Central Government of India under Section 211(3C) of the Companies Act, 195$.

ii.) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the Company.

Mi.} Sale of goods is recognized on transfer of significant risk and rewards of ownership which is generally on shipment and dispatch to customers. Sale is inclusive of excise doty and other levies wherever applicable. Export benefits / Value added tax benefits are recognized as Income when the right to receive credit as per *ht terms of the scheme is established and there is no significant uncertainty regarding the claim. Other revenue / cost are recognized on accrual basis. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding aid rate applicable. Share of profit and loss from partnership fin is -ecognized when Company''* right / obligation to receive / pay is established.

(B) Fixed Assets & Depredation / Amortization:-

L) Fixed assets tangible and intangible are stated at cost of acquisition or construction net of recoverable taxes less accumulated depreciation and Impairment losses if any. All cost including finance Cost, rill commencement of commercial production Is capitalized. Application software expenses tor internal use are treated as intangible assets.

ii.) Depreciation on fixed assets is provided on the straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956. Intangible assets are amortized equally over five years.

iii,) Pursuant to Accounting standard 28 " Impairment of Assets* issued by the 1CAI, the Company has a system to review the carrying cast of all the assets vis-a-vis recoverable value and impairment loss, if any is charged to Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in estimate of recoverable amount Lease hold assets are amortized over the period of lease from the date of start of commercial production.

(C) Investments:-

i.) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made only tf such decline is other than temporary in the opinion of the management.

ii.) Current Investments, if any, are stated at Lower of cost and fair value determined on individual investment basis.

iii,) Investments in shares of foreign subsidiaries are expressed at the rates of exchange prevailing at the time when original investments were made

(D) Foreign Curre ncy Tran sa cti ons:-

Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of the transactions. Monetary items denominated in foreign currency remaining unsettled ax the year-end an restated at the exchange rate prevailing at the end of the year. Gains and losses on foreign exchange transactions other than those relating to fixed assets are charged to profit & loss account. Premium paid on forward contract has been recognized over the life of the contract Any profit or loss on cancellation or renewal of such forward exchange contract is recognized as income or expenditure for the period. Non- monetary foreign currency items are considered at cost.

(E) Inventories:-

Inventories are valued at lower of cost and net realizable value except by products which are valued at estimated net realizable value. In determining the cost of raw material, stores, spares, and other material the first in first out {FIFO) method is used. Finished goods and wort in progress include material cost, labour and factory overheads and excise duty, if applicable.

(F-) tmplcyee Retirement Benefit:-

i,J Company makes contributions in respect of provident fund to Government Authorities and the Liability is limited to the extent of contributions. Tie employees of the Company are entitled to leave as pe* leave policy of the Company. The liability in respect of unutilized leave balances is provided based on an actuarial valuation carried out by an independent actuary as at the year end and changed to the Profit and Loss Account.

ii.) The Company has created a trust and has taken group gratuity policy with The Life Insurance Corporation of India for the future payments of retiring gratuities. The liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valuation by an independent actuary at the year end which is calculated using Projected Unit Credit Method. Actuaral ga''ns and losses which comprise experience adjustment and the effect of changes in actuarial assumptions are recognized in the Profit and Loss Account.

(G) Lease Rent- Lease rentals are expensed with reference to Lease terms and other considerations. (H) Liquidated Damages:-

Liqui dated damages / Penalties, if any are provided whenever there is a claim from party and when the same is accepted by the Company,

(I) Custom Duty:-

The year-end inventory is inclusive of custom duty.

(3) Taxation:''

Taxation expense comprises current tax and deferred tax charge or credit. Pro vision for income tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. Advance tax and tax deducted at source are adjusted against provision for taxation and balance, if any, are shown in the balance sheet under respective heads.

(K) Deferred Taxation:-

Deferred tax resulting from timing differences between book and tax profit is accounted for under the Liability method at the current -ate af Income tax to the extern that the timing differences are expected to crystallize as deferred tax charge / benefit in the profit and loss account and as deferred tax Assets / Liability in the Balance-Sheet

(L) Insurance Claims- Insurance and other claims to the extent considered recoverable are accounted for in the year of claim based on the amount assessed by the surveyor. However, claims and refund whose recovery cannot be ascertained with reasonable certainly, are accounted for on acceptance / actual receipts basis.

(M} Borrowing Costs- Borrowing cost that is attributable to the acquisition or construction of qualifying assets is capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to profit and loss account.

(N) Excise Duty and Sales Tax:-

Excise duty has been accounted on the basis of both payment made in respect of goods cleared and provision for goods lying In bonded area. Sales Tax is charged to Profit and Loss Account

(0) Use
In preparing Company''s financial statements in conformity with accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and Liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from those estimates. Difference between the actual results and estimates are Ttcognized n the period in which results are
(P) Co m mo dfty H edging Trail sartlon s:-

The commodity hedging contracts are accounted on the date of their settlement and realized gain / toss In respects of settled contracts are recognized in the profit and toss account along with the underlying transactions. Pursuant to announcement on accounting for the derivatives issued by the Institute of Chartered Accountants of India (ICAI), In accordance with the principle of prudence as enunciated in Accounting Standard -1 (AS-1) ''Disclosure of Accounting Policies", the Company provides for losses in respect of alt outstanding derivatives contracts at the balance sheet date by marking them mark to market. Any net unrealized gains arising on such Mark to Market are not recognized as income.

(Q) Provision, Contingent Liabilities and Contingent Assets: -

Provisions involving substantial degree of estimation in measurement anRs. recognized when there is a present obligation as result uf past events and it is probable that there will be at* outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements,

(R) Related Party Transaction:-

Parties are considered to be rotated if at any time during the year; one party has the ability to control the other party or to exercise significant Influence over the other party in making financial and / or operating decision.

(s) Earnings per Share (EPS};-

The earning considered in ascertaining the Company''s EPS comprises the net profit for the period after tax attributed to equity shareholders. The number of shares used in computing bask EPS is the weighted average number of shares outstanding during the year.

(T) Government Grants:-

Grants received against specific fixed assets are adjusted to the cost Of the assets and chose in the nature of promoter''s contribution are credited to capital reserve. Revenue grants are recognized in the profit and loss account in accordance with the related schemes and in the period in which these are accrued and it is reasonably certain that the ultimate collection will be made.

(U) Share Issue Ex pen ses:-

Shara Issue expenses are adjusted against security premium account


Mar 31, 2012

(A) Basis of preparation of financial statements and revenue recognition:-

i) The financial statement have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

ii) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the Company.

iii) Sale of goods is recognized on transfer of significant risk and rewards of ownership which is generally on shipment and dispatch to customers. Sale is inclusive of excise duty and other levies wherever applicable. Export benefits/Value added tax benefits are recognized as Income when the right to receive credit as per the terms of the scheme is established and there is no significant uncertainty regarding the claim. Other revenue/ cost are recognized on accrual basis. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking in to account the amount outstanding and rate applicable. Share of profit and loss from partnership firm is recognized when Company's right/obligation to receive/ pay is established.

(B) Fixed Assets & Depreciation / Amortization:-

i) Fixed assets tangible and intangible are stated at cost of acquisition or construction net of recoverable taxes less accumulated depreciation and impairment losses if any . All cost including finance Cost, till commencement of commercial production is capitalized. Application software expenses for internal use are treated as intangible assets.

ii) Depreciation on fixed assets is provided on the straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act 1956. Intangible assets are amortized equally over five years.

iii) Pursuant to Accounting standard 28 " Impairment of Assets" issued by the ICAI, the Company has a system to review the carrying cost of all the assets vis-a-vis recoverable value and impairment loss, if any is charged to Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in estimate of recoverable amount.

iv) Lease hold assets are amortized over the period of lease from the date of start of commercial production.

(C) Investments:-

i) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made only if such decline is other than temporary in the opinion of the management.

ii) Current Investments, if any, are stated at lower of cost and fair value determined on individual investment basis.

iii) Investments in shares of foreign subsidiaries are expressed at the rates of exchange prevailing at the time when original investments were made.

(D) Foreign Currency Transactions:-

i) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of the transactions. Monetary items denominated in foreign currency remaining unsettled at the year-end are restated at the exchange rate prevailing at the end of the year. Gains and losses on foreign exchange transactions other than those relating to fixed assets are charged to profit & loss account. Premium paid on forward contract has been recognized over the life of the contract. Any profit or loss on cancellation or renewal of such forward exchange contract is recognized as income or expenditure for the period. Non- monetary foreign currency items are considered at cost.

(E) Inventories:-

Inventories are valued at lower of cost and net realizable value except by products which are valued at estimated net realizable value. In determining the cost of raw material, stores, spares, and other material the first in first out (FIFO) method is used. Finished goods and work in progress include material cost, labour and factory overheads and excise duty, if applicable.

(F) Employee Retirement Benefit:-

i) Company makes contributions in respect of provident fund to Government authorities and the liability is limited to the extent of contributions. The employees of the Company are entitled to leave as per leave policy of the Company. The liability in respect of unutilized leave balances is provided based on an actuarial valuation carried out by an independent actuary as at the year end and charged to the Profit and Loss Account.

ii) The Company has created a trust and has taken group gratuity policy with The Life Insurance Corporation of India for the future payments of retiring gratuities. The liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valuation by an independent actuary at the year end which is calculated using Projected Unit Credit Method. Actuarial gains and losses which comprise experience adjustment and the effect of changes in actuarial assumptions are recognized in the Profit and Loss Account.

(G) Lease Rent:-

Lease rentals are expensed with reference to lease terms and other considerations.

(H) Liquidated Damages:-

Liquidated damages / Penalties, if any are provided whenever there is a claim from party and when the same is accepted by the Company.

(I) Custom Duty:-

The year end inventory is inclusive of custom duty.

(J) Taxation:-

Taxation expense comprises current tax and deferred tax charge or credit. Provision for income tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. Advance tax and tax deducted at source are adjusted against provision for taxation and balance, if any, are shown in the balance sheet under respective heads.

(K) Deferred Taxation:-

Deferred tax resulting from timing differences between book and tax profit is accounted for under the liability method at the current rate of Income tax to the extent that the timing differences are expected to crystallize as deferred tax charge/ benefit in the profit and loss account and as deferred tax Assets/Liability in the Balance Sheet.

(L) Insurance Claim:-

Insurance and other claims to the extent considered recoverable are accounted for in the year of claim based on the amount assessed by the surveyor. However, claims and refund whose recovery cannot be ascertained with reasonable certainty, are accounted for on acceptance/actual receipts basis.

(M) Borrowing Cost:-

Borrowing cost that is attributable to the acquisition or construction of qualifying assets is capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to profit and loss account.

(N) Excise Duty and Sales Tax:-

Excise duty has been accounted on the basis of both payment made in respect of goods cleared and provision for goods lying in bonded area. Sales Tax is charged to Profit and Loss Account.

(O) Use of Estimates:-

In preparing Company's financial statements in conformity with accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Difference between the actual results and estimates are recognized in the period in which results are known/materialized.

(P) Commodity Hedging Transactions:-

The commodity hedging contracts are accounted on the date of their settlement and realized gain/(loss) in respects of settled contracts are recognized in the profit and loss account, along with the underlying transactions. Pursuant to announcement on accounting for the derivatives issued by the Institute of Chartered Accountants of India (ICAI), in accordance with the principle of prudence as enunciated in Accounting Standard -1 (AS-1) " Disclosure of Accounting Policies" the Company provide for losses in respect of all outstanding derivatives contracts at the balance sheet date by marking them mark to market. Any net unrealized gains arising on such Mark to Market are not recognized as income.

(Q) Provision, Contingent Liabilities and Contingent Assets:-

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

(R) Related Party Transaction:-

Parties are considered to be related if at any time during the year ADs- one party has the ability to control the other party or to exercise significant influence over the other party in making financial and/or operating decision.

(S) Earnings per Share:-

The earning considered in ascertaining the Company's EPS comprises the net profit for the period after tax attributed to equity shareholders. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

(T) Government Grants:-

Grants received against specific fixed assets are adjusted to the cost of the assets and those in the nature of promoter's contribution are credited to capital reserve. Revenue grants are recognized in the profit and loss account in accordance with the related schemes and in the period in which these are accrued and it is reasonably certain that the ultimate collection will be made.

(U) Share Issue Expenses:-

Share issue expenses are adjusted against security premium account

(V) Presentation and disclosures of financial statements:-

During the year ended 2012, the revised schedule VI notified under the Companies Act 1956, has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised schedule VI did not have any impact on recognition and measurement principles followed for preparation of financial statement. However, it has significantly impacted presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirement applicable in the current year.


Mar 31, 2011

(A) Basis of preparation of financial statements and revenue recognition

i) The financial statement have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

ii) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the Company.

iii) Sale of goods is recognised on transfer of significant risk and rewards of ownership which is generally on shipment and dispatch to customers. Sale is inclusive of excise duty and other levies wherever applicable. Export benefits/Value added tax benefits are recongnised as Income when the right to receive credit as per the terms of the scheme is established and there is no significant uncertainty regarding the claim. Other revenue/ cost is recognised on accrual basis.

(B) Fixed Assets & Depreciation / Amortisation

i) Fixed assets are stated at cost of acquisition or construction net of Value Added Tax less accumulated depreciation. All cost, till commencement of commercial production is capitalized. Application software expenses for internal use are treated as intangible assets.

ii) Depreciation on fixed assets is provided on the straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956. Intangible assets are amortized equally over five years.

iii) Pursuant to Accounting standard 28" Impairment of Assets" issued by the ICAI, the Company has a system to review the carrying cost of all the assets vis-à-vis recoverable value and impairment loss, if any is charged to Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in estimate of recoverable amount.

iv) Lease hold assets are amortized over the period oflease from the date of start of commercial production.

(C) Investments

i) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made only if such decline is other than temporary in the opinion of the management.

ii) Current Investments, if any, are stated at lower of cost and fair value determined on individual investment basis.

iii) Investments in shares of foreign subsidiaries are expressed at the rates of exchange prevailing at the time when original investments were made.

iv) Dividend income is recognised when right to receive is established.

v) Share of profit/loss from partnership firm is recognized when the Company's right/obligation to receive /pay is established.

(D) Foreign Currency Transactions

i) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of the transactions. Monetary items denominated in foreign currency remaining unsettled at the year-end are restated at the exchange rate prevailing at the end of the year. Gains and losses on foreign exchange transactions other than those relating to fixed assets are charged to profit & loss account. Premium paid on forward contract has been recognised over the life of the contract. Any profit or loss on cancellation or renewal of such forward exchange contract is recognised as income or expenditure for the period

(E) Inventories

Inventories are valued at lower of cost and net realizable value except by products which is valued at estimated realizable value. In determining the cost of raw material, stores, spares, and other material the first in first out (FIFO) method is used. Finished goods and work in progress include material cost, labour and factory overheads and excise duty, if applicable.

(F) Employee Retirement Benefit

i) Company makes contributions in respect of provident fund to Government authorities and the liability is limited to the extent of contributions. The employees of the Company are entitled to leave as per leave policy of the Company. The liability in respect of unutilized leave balances is provided based on an actuarial valuation carried out by an independent actuary as at the year end and charged to the Profit and Loss Account.

ii) The Company has created a trust and has taken group gratuity policy with The Life Insurance Corporation of India for the future payments of retiring gratuities. The liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valuation by an independent actuary at the year end which is calculated using Projected Unit Credit Method. Actuarial gains and losses which comprise experience adjustment and the effect of changes in actuarial assumptions are recognized in the Profit and Loss Account.

(G) Lease Rent

Lease rentals are expensed with reference to lease terms and other considerations.

(H) Liquidated Damages

Liquidated damages / Penalties, if any are provided whenever there is a claim from party and when the same is accepted by the Company.

(I) Custom Duty

The year end inventory is inclusive of custom duty.

(J) Taxation

Taxation expense comprise current tax and deferred tax charge or credit. Provision for income tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. Advance tax and tax deducted at source are adjusted against provision for taxation and balance, if any, are shown in the balance sheet under respective heads.

(K) Deferred Taxation

Deferred tax resulting from timing differences between book and tax profit is accounted for under the liability method at the current rate of Income tax to the extent that the timing differences are expected to crystallize as deferred tax charge/ benefit in the profit and loss account and as deferred tax Assets/Liability in the Balance Sheet.

(L) Insurance Claim

Insurance and other claims to the extent considered recoverable are accounted for in the year of claim based on the amount assessed by the surveyor. However, claims and refund whose recovery cannot be ascertained with reasonable certainty, are accounted for on acceptance/actual receipts basis.

(M) Borrowing Cost

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

(N) Excise Duty and Sales Tax

Excise duty has been accounted on the basis of both payment made in respect of goods cleared and provision for goods lying in bonded area. Sales Tax is Charge to Profit and Loss Account.

(O) Use of Estimates

In preparing Company's financial statements in conformity with accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

(P) Commodity Hedging Transactions

The commodity hedging contracts are accounted on the date of their settlement and realised gain/ loss in respects of settled contracts are recognised in the profit and loss account, along with the underlying transactions. Pursuant to announcement on accounting for the derivatives issued by the Institute of Chartered Accountants of India (ICAI), in accordance with the principle of prudence as enunciated in Accounting Standard -1 (AS-1) "Disclosure of Accounting Policies" the Company provide for losses in respect of all outstanding derivatives contracts at the balance sheet date by marking them mark to market. Any net unrealized gains arising on such Mark to Market are not recognised as income.

(Q) Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as result of past events and it is probable that there will be an outflow of resources. Contigent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

(R) Related Party Transaction

Parties are considered to be related if at any time during the year, one party has the ability to control the other party or to exercise significant influence over the other party in making financial and / or operating decision.

(S) Earning Per Share (EPS)

The earning considered in ascertaining the Company's EPS comprises the net profit for the period after tax attributed to equity shareholders. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

(T) Government Grants

Grants received against specific fixed assets are adjusted to the cost of the assets and those in the nature of promoter's contribution are credited to capital reserve. Revenue grants are recognized in the profit and loss account in accordance with the related schemes and in the period in which these are accrued and it is reasonably certain that the ultimate collection will be made.

(U) Share Issue Expenses

Share Issue expenses are adjusted against security premium account.


Mar 31, 2010

(A) Basis of preparation of financial statements and revenue recognition :

i) The financial statement have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

ii) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the Company.

iii) Sale of goods is recognised on transfer of significant risk and rewards of ownership which is generally on shipment and dispatch to customers. Sale is inclusive of excise duty and other levies wherever applicable. Export benefits/Value added tax benefits are recongnised as Income when the right to receive credit as per the terms of the scheme is established and there is no significant uncertainty regarding the claim. Other revenue/ cost is recognised on accrual basis.

(B) Fixed Assets & Depreciation / Amortisation :-

i) Fixed assets are stated at cost of acquisition or construction net of Value Added Tax less accumulated depreciation. All cost, till commencement of commercial production is capitalized. Application software expenses for internal use are treated as intangible assets.

ii) Depreciation on fixed assets is provided on the straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act 1956. Intangible assets are amortized equally over five years.

iii) Pursuant to Accounting standard 28 " Impairment of Assets" issued by the ICAI, the Company has a system to review the carrying cost of all the assets vis-a-vis recoverable value and impairment loss, if any is charged to Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in estimate of recoverable amount.

iv) Lease hold assets are amortized over the period of lease from the date of start of commercial production.

(C) Investments

i) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made only if such decline is other than temporary in the opinion of the management.

ii) Current Investments, if any, are stated at lower of cost and fair value determined on individual investment basis.

iii) Investments in shares of foreign subsidiaries are expressed at the rates of exchange prevailing at the time when original investments were made.

iv) Dividend income is recognised when right to receive is established.

v) Share of profit/loss from partnership firm is recognized when the companys right/obligation to receive /pay is established.

(E) Inventories :- r

Inventories are valued at lower of cost and net realizable value except by products which is valued at estimated realizable value. In determining the cost of raw material, stores, spares, and other material the first in first out (FIFO) method is used. Finished goods and work in progress include material cost, labour and factory overheads and excise duty, if applicable.

(F) Employee Retirement Benefit :-

i) Company makes contributions in respect of provident fund to Government authorities and the liability is limited to the extent of contributions. The employees of the company are entitled to leave as per leave policy of the Company. The liability in respect of unutilized leave balances is provided based on an actuarial valuation carried out by an independent actuary as at the year end and charged to the Profit and Loss Account.

ii) The Company has created a trust and has taken group gratuity policy with The Life Insurance Corporation of India for the future payments of retiring gratuities. The liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valuation by an independent actuary at the year end which is calculated using Projected Unit Credit Method. Actuarial gains and losses which comprise experience adjustment and the effect of changes in actuarial assumptions are recognized in the Profit and Loss Account.

(G) Lease Rent :-

Lease rentals are expensed with reference to lease terms and other considerations.

(H) Liquidated Damages:

Liquidated damages / Penalties, if any are provided whenever there is a claim from party and when the same is accepted by the Company.

(I) Custom Duty

The year end inventory is inclusive of custom duty. (J) Taxation :-

Taxation expense comprise current tax and deferred tax charge or credit. Provision for income tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. Advance tax and tax deducted at source are adjusted against provision for taxation and balance, if any, are shown in the balance sheet under respective heads. .^

(K) Deferred Taxation

Deferred tax resulting from timing differences between book and tax profit is accounted for under the liability method at the current rate of Income tax to the extent that the timing differences are expected to crystallize as deferred tax charge/ benefit in the profit and loss account and as deferred tax Assets/Liability in the Balance-Sheet.

(L) Insurance Claim

Insurance and other claims to the extent considered recoverable are accounted for in the year of claim based on the amount assessed by the surveyor. However, claims and refund whose recovery cannot be ascertained with reasonable certainty, are accounted for on acceptance/actual receipts basis.

(M) Borrowing Cost

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

(N) Excise Duty and Sales Tax

Excise duty has been accounted on the basis of both payment made in respect of goods cleared and provision made for goods lying in bonded area. Sales Tax is Charge to Profit and Loss Account.

(O) Use o* Estimates

In preparing Companys financial statements in conformity with accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

(P) Commodity Hedging Transactions

The commodity hedging contracts are accounted on the date of their settlement and realised gain/loss in respects of settled contracts are recognised in the profit and loss account, along with the underlying transactions. Pursuant

to announcement on accounting for the derivatives issued by the Institute of Chartered Accountants of India (ICAI), in accordance with the principle of prudence as enunciated in Accounting Standard -1 (AS-1) "Disclosure of Accounting Policies" the company provide for losses in respect of all outstanding derivatives contracts at the balance sheet date by marking them mark to market. Any net unrealized gains arising on such Mark to Market are not recognised as income.

(Q) Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as result of past events and it is probable that there will be an outflow of resources. Contigent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

(R) Related Party Transaction

Parties are considered to be related if at any time during the year, one party has the ability to control the other party or to exercise significant influence over the other party in making financial and / or operating decision.

(S) Earning Per Share (EPS)

The earning considered in ascertaining the companys EPS comprises the net profit for the period after tax attributed to equity shareholders. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

(T) Government Grants

Grants received against specific fixed assets are adjusted to the cost of the assets and those in the nature of promoters contribution are credited to capital reserve. Revenue grants are recognized in the profit and loss account in accordance with the related schemes and in the period in which these are accrued and it is reasonably certain that the ultimate collection will be made.

(U) Share Issue Expenses

Share Issue expenses are adjusted against security premium account

 
Subscribe now to get personal finance updates in your inbox!