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Accounting Policies of Hisar Metal Industries Ltd. Company

Mar 31, 2015

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

i) The financial statements have been prepared to comply with the Generally Accepted Accounting Prin- ciple in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.

ii) The Financial Statements are prepared on accural basis under the historical cost convention, except for certain Fixed Assets which are carried at revalued amounts.

1.2 USE OF ESTIMATES

The preparation of financial statements in confirmity with Indian Generally Accepted Accounting Prin- ciples requires judgement, estimates and assumptions to be made that affect the reported amount of assets and labilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known/materialised.

1.3 REVENUE RECOGNITION

Revenue is recongnised only when risks and rewards incidential to ownership are transferred to the customer, it can be reliably measured and it is reasonable to except ultimate collection. Revenue from operation includes sale of goods, services, service tax, excise duty and sales during trial run period, adjusted for discounts (net), and gain/loss on corresponding hedge contracts.

Dividend Income is recognised when the right to receive payment is established.

Interest Income is recognised on a time proportion basis taking into account the amount outstanding and the interest rate applicable.

1.4 TAXATION

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognised only to the extent that there is a reasonable certainity that sufficient further income will be available except that deferred tax assets, in case there are unabsorbed depreciation or losses, are recognised if there is virtual certainty that suffi- cient further taxable income will be available to realise the same.

Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.

1.5 FIXED ASSETS

i) Tangible assets

Tangible assets are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation, less accumulated depreciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.

Subsequent expenditures related to an item of Tangible Assets are added to its book value only if they increase the future benefits from the existing assets beyond its previously assessed standard of perfor- mance.

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

ii) Intangible assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amorti- sation/depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.

1.6 ACCOUNTING FOR DERIVATIVE INSTRUMENT

In respect of derivative contracts, premium paid, gains/losses on settlement and losses on restatement are recognised in the Profit and Loss Statement except in case where they relate to the acquisition or construction of Fixed Assets, in which case, adjusted to the carrying cost of such assets.

1.7 DEPRECIATION

Depreciation on Fixed Assets is provided on Straight Line Method (SLM). Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act , 2013 except in respect of the following assets, where useful life is different than those prescribed in Schedule II are used.

In respect of addition or extensions forming an integral part of existing assets and insurance spares, including incremental cost arising on account of translation of foreign currency liabilities for acquisition of Fixed Assets, depreciation is provided as aforesaid over the residual life of the respective assets.

1.8 VALUATION OF INVENTORIES

Items of Inventories are measured at lower of cost or net realisable value after providing for obsoles- cence , if any, except in case of by-products which are valued at the net releasable value. Cost of inven- tories comprises of all costs of purchase, cost of conversion and other costs including manufacturing overhead incurred in bringing them to their respective present location and condition. Cost of raw mate- rials, process chemicals, store and spares, packing materials, trading and other products are determined on weighted average basis.

1.9 EMPLOYEE BENEFITS

POST EMPLOYMENT BENEFITS

i) Defined Contribution Plan

A defined contribution plan is a post-employment benefit plan under which the Company pays speci- fied contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund, Superannuation Fund and Pension Scheme. The Company's contribution is recognised as an expense in the Profit and Loss Statement during the period in which the employee renders the related service.

ii) Defined benefit and other Long term Benefit plan:

The liability in respect of defined benefit plan and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefits is expected to be derived from employees' services.

Actuarial gains and losses in respect of post-employment and other long term benefits are charged to the Profit and Loss Statement.

SHORT TERM EMPLOYEE BENEFITS

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services. These benefits include performance incentive and compensated absences.

1.10 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision is recognised in the accounts, when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are not discontinued to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent liabilities are disclosed unless the possibility of outflow of resources is remote.

Contingent Assets are neither recognised nor disclosed in the financial statements.

1.11 INVESTMENTS

Current investments are carried at lower of cost or quoted/fair value. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

1.12 BORROWING COSTS

Borrowing cost attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of such asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.

1.13 IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impair- ment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.14 EARNING/ (LOSS) PER SHARE

Basic earnings/(Loss) per share are calculated by dividing the net profit/ (Loss) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year are adjusted for events of bonus issue to existing shareholders; share split; and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings/(Loss) per share, the net profit/(Loss) for the year attribut- able to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.15 FOREIGN EXCHANGE TRANSACTION

a. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

b. Monetary items denominated in foreign currencies at the year end are restated at year end rates. In the case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract .

c. Non -monetary foreign currency items are carried at cost.

d. In respect of integral foreign operations, all transactions are translated at rates prevailing on the date of transaction or that approximates the actual rate at the date of transaction . Monetary assets and liabilities are restated at the year end rates.

e. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss Statement , except in case of long term liabilities , where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.




Mar 31, 2014

1.1 BASIS OF PREPARTION OF FINANCIAL STATEMENTS

i) The financial statements are prepared under the historical cost convention, in accordance with the generally accepted accounting principles in India, the provisions of the Companies Act, 1956 and applicable accounting standards.

ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

iii) Financial statements for the year ended 31 st March, 2014 have been prepared based on revised Schedule VI of the Companies Act, 1956. The adoption of revised Schedule VI does not impact recognition and measurement principles of individual items within this Financial stalments. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has accordingly reclassified the previous year''s figures to meet the requirements applicable for the current year.

1.2 USE OF ESTIMATES

The prepratlon of financial statements in confiunity with generally accepted accounting principles requires estimates and assumptions to be made that effect the reported amount of asssets and liabilities on the date of the financial statements and the reported amount of revenue and expenses during the reporting period.Differences between the actual results and estimates are recognised in the period in which ihe results are known/materialised.

1.3 REVENUE RECOGNITION

Revenue is recongnised only when it can be reliably measured and is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services, sales tax, excise duty and sales during the trial run period, adjusted lor discounts, value added tax and gain/loss on corresponding hedge contracts.

1.4 TAXATION

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, I 96 I. Deferred tax resulting from timing differences between book and taxable profit is accounted for using the tax rates and laws that have been etiacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reason able/virtual certainty, as the case may be, that the asset will be realised in future.

1.5 FIXED ASSETS

i) Tangible assets

Owned tangible fixed assets are stated at cost less accumulated depreciation and impairment loss, if any. All costs relating to acquistion and installation of fixed assets upto the time tire assets get ready for their intended use are capitalised.

ii) Intangible assets

Intangible assets are recognised only if acquired and it is probable that the future economic benefits that are attributable to (he assets will flow to (he Company and the cost of assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less accumulated depreciation and accumulated impairment losses, if any.

1.6 ACCOUNTING FOR DERIVATIVE INSTRUMENTS

In respect of derivative contracts, premium paid, gains/losses on settlement and losses on rcstatment are recognised in the profit and loss account except in case where they arc relate to the acquisition or construction of fixed assets, in which case, they are adjusted to the carrying cost of such assets.

1.7 DEPRECIATION

Depreciation on fixed assets has been provided on the Straight line method in accordance with the provisions of Section 205{2XbJ of the Companies Act, 1956 and in the manner and at the rates specified in Schedule XIV of the Companies Act, 1956,,

1.8 VALUATION OF INVENTORIES

Inventories ate valued at lower of cost or net realisable value after providing for obsolescence, if any. Cost of inventories comprises of all costs of purchase* cost of conversion and other costs including manufacturing overheads incurred in bringing them lo their respective present location and condition. Cost of raw material store and spares and other products are determined on E:IFO basis. By- products.11 Scrap are valued at net realisable value.

1.9 EMPLOYEE BENEFITS

i) Defined Contribution Plan

Company''s contribution paid/payable for the year to defined contribution schemes are charged to statement of Profit & Lj>ss,

ii) Defined benefit and other Long term Benefit plan;

Company liablity towards defined benefit plans and other long term benefit plan arc determined on the basis of actuarial valuations. Actuarial valuations are carried out at the balance sheet date, Actuarial gains and losses are recognised in the statement of profit and loss in the period of occurence of such gain and losses.

The employee benefit obligation recognised in the balance sheet represent the present value of the defined benefit obligation as adjusted for unrecognised past service cost.

iii) Short Term Employee Benefits:

Short-term employees benefit expected to be paid in exchange for the services rendered by employees are recongnised undiscounted during the period employee renders services.

1.10 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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

1.11 INVESTMENTS

Current investments are carried at lower of cost or quoted/fkir value, Long term investments are seated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary,

1.12 BORROWING COSTS

Borrowing cost attributable to the acquisition or construction of a qualifying asset are capitalised as pad of (he cost of such asset, A qualifying asset is one that necessarily lakes substantial period of time to get ready for intended use, Ad other borrowing costs are recognised as an expense in the period in which they are incurred.

1.13 IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset 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 recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.14 EARNING/ (LOSS) PER SHARE

fiasic earnings/(Loss) per share are calculated by dividing the net profit'' (Loss) for the year attributable to equity shareholders by the Weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year are adjusted for events of bonus issue to existing shareholders: share split; and reverse share split (consolidation of shares),

For the purpose of calculating diluted earnings/(Loss) per share, the net pro ft t/( Loss) for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares,

1.15 FOREIGN EXCHANGE TRANSACTON

Transaction in Foreign Currency are recorded at ihe exchange rates prevailing on the date of transaction. Monetary'' items are restated at the period end rates. The exchange difference between the rate prevailing on the date of transaction and on settlement/restalment is recognised as income or expense us the case may be.


Mar 31, 2013

1.1 BASIS OF PREPARTION OF FINANCIAL STATEMENTS

i) The financial statements are prepared under the historical cost convention, in accordance with the generally accepted accounting principles in India, the provisions of the Companies Act, 1956 and applicable accounting standards.

ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

iii) Financial statements for the year ended 31 st March, 2013 have been prepared based on revised Schedule VI of the Companies Act, 1956. The adoption of revised Schedule VI does not impact recognition and measurement principles of individual items within this Financial statments. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has accordingly reclassified the previous year''s figures to meet the requirements applicable for the current year.

1.2 USE OF ESTIMATES

The prepration of financial statements in confirmity with generally accepted accounting principles requires estimates and assumptions to be made that effect the reported amount of assets and liablities on the date of the financial statements and the reported amount of revenue and expenses during the reporting period.Differences between the actual results and estimates are recognised in the period in which the results are known/materialised.

1.3 REVENUE RECOGNITION

Revenue is recongnised only when it can be reliably measured and is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services, sales tax, excise duty and sales during the trial run period, adjusted for discounts, value added tax and gain/loss on corresponding hedge contracts.

1.4 TAXATION

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from timing differences between book 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 asset is recognised and carried forward only to the extent that there is a reasonable/virtual certainty, as the case may be, that the asset will be realised in future.

1.5 FIXED ASSETS

i) Tangible assets : Owned tangible fixed assets are stated at cost less accumulated depreciation and impairment loss, if any. All costs relating to acquistion and installation of fixed assets upto the time the assets get ready for their intended use are capitalised.

ii) Intangible assets : Intangible assets are recognised only if acquired and it is probable that the future economic benefits that are attributable to the assets will flow to the Company and the cost of assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less accumulated depreciation and accumulated impairment losses, if any.

1.6 ACCOUNTING FOR DERIVATIVE INSTRUMENTS

In respect of derivative contracts, premium paid, gains/losses on settlement and losses on restatment are recognised in the profit and loss account except in case where they are relate to the acquisition or construction of fixed assets, in which case, they are adjusted to the carrying cost of such asset.

1.7 DEPRECIATION

Depreciation on fixed assets has been provided on the Straight line method in accordance with the provisions of Section 205(2)(b) of the Companies Act, 1956 and in the manner and at the rates specified in Schedule XIV of the Companies Act, 1956.

1.8 VALUATION OF INVENTORIES

Inventories are valued at lower of cost or net realisable value after providing for obsolescence, if any. Cost of inventories comprises of all costs of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. Cost of raw material store and spares and other products are determined on FIFO basis. By- products/ Scrap are valued at net realisable value.

1.9 EMPLOYEE BENEFITS

i) Defined Contribution Plan : Company''s contribution paid/payable for the year to defined contribution schemes are charged to statement of Profit & Loss.

ii) Defined benefit and other Long term Benefit plan : Company liablity towards defined benefit plans and other long term benefit plan are determined on the basis of actuarial valuations. Actuarial valuations are carried out at the balance sheet. Actuarial gains and losses are recognised in the statement of profit and loss in the period of occurence of such gain and losses.

The employee benefit obligation recognised in the balance sheet represent the present value of the defined benefit obligation as adjusted for unrecognised past service cost.

iii) Short Term Employee Benefits : Short-term employees benefit expected to be paid in exchange for the services rendered by employees are recongnised undiscounted during the period employee renders services.

1.10 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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

1.11 INVESTMENTS

Current investments are carried at lower of cost or quoted/fair value. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

1.12 BORROWING COSTS

Borrowing cost attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of such asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.

1.13 IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset 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 recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.14 EARNING/(LOSS) PER SHARE

Basic earnings/(Loss) per share are calculated by dividing the net profit/ (Loss) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year are adjusted for events of bonus issue to existing shareholders; share split; and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings/(Loss) per share, the net profit/(Loss) for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.15 FOREIGN EXCHANGE TRANSACTON

Transaction in Foreign Currency are recorded at the exchange rates prevailing on the date of transaction. Monetary items are restated at the period end rates. The exchange difference between the rate prevailing on the date of transaction and on settlement/res.tatment is recognised as income or expense as the case may be.


Mar 31, 2012

1.1 BASIS OF PREPARTION OF FINANCIAL STATEMENTS

i) The financial statements are prepared under the historical cost convention, in accordance with the generally accepted accounting principles in India, the provisions of the Companies Act, 1956 and applicable accounting standards.

ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

1.2 USE OF ESTIMATES

The prepration of financial statements in confirmity with generally accepted accounting principles requires estimates and assumptions to be made that effect the reported amount of asssets and liablities on the date of the financial statements and the reported amount of revenue and expenses during the reporting period.Differences between the actual results and estimates are recognised in the period in which the results are known/materialised.

1.3 REVENUE RECOGNITION

Revenue is recongnised only when it can be reliably measured and is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services, sales tax, excise duty and sales during the trial run period, adjusted for discounts, value added tax and gain/loss on corresponding hedge contracts.

1.4 TAXATION

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from timing differences between book 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 asset is recognised and carried forward only to the extent that there is a reasonable/virtual certainty, as the case may be, that the asset will be realised in future.

1.5 FIXED ASSETS

i) Tangible assets

Owned tangible fixed assets are stated at cost less accumulated depreciation and impairment loss, if any. All costs relating to acquistion and installation of fixed assets upto the time the assets get ready for their intended use are capitalised.

ii) Intangible assets

Intangible assets are recognised only if acquired and it is probable that the future economic benefits ¦

that are attributable to the assets will flow to the Company and the cost of assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less accumulated depreciation and accumulated impairment losses, if any.

1.6 ACCOUNTING FOR DERIVATIVE INSTRUMENTS

In respect of derivative contracts, premium paid, gains/losses on settlement and losses on restatment are recognised in the profit and loss account except in case where they are relate to the acquisition or construction of fixed assets, in which case, they are adjusted to the carrying cost of such asset.

1.7 DEPRECIATION

Depreciation on fixed assets has been provided on the Straight line method in accordance with the provisions of Section 205(2)(b) of the Companies Act, 1956 and in the manner and at the rates specified in Schedule XIV of the Companies Act, 1956..

1.8 VALUATION OF INVENTORIES

Inventories are valued at lowe of cost or net realisable value after providing for obsolescence , if any.. Cost of inventories comprises of all costs of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. Cost of raw material

store and spares and other products are determined on FIFO basis. By- products/ Scrap are valued at net realisable value.

1.9 EMPLOYEE BENEFITS

i) Defined Contribution Plan

Company's contribution paid/payable for the year to defined contribution schemes are charged to statement of Profit & Loss.

ii) Defined benefit and other Long term Benefit plan :

Company liablity towards defined benefit plans and other long term benefit plan are determined on the basis of actuarial valuations. Actuarial valuations are carried out at the balance sheet. Actuarial gains and losses are recognised in the statement of profit and loss in the period of occurence of such gain and losses.

The employee benefit obligation recognised in the balance sheet represent the present value of the defined benefit obligation as adjusted for unrecognised past service cost.

iii) Short Term Employee Benefits:

Short-term employees benefit expected to be paid in exchange for the services rendered by employees are recongnised undiscounted during the period employee renders services.

1.10 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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

1.11 INVESTMENTS

Current investments are carried at lower of cost or quoted/fair value. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

1.12 BORROWING COSTS

Borrowing cost attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of such asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.

1.13 IMPAIRMENT OFASSETS

An asset is treated as impaired when the carrying cost of asset 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 recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.14 EARNING/(LOSS) PER SHARE

Basic earnings/(Loss) per share are calculated by dividing the net profit/ (Loss) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year are adjusted for events of bonus issue to existing shareholders; share split; and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings/(Loss) per share, the net profit/(Loss) for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.15 FOREIGN EXCHANGE TRANSACTON

Transaction in Foreign Currency are recorded at the exchange rates prevailing on the date of transaction. Monetary items are restated at the period end rates. The exchange differnce between the rate prevailing on the date of transaction and on settlement/restatment is recognised as income or expense as the case may be.


Mar 31, 2010

I) GENERAL

a) The financial statements are prepared under the historical cost convention and in accordance with the requirement of the Companies Act, 1956.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

ii) BASIS OF ACCOUNTING The Company follows the mercantile system of Accounting and recognises income and expenditure on accrual basis.

iii) SALES Sales are inclusive of Excise Duty but net of Sales Tax.

iv) TAXATION

The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the Company. Deferred tax assets and liabilities are recognised for future tax consequences attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax assets and liabilities are measured as per the tax rates / laws that have been enacted or substantively enacted by the Balance Sheet date.

v) FIXED ASSETS AND DEPRECIATION

a) VALUATION OF FIXED ASSETS

Fixed Assets are stated at cost of acquisition inclusive of all incidental expenses related thereto.

b) DEPRECIATION

Depreciation on all fixed assets has been provided on straight line method on pro-rata basis for the period of use at the rates specified in SCHEDULE XIV to the Companies Act, 1956.

vi) VALUATION OF INVENTORIES

Raw Materials, stores and spare parts are valued at cost. Finished Goods & Scrap are valued at cost or Market value whichever is lower.

vii) RETIREMENT BENEFITS.

Gratuity and Leave Encashment is accounted for on accrual basis, on the basis of actuarial valuations.

viii) CONTINGENT LIABILITIES

Contingent liabilities are usually not provided for unless it is probable that the future outcome may be materially detrimental to the Company and are disclosed by way of notes.

ix) INVESTMENTS

Investments are stated at cost.

x) IMPAIRMENT

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

ii. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

iii. A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

xi) EXPENDITURE ON NEW PROJECTS AND SUBSTANTIAL EXPANSION

Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period, which are not related to the construction activity nor is incidental thereto are charged to the Profit & Loss Account. Income earned during construction period is deducted from the total of the indirect expenditure.

All direct capital expenditure on expansion is capitalized. As regards indirect expenditure on expansion, only that portion is capitalized which represents the marginal increase in such expenditure involved as a result of expansion. Both direct and indirect expenditure are capitalized only if they increase the value of the asset beyond its originally assessed standard of performance.

xii) EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue to existing shareholders; share split; and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

xiii) PROVISIONS

A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions except those disclosed elsewhere in the notes to the financial statements, are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

xiv) FOREIGN EXCHANGE TRANSACTON

Transaction in Foreign Currency are converted at the rates prevailing on the date of transaction. Gain/Loss on Realization/Payment of revenue transaction in the same year is charged to "Exchange Fluctuation Account" in the Profit & Loss Account.


Mar 31, 2009

GENERAL

a) The financial statements are prepared under the historical cost convention and in accordance with the requirement of the Companies Act, 1956.

b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

ii) BASIS OF ACCOUNTING

The Company follows the mercantile system of Accounting and recognises income and expenditure on accrual basis.

iii) SALES

Sales are inclusive of Excise Duty but net of Sales Tax.

iv) TAXATION

The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the Company. Deferred tax assets and liabilities are recognised for future tax consequences attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax assets and liabilities are measured as per the tax rates / laws that have been enacted or substantively enacted by the Balance Sheet date.

v) FIXED ASSETS AND DEPRECIATION

a) VALUATION OF FIXED ASSETS

Fixed Assets are stated at cost of acquisition inclusive of all incidental expenses related thereto.

b) DEPRECIATION

Depreciation on all fixed assets has been provided on straight line method on pro-rata basis for the period of use at the rates specified in SCHEDULE XIV to the Companies Act, 1956.

vi) VALUATION OF INVENTORIES

Raw Materials, stores and spare parts are valued at cost. Finished Goods & Scrap are valued at cost or Market value whichever is lower.

vii) RETIREMENT BENEFITS.

Gratuity and Leave Encashment is accounted for on accrual basis, on the basis of actuarial valuations.

viii) CONTINGENT LIABILITIES

Contingent liabilities are usually not provided for unless it is probable that the future outcome may be materially detrimental to the Company and are disclosed by way of notes.

ix) INVESTMENTS

Investments are stated at cost.

x) IMPAIRMENT

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

ii. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

iii. A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

xi) EXPENDITURE ON NEW PROJECTS AND SUBSTANTIAL EXPANSION

Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period, which are not related to the construction activity nor is incidental thereto are charged to the Profit & Loss Account. Income earned during construction period is deducted from the total of the indirect expenditure.

AH direct capital expenditure on expansion is capitalized. As regards indirect expenditure on expansion, only that portion is capitalized which represents the marginal increase in such expenditure involved as a result of expansion. Both direct and indirect expenditure are capitalized only if they increase the value of the asset beyond its originally assessed standard of performance.

xii) EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue to existing shareholders; share split; and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings per share, the net profit or foss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

xiii) PROVISIONS

A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions except those disclosed elsewhere in the notes to the financial statements, are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

xiv) FOREIGN EXCHANGE TRANSACTON

Transaction in Foreign Currency are converted at the rates prevailing on the date of transaction. Gain/ Loss on Realization/Payment of revenue transaction in the same year is charged to "Exchange Fluctuation Account" in the Profit & Loss Account.

 
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