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Accounting Policies of Govind Rubber Ltd. Company

Mar 31, 2015

1.1 System of Accounting:

These financial statements have been prepared to comply with the Generally Accepted Accounting Principal (Indian GAAP), including the Accounting Standard notified under the relevant provision of the Companies Act, 2013.

The financial statements have been prepared under historical cost basis adjusted by revaluation of certain fixed assets and on the accounting principles of a going concern.

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

1.2 Use of Estimates:

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual and the estimates are recognized in the period in which the results are known / materialized.

1.3 Fixed Assets: Tangible Assets

Fixed Assets are stated at cost of acquisition inclusive of incidental expenses related to acquisition but net of CENVAT and includes amounts added on revaluation, less accumulated depreciation.

In respect of Major projects involving constructions, related pre-operational expenses form part of the assets capitalized. Book value of fixed assets, which appreciate significantly, are reviewed from time to time and revalued to relate them more closely to current replacement value.

Project under which assets are not ready for their intended use are disclosed under Capital Work-in- Progress.

Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation/ depletion and impairment loss, if any. The cost comprises purchase price and any cost directly attributable to bringing the assets to its working condition for the intended use.

1.4 Impairment:

The carrying amount of assets is reviewed at each balance sheet date for any indication of impairment based on internal/external factors. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

1.5 Borrowing costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are 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 revenue.

1.6 Leases:

Assets leased under operating leases are shown as fixed assets. Rental income is recognized on accrual basis over the lease term.

Lease rentals in respect of assets acquired under leases are charged To Profit and Loss Account.

1.7 Depreciation: Tangible Assets

Depreciation on Fixed assets other than leasehold land has been provided on straight line method based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.

Depreciation on increased value of fixed assets due to revaluation is computed on the basis of the remaining useful life as estimated by the Value on straight-line method and adjusted to Revaluation Reserve Account. Premium on leasehold land is amortised over the duration of lease and proportionate amount of premium written off is being charged to Statement of profit and loss.

Intangible Assets

These are amortised overaperiodof3years.

1.8 Investments:

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

1.9 Inventories:

Inventories are valued at lower of cost and net realisable value. Cost is computed on the first-in-first- out basis and net of CENVAT, wherever applicable. Finished goods and work in process include cost of conversion and other costs incurred in bringing the inventories to their present location and condition and excise duty paid/payable on such goods.

1.10Export Benefits

Consumption of raw material is arrived at after adjusting the difference between the cost of indigenous / duty paid imported raw materials and international cost of raw materials entitled to be imported / imported under Duty Exemption Scheme of the Government of India against direct/indirect exports made/to be made by the company during the year. Export Incentive under Duty Entitlement Scheme and Duty Free Entitlement Certificate under EXIM Policy are accounted for in the year of export. Profit /Loss on sale of DEPB/Import Licenseis accounted for in the year of such sale.

1.11Sales:

Sale of goods is recognised on dispatch to customers. Sales are Inclusive of Excise Duty and net of Sales-Tax.

1.12Foreign Exchange Transactions:

a) Transactions in foreign currencies are accounted for at prevailing exchange rates. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment/realization in the Statement of profit and loss. The Current Assets and Current liabilities related to foreign currency transactions, other than those covered by forward contracts, remaining unsettled at the end ofthe year are adjusted at the rates prevailing at the year end, except for Pre-Shipment Credits in Foreign Currencies (PCFCs) which have been stated at the amounts received on the date of disbursement, since the PCFCs are liquidated against future export proceeds, at the rate of exchange at which the loans were disbursed. b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contract is recognized over the life of the contract. Any income or expense on account of exchange difference either on settlement or on trans- lation is recognized in the profit and loss account.

1.13Employee Benefits:

a) Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of profit and loss of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the Statement of profit and loss for the year in which the employee has rendered services. The expenses are recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefits are charged tothe profit and loss account.

1.14Deferred tax:

Deferred tax is recognized on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversible in one or more subsequent years.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of business losses are recognized if there is virtual certainty that there will be sufficient future taxable income available to absorb such losses.

1.15 Provisions and Contingent Liabilities:

Provisions are recognized in the accounts in respect of present probable obligations , the amount of which can be reliably estimated .

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence of one or more uncertain future events not wholly within the controlof the company.

1.16 Derivatives:

The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the company and the company does not use the foreign exchange contracts for trading or speculation purposes. The company records the gain or loss on effective hedges in the profit and loss account of that period.


Mar 31, 2014

1.1 System of Accounting:

The financial statements have been prepared under historical cost basis adjusted by revaluation of certain fixed assets and on the accounting principles of a going concern.

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

1.2 Use of Estimates:

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period.

Difference between the actual and the estimates are recognized in the period in which the results are known / materialized.

1.3 Fixed Assets:

Fixed Assets are stated at cost of acquisition inclusive of incidental expenses related to acquisition but net of CENVAT and includes amounts added on revaluation, less accumulated depreciation.

In respect of Major projects involving constructions, related pre-operational expenses form part of the assets capitalized. Book value of fixed assets, which appreciate significantly, are reviewed from time to time and revalued to relate them more closely to current replacement value.

1.4 Impairment:

The carrying amount of assets is reviewed at each balance sheet date for any indication of impairment based on internal/external factors. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

1.5 Borrowing costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are 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 revenue.

1.6 Leases:

Assets leased under operating leases are shown as fixed assets. Rental income is recognized on accrual basis over the lease term.

Lease rentals in respect of assets acquired under leases are charged to Profit and Loss Account.

1.7 Depreciation:

Depreciation on Fixed assets other than leasehold land has been provided on straight line method at the rates and in

the manner specified in Schedule XIV to the Companies Act 1956.

Depreciation on increased value of fixed assets due to revaluation is computed on the basis of the remaining useful life as estimated by the Valuer on straight-line method and adjusted to Revaluation Reserve Account.

Premium on leasehold land is amortised over the duration of lease and proportionate amount of premium written off is being charged to Statement of profit and loss.

1.8 Investments:

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

1.9 Inventories:

Inventories are valued at lower of cost and net realisable value. Cost is computed on the first-in-first-out basis and net of CENVAT, wherever applicable. Finished goods and work in process include cost of conversion and other costs incurred in bringing the inventories to their present location and condition and excise duty paid/payable on such goods.

1.10 Export Benefits

Consumption of raw material is arrived at after adjusting the difference between the cost of indigenous / duty paid imported raw materials and international cost of raw materials entitled to be imported / imported under Duty Exemption Scheme of the Government of India against direct/indirect exports made/to be made by the company during the year. Export Incentive under Duty Entitlement Scheme and Duty Free Entitlement Certificate under EXIM Policy are accounted for in the year of export. Profit /Loss on sale of DEPB/Import License is accounted for in the year of such sale .

1.11 Sales:

Sale of goods is recognised on dispatch to customers. Sales are inclusive of Excise Duty and net of Sales-Tax.

1.12 Foreign Exchange Transactions:

a) Transactions in foreign currencies are accounted for at prevailing exchange rates. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment/realization in the Statement of profit and loss. The Current Assets and Current liabilities related to foreign currency transactions, other than those covered by forward contracts, remaining unsettled at the end of the year are adjusted at the rates prevailing at the year end, except for Pre-Shipment Credits in Foreign Currencies (PCFCs) which have been stated at the amounts received on the date of disbursement, since the PCFCs are liquidated against future export proceeds, at the rate of exchange at which the loans were disbursed.

b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contract is recognized over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account.

1.13 Employee Benefits:

a) Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of profit and loss of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the Statement of profit and loss for the year in which the employee has rendered services. The expenses are recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefits are charged to the profit and loss account.

1.14 Deferred tax:

Deferred tax is recognized on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversible in one or more subsequent years.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of business losses are recognized if there is virtual certainty that there will be sufficient future taxable income available to absorb such losses.

1.15 Provisions and Contingent Liabilities:

Provisions are recognized in the accounts in respect of present probable obligations , the amount of which can be reliably estimated .

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence of one or more uncertain future events not wholly within the control of the company.

1.16 Derivatives:

The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the company and the company does not use the foreign exchange contracts for trading or speculation purposes. The company records the gain or loss on effective hedges in the profit and loss account of that period.

Out of the above-

i) 5069745 Equity shares of Rs. 10/- each are issued as fully paid up to Financial Institutions/ Bank against simple Interest dues as on 31st March, 2003 as per restructuring package approved by CDR Cell of RBI.

ii) 459474 Equity shares of Rs. 10/- each are issued as fully paid up on Net present value (NPV) basis on account of 1% reduction in the rate of interest payable in future to Financial Institution/Bank, in terms of re-workout package approved by CDR Cell of RBI.

Total 2,856.00 2,944.17

NOTES :

1) Term Loans from Banks/Financial Institutionsare secured by way of first charge on parri-passu basis on Company''s movable and immovable assets both present and future subject to prior charge on inventories and Book debts in favour of Company''s Bankers.

2) Vehicles loans are secured by hypothecation of vehicles acquired out of proceeds of the loans.

3) Term Loans from Banks and Financial Institutions as shown above are personally guaranteed by the Managing Director.

4) Maturity profile of Secured Term Loan

Between 1-2 years 1006.00 Lacs

Between 2-3 years NIL

Between 3-4 years NIL

Beyond 4 Years NIL

5) Interest on above said term loan ranging between 7.5% to 9.00%.

25. a) In the opinion of the Company, the Current Assets,

Loans and Advances are approximately of the value stated, if realized in the ordinary course of business and all known liabilities have been accounted for.

b) Debit and Credit balances of Trade Receivable and Trade Payable are subject to confirmation and Reconciliation of Accounts.


Mar 31, 2013

1.1 System of Accounting:

The financial statements have been prepared under historical cost basis adjusted by revaluation of certain fixed assets and on the accounting principles of a going concern. The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

1.2 Use of Estimates:

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual and the estimates are recognized in the period in which the results are known / materialized.

1.3 Fixed Assets:

Fixed Assets are stated at cost of acquisition inclusive of incidental expenses related to acquisition but net of CENVAT and includes amounts added on revaluation, less accumulated depreciation.

In respect of Major projects involving constructions, related pre-operational expenses form part of the assets capitalized. Book value of fixed assets, which appreciate significantly, are reviewed from time to time and revalued to relate them more closely to current replacement value.

1.4 Impairment:

The carrying amount of assets is reviewed at each balance sheet date for any indication of impairment based on internal/external factors. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

1.5 Borrowing costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are 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 & Loss.

1.6 Leases:

Assets leased under operating leases are shown as fixed assets. Rental income is recognized on accrual basis over the lease term.

Lease rentals in respect of assets acquired under leases are charged to statement of Profit & Loss.

1.7 Depreciation:

Depreciation on Fixed assets other than leasehold land has been provided on straight line method at the rates and in the manner specified in Schedule XIV to the Companies Act 1956.

Depreciation on increased value of fixed assets due to revaluation is computed on the basis of the remaining useful life as estimated by the Valuer on straight-line method and adjusted to Revaluation Reserve Account. Premium on leasehold land is amortised over the duration of lease and proportionate amount of premium written off is being charged to Statement of profit and loss.

1.8 Investments:

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

1.9 Inventories:

Inventories are valued at lower of cost and net realisable value. Cost is computed on the first-in-first-out basis and net of CENVAT, wherever applicable. Finished goods and work in process include cost of conversion and other costs incurred in bringing the inventories to their present location and condition and excise duty paid/payable on such goods.

1.10 Export Benefits

Consumption of raw material is arrived at after adjusting the difference between the cost of indigenous / duty paid imported raw materials and international cost of raw materials entitled to be imported / imported under Duty Exemption Scheme of the Government of India against direct/indirect exports made/to be made by the company during the year. Export Incentive under Duty Entitlement Scheme and Duty Free Entitlement Certificate under EXIM Policy are accounted for in the year of export. Profit /Loss on sale of DEPB/lmport License is accounted for in the year of such sale .

1.11 Sales:

Sale of goods is recognised on dispatch to customers. Sales are inclusive of Excise Duty and net of Sales-Tax.

1.12 Foreign Exchange Transactions:

a) Transactions in foreign currencies are accounted for at prevailing exchange rates. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment/realization in the Statement of profit and loss. The Current Assets and Current liabilities related to foreign currency transactions, other than those covered by forward contracts, remaining unsettled at the end of the year are adjusted at the rates prevailing at the year end, except for Pre-Shipment Credits in Foreign Currencies (PCFCs) which have been stated at the amounts received on the date of disbursement, since the PCFCs are liquidated against future export proceeds, at the rate of exchange at which the loans were disbursed.

b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contract is recognized over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account.

1.13 Employee Benefits:

a) Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of profit and loss of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the Statement of profit and loss for the year in which the employee has rendered services. The expenses are recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefits are charged to statement of Profit & Loss.

1.14 Deferred tax:

Deferred tax is recognized on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversible in one or more subsequent years.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of business losses are recognized if there

is virtual certainty that there will be sufficient future taxable income available to recoup such losses.

1.15 Provisions and Contingent Liabilities:

Provisions are recognized in the accounts in respect of present probable obligations , the amount of which can be reliably estimated .

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence of one or more uncertain future events not wholly within the control of the company.

1.16 Derivatives:

The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the company and the company does not use the foreign exchange contracts for trading or speculation purposes. The company records the gain or loss on effective hedges in statement of Profit & Loss of that period.


Mar 31, 2012

1.1 System of Accounting:

The financial statements have been prepared under historical cost basis adjusted by revaluation of certain fixed assets and on the accounting principles of a going concern.

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

1.2 Use of Estimates:

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period.

Difference between the actual and the estimates are recognized in the period in which the results are known / materialized.

1.3 Fixed Assets:

Fixed Assets are stated at cost of acquisition inclusive of incidental expenses related to acquisition but net of CENVAT and includes amounts added on revaluation, less accumulated depreciation.

In respect of Major projects involving constructions, related pre-operational expenses form part of the assets capitalized. Book value of fixed assets, which appreciate significantly, are reviewed from time to time and revalued to relate them more closely to current replacement value.

1.4 Impairment:

The carrying amount of assets is reviewed at each balance sheet date for any indication of impairment based on internal/external factors. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

1.5 Borrowing costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are 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 revenue.

1.6 Leases:

Assets leased under operating leases are shown as fixed assets. Rental income is recognized on accrual basis over the lease term.

Lease rentals in respect of assets acquired under leases are charged to Profit and Loss Account.

1.7 Depreciation:

Depreciation on Fixed assets other than leasehold land has been provided on straight line method at the rates and in the manner specified in Schedule XIV to the Companies Act 1956.

Depreciation on increased value of fixed assets due to revaluation is computed on the basis of the remaining

useful life as estimated by the Valuer on straight-line method and adjusted to Revaluation Reserve Account. Premium on leasehold land is amortised over the duration of lease and proportionate amount of premium written off is being charged to Profit & Loss Account.

1.8 Investments:

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

1.9 Inventories:

Inventories are valued at lower of cost and net realisable value. Cost is computed on the first-in-first-out basis and net of CENVAT, wherever applicable. Finished goods and work in process include cost of conversion and other costs incurred in bringing the inventories to their present location and condition and excise duty paid/payable on such goods.

1.10 Export Benefits

Consumption of Raw material is arrived at after adjusting the difference between the cost of indigenous / duty paid imported raw materials and international cost of raw materials entitled to be imported / imported under Duty Exemption Scheme of the Government of India against direct/indirect exports made/to be made by the company during the year. Export Incentive under Duty Entitlement Scheme and Duty Free Entitlement Certificate under EXIM Policy are accounted for in the year of export. Profit /Loss on sale of DEPB/lmport License is accounted for in the year of such sale .

1.11 Sales:

Sale of goods is recognised on dispatch to customers. Sales are inclusive of Excise Duty and net of Sales-Tax.

1.12 Foreign Exchange Transactions:

a) Transactions in foreign currencies are accounted for at prevailing exchange rates. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment/realization in the Profit and Loss Account. The Current Assets and Current liabilities related to foreign currency transactions, other than those covered by forward contracts, remaining unsettled at the end of the year are adjusted at the rates prevailing at the year end, except for Pre- Shipment Credits in Foreign Currencies (PCFCs) which have been stated at the amounts received on the date of disbursement, since the PCFCs are liquidated against future export proceeds, at the rate of exchange at which the loans were disbursed.

b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contract is recognized over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account.

1.13 Employee Benefits:

a) Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expenses are recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefits are charged to the profit and loss account.

1.14 Deferred tax:

Deferred tax is recognized on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversible in one or more subsequent years.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of business losses are recognized if there is virtual certainty that there will be sufficient future taxable income available to absorb such losses.

1.15 Provisions and Contingent Liabilities:

Provisions are recognized in the accounts in respect of present probable obligations , the amount of which can be reliably estimated .

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence of one or more uncertain future events not wholly within the control of the company.

1.16 Derivatives:

The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the company and the company does not use the foreign exchange contracts for trading or speculation purposes. The company records the gain or loss on effective hedges in the profit and loss account of that period.


Mar 31, 2011

A. System of Accounting:

The financial statements have been prepared under historical cost basis adjusted by revaluation of certain fixed assets and on the accounting principles of a going concern.

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

b. Use of Estimates:

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period.

Difference between the actual and the estimates are recognized in the period in which the results are known / materialized.

c. Fixed Assets:

Fixed Assets are stated at cost of acquisition inclusive of incidental expenses related to acquisition but net of CENVAT and includes amounts added on revaluation, less accumulated depreciation.

In respect of Major projects involving constructions, related pre-operational expenses form part of the assets capitalized. Book value of fixed assets, which appreciate significantly, are reviewed from time to time and revalued to relate them more closely to current replacement value.

d. Impairment:

The carrying amount of assets is reviewed at each balance sheet date for any indication of impairment based on internal/ external factors. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use,

the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

e. Borrowing costs:

Borrowing costs are attributable to the acquisition or construction of qualifying assets are 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 revenue.

f. Leases:

Assets leased under operating leases are shown as fixed assets. Rental income is recognized on accrual basis over the lease term.

Lease rentals in respect of assets acquired under leases are charged to Profit and Loss Account.

g. Depreciation:

Depreciation on Fixed assets other than leasehold land has been provided on straight line method at the rates and in the manner specified in Schedule XIV to the Companies Act 1956.

Depreciation on increased value of fixed assets due to revaluation is computed on the basis of the remaining useful life as estimated by the Valuer on straight-line method and adjusted to Revaluation Reserve Account.

Premium on leasehold land is amortised over the duration of lease and proportionate amount of premium written off is being charged to Profit & Loss Account.

h. Investments:

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

i. Inventories:

Inventories are valued at lower of cost and net realisable value. Cost is computed on the first-in-first-out basis and

net of CENVAT, wherever applicable. Finished goods and work in process include cost of conversion and other costs incurred in bringing the inventories to their present location and condition and excise duty paid/payable on such goods.

j. Export Benefits

Consumption of Raw material is arrived at after adjusting the difference between the cost of indigenous / duty paid imported raw materials and international cost of raw materials entitled to be imported / imported under Duty Exemption Scheme of the Government of India against direct/indirect exports made/to be made by the company during the year. Export Incentive under Duty Entitlement Scheme and Duty Free Entitlement Certificate under EXIM Policy are accounted for in the year of export. Profit /Loss on sale of DEPB/lmport License is accounted for in the year of such sale .

k. Sales:

Sale of goods is recognised on dispatch to customers. Sales are inclusive of Excise Duty and net of Sales-Tax.

I. Foreign Exchange Transactions:

a) Transactions in foreign currencies are accounted for at prevailing exchange rates. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment/realization in the Profit and Loss Account. The Current Assets and Current liabilities related to foreign currency transactions, other than those covered by forward contracts, remaining unsettled at the end of the year are adjusted at the rates prevailing at the year end, except for Pre-Shipment Credits in Foreign Currencies (PCFCs) which have been stated at the amounts received on the date of disbursement, since the PCFCs are liquidated against future export proceeds, at the rate of exchange at which the loans were disbursed.

b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contract is recognized over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account.

m. Employee Benefits:

a) Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expenses are recognized at the present value of the amount payable . determined using actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefits are charged to the profit and loss account.

n. Deferred tax:

Deferred tax is recognized on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversible in one or more subsequent years.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of business losses are recognized if there is virtual certainty that there will be sufficient future taxable income available to absorb such losses.

0. Provisions and Contingent Liabilities:

Provisions are recognized in the accounts in respect of present probable obligations , the amount of which can be reliably estimated .

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence of one or more uncertain future events not wholly within the control of the company.

p. Derivatives:

The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the company and the company does not use the foreign exchange contracts for trading or speculation purposes. The company records the gain or loss on effective hedges in the profit and loss account of that period.


Mar 31, 2010

A. Export Benefits

Consumption of Raw material is arrived at after adjusting the difference between the cost of indigenous / duty paid imported raw materials and international cost of raw materials entitled to be imported / imported under Duty Exemption Scheme of the Government of India against direct/indirect exports made/to be made by the company during the year. Export Incentive under Duty Entitlement Pass Book Scheme and Duty Free Entitlement Certificate under EXIM Policy are accounted for in the year of export Profit /Loss on sale of DEPB/lmport License is accounted for in the year of such sale .

B. Sales:

Sale of goods is recognised on dispatch to customers. Sales are inclusive of Excise Duty and net of Sales-Tax.

C. Foreign Exchange Transactions:

a) Transactions in foreign currencies are accounted for at prevailing exchange rates. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment/realization in the Profit and Loss Account. The Current Assets and Current liabilities related to foreign currency transactions, other than those covered by forward contracts, remaining unsettled at the end of the year are adjusted at the rates prevailing at the year end, except for Pre-Shipment Credits in Foreign Currencies ( PCFCs ) which have been stated at the amounts received on the date of disbursement, since the PCFCs are liquidated against future export proceeds, at the rate of exchange at which the loans were disbursed.

b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contract is recognized over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account.

D. Employee Benefits:

a) Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expenses is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefits are charged to the profit and loss account.

E. Deferred tax:

Deferred tax is recognized on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversible in one or more subsequent years.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of business losses are recognized if there is virtual certainty that there will be sufficient future taxable income available to absorb such losses.

F. Provisions and Contingent Liabilities:

Provisions are recognized in the accounts in respect of present probable obligations , the amount of which can be reliably estimated .

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence of one or more uncertain future events not wholly within the control of the company.

G. Derivatives:

The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the company and the company does not use the foreign exchange contracts for trading or speculation purposes. The company records the gain or loss on effective hedges in the profit and loss account of that period.

 
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