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Accounting Policies of Hanung Toys & Textiles Ltd. Company

Mar 31, 2015

1.1 Basis for Preparation of Financial Statements

The financial statements have been prepared on the historical cost convention and based on the Generally Accepted Accounting Principles (GAAP) and the Accounting Standards as referred under section 133 of the Companies Act, 2013 read with rules 7 of the Companies (Accounts) Rules, 2014, which have been adopted by the Company and disclosures are made in accordance with the requirements of Schedule III of the Companies Act, 2013 and according to Indian Accounting Standards. In case of any deviations from applicable Accounting Standards, the same have been specified/disclosed wherever applicable.

1.2 Use of estimates

The preparation of financial statements requires management to make estimates and assumption that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and results of operations during the reported period. Although, these estimates are based upon management's best knowledge of current events and actions, whereas actual results could differ from these estimates.

1.3 Fixed Assets

Fixed assets are stated at costs, which comprises of purchase consideration and other directly attributable cost of bringing the assets to its working condition for the intended use.

Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule-II. Accordingly the unamortized carrying value is being depreciated/ amortized over the revised/ remaining useful lives.

1.4 Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that any asset including goodwill, may be impaired. If any such indication exists, the carrying value of such assets is reduced to its estimated recoverable amount and the amount of such impairment loss is charged to the Statement of Profit & Loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect.

1.5 Investments

Investments are valued at costs unless there is a permanent fall in their value as at the date of Balance Sheet.

1.6 Inventories

Inventories are valued at lower of cost or the net realizable value.

Finished goods and stock-in-process include conversion and other costs incurred in bringing the inventories to their present location and condition.

1.7 Revenue Recognition

Sales are inclusive of excise duty / customs duty and net of trade discounts. Export sales include goods invoiced against confirmed orders and cleared from excise and customs authorities. Revenue from job work is accounted as and when on work being accepted by the customer.

Dividend income on investments is accounted for when the right to receive the payment is established. Export incentives receivable on exports made during the year, are recognized as income.

1.8 Employee Benefits

Provisions for gratuity and leave encashment, which are in the nature of defined benefit plans, are provided as per the Payment of Gratuity Act, as at the balance sheet date and include 413 employees who have left the organization in the last financial year, there gratuity amounting to Rs.122.45 lacs is yet to be paid. Contributions to provident fund, which are defined contribution scheme, are charged to the Statement of Profit and Loss when incurred. The Company has further obligations beyond its monthly contributions to this fund amounting to Rs. 369.58 Lacs.

1.9 Borrowing Costs

Borrowing costs directly attributable to acquisition, construction and production of assets are capitalized as part of the cost of such asset up to the date of completion. Other borrowing costs are recognized as expenses in the period in which they are incurred and charged to the Statement of Profit & Loss.

1.10 Research and Development

Revenue expenditure on Research & Development is included under the natural heads of expenditure. Capital expenditure on Research & Development is treated in the same manner as expenditure on other fixed assets.

1.11 Lease

Leases where the Lessor retains substantially all the risks and rewards of ownership of the leased assets, are classified as operating leases. Operating lease payments are recognized as expenses in the Statement of Profit and Loss as per the terms of the lease.

1.12 Taxes on Income

Provision for current income tax is made on the basis of the estimated taxable income for the current accounting year computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized on timing difference between the income accounted in financial statements and taxable income for the year, and quantified using tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

1.13 Government Grants

Where grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset. Project capital subsidy credited to capital reserve. Other government grants or subsidies including export incentives are credited to the Statement of Profit and Loss or deducted from related expenses.

1.14 Provision, Contingent Liabilities

Liabilities though contingent, are provided for if there are reasonable prospects of such liabilities maturing. The other Contingent Liabilities, which are not acknowledged as debt, are disclosed by way of a note to the financial statements, but claims of frivolous nature are ignored. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

1.15 Translation of Foreign Currency Items

Transactions in foreign currency are recorded at the rate of exchange in force on the date of the transactions. Current Assets and Current Liabilities denominated in foreign currency are translated at the exchange rate prevalent at the date of the Balance Sheet. The Gain / loss is recognized in the Statement of Profit & Loss, except in cases where they relate to the acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.


Mar 31, 2014

1.1 Basis for Preparation of Financial Statements

The financial statements have been prepared on the historical cost convention basis. The Generally Accepted Accounting Principles (GAAP) and the Accounting Standards referred under section 211(3C) of the Companies Act, 1956 have been adopted by the Company and disclosures made in accordance with the requirements of Schedule VI of the Companies Act, 1956 and the Indian Accounting Standards and the deviations from Accounting Standards have been specified wherever applicable.

1.2 Use of estimates

The preparation of financial statements requires management to make estimates and assumption that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and results of operations during the reported period. Although these estimate based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

1.3 Fixed Assets

Fixed assets are stated at costs, which comprises of purchase consideration and other directly attributable cost of bringing the assets to its working condition for the intended use. Deprecation on fixed assets is provided on straight-line method at the rates and in the manner as prescribed in Schedule XIV to the Companies Act, 1956.

1.4 Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that any asset including goodwill, may be impaired. If any such indication exists, the carrying value of such assets is reduced to its estimated recoverable amount and the amount of such impairment loss is charged to Profit & Loss Account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect.

1.5 Investments

Investments are valued at costs unless there is a permanent fall in their value as at the date of Balance Sheet.

1.6 Inventories

Inventories are valued at lower of cost or estimated cost or net realizable value however Rs. 16280.57 lacs being losses on foreign exchange transaction have been adjusted in the current year. Finished goods and stock-in-process include conversion and other costs incurred in bringing the inventories to the present location and condition. In the current year, Inventories also includes slow moving stock of Rs. 27269.26 lacs, which in the opinion of the management is fully realizable over a period of 2-3 years only.

1.7 Revenue Recognition

Sales are inclusive of excise duty / customs duty and net of trade discounts. Export sales include goods invoiced against confirmed orders and cleared from excise and customs authorities.

Revenue from job work is accounted as and when incurred.

Dividend income on investments is accounted for when the right to receive the payment is established.

Export incentives receivable on exports made during the year, are recognized as income.

1.8 Employee Benefits

Provisions for gratuity and leave encashment, which are in the nature of defined benefit plans, are provided as per the Payment of Gratuity Act, as at the balance sheet date. and include 173 employees who have left the organization in the last financial year, there gratuity amounting to Rs.37.88 lacs is yet to be paid. Contributions to provident fund, which are defined contribution scheme, are charged to the profit and loss account as incurred. The company has further obligations beyond its monthly contributions to this fund amounting to Rs. 316.26 Lacs.

1.9 Borrowing Costs

Borrowing costs directly attributable to acquisition, construction and production of assets are capitalized as a part of the cost of such asset up to the date of completion. Other borrowing costs are recognized as expenses in the period in which they are incurred and charged to the Profit & Loss Account.

1.10 Research and Development

Revenue expenditure on Research & Development is included under the natural heads of expenditure. Capital expenditure on Research & Development is treated in the same manner as expenditure on other fixed assets.

1.11 Lease

Leases where the lessor retains substantially all the risks and rewards of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as expenses in the profit and loss account as per the terms of the lease.

1.12 Taxes on Income

Provision for current income tax is made on the basis of the estimated taxable income for the current accounting year computed in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognized on timing difference between the income accounted in financial statements and taxable income for the year, and quantified using tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

1.13 Government Grants

Where grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset. Project capital subsidy credited to capital reserve. Other government grants or subsidies including export incentives are credited to profit and loss account or deducted from related expenses.

1.14 Provision, Contingent Liabilities

Liabilities though contingent, are provided for if there are reasonable prospects of such liabilities maturing. The other Contingent Liabilities, which are not acknowledged as debt, are disclosed by way of note, but claims of frivolous nature are ignored. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

1.15 Translation of Foreign Currency Items

Transactions in foreign currency are recorded at the rate of exchange in force on the date of the transactions. Current Assets and Current Liabilities denominated in foreign currency are translated at the exchange rate prevalent at the date of the Balance Sheet however the balances of trade debtors and creditors which have not been translated in the current year. The Accounting Standard 11- The Effect of Changes in Foreign Exchange Rates has been accordingly not been complied with. The Gain / loss is recognized in the Profit & Loss Account, except in cases where they relate to the acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.


Mar 31, 2013

1.1 Basis for Preparation of Financial Statements

The financial statements have been prepared on the historical cost convention basis. The Generally Accepted Accounting Principles (GAAP) and the Accounting Standards referred under section 211 (3C) of the Companies Act, 1956 have been adopted by the Company and disclosures made in accordance with the requirements of Schedule VI of the Companies Act, 1956 and the Indian Accounting Standards.

1.2 Use of estimates

The preparation of financial statements requires management to make estimates and assumption that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and results of operations during the reported period. Although these estimate based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

1.3 Fixed Assets

Fixed assets are stated at costs, which comprises of purchase consideration and other directly attributable cost of bringing the assets to its working condition for the intended use. Deprecation on fixed assets is provided on straight-line method at the rates and in the manner as prescribed in Schedule XIV to the Companies Act, 1956.

1.4 Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that any asset including goodwill, may be impaired. If any such indication exists, the carrying value of such assets is reduced to its estimated recoverable amount and the amount of such impairment loss is charged to Profit & Loss Account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect.

1.5 Investments

Investments are valued at costs unless there is a permanent fall in their value as at the date of Balance Sheet.

1.6 Inventories

Inventories are valued at lower of cost or estimated cost or net realizable value. Finished goods and stock-in-process include conversion and other costs incurred in bringing the inventories to the present location and condition.

1.7 Revenue Recognition

Sales are inclusive of excise duty / customs duty and net of trade discounts. Export sales include goods invoiced against confirmed orders and cleared from excise and customs authorities. Revenue from job work is accounted as and when incurred. Dividend income on investments is accounted for when the right to receive the payment is established. Export incentives receivable on exports made during the year, are recognized as income.

1.8 Employee Benefits

Provision for gratuity and leave encashment, which are in the nature of defined benefit plans, are provided based on actuarial valuations based on projected unit credit method, as at the balance sheet date. Contributions to provident fund, which are defined contribution scheme, are charged to the profit and loss account as incurred. The company has no further obligations beyond its monthly contributions to this fund.

1.9 Borrowing Costs

Borrowing costs directly attributable to acquisition, construction and production of assets are capitalized as a part of the cost of such asset up to the date of completion. Other borrowing costs are recognized as expenses in the period in which they are incurred and charged to the Profit & Loss Account.

1.10 Research and Development

Revenue expenditure on Research & Development is included under the natural heads of expenditure. Capital expenditure on Research & Development is treated in the same manner as expenditure on other fixed assets.

1.11 Lease

Leases where the lessor retains substantially all the risks and rewards of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as expenses in the profit and loss account as per the terms of the lease.

1.12 Taxes on Income

Provision for current income tax is made on the basis of the estimated taxable income for the current accounting year computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized on timing difference between the income accounted in financial statements and taxable income for the year, and quantified using tax rates and laws enacted or substantively enacted as on the Balance Sheet date are accounted for on the basis of Accounting Standard (AS-22).

1.13 Government Grants

Where grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset. Project capital subsidy credited to capital reserve. Other government grants or subsidies including export incentives are credited to profit and loss account or deducted from related expenses.

1.14 Provision and Contingent Liabilities

Liabilities though contingent, are provided for if there are reasonable prospects of such liabilities maturing. The other Contingent Liabilities, which are not acknowledged as debt, are disclosed by way of note, but claims of frivolous nature are ignored. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

1.15 Translation of Foreign Currency Items

Transactions in foreign currency are recorded at the rate of exchange in force on the date of the transactions. Current Assets and Current Liabilities denominated in foreign currency are translated at the exchange rate prevalent at the date of the Balance Sheet. The resultant gain / loss is recognized in the Profit & Loss Account, except in cases where they relate to the acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets. The Forward Contract including derivatives contract entered into to hedge foreign currency risk on unexpected firm commitments and highly probable forecast transactions recognized in the financial statements accordingly as per Accounting Standards issued by the Institute of chartered Accountants of India, exchange difference arising on such contracts are recognized in the period.in which they arise. Gain and losses arising on account of such transaction are recognized as income/ expenses in the Profit and Loss Account.


Mar 31, 2012

1.1 Basis for Preparation of Financial Statements

The financial statements have been prepared on the historical cost convention basis. The Generally Accepted Accounting Principles (GAAP) and the Accounting Standards referred under section 211(3C) of the Companies Act, 1956 have been adopted by the Company and disclosures made in accordance with the requirements of Schedule VI of the Companies Act, 1956 and the Indian Accounting Standards.

1.2 Use of estimates

The preparation of financial statements requires management to make estimates and assumption that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and results of operations during the reported period. Although these estimate based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

1.3 Fixed Assets

Fixed assets are stated at costs, which comprises of purchase consideration and other directly attributable cost of bringing the assets to its working condition for the intended use. Deprecation on fixed assets is provided on straight-line method at the rates and in the manner as prescribed in Schedule XIV to the Companies Act, 1956.

1.4 Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that any asset including goodwill, may be impaired. If any such indication exists, the carrying value of such assets is reduced to its estimated recoverable amount and the amount of such impairment loss is charged to Profit & Loss Account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect.

1.5 Investments

Investments are valued at costs unless there is a permanent fall in their value as at the date of Balance Sheet.

1.6 Inventories

Inventories are valued at lower of cost or estimated cost or net realizable value. Finished goods and stock-in-process include conversion and other costs incurred in bringing the inventories to the present location and condition.

1.7 Revenue Recognition

Sales are inclusive of excise duty / customs duty and net of trade discounts. Export sales include goods invoiced against confirmed orders and cleared from excise and customs authorities.

Revenue from job work is accounted as and when incurred. Dividend income on investments is accounted for when the right to receive the payment is established. Export incentives receivable on exports made during the year, are recognized as income.

1.8 Employee Benefits

Provision for gratuity and leave encashment, which are in the nature of defined benefit plans, are provided based on actuarial valuations based on projected unit credit method, as at the balance sheet date. Contributions to provident fund, which are defined contribution scheme, are charged to the profit and loss account as incurred. The company has no further obligations beyond its monthly contributions to this fund.

1.9 Borrowing Costs

Borrowing costs directly attributable to acquisition, construction and production of assets are capitalized as a part of the cost of such asset up to the date of completion. Other borrowing costs are recognized as expenses in the period in which they are incurred and charged to the Profit & Loss Account.

1.10 Research and Development

Revenue expenditure on Research & Development is included under the natural heads of expenditure. Capital expenditure on Research & Development is treated in the same manner as expenditure on other fixed assets.

1.11 Lease

Leases where the lessor retains substantially all the risks and rewards of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as expenses in the profit and loss account as per the terms of the lease.

1.12 Taxes on Income

Provision for current income tax is made on the basis of the estimated taxable income for the current accounting year computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized on timing difference between the income accounted in financial statements and taxable income for the year, and quantified using tax rates and laws enacted or substantively enacted as on the Balance Sheet date are accounted for on the basis of Accounting Standard (AS-22).

1.13 Government Grants

Where grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset. Project capital subsidy credited to capital reserve. Other government grants or subsidies including export incentives are credited to profit and loss account or deducted from related expenses.

1.14 Provision, Contingent Liabilities

Liabilities though contingent, are provided for if there are reasonable prospects of such liabilities maturing. The other Contingent Liabilities, which are not acknowledged as debt, are disclosed by way of note, but claims of frivolous nature are ignored. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

1.15 Translation of Foreign Currency Items

Transactions in foreign currency are recorded at the rate of exchange in force on the date of the transactions. Current Assets and Current Liabilities denominated in foreign currency are translated at the exchange rate prevalent at the date of the Balance Sheet. The resultant gain / loss is recognized in the Profit & Loss Account, except in cases where they relate to the acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets. The Forward Contact including derivatives contract entered into to hedge foreign currency risk on unexpected firm commitments and highly probable forecast transactions recognized in the financial statements accordingly as per Accounting Standards issued by the Institute of chartered Accountants of India, exchange difference arising on such contracts are recognized in the period in which they arise. Gain and losses arising on account of such transaction are recognized as income/ expenses in the Profit and Loss Account.

2.1 Issued, Subscribed and Paid up Capital

25187925 (Pr. Yr. 25187925) Equity Shares of X 10/- each fully paid up. Of the above 5117330 (Pr. Yr. 5117330) Equity Shares allotted as fully paid up by way of Bonus Shares and 7147835 (Pr. Yr. 7147835) Equity Shares allotted as fully paid up pursuant to a contract without payment being received in cash.

2.2 Company has allotted 1250000 warrants on a preferential basis to promoter group on 06.06.2010 upon payment of exercise price of Rs. 245.73 per warrant, as reduced by the 25% upfront money paid at the time of allotment of warrants. The last date for the exercise of the conversion right of the warrant holder was December 6, 2011 (within 18 months from the date of their allotment). The warrant holders (Promoter's Group Entity) have not exercised their option to convert the aforesaid 1250000 warrant in to equity shares of the company. Therefore the amount of Rs. 767.91 lacs being the initial 25% of the total consideration of Rs. 3071.63 lacs received by the company have been forfeited.

2.3 Equity Shares carry voting rights at the General Meeting of the Company and are entitled to dividend and to participate in surplus, if any, in the event of winding up.

3.1 Term Loan against First Pari-passu charge with other banks on present & future fixed assets of the company other than those exclusively financed by any other banks/ financial institutions & second pari-passu charge with other banks on all present & future current assets of the company & personal guarantee of Sh. A. K. Bansal & Smt. Anju Bansal, directors, their relatives & corporate guarantee of group companies / others - The loan is collaterally secured by equitable mortgage of land & building of associate concerns / others on pari-passu basis with other member banks.

3.2 Loan from banks for purchase of vehicle (Total outstanding Rs. 78.80 Lacs, Previous year Rs. 61.06 lacs are secured against the vehicle purchased out of those loans. The loans are repayable, in monthly installments.

4.1 Working Capital loans Comprising of Export Packing Credit, FDBP etc. from Banks, secured by hypothecation of stocks, book debts, bills and personal / corporate guarantee of wholetime directors / Group Company / others. The limits are also collaterally secured by immovable properties owned by directors and associate concerns / others. The loan is collateraly secured by way of equitable mortgage on pari-passu basis with other banks of all present & future fixed assets of the company.


Mar 31, 2011

01. Basis for Preparation of Financial Statements

The financial statements have been prepared on the historical cost convention basis. The Generally Accepted Accounting Principles (GAAP) and the Accounting Standards referred under section 211(3C) of the Companies Act, 1956 have been adopted by the Company and disclosures made in accordance with the requirements of Schedule VI of the Companies Act, 1956 and the Indian Accounting Standards.

02. Fixed Assets

a) Fixed assets are stated at costs, which comprises of purchase consideration and other directly attributable cost of bringing the assets to its working condition for the intended use.

b) Deprecation on fixed assets is provided on straight- line method at the rates and in the manner as prescribed in Schedule XIV to the Companies Act, 1956.

03. Translation of Foreign Currency Items

Transactions in foreign currency are recorded at the rate of exchange in force on the date of the transactions. Current Assets and Current Liabilities denominated in foreign currency are translated at the exchange rate prevalent at the date of the Balance Sheet. The resultant gain / loss is recognized in the Profit & Loss Account, except in cases where they relate to the acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets. The Forward Contract including derivatives contract entered into to hedge foreign currency risk on unexpected firm commitments and highly probable forecast transactions recognized in the financial statements accordingly as per Accounting Standards issued by the Institute of chartered Accountants of India, exchange difference arising on such contracts are recognized in the period in which they arise. Gain and losses arising on account of such transaction are recognized as income/ expenses in the Profit and Loss Account.

04. Research and Development

Revenue expenditure on Research & Development is included under the natural heads of expenditure. Capital expenditure on Research & Development is treated in the same manner as expenditure on other fixed assets.

05. Valuation of Inventory

a) Closing stock of finished goods is valued at the lower of estimated cost or net realizable value.

b) Closing stock of semi-finished goods is valued at estimated cost.

c) Inventory of raw material and packing material is valued at cost.

06. Investments

Investments are valued at costs unless there is a permanent fall in their value as at the date of Balance Sheet.

07. Retirement Benefits

Encashment of accrued leave salary and retirement benefits to employees are provided on accrual basis.

08. Contingent Liability

Liabilities though contingent, are provided for if there are reasonable prospects of such liabilities maturing. The other Contingent Liabilities, which are not acknowledged as debt are disclosed by way of note, but claims of frivolous nature are ignored. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

09. Revenue Recognition

a. Sales are inclusive of excise duty / customs duty and net of trade discounts. Export sales include goods invoiced against confirmed orders and cleared from excise and customs authorities.

b. Export incentives receivable on exports made during the year, are recognized as income.

c. Other items of revenue including export benefits are recognized in accordance with the Accounting Standard (AS-9). Accordingly, wherever there are uncertainties in the ascertainment / realization of income such as interest from customers, the same is not accounted for.

10. Taxes on Income

a. Provision for current income tax is made on the basis of the estimated taxable income for the current accounting year computed in accordance with the provisions of the Income Tax Act, 1961.

b. Deferred tax is recognized on timing difference between the income accounted in financial statements and taxable income for the year, and quantified using tax rates and laws enacted or substantively enacted as on the Balance Sheet date are accounted for on the basis of Accounting Standard (AS-22)

11. Borrowing Costs

Borrowing costs directly attributable to acquisition, construction and production of assets are capitalized as a part of the cost of such asset up to the date of completion. Other borrowing costs are recognized as expenses in the period in which they are incurred and charged to the Profit & Loss Account.

12. Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that any asset including goodwill, may be impaired. If any such indication exists, the carrying value of such assets is reduced to its estimated recoverable amount and the amount of such impairment loss is charged to Profit & Loss Account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect.

13. Segment accounting

Segment accounting policies are in line with the accounting policies of the company. In addition, the following specific accounting policies have been followed for segment reporting:

a. Segment revenue includes sales and other income directly identifiable with/ allocable to the segment.

b. Expenses that are directly identifiable with / allocable to segment are considered for determining the segment results.

c. Segment assets and liabilities include those directly identifiable with respective segments. Unallocable assets and liabilities represent the assets and liabilities that relate to the company as a whole and not allocable to any segment.


Mar 31, 2010

1. Basis for Preparation of Financial Statements

The financial statements have been prepared on the historical cost convention basis. The Generally Accepted Accounting Principles (GAAP) and the Accounting Standards referred under section 211(3C) of the Companies Act, 1956 have been adopted by the Company and disclosures made in accordance with the requirements of Schedule VI of the Companies Act, 1956 and the Indian Accounting Standards.

2. Fixed Assets

a) Fixed assets are stated at costs, which comprises of purchase consideration and other directly attributable cost of bringing the assets to its working condition for the intended use.

b) Deprecation on fixed assets is provided on straight-line method at the rates and in the manner as prescribed in Schedule XIV to the Companies Act, 1956.

3. Translation of Foreign Currency Items

Transactions in foreign currency are recorded at the rate of exchange in force on the date of the transactions. Current Assets and Current Liabilities denominated in foreign currency are translated at the exchange rate prevalent at the date of the Balance Sheet. The resultant gain / loss is recognized in the Profit & Loss Account, except in cases where they relate to the acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets. The Forward Contact including derivatives contract entered into to hedge foreign currency risk on unexpected firm commitments and highly probable forecast transactions recognized in the financial statements accordingly as per Accounting Standards issued by the Institute of chartered Accountants of India, exchange difference arising on such contracts are recognized in the period in which they arise. Gain and losses arising on account of such transaction are recognized as income/ expenses in the Profit and Loss Account.

4. Research and Development

Revenue expenditure on Research & Development is included under the natural heads of expenditure. Capital expenditure on Research & Development is treated in the same manner as expenditure on other fixed assets.

5. Valuation of Inventory

a) Closing stock of finished goods is valued at the lower of estimated cost or net realizable value.

b) Closing stock of semi-finished goods is valued at estimated cost.

c) Inventory of raw material and packing material is valued at cost.

6. Investments

Investments are valued at costs unless there is a permanent fall in their value as at the date of Balance Sheet.

7. Retirement Benefits

Encashment of accrued leave salary and retirement benefits to employees are provided on accrual basis.

8. Contingent Liability

Liabilities though contingent, are provided for if there are reasonable prospects of such liabilities maturing. The other Contingent Liabilities, which are not acknowledged as debt are disclosed by way of note, but claims of frivolous nature are ignored. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

9. Revenue Recognition

a. Sales are inclusive of excise duty / customs duty and net of trade discounts. Export sales include goods invoiced against confirmed orders and cleared from excise and customs authorities.

b. Export incentives receivable on exports made during the year, are recognized as income.

c. Other items of revenue including export benefits are recognized in accordance with the Accounting Standard (AS-9). Accordingly, wherever there are uncertainties in the ascertainment / realization of income such as interest from customers, the same is not accounted for.

10. Taxes on Income

a. Provision for current income tax is made on the basis of the estimated taxable income for the current accounting year computed in accordance with the provisions of the Income Tax Act, 1961.

b. Deferred tax is recognized on timing difference between the income accounted in financial statements and taxable income for the year, and quantified using tax rates and laws enacted or substantively enacted as on the Balance Sheet date are accounted for on the basis of Accounting Standard (AS-22)

11. Borrowing Costs

Borrowing costs directly attributable to acquisition, construction and production of assets are capitalized as a part of the cost of such asset up to the date of completion. Other borrowing costs are recognized as expenses in the period in which they are incurred and charged to the Profit & Loss Account.

12. Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that any asset including goodwill, may be impaired. If any such indication exists, the carrying value of such assets is reduced to its estimated recoverable amount and the amount of such impairment loss is charged to Profit & Loss Account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect.

13. Segment accounting

Segment accounting policies are in line with the accounting policies of the company. In addition, the following specific accounting policies have been followed for segment reporting:

a. Segment revenue includes sales and other income directly identifiable with/ allocable to the segment.

b. Expenses that are directly identifiable with / allocable to segment are considered for determining the segment results.

c. Segment assets and liabilities include those directly identifiable with respective segments. Unallocable assets and liabilities represent the assets and liabilities that relate to the company as a whole and not allocable to any segment.



 
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