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Accounting Policies of Gujarat Intrux Ltd. Company

Mar 31, 2018

1.1 Summary of significant accounting policies

a) Property, Plant and Equipment

Measurement at recognition:

An item of property, plant and equipment that qualifies as an asset is measured on initial recognition at cost. Following initial recognition, items of property, plant and equipment are carried at its cost less accumulated depreciation and accumulated impairment losses.

The Company identifies and determines cost of each part of an item of property, plant and equipment separately, if the part has a cost which is significant to the total cost of that item of property, plant and equipment and has useful life that is materially different from that of the remaining item.

The cost of an item of property, plant and equipment comprises of its purchase price including import duties and other non refundable purchase taxes or levies, directly attributable cost of bringing the asset to its working condition for its intended use and the initial estimate of decommissioning, restoration and similar liabilities, if any.

Any trade discounts and rebates are deducted in arriving at the purchase price. Cost includes cost of replacing a part of a plant and equipment if the recognition criteria are met. Expenses directly attributable to new manufacturing facility during its construction period are capitalized if the recognition criteria are met. Expenditure related to plans, designs and drawings of buildings or plant and machinery is capitalized under relevant heads of property, plant and equipment if the recognition criteria are met.

Items such as spare parts, stand-by equipment and servicing equipment that meet the definition of property, plant and equipment are capitalized at cost and depreciated over their useful life. Costs in nature of repairs and maintenance are recognized in the Statement of Profit and Loss as and when incurred.

Capital work in progress and Capital advances:

Cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work in progress. Advances given towards acquisition of fixed assets outstanding at each Balance Sheet date are disclosed as Other Non-Current Assets.

Depreciation:

Depreciation on each part of an item of property, plant and equipment is provided using the Straight Line Method based on the useful life of the asset as estimated by the management and is charged to the Statement of Profit and Loss as per the requirement of Schedule II of the Companies Act, 2013. The estimate of the useful life of the assets has been assessed based on technical advice which considers the nature of the asset, the usage of the asset, expected physical wear and tear, the operating conditions of the asset, anticipated technological changes, manufacturers warranties and maintenance support, etc.The estimated useful life of items of property, plant and equipment is mentioned below:

The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of property plant and equipment (as mentioned below) over estimated useful lives which are different from the useful lives prescribed under Schedule II to the Companies Act, 2013 (Schedule III). The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.

Information Technology Hardware are depreciated over the estimated useful lives of 10 years, which is higher than the life prescribed in Schedule II

The useful lives, residual values of each part of an item of property, plant and equipment and the depreciation methods are reviewed at the end of each financial year. If any of these expectations differ from previous estimates, such change is accounted for as a change in an accounting estimate.

Derecognition:

The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the Derecognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss when the item is derecognized.

b) Intangible assets

Measurement at recognition:

“Intangible assets acquired separately are measured on initial recognition at cost. Intangible assets arising on acquisition of business are measured at fair value as at date of acquisition. Internally generated intangibles including research cost are not capitalized and the related expenditure is recognized in the Statement of Profit and Loss in the period in which the expenditure is incurred. Following initial recognition, intangible assets are carried at cost less accumulated amortization and”accumulated impairment loss, if any.”

Amortization:

Intangible Assets with finite lives are amortized on a Straight Line basis over the estimated useful economic life. The amortization expense on intangible assets with finite lives is recognized in the Statement of Profit and Loss. The estimated useful life of intangible assets is mentioned below:

Years

Information Technology Software 10

The Company, based on technical assessment made by technical expert and management estimate, depreciates Information Technology Software (as mentioned below) over estimated useful lives which are different from the useful lives prescribed under Schedule II to the Companies Act, 2013 (Schedule III). The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.

Information Technology Software are depreciated over the estimated useful lives of 10 years, which is higher than the life prescribed in Schedule II

The amortization period and the amortization method for an intangible asset with finite useful life is reviewed at the end of each financial year. If any of these expectations differ from previous estimates, such change is accounted for as a change in an accounting estimate.

Derecognition:

The carrying amount of an intangible asset is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the Derecognition of an intangible asset is measured as the difference between the net disposal proceeds and the carrying amount of the intangible asset and is recognized in the Statement of Profit and Loss when the asset is derecognized.

c) Impairment

Assets that have an indefinite useful life, for example goodwill, are not subject to amortization and are tested for impairment annually and whenever there is an indication that the asset may be impaired. Assets that are subject to depreciation and amortization are reviewed for impairment, whenever events or changes in circumstances indicate that carrying amount may not be recoverable. Such circumstances include, though are not limited to, significant or sustained decline in revenues or earnings and material adverse changes in the economic environment. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit (CGU) exceeds its recoverable amount. The recoverable amount of an asset is the greater of its fair value less cost to sell and value in use. To calculate value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market rates and the risk specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the CGU to which the asset belongs. Fair value less cost to sell is the best estimate of the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the cost of disposal. Impairment losses, If any, are recognized in the Statement of Profit and Loss and included in depreciation and amortization expenses. Impairment losses are reversed in the Statement of Profit and Loss only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had previously been recognized.

d) Revenue

Revenue is recognized when it is probable that economic benefits associated with a transaction flows to the Company in the ordinary course of its activities and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates allowed by the Company.

Revenue includes only the gross inflows of economic benefits, including excise duty, received and receivable by the Company, on its own account. Amounts collected on behalf of third parties such as sales tax and value added tax are excluded from revenue.

Sale of products:

Revenue from sale of products is recognized when the Company transfers all significant risks and rewards of ownership to the buyer, while the Company retains neither continuing managerial involvement nor effective control over the products sold.

Rendering of services:

Revenue from services is recognized when the stage of completion can be measured reliably. Stage of completion is measured by the services performed till Balance Sheet date as a percentage of total services contracted. Interest, royalties and dividends:

Interest income is recognized using effective interest method. DEPB licence income / MEIS licence income / FPS income is recognized on an accrual basis in accordance with the substance of the relevant agreement. Dividend income is recognized when the right to receive payment is established.

e) Inventory

Raw materials, work-in-progress, finished goods, packing materials, stores, spares, components and consumables are carried at the lower of cost and net realizable value. However, materials and other items held for use in production of inventories are not written down below cost if the finished goods in which they will be incorporated are expected to be sold at or above cost. The comparison of cost and net realizable value is made on an item-by item basis.

In determining the cost of raw materials, packing materials, stores, spares, components and consumables, first in first out cost method is used. Cost of inventory comprises all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.

Cost of finished goods and work-in-progress includes the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads, excise duty as applicable and other costs incurred in bringing the inventories to their present location and condition. Fixed production overheads are allocated on the basis of normal capacity of production facilities.

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

f) Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

- Financial Assets

Initial recognition and measurement:

The Company recognizes a financial asset in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial assets are recognized initially at fair value, plus in the case of financial assets not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial asset.

Where the fair value of a financial asset at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from observable markets (i.e. level 2 input).

In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction price is deferred appropriately and recognized as a gain or loss in the Statement of Profit and Loss only to the extent that such gain or loss arises due to a change in factor that market participants take into account when pricing the financial asset.

However, trade receivables that do not contain a significant financing component are measured at transaction price.

Subsequent measurement:

For subsequent measurement, the Company classifies a financial asset in accordance with the below criteria:

i. The Company’s business model for managing the financial asset and

ii. The contractual cash flow characteristics of the financial asset.

Based on the above criteria, the Company classifies its financial assets into the following categories:

i. Financial assets measured at amortized cost

ii. Financial assets measured at fair value through other comprehensive income (FVTOCI)

iii. Financial assets measured at fair value through profit or loss (FVTPL)

i. Financial assets measured at amortized cost:

A financial asset is measured at the amortized cost if both the following conditions are met:

a) The Company’s business model objective for managing the financial asset is to hold financial assets in order to collect contractual cash flows, and

b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

This category applies to cash and bank balances, trade receivables, loans and other financial assets of the Company. Such financial assets are subsequently measured at amortized cost using the effective interest method. Under the effective interest method, the future cash receipts are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial asset over the relevant period of the financial asset to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest income over the relevant period of the financial asset. The same is included under other income in the Statement of Profit and Loss.

The amortized cost of a financial asset is also adjusted for loss allowance, if any.

ii. Financial assets measured at FVTOCI:

A financial asset is measured at FVTOCI if both of the following conditions are met:

a) The Company’s business model objective for managing the financial asset is achieved both by collecting contractual cash flows and selling the financial assets, and

b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

iii. Financial assets measured at FVTPL:

A financial asset is measured at FVTPL unless it is measured at amortized cost or at FVTOCI as explained above. This is a residual category. Such financial assets are subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Statement of Profit and Loss.

Derecognition:

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the Company’s Balance Sheet) when any of the following occurs:

i. The contractual rights to cash flows from the financial asset expires;

ii. The Company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;

iii. The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a ‘pass-through’ arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);

iv. The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.

In cases where Company has neither transferred nor retained substantially all of the risks and rewards of the financial asset, but retains control of the financial asset, the Company continues to recognize such financial asset to the extent of its continuing involvement in the financial asset. In that case, the Company also recognizes an associated liability. The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

On Derecognition of a financial asset, (except as mentioned in ii above for financial assets measured at FVTOCI), the difference between the carrying amount and the consideration received is recognized in the Statement of Profit and Loss.

Impairment of financial assets:

The Company applies expected credit losses (ECL) model for measurement and recognition of loss allowance on the following:

i. Trade receivables

ii. Financial assets measured at amortized cost (other than trade receivables)

iii. Financial assets measured at fair value through other comprehensive income (FVTOCI)

In case of trade receivables and lease receivables, the Company follows a simplified approach wherein an amount equal to lifetime ECL is measured and recognized as loss allowance.

In case of other assets (listed as ii and iii above), the Company determines if there has been a significant increase in credit risk of the financial asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month ECL is measured and recognized as loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime ECL is measured and recognized as loss allowance. ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the Statement of Profit and Loss under the head ‘Other expenses’.

- Financial Liabilities

Initial recognition and measurement:

The Company recognizes a financial liability in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial liabilities are recognized initially at fair value minus, in the case of financial liabilities not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial liability.

Where the fair value of a financial liability at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from observable markets (i.e. level 2 input).

In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction price is deferred appropriately and recognized as a gain or loss in the Statement of Profit and Loss only to the extent that such gain or loss arises due to a change in factor that market participants take into account when pricing the financial liability.

Subsequent measurement

All financial liabilities of the Company are subsequently measured at amortized cost using the effective interest method

Derecognition:

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the Derecognition of the original liability and the recognition of a new liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid is recognized in the Statement of Profit and Loss.

g) Fair value

The Company measures financial instruments at fair value in accordance with the accounting policies mentioned above. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- In the pricipal market for the assest or liability, or

- In the absence of principal market, in the most advantageous market for the assets or liability

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy that categorizes into three levels, described as follows, the inputs to valuation techniques used to measure value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).

Level 1 — quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 — inputs other than quoted prices included within Level 1 that are observable for the asset or liability,

either directly or indirectly

Level 3 — inputs that are unobservable for the asset or liability

For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period and discloses the same.

h) Foreign Currency Translation Initial Recognition:

On initial recognition, transactions in foreign currencies entered into by the Company are recorded in the functional currency (i.e. Indian Rupees), by applying to the foreign currency amount, the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss. Measurement of foreign currency items at reporting date:

Foreign currency monetary items of the Company are translated at the closing exchange rates. Non-monetary items that are measured at historical cost in a foreign currency, are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency, are translated using the exchange rates at the date when the fair value is measured.

Exchange differences arising out of these translations are recognized in the Statement of Profit and Loss.

i) Income Taxes

Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current tax:

Current tax is the amount of income taxes payable in respect of taxable profit for a period. Taxable profit differs from ‘profit before tax’ as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible under the Income Tax Act, 1961.

Current tax is measured using tax rates that have been enacted by the end of reporting period for the amounts expected to be recovered from or paid to the taxation authorities.

Deferred tax:

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit under Income Tax Act, 1961

Deferred tax liabilities are generally recognized for all taxable temporary differences. However, in case of temporary differences that arise from initial recognition of assets or liabilities in a transaction (other than business combination) that affect neither the taxable profit nor the accounting profit, deferred tax liabilities are not recognized. Also, for temporary differences if any that may arise from initial recognition of goodwill, deferred tax liabilities are not recognized.

Deferred tax assets are generally recognized for all deductible temporary differences to the extent it is probable that taxable profits will be available against which those deductible temporary difference can be utilized. In case of temporary differences that arise from initial recognition of assets or liabilities in a transaction (other than business combination) that affect neither the taxable profit nor the accounting profit, deferred tax assets are not recognized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefits of part or all of such deferred tax assets to be utilized.

Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Presentation of current and deferred tax:

Current and deferred tax are recognized as income or an expense in the Statement of Profit and Loss, except when they relate to items that are recognized in Other Comprehensive Income, in which case, the current and deferred tax income/ expense are recognized in Other Comprehensive Income.

The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. In case of deferred tax assets and deferred tax liabilities, the same are offset if the Company has a legally enforceable right to set off corresponding current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the Company. j) Provisions and Contingencies

The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated.

If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made.

k) Cash and Cash Equivalents

Cash and Cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances, demand deposits with banks where the original maturity is three months or less and other short term highly liquid investments. 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 and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid. Post-Employment Benefits:

Defined Benefit plans:

i) Provident Fund scheme:

Contribution as required by the statute made to the Government provident fund is debited to Profit and loss statement.

ii) Gratuity scheme:

The cost of providing defined benefits is determined using the Projected Unit Credit method with actuarial valuations being carried out at each reporting date. The defined benefit obligations recognized in the Balance Sheet represent the present value of the defined benefit obligations as reduced by the fair value of plan assets, if applicable. Any defined benefit asset (negative defined benefit obligations resulting from this calculation) is recognized representing the present value of available refunds and reductions in future contributions to the plan.

All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability / (asset) are recognized in the Statement of Profit and Loss. Remeasurements of the net defined benefit liability / (asset) comprising actuarial gains and losses and the return on the plan assets (excluding amounts included in net interest on the net defined benefit liability/asset), are recognized in Other Comprehensive Income. Such remeasurements are not reclassified to the Statement of Profit and Loss in the subsequent periods.

The Company presents the above liability/(asset) as current and non-current in the Balance Sheet as per actuarial valuation by the independent actuary.

m) Borrowing Cost

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, if any, 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, if any. All other borrowing costs are expensed in the period in which they occur. n) Segment Reporting

The Chairman and Managing Director of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by IND AS 108, “ Operating Segments”. The Company operates in one segment only i.e. “ Manufacturing of Steel, Non - Alloys Steel and Alloys Steel Casting”. The CODM evaluates performance of the Company based on revenue and operating income from “Manufacturing of Steel, Non - Alloys Steel and Alloys Steel Casting”. Accordingly, segment information has not been seperately disclosed. o) Events after Reporting date

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed. p) Earnings per share

Basic EPS is calculated in accordance with Ind AS - 33 ‘ Earning per Share” by dividing the profit / loss for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year.

Diluted EPS is calculated in accordance with Ind AS - 33 ‘ Earning per Share” by dividing the profit / loss attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.


Mar 31, 2015

I. Basis of accounting and preparation of financial statements

The financial statements of the company have been prepared on accrual basis under the historical cost convention in accordance with the Generally Accepted Accounting Principles in India to comply with the Accounting Standards and the relevant provisionsofthecompaniesAct,2013.

ii. Employee benefits

a. Provident fund Defined contribution plan

Contribution as required by the statute made to the Government provident fund is debited to Profit and loss statement.

b. Gratuity Defined benefit plan

The company reports gratuity defined benefit plan in accordance with revised AS -15. The company accounts for the liability for future gratuity benefits based on actuarial valuation. The net present value of the company's obligation towards the same is actuarially determined and based on the projected unit credit method as at balance sheet date. Actuarial gains and losses are immediately recognized in the profit and loss statement.

iii. Revenue/income recognition

a. Income and expenditure are generally accounted on accrual, as the year earned or incurred.

b. DEPB license sales income is accounted on accrual basis.

c. Revenue in respect of other income is recognized when no significant uncertainty as to its determination of realization exists.

iv. Accounting for current and deferred tax

a) Current tax is accounted on the basis of estimated taxable income for the current accounting year and in accordance with the provisions of the Income Tax Act, 1961.

b) Deferred tax resulting from "timing difference" between accounting and taxable profit for the period is accounted by using the tax rates and laws that have been enacted or substantively enacted as at the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future. Net deferred tax liabilities are arrived at after setting off deferred tax assets.

v. Excise duty and Cenvat

The company is following the exclusive method in respect of the excise duty on purchase. The payments for excise duty on finished goods are accounted for as and when such goods are cleared from the factory premises. Excise duties recovered are included in the sale of products. Excise duty paid on dispatch is shown separately in the profit and loss statement.

vi. Translation of foreign currency items

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Balances in the form of current assets and current liabilities in foreign currency, outstanding at the close of the year, are converted in Indian currency at the appropriate rates of exchange prevailing on the date of the balance sheet. Resulting foreign currency realization/revaluation and balance profit/loss is accounted during the year.

vii. Impairment of assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit and loss statement in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of recoverable amount.

viii. Earning per share

The company reports basic Earning Per Share (EPS) in accordance with AccountingStandard-20 on Earning Per Share. Basic EPS is computed by dividing the net profit or loss for the year by weighted average number of equity shares outstanding during the year.

ix. Investment

As per Accounting Standard-13 " Accounting for Investment", long term investment are valued at cost or market value whichever is lower unless there are permanent diminution in the value of investment while short term investment are valued at cost or carrying amount which ever is lower.

d) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows:

As the company has no funded plan and hence opening and closing fair value in plan assets and changes there of is NIL

e) The major categories of plan assets as a percentage of total plan assets are as follows: The company has no funded plan.

f) Principal actuarial assumptions at the Balance sheet date (expressed in weighted averages) :

Discount rate : 8.07%

Expected return on plan assets : -

Proportion of employees opting for early Retirement : -

Annual increase in salary costs : 6.00%

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.


Mar 31, 2014

I. Basis of accounting and preparation of financial statements

The financial statements of the Company has been prepared on accrual basis under the historical cost convention in accordance with the Generally Accepted Accounting Principles in India to comply with the Accounting Standards notified under Section 211 (3C) of the Companies Act, 1956 and the relavent provi- sions thereof.

II. Employee Benefits

a. Provident Fund-Defined Contribution Plan

Contribution as required by the statute made to the Government Provident Fund is debited to Profit & Loss Statement.

b. Gratuity-Defined Benefit Plan

The Company reports gratuity defined benefit plan in accordance with revised AS-15. The Company ac- counts for the liability for future gratuity benefits based on actuarial Valuation. The Net Present value of the company''s obligation towards the same is actuarially determined and based on the projected unit credit method as at balance sheet date. Actuarial gains and losses are immediately recognized in the profit and loss statement.

III. Revenue/lncome Recognition

(i) . Income and Expenditure are generally accounted on accrual, as they are earned or Incurred.

(ii) . DEPB License Sales Income is accounted on the accrual basis.

(iii) . Revenue in respect of other income is recognized when no significant uncertainty as to its determination of

realization exists.

IV Accounting for Current & Deferred Tax

(a) Current tax is accounted on the basis of estimated taxable income for the current accounting year and in accordance with the provisions of the Income Tax Act, 1961

(b) Deferred tax resulting from "Timing Difference" between accounting and taxable profit for the period is accounted by using the tax rates and laws that have been enacted or substantively enacted as at the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future. Net deferred tax liabilities are arrived at after setting of deferred tax assets.

V. Excise Duty & Cenvat

The Company is following the exclusive method in respect of excise duty on purchase. The Payments for excise duty on finished goods are accounted for as and when such goods are cleared from factory premises. Excise Duties recovered are included in the sales of products. Excise Duty paid on dispatch is shown sepa- rately in the profit & loss statement.

VI. Translation of Foreign Currency Items

Transaction denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Balances in the form of current assets and current liabilities in foreign currency, outstanding at the close of the year, are converted in Indian currency at the appropriate rates of exchange prevailing on the date of the balance sheet. Resulting foreign currency realization/revaluation and balance Profit/loss is accounted during the year.

VII. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Statement in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of recoverable amount.

VIII. Earning Per share

The Company reports basic Earning Per Share (EPS) in accordance with Accounting Stan- dard 20 on Earning Per Share. Basic EPS is computed by dividing the net profit or loss for the year by weighted average number of equity shares outstanding during the year.

IX. Investment

As per Accounting Standard 13 "Accounting for Investment" long term investment are valued at cost or market value whichever is lower unless there are permanent diminution in the value of investment, while short term investment are valued at cost or carrying amount whichever is lower.


Mar 31, 2013

I. Basis of accounting and preparation of financial statements

The financial statements of the Company has been prepared on accrual basis under the historical cost convention in accordance with the Generaly Accepted Accounting Principles in India to comply with the Accounting Standards notified under Section 211 (3C) of the Compnies Act, 1956 and the relevent provisions thereof.

II. Employee Benefits

a. Provident Fund-Defined Contribution Plan

Contribution as required by the Statute Made to the Government Provident Fund is debited to Profit & Loss Statement.

b. Gratuity-Defined Benefit Plan

The Company reports gratuity defined benefit plan in accordance with revised AS-15. The Company accounts for the liability for future gratuity benefits based on actuarial Valuation. The Net Present value of the company''s obligation towards the same is actuarially determined and based on the projected unit credit method as at balance sheet date. Actuarial gains and losses are immediately recognized in the profit and loss statement.

III. Revenue/Income Recognition

(i). Income and Expenditure are generally accounted on accrual, as they are earned or Incurred. (ii). DEPB License Sales Income is accounted on the accrual basis.

(iii). Revenue in respect of other income is recognized when no significant uncertainty as to its determination of realization exists.

IV Accounting for Current & Deferred Tax

(a) Current tax is accounted on the basis of estimated taxable income for the current accounting year and in accordance with the provisions of the Income Tax Act, 1961

(b) Deffered tax resulting from "Timing Difference" between accounting and taxable profit for the period is accounted by using the tax rates and laws that have been enacted or substantively enacted as at the balance sheet date. Deffered tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future. Net deffered tax liabilities are arrived at after setting of deffered tax assets.

V. Excise Duty & Cenvat

The Company is following the exclusive method in respect of excise duty on purchase. The Payments for excise duty on finished goods are accounted for as and when such goods are cleared from factory premises. Excise Duties recovered are included in the sales of products. Excise Duty paid on dispatch is shown separately in the profit & loss statement.

VI. Translation of Foreign Currency Items

Transaction denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Balances in the form of current assets and current liabilities in foreign currency, outstanding at the close of the year, are converted in Indian currency at the appropriate rates of exchange prevailing on the date of the balance sheet. Resulting foreign currency realization/revaluatation and bal- ance Profit/loss is accounted during the year.

VII. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Statement in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of recoverable amount.

VIII. Earning Per share

The Company reports basic Earning Per Share (EPS) in accordance with Accounting Standard 20 on Earning Per Share. Basic EPS is computed by dividing the net profit or loss for the year by weighted average number of equity shares outstanding during the year.

IX. Investment

As per Accounting Standard 13 "Accounting for Investment" long term investment are valued at cost or market value whichever is lower unless there are permanent diminution in the value of investment, while short term investment are valued at cost or carrying amount whichever is lower.


Mar 31, 2012

1. Basis of accounting/accounting conventions

The Company uses the Accrual method of Accounting. The financial statements are prepared in conformity with generally accepted accounting principles, which require the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the end of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Financial Statements have been prepared under the historical cost convention.

2. Fixed Assets

Fixed Assets are stated at cost or less accumulated depreciation and impairment loss, if any. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. Expenditure for additions, improvements and renewals are capitalized and expenditure for maintenance and repairs are charged to the Profit & Loss Account, when assets are sold or discarded their cost and accumulated depreciation are removed from the accounts and any gain or loss resulting from their disposal is included in the profit & loss account.

3. Inventories

Raw Materials, Stores, Spares, Tools & Packing Materials are Valued at Cost or net realizable Value which ever is less. Goods in progress & Finished Goods are valued at cost or Net Realizable Value which ever is less.

4. Depreciation/Amortization

Depreciation on fixed assets is provided on straight- line method at the rates prescribed in Schedule XIV to the Companies Act, 1956.Depreciation on fixed assets added/ disposed Off during the year, is provided on pro rata basis with reference to the day of addition/ disposal.

5. Prior Period Items & Extra Ordinary Items

The company follows the practice of making adjustments through 'prior year adjustments' in respect of all material transactions pertaining to the period prior to the current accounting year.

6. Employee Benefits

a. Provident Fund-Defined Contribution Plan

Contribution as required by the Statute Made to the Government Provident Fund is debited to Profit & Loss Account.

b. Gratuity-Defined Benefit Plan

The Company reports gratuity defined benefit plan in accordance with revised AS-15. The Company accounts for the liability for future gratuity benefits based on actuarial Valuation. The Net Present value of the company's obligation towards the same is actuarially determined and based on the projected unit credit method as at Blance Sheet date. Actuarial gains and losses are immediately recognized in the Profit and Loss Account.

7. Revenue/Income Reorganization

(i). Incomes and Expenditure are generally accounted on accrual, as they earned or Incurred.

(ii). DEPB License Sales Income is accounted on the Accrual basis.

(iii). Revenue in respect of other income is recognized when no significant uncertainty as to its determination of Realization exists.

8. Sales / Service Income

Sales are accounted on dispatch of goods. Export sales are accounted on the basis of date of Bill of lading. Sales value is inclusive of Cenvat Duty.

9. Provisions for Current & Deferred Tax

Provision for current tax is made after taking in to the consideration benefits admissible under the Income Tax Act, 1961. Deferred tax resulting from "Timing Difference" between the Books and Taxable Profit is ac- counted for using the Tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred Tax Liability is recognized and carried forward only to the extent that there is a reasonable/virtual certainty that the liability assets will materialize in the future.

10. Excise Duty & Cenvat

The Company is following the Exclusive method in respect of excise duty on purchase. The Payments for excise duty on finished goods are accounted for as and when such goods are cleared from factory premises. Excise Duties recovered are included in the sales of Products. Excise Duty paid on dispatches are shown separately in the profit & Loss Account.

11. Translation of Foreign Currency Items

Transaction denomited in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Balances in the form of current assets and current liabilities in foreign currency, outstanding at the close of the year, are converted in Indian currency at the appropriate rates of exchange prevailing on the date of the balance sheet. Resultant foreign currency realisation/revaluatation and balance Profit/loss is accounted during the year.

12. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of recoverable amount.

13. Earning Per share

The Company reports basic Earning Per Share (EPS) in accordance with Accounting Standered 20 on Earning Per Share. Basic EPS is computed by dividing the net profit or loss for the year by weighted average number of equity shares outstanding during the year.

14. Investment

As per Accounting Standard 10 "Accounting for Investment" long term investment are valued at cost or market price whichever is lower unless there are permanent diminution in the value of investment. While short term investment are valued at cost or carrying amount whichever is lower.


Mar 31, 2010

1. Basis of accounting/accounting conventions

The Company uses the Accrual method of Accounting. The financial statements are prepared in conformity with generally accepted accounting principles, which require the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the end of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Financial Statements have been prepared under the historical cost convention.

2. Fixed Assets

Fixed Assets are stated at cost or less accumulated depreciation and impairment loss, if any. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. Expenditure for additions, improvements and renewals are capitalized and expenditure for maintenance and repairs are charged to the Profit & Loss Account, when assets are sold or discarded their cost and accumulated depreciation are removed from the accounts and any gain or loss resulting from their disposal is included in the profit & loss account.

3. Inventories

Raw Materials, Stores, Spares, Tools & Packing Materials are Valued at Cost or net realizable Value which ever is less. Goods in progress & Finished Goods are valued at cost or Net Realizable Value which ever is less.

4. Depreciation/Amortization

Depreciation on fixed assets is provided on straight- line method at rates prescribed in Schedule XIV to the Companies Act, 1956.Depreciation on fixed assets added/ disposed Off during the year, is provided on pro rata basis with reference to the day of addition/ disposal,

5. Prior Period Items & Extra Ordinary Items

The company follows the practice of making adjustments through prior year adjustments in respect of all material transactions pertaining to the period prior to the current accounting year.

6. Employee Benefits

a. Provident Fund - Defined Contribution Plan

Contribution as required by the Statute Made to the Government Provident Fund is debited to Profit & Loss Account.

b. Gratuity - Defined Benefit Plan

The Company accounts for the liability for future gratuity benefits based on actuarial Valuation. The Net Present value of the Companys obligation towards the same is actuarially determined and based on the projected unit credit method as at Balance Sheet date. Actuarial gains and losses are immediately recognized in the Profit and Loss Account.

7. Revenue/Income Reorganization

(i). Incomes and Expenditure are generally accounted on accrual, as they are earned or Incurred. (ii). DEPB License Sales Income is accounted on the Accrual basis.

(iii). Revenue in respect of other income is recognized when no significant uncertainty as to its determination of Realization exists.

8. Sales / Service Income

Sales are accounted on dispatch of goods. Export sales are accounted on the basis of date of Bill of Lading. Sales value is inclusive of Cenvat Duty.

9. Provisions for Current & Deferred Tax

Provision for current tax is made after taking in to the consideration benefits admissible under the Income Tax Act, 1961. Deferred tax resulting from "Timing Difference" between the Books and Taxable Profit is accounted for using the Tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred Tax Liability is recognized and carried forward only to the extent that there is a reasonable/virtual certainty that the liability assets will be materialize in the future.

10. Excise Duty & Cenvat

The Company is following the Exclusive method in respect of excise duty on Purchase. The Payments for excise duty on finished goods are accounted for as and when such goods are cleared from factory premises. Excise Duties recovered are included in the sales of Products. Excise Duty paid on dispatches are shown separately in the profit & Loss Account.

11. Translation of Foreign Currency Items

Transaction denomited in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Balances in the form of current assets and current liabilities in foreign currency, outstanding at the close of the year, are converted in Indian currency at the appropriate rates of exchange prevailing on the date of the balance sheet. Resultant Profit /loss is accounted during the year.

12. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of recoverable amount.

13. Earning Per Share

The Company reports basic Earning Per Share (EPS) in accordance with Accounting Slandered 20 on Earning Per Share. Basic EPS is computed by dividing the net profit or loss for the year by weighted average number of equity shares outstanding during the year.

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