Mar 31, 2015
A. Use of estimates : The preparation of financial statements in
conformity with Indian GAAP requires the management to make judgments,
estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities and the disclosure of contingent
liabilities, at the end of the reporting period. Although these
estimates are based on the management's best knowledge of current
events and actions, uncertainty about these assumptions and estimates
could result in the outcomes requiring a material adjustment to the
carrying amounts of assets or liabilities in future periods.
b. Tangible fixed assets : Fixed Assets are stated at cost of
acquisition and installation, net of cenvet, Vat less accumulated
Depreciation. Borrowing costs incurred during the period of
construction/Acquisitions of assets are added to the cost of Fixed
Assets. Major expenses on modification/alterations increasing
efficiency/capacity of the plant are also capitalized. Subsequent
expenditure related to an item of fixed asset is added to its book
value only if it increases the future benefits from the existing asset
beyond its previously assessed standard of performance. All other
expenses on existing fixed assets, including day-to-day repair and
maintenance expenditure and cost of replacing parts, are charged to the
statement of profit and loss for the period during which such expenses
are incurred.
Gains or losses arising from derecognition of fixed assets are measured
as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and
loss when the asset is derecognized.
c. Depreciation on tangible fixed assets : Hither to depreciation on
fixed assets was provided on written down value method at the rates and
in the manner prescribed in Schedule XIV of the Companies Act 1956, (as
amended). Consequent to the enactment of the Companies Act, 2013 (The
Act) and its applicability for accounting periods commencing after
01/04/2014, the company reviewed its policy of providing depreciation
with reference to the estimated economic lives of Fixed Assets as
prescribed by Schedule II of the Act.
In case of any asset whose life is already exhausted, the carrying
value as at 01/04/2014 of Rs. 1,371 (in '000) has been ascertained and
the impact is recognized in general reserve (net of deferred tax). Had
the Company followed the earlier depreciation policy, the depreciation
charge for the year would have been higher by Rs. 1,523 (in '000) and
profit before tax would have been lower by Rs. 1,523 (in '000).
d. Intangible assets : Intangible assets acquired separately are
measured on initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less accumulated amortization and
accumulated impairment losses, if any. Internally generated intangible
assets, excluding capitalized development costs, are not capitalized
and expenditure is reflected in the statement of profit and loss in the
year in which the expenditure is incurred.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life.
e. Borrowing costs : Borrowing cost includes interest, amortization of
ancillary costs incurred in connection with the arrangement of
borrowings and exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the
interest cost. Borrowing costs directly attributable to the
acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use or
sale are capitalized as part of the cost of the respective asset. All
other borrowing costs are expensed in the period they occur.
f. Impairment of tangible and intangible assets : The company assesses
at each reporting date whether there is an indication that an asset may
be impaired. If any indication exists, or when annual impairment
testing for an asset is required, the company estimates the asset's
recoverable amount. An impairment loss is recognised in the accounts to
the extent the carrying amount exceeds, the recoverable amount.
g. Government grants and subsidies : Grants and subsidies from the
government are recognized when there is reasonable assurance that (i)
the company will comply with the conditions attached to them, and (ii)
the grant/subsidy will be received.
When the grant or subsidy relates to revenue, it is recognized as
income on a systematic basis in the statement of profit and loss over
the periods necessary to match them with the related costs, which they
are intended to compensate. Such grants are deducted in reporting the
related expense. Where the grant relates to an asset, it is recognized
as deferred income and released to income in equal amounts over the
expected useful life of the related asset.
Where the company receives non-monetary grants, the asset is accounted
for on the basis of its acquisition cost. In case a non-monetary asset
is given free of cost, it is recognized at a nominal value.
Government grants of the nature of promoters' contribution are credited
to capital reserve and treated as a part of the shareholders' funds.
h. Investments : Investments, which are readily realizable and
intended to be held for not more than one year from the date on which
such investments are made, are classified as current investments. All
other investments are classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
i. Inventories : Raw materials and stores and spares are valued at
lower of cost and net realizable value. However, materials and other
items held for use in the production of inventories are not written
down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost. Cost of raw
materials and stores and spares is determined on First-in- First-out
basis.
Work-in-progress and finished goods are valued at lower of cost and net
realizable value. Cost includes direct materials and labour and a
proportion of manufacturing overheads based on normal operating
capacity. Cost of finished goods includes excise duty.
Waste is valued at net realizable value.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
j. Revenue recognition : Revenue is recognized to the extent that it
is probable that the economic benefits will flow to the company and the
revenue can be reliably measured. The following specific recognition
criteria must also be met before revenue is recognized:
Sale of goods : Revenue from sale of goods is recognized when all the
significant risks and rewards of ownership of the goods have been passed
to the buyer, usually on delivery of the goods. The company collects
sales taxes and value added taxes (VAT) on behalf of the government and,
therefore, these are not economic benefits flowing to the company.
Hence, they are excluded from revenue. Excise duty deducted from revenue
(gross) is the amount that is included in the revenue (gross) and not
the entire amount of liability arising during the year.
Interest : Interest income is recognized on a time proportion basis
taking into account the amount outstanding and the applicable interest
rate. Interest income is included under the head "other income" in the
statement of profit and loss.
k. Foreign currency translation
Foreign currency transactions and balances
Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items, which are
measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction.
Non- monetary items, which are measured at fair value or other similar
valuation denominated in a foreign currency, are translated using the
exchange rate at the date when such value was determined.
Exchange differences
Transactions denominated in foreign currencies are normally recorded at
the exchange rate prevailing at the time of the transaction.
Monetary items denominated in foreign currency at the year end are
translated at the exchange rates prevailing at the balance sheet date.
Premium or discount arising at the inception of the forward exchange
contract is amortized as income or expense over the period of the
contract. Any profit or loss arising in renewal or cancellation of
forward exchange contracts are recognized as income or expenses during
the year.
Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
account.
Losses in respect of all outstanding derivative contracts at the
balance sheet date is provided by marking them to market.
l. Employee benefits
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages, short term compensated absences, etc, and the
expected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
Post-Employment Benefits :
(i) Defined Contribution Plans :
State Governed Provident Fund scheme and employees state insurance
scheme are defined contribution plans. The contribution paid / payable
under the scheme is recognized during the period in which the employees
renders the related services.
(ii) Defined Benefit Plans:
The employee's gratuity fund scheme and compensated absences is
company's defined benefit plans. The present value of the obligation
under such defined benefit plan is determined based on actuarial
valuation using the projected Unit Credit Method, which recognizes each
period of service as giving rise to additional unit of employee
benefits entitlement and measures each unit separately to build up the
final obligation.
The obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of the obligation under defined benefit plans, is based on the market
yields on Government Securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the profit and
loss account.
Gains or losses on the curtailment or settlement of any defined
benefits plans are recognized when the curtailment or settlement
occurs. Past service cost is recognized as expense on a straight-line
basis over the average period until the benefits become vested.
(iii) Long term employee benefits :
The obligation for long term employee benefits such as long term
compensated absences, is recognized in the same manner as in case of
defined benefit plans as mentioned in ii) above.
m. Income taxes
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognized on difference
between taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
Where there is unabsorbed depreciation or carry forward losses,deferred
tax assets are recognised only to the extent there is reasonable
certainty of realisation in future. Such assets are reviewed at each
balance sheet date to reassess realisation.
MAT credit is recognised as an assets only when there is convicing
evidence that the company will pay normal income tax within the
specified period. The assets are reviewed at each balance sheet date.
n. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the number
of equity shares outstanding during the period.
o. Provisions
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
Where the company expects some or all of a provision to be reimbursed,
for example under an insurance contract, the reimbursement is
recognized as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is presented
in the statement of profit and loss net of any reimbursement.
p. Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The company does not
recognize a contingent liability but discloses its existence in the
financial statements.
q. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
Mar 31, 2014
A. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
b. Tangible fixed assets
Fixed Assets are stated at cost of acquisition and installation, net of
cenvet, Vat less accumulated Depreciation. Borrowing costs incurred
during the period of construction/Acquisitions of assets are added to
the cost of Fixed Assets. Major expenses on modification/alterations
increasing efficiency/capacity of the plant are also capitalized.
Subsequent expenditure related to an item of fixed asset is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day-to-day
repair and maintenance expenditure and cost of replacing parts, are
charged to the statement of profit and loss for the period during which
such expenses are incurred.
Gains or losses arising from derecognition of fixed assets are measured
as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and
loss when the asset is derecognized.
c. Depreciation on tangible fixed assets
Depreciation on fixed assets is calculated on a straight-line basis
using the rates arrived at based on the useful lives estimated by the
management, or those prescribed under the Schedule XIV to the Companies
Act, 1956, whichever is higher.
d. Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortization and accumulated
impairment losses, if any. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and
expenditure is reflected in the statement of profit and loss in the
year in which the expenditure is incurred.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life.
e. Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
f. Impairment of tangible and intangible assets
The company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the company
estimates the asset''s recoverable amount. An impairment loss is
recognised in the accounts to the extent the carrying amount exceeds,
the recoverable amount.
g. Government grants and subsidies
Grants and subsidies from the government are recognized when there is
reasonable assurance that (i) the company will comply with the
conditions attached to them, and (ii) the grant/subsidy will be
received.
When the grant or subsidy relates to revenue, it is recognized as
income on a systematic basis in the statement of profit and loss over
the periods necessary to match them with the related costs, which they
are intended to compensate. Such grants are deducted in reporting the
related expense. Where the grant relates to an asset, it is recognized
as deferred income and released to income in equal amounts over the
expected useful life of the related asset.
Where the company receives non-monetary grants, the asset is accounted
for on the basis of its acquisition cost. In case a non-monetary asset
is given free of cost, it is recognized at a nominal value.
Government grants of the nature of promoters'' contribution are credited
to capital reserve and treated as a part of the shareholders'' funds.
h. Investments
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
i. Inventories
Raw materials and stores and spares are valued at lower of cost and net
realizable value. However, materials and other items held for use in
the production of inventories are not written down below cost if the
finished products in which they will be incorporated are expected to be
sold at or above cost. Cost of raw materials and stores and spares is
determined on First-in-First-out basis.
Work-in-progress and finished goods are valued at lower of cost and net
realizable value. Cost includes direct materials and labour and a
proportion of manufacturing overheads based on normal operating capacity.
Cost of finished goods includes excise duty.
Waste is valued at net realizable value.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
j. Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
Sale of goods
Revenue from sale of goods is recognized when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
usually on delivery of the goods. The company collects sales taxes and
value added taxes (VAT) on behalf of the government and, therefore,
these are not economic benefits flowing to the company. Hence, they are
excluded from revenue. Excise duty deducted from revenue (gross) is
the amount that is included in the revenue (gross) and not the entire
amount of liability arising during the year.
Interest
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the
statement of profit and loss.
k. Foreign currency translation
Foreign currency transactions and balances
Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items, which are
measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction.
Non- monetary items, which are measured at fair value or other similar
valuation denominated in a foreign currency, are translated using the
exchange rate at the date when such value was determined.
Exchange differences
Transactions denominated in foreign currencies are normally recorded at
the exchange rate prevailing at the time of the transaction.
Monetary items denominated in foreign currency at the year end are
translated at the exchange rates prevailing at the balance sheet date.
Premium or discount arising at the inception of the forward exchange
contract is amortized as income or expense over the period of the
contract. Any profit or loss arising in renewal or cancellation of
forward exchange contracts are recognized as income or expenses during
the year.
Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
account.
Losses in respect of all outstanding derivative contracts at the
balance sheet date is provided by marking them to market.
l. Employee benefits
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages, short term compensated absences, etc, and the
expected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
Post-Employment Benefits :
(i) Defined Contribution Plans :
State Governed Provident Fund scheme and employees state insurance
scheme are defined contribution plans. The contribution paid / payable
under the scheme is recognized during the period in which the employees
renders the related services.
(ii) Defined Benefit Plans:
The employee'' s gratuity fund scheme and compensated absences is
company''s defined benefit plans.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected Unit Credit
Method, which recognizes each period of service as giving rise to
additional unit of employee benefits entitlement and measures each unit
separately to build up the final obligation.
The obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of the obligation under defined benefit plans, is based on the market
yields on Government Securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the profit and
loss account.
Gains or losses on the curtailment or settlement of any defined
benefits plans are recognized when the curtailment or settlement
occurs. Past service cost is recognized as expense on a straight-line
basis over the average period until the benefits become vested.
(c ) Long term employee benefits :
The obligation for long term employee benefits such as long term
compensated absences, is recognized in the same manner as in case of
defined benefit plans as mentioned in b) ii) above.
m. Income taxes
Current tax is determined as the amount of tax payable in respect of
taxable income for the year.
Deferred tax is recognized on difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.Where there is unabsorbed
depreciation or carry forward losses,deferred tax assets are recognised
only to the extent there is reasonable certainty of realisation in
future.Such assets are reviewed at each balance sheet date to reassess
realisation.
MAT credit is recognised as an assets only when there is convicing
evidence that the company will pay normal income tax within the
specified period. The assets are reviewed at each balance sheet date.
n. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the number
of equity shares outstanding during the period.
o. Provisions
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the
obligation. Provisions are not discounted to their present value and
are determined based on the best estimate required to settle the
obligation at the reporting date. These estimates are reviewed at each
reporting date and adjusted to reflect the current best estimates.
Where the company expects some or all of a provision to be reimbursed,
for example under an insurance contract, the reimbursement is
recognized as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is presented
in the statement of profit and loss net of any reimbursement.
p. Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The company does not
recognize a contingent liability but discloses its existence in the
financial statements.
q. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
r. Measurement of EBITDA
As permitted by the Guidence note on the Revised Schedule VI to The
Companies Act, 1956, the company has to present earning before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. In its
measurement, the company does not include depreciation and amortization
expense, finance cost and tax expense.
b. Terms/rights attached to equity shares
The company has only one class of equity shares having a par value of Rs.
10 per share. Each holder of equity shares is entitled to one vote per
share.
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
Term loans from State Bank of India are taken during the financial year
2006-07 to 2013-14 and carries interest 14.00% to 14.50 % p.a. The
loans are repayable in 72 monthly installments along with interest,
from the date of loan. The loan is secured by hypothecation of entire
current assets of the company and hypothecation of existing Plant &
Machineries, Electric installation, Building & Proposed machineries &
Building. Auto Loans takenfrom finance company is secured by
hypothecation of vehicle taken on finance and carries interest 9.70% to
11.00% p.a. The loans are repayable in 36 monthly installment alongwith
interest, from the date of loan. Unsecured bans are interest free and
are repayable after five years from the respective date of loan. (Also
guaranteed by Managing Director)
Hypothecation of entire current assets of the company and hypothecation
of existing Plant & Machineries, Electric lnstallation,Bulldlng &
Proposed machineries & Building. The cash credit is repayable on demand
and carries interest @ 12.95% to 13.25% p.a. (Also guaranteed by
Managing Director)
Deposits given as security
Fixed deposits with a carrying amount of Rs. 7,914 in (Rs.000)(31 March
2013: Rs. 5,580 in (Rs.000) are pledged with the Bank towards letter of
credit and Rs. 3,224 in (Rs.000) (31 March 2013: Rs. 300 in (Rs.000) towards
bank guarantee.
Mar 31, 2013
A. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
b. Tangible fixed assets
Fixed Assets are stated at cost of acquisition and installation, net of
cenvet, Vat less accumulated Depreciation. Borrowing costs incurred
during the period of construction/Acquisitions of assets are added to
the cost of Fixed Assets. Major expenses on modification/alterations
increasing efficiency/capacity of the plant are also capitalized.
Subsequent expenditure related to an item of fixed asset is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day-to-day
repair and maintenance expenditure and cost of replacing parts, are
charged to the statement of profit and loss for the period during which
such expenses are incurred.
Gains or losses arising from derecognition of fixed assets are measured
as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and
loss when the asset is derecognized.
c. Depreciation on tangible fixed assets
Depreciation on fixed assets is calculated on a straight-line basis
using the rates arrived at based on the useful lives estimated by the
management, or those prescribed under the Schedule XIV to the Companies
Act, 1956, whichever is higher.
d. Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortization and accumulated
impairment losses, if any. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and
expenditure is reflected in the statement of profit and loss in the
year in which the expenditure is incurred.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life.
e. Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
f. Impairment of tangible and intangible assets
The company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the company
estimates the asset''s recoverable amount. An impairment loss is
recognised in the accounts to the extent the carrying amount exceeds,
the recoverable amount.
g. Government grants and subsidies
Grants and subsidies from the government are recognized when there is
reasonable assurance that (i) the company will comply with the
conditions attached to them, and (ii) the grant/subsidy will be
received.
When the grant or subsidy relates to revenue, it is recognized as
income on a systematic basis in the statement of profit and loss over
the periods necessary to match them with the related costs, which they
are intended to compensate. Such grants are deducted in reporting the
related expense. Where the grant relates to an asset, it is recognized
as deferred income and released to income in equal amounts over the
expected useful life of the related asset.
Where the company receives non-monetary grants, the asset is accounted
for on the basis of its acquisition cost. In case a non-monetary asset
is given free of cost, it is recognized at a nominal value.
Government grants of the nature of promoters'' contribution are credited
to capital reserve and treated as a part of the shareholders'' funds.
h. Investments
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
i. Inventories
Raw materials and stores and spares are valued at lower of cost and net
realizable value. However, materials and other items held for use in
the production of inventories are not written down below cost if the
finished products in which they will be incorporated are expected to be
sold at or above cost. Cost of raw materials and stores and spares is
determined on First-in-First-out basis.
Work-in-progress and finished goods are valued at lower of cost and net
realizable value. Cost includes direct materials and labour and a
proportion of manufacturing overheads based on normal operating
capacity. Cost of finished goods includes excise duty.
Waste is valued at net realizable value.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
j. Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
Sale of goods
Revenue from sale of goods is recognized when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
usually on delivery of the goods. The company collects sales taxes and
value added taxes (VAT) on behalf of the government and, therefore,
these are not economic benefits flowing to the company. Hence, they are
excluded from revenue. Excise duty deducted from revenue (gross) is
the amount that is included in the revenue (gross) and not the entire
amount of liability arising during the year.
Interest
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the
statement of profit and loss.
k. Foreign currency translation
Foreign currency transactions and balances
Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items, which are
measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction.
Non- monetary items, which are measured at fair value or other similar
valuation denominated in a foreign currency, are translated using the
exchange rate at the date when such value was determined.
Exchange differences
Transactions denominated in foreign currencies are normally recorded at
the exchange rate prevailing at the time of the transaction.
Monetary items denominated in foreign currency at the year end are
translated at the exchange rates prevailing at the balance sheet date.
Premium or discount arising at the inception of the forward exchange
contract is amortized as income or expense over the period of the
contract. Any profit or loss arising in renewal or cancellation of
forward exchange contracts are recognized as income or expenses during
the year.
Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
account.
Losses in respect of all outstanding derivative contracts at the
balance sheet date is provided by marking them to market.
l. Employee benefits
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages, short term compensated absences, etc, and the
expected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
Post-Employment Benefits :
(i) Defined Contribution Plans :
State Governed Provident Fund scheme and employees state insurance
scheme are defined contribution plans. The contribution paid / payable
under the scheme is recognized during the period in which the employees
renders the related services.
(ii) Defined Benefit Plans:
The employee'' s gratuity fund scheme and compensated absences is
company''s defined benefit plans.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected Unit Credit
Method, which recognizes each period of service as giving rise to
additional unit of employee benefits entitlement and measures each unit
separately to build up the final obligation.
The obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of the obligation under defined benefit plans, is based on the market
yields on Government Securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the profit and
loss account.
Gains or losses on the curtailment or settlement of any defined
benefits plans are recognized when the curtailment or settlement
occurs. Past service cost is recognized as expense on a straight-line
basis over the average period until the benefits become vested.
(c ) Long term employee benefits :
The obligation for long term employee benefits such as long term
compensated absences, is recognized in the same manner as in case of
defined benefit plans as mentioned in b) ii) above.
m. Income taxes
Current tax is determined as the amount of tax payable in respect of
taxable income for the year.
Deferred tax is recognized on difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.Where there is unabsorbed
depreciation or carry forward losses,deferred tax assets are recognised
only to the extent there is reasonable certainty of realisation in
future.Such assets are reviewed at each balance sheet date to reassess
realisation.
MAT credit is recognised as an assets only when there is convicing
evidence that the company will pay normal income tax within the
specified period. The assets are reviewed at each balance sheet date.
n. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the number
of equity shares outstanding during the period.
o. Provisions
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
Where the company expects some or all of a provision to be reimbursed,
for example under an insurance contract, the reimbursement is
recognized as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is presented
in the statement of profit and loss net of any reimbursement.
p. Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The company does not
recognize a contingent liability but discloses its existence in the
financial statements.
q. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
r. Measurement of EBITDA
As permitted by the Guidence note on the Revised Schedule VI to The
Companies Act, 1956, the company has to present earning before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. In its
measurement, the company does not include depreciation and amortization
expense, finance cost and tax expense.
Mar 31, 2012
A. Change in accounting policy
Presentation and disclosure of financial statements
During the year ended 31 March 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 does not impact recognition and measurement
principles followed for preparation of financial statements. However,
it has significant impact on presentation and disclosures made in the
financial statements. The company has also reclassified the previous
year figures in accordance with the requirements applicable in the
current year.
b. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management's best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
c. Tangible fixed assets
Fixed Assets are stated at cost of acquisition and installation, net of
cenvet, Vat less accumulated Depreciation. Borrowing costs incurred
during the period of construction/Acquisitions of assets are added to
the cost of Fixed Assets. Major expenses on modification/alterations
increasing efficiency/capacity of the plant are also capitalized.
Subsequent expenditure related to an item of fixed asset is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day-to-day
repair and maintenance expenditure and cost of replacing parts, are
charged to the statement of profit and loss for the period during which
such expenses are incurred.
Gains or losses arising from derecognition of fixed assets are measured
as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and
loss when the asset is derecognized.
d. Depreciation on tangible fixed assets
Depreciation on fixed assets is calculated on a straight-line basis
using the rates arrived at based on the useful lives estimated by the
management, or those prescribed under the Schedule XIV to the Companies
Act, 1956, whichever is higher.
e. Intangible assets
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortization and accumulated
impairment losses, if any. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and
expenditure is reflected in the statement of profit and loss in the
year in which the expenditure is incurred.
Intangible assets are amortized on a straight line basis over the
estimated useful economic life.
f. Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
g. Impairment of tangible and intangible assets
The company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the company
estimates the asset's recoverable amount. An impairment loss is
recognised in the accounts to the extent the carrying amount exceeds,
the recoverable amount.
h. Government grants and subsidies
Grants and subsidies from the government are recognized when there is
reasonable assurance that (i) the company will comply with the
conditions attached to them, and (ii) the grant/subsidy will be
received.
When the grant or subsidy relates to revenue, it is recognized as
income on a systematic basis in the statement of profit and loss over
the periods necessary to match them with the related costs, which they
are intended to compensate. Such grants are deducted in reporting the
related expense. Where the grant relates to an asset, it is recognized
as deferred income and released to income in equal amounts over the
expected useful life of the related asset.
Where the company receives non-monetary grants, the asset is accounted
for on the basis of its acquisition cost. In case a non-monetary asset
is given free of cost, it is recognized at a nominal value.
Government grants of the nature of promoters' contribution are credited
to capital reserve and treated as a part of the shareholders' funds.
i. Investments
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
j. Inventories
Raw materials and stores and spares are valued at lower of cost and net
realizable value. However, materials and other items held for use in
the production of inventories are not written down below cost if the
finished products in which they will be incorporated are expected to be
sold at or above cost. Cost of raw materials and stores and spares is
determined on First-in-First-out basis.
Work-in-progress and finished goods are valued at lower of cost and net
realizable value. Cost includes direct materials and labour and a
proportion of manufacturing overheads based on normal operating
capacity. Cost of finished goods includes excise duty and is determined
on First- in-First-out basis.
Waste is valued at net realizable value.
Stock in Transit is valued at cost.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
k. Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
Sale of goods
Revenue from sale of goods is recognized when all the significant risks
and rewards of ownership of the goods have been passed to the buyer,
usually on delivery of the goods. The company collects sales taxes and
value added taxes (VAT) on behalf of the government and, therefore,
these are not economic benefits flowing to the company. Hence, they are
excluded from revenue. Excise duty deducted from revenue (gross) is
the amount that is included in the revenue (gross) and not the entire
amount of liability arising during the year.
Interest
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the
statement of profit and loss.
l. Foreign currency translation
Foreign currency transactions and balances
Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items, which are
measured in terms of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of the transaction.
Non- monetary items, which are measured at fair value or other similar
valuation denominated in a foreign currency, are translated using the
exchange rate at the date when such value was determined.
Exchange differences
Transactions denominated in foreign currencies are normally recorded at
the exchange rate prevailing at the time of the transaction.
Monetary items denominated in foreign currency at the year end are
translated at the exchange rates prevailing at the balance sheet date.
Premium or discount arising at the inception of the forward exchange
contract is amortized as income or expense over the period of the
contract. Any profit or loss arising in renewal or cancellation of
forward exchange contracts are recognized as income or expenses during
the year.
Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
account.
Losses in respect of all outstanding derivative contracts at the
balance sheet date is provided by marking them to market.
m. Employee benefits
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages, short term compensated absences, etc, and the
expected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
Post-Employment Benefits :
(i) Defined Contribution Plans :
State Governed Provident Fund scheme and employees state insurance
scheme are defined contribution plans. The contribution paid/payable
under the scheme is recognized during the period in which the employees
renders the related services.
(ii) Defined Benefit Plans:
The employee' s gratuity fund scheme and compensated absences is
company's defined benefit plans.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the projected Unit Credit
Method, which recognizes each period of service as giving rise to
additional unit of employee benefits entitlement and measures each unit
separately to build up the final obligation.
The obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of the obligation under defined benefit plans, is based on the market
yields on Government Securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the profit and
loss account.
Gains or losses on the curtailment or settlement of any defined
benefits plans are recognized when the curtailment or settlement
occurs. Past service cost is recognized as expense on a straight-line
basis over the average period until the benefits become vested.
(c ) Long term employee benefits :
The obligation for long term employee benefits such as long term
compensated absences, is recognized in the same manner as in case of
defined benefit plans as mentioned in b) ii) above.
n. Income taxes
Current tax is determined as the amount of tax payable in respect of
taxable income for the year.
Deferred tax is recognized on difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.Where there is unabsorbed
depreciation or carry forward losses,deferred tax assets are recognised
only to the extent there is reasonable certainty of realisation in
future.Such assets are reviewed at each balance sheet date to reassess
realisation.
MAT credit is recognised as an assets only when there is convincing
evidence that the company will pay normal income tax within the
specified period. The assets are reviewed at each balance sheet date.
o. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the number
of equity shares outstanding during the period.
p. Provisions
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
Where the company expects some or all of a provision to be reimbursed,
for example under an insurance contract, the reimbursement is
recognized as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is presented
in the statement of profit and loss net of any reimbursement.
q. Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The company does not
recognize a contingent liability but discloses its existence in the
financial statements.
r. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
s. Measurement of EBITDA
As permitted by the Guidance note on the Revised Schedule VI to The
Companies Act, 1956, the company has to present earning before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. In its
measurement, the company does not include depreciation and amortization
expense, finance cost and tax expense.
Mar 31, 2011
A) ACCOUNTING CONVENTION:
The Financial statements have been prepared in accordance with the
accounting principals generally accepted in India (Indian GAAP) and
comply with the companies (Accounting Standards) Rules,2006 issued by
the Central Government and relevant provisions of Companies Act, 1956
and are based on the historical cost Convention.
b) USE OF ESTIMATES
Preparation of financial statements in conformity with the generally
accepted accounting principles require Management to make estimates and
assumptions that affect the reported amounts of the financial
Statements and accompanying notes. Difference between the actual result
and estimates, are recognized in the period in which the results are
known/materialized.
c) FIXED ASSETS, DEPRECIATION AND EXPENDITURE DURING CONSTRUCTION
PERIOD:
i) Fixed Assets are stated at cost of acquisition and installation, net
of CENVAT, VAT less accumulated Depreciation. Borrowing costs incurred
during the period of construction/ Acquisitions of assets are added to
the cost of Fixed Assets. Major expenses on modification/ alterations
increasing efficiency/capacity of the plant are also capitalized.
ii) Depreciation on fixed assets is provided on Straight Line Method at
the rates and in the manner prescribed in Schedule XIV of the Companies
Act,1956,( as amended).
iii) Impairment of Assets :
At each balance sheet date, the carrying amount of assets are assessed
whether there is any indication of impairment. If estimated recoverable
amount is found less than its carrying amount, impairment loss is
recognized and assets are written down to their recoverable amount.
d) EMPLOYEE BENEFITS :
(a) Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages, short term compensated absences, etc, and the
expected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
(b) Post-Employment Benefits :
(i) Defined Contribution Plans :
State Governed Provident Fund scheme and employees state insurance
scheme are defined contribution plans. The contribution paid / payable
under the scheme is recognized during the period in which the employees
renders the related services.
(ii) Defined Benefit Plans:
The employee' s gratuity fund scheme and compensated absences is
company's defined benefit plans.
The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the Projected Unit Credit
Method, which recognizes each period of service as giving rise to
additional unit of employee benefits entitlement and measures each unit
separately to build up the final obligation.
The obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of the obligation under defined benefit plans, is based on the market
yields on Government Securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the profit and
loss account.
Gains or losses on the curtailment or settlement of any defined
benefits plans are recognized when the curtailment or settlement
occurs. Past service cost is recognized as expense on a straight-line
basis over the average period until the benefits become vested.
(c) Long term employee benefits :
The obligation for long term employee benefits such as long term
compensated absences, is recognized in the same manner as in case of
defined benefit plans as mentioned in b) ii) above.
e) INVENTORIES :
Stocks of Stores and spares, raw materials (including stock-in-transit)
are valued at lower of cost or net realizable value and for this
purpose cost is determined on First-in-First out basis.
Semi-finished goods and Finished goods are valued at lower of cost or
net realizable value and for this purpose cost is determined on
absorption costing basis.
Waste is valued at net realizable value.
f) REVENUE RECOGNITION
i) Revenue is recognized when it is earned and no significant
uncertainty exist as to its realization or collection.
ii) Revenue from sales of goods is recognized on delivery of the
products, when all significant contractual obligations have been
satisfied,the property in the goods is transferred for a price,
significant risks & rewards of ownership are transferred to the
customers and no effective ownership is retained.
iii) Gross sales are inclusive of excise duty and net of trade
discounts and VAT.The excise duty recovered is presented as reduction
from gross turnover.
g) BORROWING COSTS:
Borrowing costs, whether specific or general utilized for acquisition,
construction or production of qualifying assets are capitalized as part
of cost of such assets till the activities necessary for its intended
use or sale are complete. All other borrowing costs are charged to
profit and loss statement of the year in which incurred.
h) FOREIGN CURRENCY TRANSCATIONS :
(i) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction.
(ii) Monetary items denominated in foreign currency at the year end are
translated at the exchange rates prevailing at the balance sheet date.
(iii) Premium or discount arising at the inception of the forward
exchange contract is amortized as income or expense over the period of
the contract. Any profit or loss arising in renewal or cancellation of
forward exchange contracts are recognized as income or expenses during
the year.
(iv) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
account.
(v) Losses in respect of all outstanding derivative contracts at the
balance sheet date is provided by marking them to market.
i) TAXES ON INCOME AND EXPENSES :
i) Current tax is determined as the amount of tax payable in respect of
taxable income for the year.
ii) Deferred tax is recognized on difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.Where there is unabsorbed
depreciation or carry forward losses,deferred tax assets are recognised
only to the extent there is reasonable certainty of realisation in
future.Such assets are reviewed at each balance sheet date to reassess
realisation.
iii) MAT credit is recognised as an assets only when there is
convincing evidence that the company will pay normal income tax within
the specified period. The assets shall be reviewed at each balance
sheet date.
j) PROVOISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSTES :
Provisions are recognized when the company has present obligation as a
result of past events, for which it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made for the amount of the
obligation.
Contingent liabilities are disclosed by way of notes to financial
statements.
Contingent Assets are neither recognized nor disclosed in the financial
statements.
Provisions, contingent Liabilities and contingent assets are reviewed
at each balance sheet date.
k) CONTINGENCIES AND EVENTS OCCURING AFTER THE BALANCE SHEET DATE :
All contingencies and events occurring after the Balance Sheet date
which have a material effect on the financial position of the Company
are considered for preparing the financial statements.
Mar 31, 2010
A) ACCOUNTING CONVENTION:
The Financial statements have been prepaid in accordance with the
accounting principals generally accepted in India (Indian GAAP) and
comply with the companies (Accounting Standards) Rules, 2006 issued by
the Central Government and relevant provisions of Companies Act, 1956
and are basod on the historical cost Convention as modified to include
the revaluation of certain fixed assets.
b) USE OF ESTIMATES
Preparation of financial statements in conformity with the generally
accepted accounting principles require Management to make estimates and
assumptions that affect the reported amounts of the financial
Statements and accompanying notes. Difference between the actual result
and estimates. are recognized in the period in whicth the results are
known/materialized.
c) FIXED ASSETS, DEPRECIATION AND EXPENDITURE DURING CONSTRUCTION
PERIOD
i) Fixed Assets are stated at cost of acquisition and installation, net
of cenvet, Vat less accumulated Depreciation. Borrowing costs incurred
during the period of construction/Acquisitions of assets are added to
the cost of Fixed Assets. Major expenses on modification/alterations
increasing efficiency/capacity of the plant are also capitalized.
li) Depreciation on fixed assets is provided on Straight Line Metthod
at the rates and in the manner prescribed in Scthedule XIV of the
Companies Act,1956. (as amended).
iii) Impairment of Assets :
At each balance sheet date, the carrying amount of assets are assessed
whether there is any indication of impairment. If estimated recoverable
amount is found less than its carrying amount, impairment loss is
recognized and assets are written down to their recoverable amount.
d) EMPLOYEE BENEFITS :
(a) Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages, short term compensated absences, etc, and the
expected cost of bonus, ex-gratia are recognized in the period in
whicth the employee renders the related service.
(b) Post-Employment Benefits :
(i) Defined Contribution Plans :
State Governed Provident Fund schene and employees state insurance
schene are defined contribution plans. the contribution paid / payable
under the schene is recognized during the period in wthicth the
employees renders the related services.
(ii) Defined Benefit Plans:
The employee s gratuity fund schene and compensated absences is
companys defined benefit plans. the present value of the obligation
under such defined benefit plan is determined based on actuarial
valuation using the projected Unit Credit Method, whicth recognizes
each period of service as giving rise to additional unit of employee
benefits entitlement and measures each unit separately to build up the
final obligation.
The obligation is measured at the present value of the estimated future
cash flows. the discount rates used for determining the present value
of the obligation under defined benefit plans, is based on the market
yields on Government Securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the profit and
loss account. Gains or losses on the curtailment or settlement of any
defined benefits plans are recognized when the curtailment or
settlement occurs. Past service cost is recognized as expense on a
straigtht-line basis over the average period until the benefits become
vested.
(c) Long term employee benefits :
The obligation for long term employee benefits such as long term
compensated absences, is recognized in the same manner as in case of
defined benefit plans as mentioned in b) ii) above.
e) INVENTORIES :
Stocks of Stores and spares, raw materials are valued at lower of cost
or net realizable value and for this purpose cost is determined on
First-in-First out basis.
Work-in-progress and Finisthed Products are valued at lower of cost or
net realizable value and for this purpose cost is determined on
absorption costing basis. Waste is valued at net realizable value.
Stock in Transit is valued at cost.
f) REVENUE RECOGNITION
i) Revenue is recognized when it is earned and no significant
uncertainty exist as to its realization or collection.
ii) Revenue from sales of goods is recognized on delivery of the
products, when all significant contractual obligations have been
satisfied, the property in the goods is transferred for a price,
significant risks & rewards of ownership are transferred to the
customers and no effective ownersthip is retained.
iii) Gross sales are inclusive of excise duty and net of trade
discounts and VAT. the excise duty recovered is presented as a
reduction from gross turnover.
g) BORROWING COSTS:
Borrowing costs, whether specific or general utilized for acquisition,
construction or production of qualifying assets are capitalized as part
of cost of sucth assets till the activities necessary for its intended
use or sale are complete. All other borrowing costs are charged to
profit and loss statement of the year in whicth incurred.
h) FOREIGN CURRENCY TRANSCATIONS :
(i) Transactions denominated in foreign currencies are normally
recorded at the Echange rate prevailing at the time of the transaction.
(ii) Monetary items denominated in foreign currency at the year end are
translated at the Echange rates prevailing at the balance Sheet date.
(ni) Premium or discount arising at the inception of the forward
Echange contract is amortized as income or expense over the period of
the contract. Any profit or loss arising in renewal or cancellation of
forward Echange contracts are recognized as income or expenses during
the year.
(iv) Any income or expense on account of Echange difference either on
settlement or on translation is recognized in the profit and loss
account.
(v) Losses in respect of all outstanding derivative contracts at the
balance sheet date is provided by marking them to market.
i) TAXES ON INCOME AND EXPENSES ;
i) Current lax is determined as the amount of tax payable in respect of
taxable income for the year.
ii) Deferred tax is recognized on difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.Where there is unabsorbed
depreciation or carry forward losses,deferred tax assets are recognised
only to the extent there is reasonable certainty of realisation in
future.Sucth assets are reviewed at each balance sheet date to reassess
realisation.
j) PROVOISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSTES :
Provisions are recognized when the companyhas present obligation as a
result of past events, for whicth it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made for the amount of the
obligation.
Contingent liabilities are disclosed by way of notes to financial
statements.
Contingent Assets are neither recognized nor disclosed in the financial
statements.
Provisions, contingent Liabilities and contingent assets are reviewed
at each balance sheet date.
k) CONTINGENCIES AND EVENTS OCCURING AFTER the BALANCESheet DATE :
All contingencies and events occurring after the BalanceSheet date
whicth thave a material effect on the financial position of the Company
are considered for preparing the financial statements.