Home  »  Company  »  IFB Industries  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of IFB Industries Ltd. Company

Mar 31, 2015

A. Background

IFB Industries Limited ("Company") is a Listed Public Limited company and is incorporated under The Companies Act, 2013. The Company is primarily engaged in the business of manufacturing and trading of home appliances. Further, the Company is also engaged in manufacturing of fine blanking components. The Company has its registered office in Kolkata.

b. Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The Company follows the accrual method of accounting under historical cost convention modified by revaluation of certain fixed assets as and when undertaken. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except for change in the accounting policy for depreciation as more fully described in Note 29. The financial statement are presented in Indian rupees and rounded off to nearest lac.

The preparation of financial statements in conformity with Indian GAAP requires the Management to make judgments, estimates and assumptions that affect the application policies and reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses for the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in current and future periods.

c. Revenue recognition

Revenue from sales of products is recognised upon the transfer of significant risks and rewards of ownership of the goods to the customers, which generally coincides with their delivery to customers. Revenue from Sale of products is stated net of Value Added Tax, Sales Tax and returns.

Revenue from services is recognised on a prorated basis over the period or as per the terms of the contract.

Interest on deposits is recognised on a time proportion basis taking into account the underlying interest rate.

Dividend income is recognised when the unconditional right to receive the income is established .

d. Tangible fixed assets

Tangible fixed assets are stated at the cost of acquisition / construction or at the revalued amount less depreciation and impairment losses. The cost of an asset comprises its purchase price and any other attributable cost incurred for bringing the asset to its working condition for its intended use. Where a tangible fixed asset has been revalued upwards, the revalued amount is credited to owner's interest under revaluation reserves.

Capital work -in -progress includes cost of assets not ready for their intended use and items under installation. In case of own manufactured items like tools, jigs, proportionate burden of overhead as applicable is also treated as part of cost. Expenditure incurred on replacement / modification to fixed asset is capitalized only when such expenditure results in increase in the economic life of such asset.

e. Intangible assets

Intangible assets are recorded at the consideration paid for acquisition less amortization.

All upgradation / enhancements are charged off as revenue expenditure unless they bring significant additional benefits.

f. Borrowing costs

Borrowing costs directly attributable to acquisition or construction of those fixed assets, which necessarily take a substantial period of time to get ready for their intended use, are capitalized. Other borrowing costs are accounted as an expense.

g. Depreciation / amortisation

Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the tools and moulds, in whose case the life of the assets has been assessed as 5 years based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.

The cost of leasehold land is amortised over the period of lease.

Intangible assets are amortised over the best estimate of its useful lives on a straight line basis. The estimated useful life currently ranges from 3 to 5 years.

h. Impairment of fixed assets

The Company periodically assesses whether there is any indication that an asset or a group of assets comprising a cash generating unit may be impaired . If any such indication exists, the Company estimates the recoverable amount of the asset. For an asset or group of assets that does not generate largely independent cash flows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost. An impairment loss is reversed only to the extent that the carrying amount of asset does not exceed the net book value that would have been determined.

i. Foreign currency transactions

Foreign exchange transactions are recorded at the rates of exchange prevailing on the date of the respective transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss.

Monetary assets and liabilities denominated in foreign currency as at the balance sheet date are translated at the dosing exchange rate on that date and the resultant exchange differences are recognized in the Statement of Profit and Loss. Non-monetary items denominated in foreign currency are carried at cost.

j. Investments

Non-current investments are stated at cost less diminution in value, if any other than temporary, determined on specific identification basis.

Current investments are stated at lower of cost and fair value. The comparison of cost and fair value is carried out separately for each investment.

Profit or loss on sale of investment is determined as the difference between the sale price and carrying value of investment, determined individually for each investment.

k. Inventories

Inventory is valued at the lower of cost or net realizable value. Cost of inventories includes, cost of purchase, cost of conversion and all other expenses incurred in bringing the goods to their present location and condition. Cost is ascertained using the weighted average method.

Fixed production overheads are allocated on the basis of normal capacity of production facilities.

l. Employee benefits

Contribution payable for provident fund and superannuation fund, which are defined contribution schemes are recognized as employee benefit expense in the Statement of Profit and Loss.

Post-employment benefits in the form of Gratuity, which is a defined benefit scheme, and other long term employee benefits in the form of leave encashment and accumulated sick leave are recognized as an expense in the Statement of Profit and Loss in the year in which the employee has rendered services. The expense is recognised at the present value of the amounts payable determined using the projected unit credit method carried out by an independent actuary. Actuarial gains and losses in respect of post-employment and other long term benefits are charged to the Statement of Profit and Loss.

m. Taxes on income

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognizes unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Minimum Alternate Tax (MAT) credit entitlement is recognized only to the extent there is convincing evidence that the Company will pay normal tax during the period specified by the Income Tax Act, 1961. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Statement of Profit and Loss. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period

The Company offsets the current tax assets and liabilities (on a year on year basis) and deferred tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

n. Provision and contingent liabilities

The Company recognizes a provision when there is a present obligation as a result of an obligating event that probably requires outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure of 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. When there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote, no provision or disclosure of contingent liability is made.

o. Government grants

Grants received from the Government authorities with reference to investments under investment subsidy schemes and no repayment are ordinarily expected in respect thereof are treated as capital reserve.

p. Segment

The Company discloses Business segment as the Primary segment. Segments have been identified taking into account the nature of products, the different risks and returns, the organisation structure and internal reporting system. The Company's operation predominantly relates to manufacture and trading of home appliances and fine blanking business. The Company primarily caters to the domestic market and export sales are not significant and accordingly there is no reportable secondary segment.

q. Leases

Leases where the lessor effectively retains substantially all the risks and rewards of ownership of the leased asset are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

r. Warranty

Warranty costs are estimated by the Management on the basis of a technical evaluation and based on past experience. Provision is made for estimated liability in respect of warranty cost in the year of sale of goods.

Provision for warranty is expected to be utilized over a period of one to five years.

s. Cash and cash equivalents

Cash and cash equivalents in the cash flow statement comprise cash on hand, current account bank balances and bank deposit account balances (with maturity of three months or less as at the balance sheet date).

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

u. Forward exchange contracts

The premium or discount arising at the inception of forward exchange contracts entered into to hedge an existing asset/liability, is amortised as expense or income over the life of the contract. Exchange differences on such a contract are recognised in the Statement of Profit and Loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognised as income or as expense for the period.


Mar 31, 2013

A. Background

IFB Industries Limited ("Company") is a Listed Public Limited and is incorporated under The Companies Act, 1956. The Company is primarily engaged in the business of manufacturing and trading of home appliances. Further, the Company is also engaged in manufacturing of fne blanking components. The Company has its registered ofce in Kolkata.

b. Basis of accounting and preparation of fnancial statements

The fnancial statements have been prepared to comply in all material respects with the applicable accounting principles in India, mandatory accounting standards notifed by the Companies (Accounting Standards) Rules, 2006, the relevant provisions of the Companies Act 1956 and the guidelines issued by the Securities and Exchange Board of India (SEBI). The Company follows the accrual method of accounting under historical cost convention modifed by revaluation of certain fxed assets as and when undertaken. The accounting policies have been consistently applied by the Company. The fnancial statement are presented in Indian rupees and rounded of to nearest lac.

The preparation of fnancial statements in conformity with generally accepted accounting principles (GAAP) requires Management to make judgements, estimates and assumptions that afect the application policies and reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the fnancial statements and reported amounts of revenues and expenses for the year. Actual results could difer from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in current and future periods.

c. Revenue recognition

Revenue from sales of products is recognised upon the transfer of signifcant risks and rewards of ownership of the goods to the customers, which generally coincides with their delivery to customers. Revenue from Sale of products is stated net of Value Added Tax/ Sales Tax and returns.

Revenue from services is recognised on a prorated basis over the period or as per the terms of the contract.

Interest on deposits is recognised on a time proportion basis taking into account the underlying interest rate.

Dividend income is recognised when the unconditional right to receive the income is established.

d. Tangible fxed assets

Tangible fxed assets are stated at the cost of acquisition/ construction or at the revalued amount less depreciation and impairment losses. The cost of an asset comprises its purchase price and any other atributable cost incurred for bringing the asset to its working condition for its intended use. Where a tangible fxed asset has been revalued upwards, the revalued amount is credited to owner''s interest under revaluation reserves.

Capital work-in-progress includes cost of assets not ready for their intended use, items under installation and items in transit. In case of own manufactured items like tools, jigs, proportionate burden of overhead as applicable is also treated as part of cost.

Expenditure incurred on replacement/ modifcation to fxed asset is capitalized only when such expenditure results in increase in the economic life of such asset.

e. Intangible assets

Intangible assets are recorded at the consideration paid for acquisition less amortization.

All upgradation/enhancements are charged of as revenue expenditure unless they bring signifcant additional benefts.

f. Borrowing costs

Borrowing costs directly atributable to acquisition or construction of those fxed assets, which necessarily take a substantial period of time to get ready for their intended use, are capitalized. Other borrowing costs are accounted as an expense.

g. Depreciation / amortisation

Depreciation is provided at the rates specifed in Schedule XIV to the Companies Act, 1956 using the straight line method on all assets except building where the writen down value method is followed.

The cost of leasehold land is amortised over the period of lease.

Assets whose actual cost does not exceed fve thousand rupees are fully depreciated in the year of acquisition. Intangible assets are amortised over the best estimate of its useful lives on a straight line basis. The estimated useful life currently ranges from of 3 to 5 years.

h. Impairment of fxed assets

The Company periodically assesses whether there is any indication that an asset or a group of assets comprising a cash generating unit may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. For an asset or group of assets that does not generate largely independent cash fows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of proft and loss. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is refected at the recoverable amount subject to a maximum of depreciable historical cost. An impairment loss is reversed only to the extent that the carrying amount of asset does not exceed the net book value that would have been determined.

i. Foreign currency transactions

Foreign exchange transactions are recorded at the rates of exchange prevailing on the date of the respective transactions. Exchange diferences arising on foreign exchange transactions setled during the year are recognized in the Statement of Proft and Loss account.

Monetary assets and liabilities denominated in foreign currency as at the balance sheet date are translated at the closing exchange rate on that date and the resultant exchange diferences are recognized in the Statement of Proft and Loss account. Non-monetary items denominated in foreign currency are carried at cost.

j. Investments

Non-current investments are stated at cost less diminution in value, if any other than temporary, determined on specifc identifcation basis.

Current investments are stated at lower of cost and fair value. The comparison of cost and fair value is carried out separately for each investment.

Proft or loss on sale of investment is determined as the diference between the sale price and carrying value of investment, determined individually for each investment.

k. Inventories

Inventory is valued at the lower of cost and net realizable value. Cost of inventories includes, cost of purchase, cost of conversion and all other expenses incurred in bringing the goods to their present location and condition. Cost is ascertained using the weighted average method. Fixed production overheads are allocated on the basis of normal capacity of production facilities.

l. Employee benefts

Contribution payable for provident fund and superannuation fund, which are defned contribution schemes are recognized as employee beneft expense in the statement of proft and loss.

Post-employment benefts (Gratuity), which is a defned beneft scheme, and other long term employee benefts (leave encashment and accumulated sick leave) are recognized as an expense in the statement of proft and loss in the year in which the employee has rendered services. The expense is recognised at the present value of the amounts payable determined using the projected unit credit method carried out by an independent actuary. Actuarial gains and losses in respect of post-employment and other long term benefts are charged to the statement of proft and loss.

m. Taxes on income

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes refect the impact of current year timing diferences between taxable income and accounting income for the year and reversal of timing diferences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufcient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profts.

At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognizes unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufcient future taxable income will be available against which such deferred tax assets can be realized.

Minimum Alternate Tax (MAT) credit entitlement is recognized only to the extent there is convincing evidence that the Company will pay normal tax during the period specifed by the Income Tax Act, 1961. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India the said asset is created by way of credit to the statement of proft and loss. The company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the efect that the Company will pay normal income tax during the specifed period

The Company ofsets the current tax assets and liabilities (on a year on year basis) and deferred tax assets and liabilities, where it has a legally enforceable right and where it intends to setle such assets and liabilities on a net basis.

n. Provision and contingent liabilities

The Company recognizes a provision when there is a present obligation as a result of an obligating event that probably requires outfow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure of a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outfow of resources. When there is a possible obligation or a present obligation and the likelihood of outfow of resources is remote, no provision or disclosure of contingent liability is made.

o. Government grants

Grants received from the Government authorities with reference to investments under investment subsidy schemes and no repayment are ordinarily expected in respect thereof are treated as capital reserve.

p. Segment

The Company discloses Business segment as the Primary segment. Segments have been identifed taking into account the nature of products, the diferent risks and returns, the organisation structure and internal reporting system. The Company''s operation predominantly relates to manufacture of home appliances and fne blanking business. The Company primarily caters to the domestic market and export sales are not signifcant and accordingly there is no reportable secondary segment

q. Leases

Leases where the lessor efectively retains substantially all the risks and rewards of ownership of the leased asset are classifed as operating leases. Operating lease payments are recognized as an expense in the statement of proft and loss on a straight-line basis over the lease term.

r. Warranty

Warranty costs are estimated by the Management on the basis of a technical evaluation and based on past experience. Provision is made for estimated liability in respect of warranty cost in the year of sale of goods. Provision for warranty is expected to be utilized over a period of one to fve years.

s. Cash and cash equivalents

Cash and cash equivalents in the cash fow statement comprise cash on hand, current account bank balances and bank deposit account balances (with maturity of three months or less as at the balance sheet date).

t. Earnings per share

Basic earnings per share are calculated by dividing the net proft or loss for the year atributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net proft or loss for the year atributable to equity shareholders and weighted average number of equity shares outstanding during the year is adjusted for the efects of all dilutive potential equity shares.

u. Forward exchange contracts

The premium or discount arising at the inception of forward exchange contracts entered into to hedge an existing asset/liability is amortised as expense or income over the life of the contract. Exchange diferences on such a contract are recognised in the Statement of Proft and Loss in the reporting period in which the exchange rates change. Any proft or loss arising on cancellation or renewal of such a forward exchange contract is recognised as income or as expense for the period.


Mar 31, 2012

Unless otherwise specified, all amounts are in Rupees lacs

a. Basis of accounting and preparation of financial statements

The financial statements have been prepared to comply in all material respect with the applicable accounting principles in India, mandatory accounting standards notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act 1956. The Company follows the accrual method of accounting under historical cost convention modified by revaluation of certain fixed assets as and when undertaken. The accounting policies have been consistently applied by the Company.

The preparation of financial statements requires the Management to make estimates and assumptions that affects the reported amounts of assets and liabilities including Contingent Liabilities as of the date of the financial statements and the reported income and expenses for the reporting period. Although these estimates are based upon historical event and management's best knowledge of current events and actions, actual results could differ from those estimates. Material estimates used in these financial statements that are susceptible to change as more information becomes available include useful economic lives of property, plant and equipment, impairment, retirement benefits, guarantees, warranties and income taxes.

b. Revenue recognition

Revenue from sales of products is recognized upon the transfer of significant risks and rewards of the ownership of the goods to the customers, which generally coincides with their delivery to customers. Sales are net of Value Added Tax/ Sales Tax and returns.

Revenue from Services is recognized on prorated basis over the period of contract.

Interest on deposits is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends from investment are recognized when the Company's right to receive payment is established.

c. Tangible Fixed assets

Tangible Fixed assets are stated at cost of acquisition/construction or at revalued amount less depreciation and impairment losses. The cost of asset comprises its purchase price and any other attributable cost incurred for bringing the asset to its working condition for its intended use. Where a tangible fixed asset has been revalued upwards, the revalued amount is credited to owner's interest under the head Revaluation Reserves.

Capital work in progress includes items under installation and items in transit. In case of own manufactured items like tools, jigs, proportionate burden of overhead as applicable is also treated as part of cost.

Expenditure incurred on replacement/ modification to fixed asset is capitalized only when such expenditure results in increase in the economic life of such asset.

d. Intangible assets

Software expected to provide future enduring economic benefits is stated at cost less amortization.

All up gradation/enhancements are charged off as revenue expenditure unless they bring significant additional benefits.

e. Depreciation / Amortization

Depreciation is provided at the rates specified in Schedule XIV of the Companies Act, 1956 on straight line method on plant and machinery and other tangible fixed assets excepting building where written down value method is followed.

Assets whose actual cost does not exceed five thousand rupees are fully depreciated in the year of acquisition.

Intangible assets are amortized over the best estimate of its useful life ranging between a periods of 3 to 5 years.

f. Impairment of fixed assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any indication exists, an asset's recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of assets exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

g. Foreign currency transactions

Transactions denominated in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Any income or expense on account of exchange differences either on settlement or on remeasurement of transactions is recognized in the Statement of Profit and Loss account.

Monetary assets and liabilities denominated in foreign currency are premeasured at the rate of exchange prevailing on the date of the balance sheet and resultant gain or loss is recognized in the Statement of Profit and Loss account. Non-monetary items denominated in foreign currency are carried at cost.

h. Investments

Long Term investments are stated at cost less diminution in value, if any other than temporary.

Current investments comprising investments in mutual funds are stated at lower of cost and fair value.

i. Inventories

Raw materials, components, work in progress and stores and spares are valued at lower of cost or net realizable value.

Finished goods and Stock in trade are valued at lower of cost or net realizable value. Cost includes all expenses incurred in bringing the goods to their present location and condition.

Cost is ascertained on weighted average method.

j. Employee Benefits

i) Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss account of the year in which the related service is rendered.

ii) Post employment benefits (Gratuity) and other long term employee benefits (Leave encashment and accumulated sick leave) are recognized as an expense in the Statement of Profit and Loss account for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post-employment and other long term benefits are charged to the Statement of Profit and Loss account.

k. Taxes on Income

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each balance sheet date the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

l. Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized 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 Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

m. Government Grants

Grants received from the Government authorities with reference to investments under investment subsidy schemes and no repayment are ordinarily expected in respect thereof are treated as capital reserve.

n. Segment

The Company discloses Business segment as the Primary segment. Segments have been identified taking into account the nature of products, the different risks and returns, the organization structure and internal reporting system. The Company's operation predominantly relates to manufacture of home appliances and fine blanking business. The Company primarily caters to the domestic market and export sales are not significant and accordingly there is no reportable secondary segment

o. Cash and cash equivalent

Cash and cash equivalents in the cash flow statement comprise cash on hand, current account bank balances, bank deposit account balances (with maturity of three months or less as at the balance sheet date) and short term investments with maturity of three months or less as at the balance sheet date.

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

q. Disclosure requirement for Derivatives Instruments

The premium or discount arising at the inception of forward exchange contracts entered into to hedge an existing asset/liability, is amortized as expense or income over the life of the contract. Exchange differences on such a contract are recognized in the Statement of Profit and Loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or as expense for the period.


Mar 31, 2011

1. Basis of accounting and preparation of financial statements

The financial statements have been prepared to comply in all material respect with the applicable accounting principles in India, mandatory accounting standards notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act 1956. The Company follows the accrual method of accounting under historical cost convention modified by revaluation of certain fixed assets as and when undertaken. The accounting policies have been consistently applied by the Company.

The preparation of financial statements requires the Management to make estimates and assumptions that affects the reported amounts of assets and liabilities including Contingent Liabilities as of the date of the financial statements and the reported income and expenses for the reporting period. Although these estimates are based upon historical event and management's best knowledge of current events and actions, actual results could differ from those estimates. Material estimates used in these financial statements that are susceptible to change as more information becomes available include useful economic lives of property, plant and equipment, impairment, retirement benefits, guarantees, warranties and income taxes.

2. Revenue recognition

Revenue from sales of products is recognized upon the transfer of significant risks and rewards of the ownership of the goods to the customers, which generally coincides with their delivery to customers. Sales are net of Value Added Tax/ Sales Tax and returns.

Revenue from Services is recognized on prorated basis over the period of contract.

Interest on deposits is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividends from investment are recognized when the Company's right to receive payment is established.

3. Fixed assets

Fixed assets are stated at cost of acquisition/construction or at revalued amount less depreciation and impairment losses. The cost of asset comprises its purchase price and any other attributable cost incurred for bringing the asset to its working condition for its intended use. Where a fixed asset has been revalued upwards, the revalued amount is credited to owner's interest under the head Revaluation Reserves.

Capital work in progress includes advances for capital items, items under installation and items in transit. In case of own manufactured items like tools, jigs, proportionate burden of overhead as applicable is also treated as part of cost.

Expenditure incurred on replacement/ modification to fixed asset is capitalized only when such expenditure results in increase in the economic life of such asset.

4. Intangible assets

Software expected to provide future enduring economic benefits is stated at cost less amortization.

All upgradation/enhancements are charged off as revenue expenditure unless they bring significant additional benefits.

5. Depreciation /Amortization

Depreciation is provided at the rates specified in Schedule XIV of the Companies Act, 1956 on straight line method on plant and machinery and other fixed assets excepting building where written down value method is followed.

Assets whose actual cost does not exceed five thousand rupees are fully depreciated in the year of acquisition.

Intangible assets are amortized over the best estimate of its useful life ranging between a periods of 3 to 5 years.

6. Impairment of fixed assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any indication exists, an asset's recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of assets exceed its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

7. Foreign currency transactions

Transactions denominated in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Any income or expense on account of exchange differences either on settlement or on remeasurement of transactions is recognized in the profit and loss account.

Monetary assets and liabilities denominated in foreign currency are remeasured at the rate of exchange prevailing on the date of the balance sheet and resultant gain or loss is recognized in the profit and loss account. Non monetary items denominated in foreign currency are carried at cost.

8. Investments

Long Term investments are stated at cost less diminution in value, if any other than temporary. Current investments comprising investments in mutual funds are stated at lower of cost and fair value.

9. Inventories

Raw materials, components, work in progress and stores and spares are valued at lower of cost or net realizable value. Finished goods are valued at lower of cost or net realizable value. Cost includes all expenses incurred in bringing the goods to their present location and condition.

Cost is ascertained on weighted average method.

10. Employee Benefits

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

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

11. Taxes on Income

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each balance sheet date the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

12. Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized 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 Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

13. Government Grants

Grants received from the Government authorities with reference to investments under investment subsidy schemes and no repayment is ordinarily expected in respect thereof are treated as capital reserve.

14. Segment

The Company discloses Business segment as the Primary segment. Segments have been identified taking into account the nature of products, the different risks and returns, the organisation structure and internal reporting system. The Company's operation predominantly relates to manufacture of home appliances and fine blanking business. The Company primarily caters to the domestic market and export sales are not significant and accordingly there is no reportable secondary segment

15. Cash and cash equivalent

Cash and cash equivalents in the cash flow statement comprise cash at bank and on hand and short term investments with an original maturity of three months or less.

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

17. Disclosure requirement for Derivatives Instruments

Premium or discount on forward contracts are amortised over the life of the contract. Foreign exchange forward contracts are revalued at the balance sheet date and the exchange difference between the spot rate at the date of the contract and the spot rate on the balance sheet date is recognized as gain/loss in the Profit & Loss account.


Mar 31, 2010

1. Basis of accounting and preparation of financial statements

The financial statements have been prepared to comply in all material respect with the applicable accounting principles in India, mandatory accounting standards notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act 1956. The Company follows the accrual method of accounting under historical cost convention modified by revaluation of certain fixed assets as and when undertaken. The accounting policies have been consistently applied by the Company.

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities including Contingent Liabilities as of the date of the financial statements and the reported income and expenses for the reporting period. Although these estimates are based upon historical event and managements best knowledge of current events and actions, actual results could differ from those estimates. Material estimates used in these financial statements that are susceptible to change as more information becomes available include useful economic lives of property, plant and equipment, impairment, retirement benefits, guarantees, warranties and income taxes.

2. Revenue recognition

Revenue from sales of products is recognized upon the transfer of significant risks and rewards of the ownership of the goods to the customers, which generally coincides with their delivery to customers. Sales are net of Value Added Tax/ Sales Tax and returns.

Revenue from Services is recognized on prorated basis over the period of contract.

Interest on deposits is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividends from investment are recognized when the Companys right to receive payment is established.

3. Fixed assets

Fixed assets are stated at cost of acquisition/construction or at revalued amount less depreciation and impairment losses. The cost of asset comprises its purchase price and any other attributable cost incurred for bringing the asset to its working condition for its intended use. Where a fixed asset has been revalued upwards, the revalued amount is credited to owners interest under the head Revaluation Reserves.

Capital work in progress includes advances for capital items, items under installation and items in transit. In case of own manufactured items like tools, jigs, proportionate burden of overhead as applicable is also treated as part of cost.

Expenditure incurred on replacement/ modification to fixed asset is capitalized only when such expenditure results in increase in the economic life of such asset.

4. Intangible assets

Software expected to provide future enduring economic benefits is stated at cost less amortization.

All upgradation/enhancements are charged off as revenue expenditure unless they bring significant additional benefits.

5. Depreciation / Amortization

Depreciation is provided at the rates specified in Schedule XIV of the Companies Act, 1956 on straight line method on plant and machinery and other fixed assets excepting building where written down value method is followed.

Assets whose actual cost does not exceed five thousand rupees are fully depreciated in the year of acquisition.

Intangible assets are amortized over the best estimate of its useful life ranging between a periods of 3 to 5 years.

6. Impairment of fixed assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Companys fixed assets. If any indication exists, an assets recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of assets exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

7. Foreign currency transactions

Transactions denominated in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Any income or expense on account of exchange differences either on settlement or on remeasurement of transactions is recognized in the profit and loss account.

Monetary assets and liabilities denominated in foreign currency are remeasured at the rate of exchange prevailing on the date of the balance sheet and resultant gain or loss is recognized in the profit and loss account. Non monetary items denominated in foreign currency are carried at cost.

8. Investments

Long Term investments are stated at cost less diminution in value, if any other than temporary. Current investments comprising investments in mutual funds are stated at lower of cost and fair value.

9. Inventories

Raw materials, components, work in progress and stores and spares are valued at cost. Finished goods are valued at lower of cost or net realizable value. Cost includes all expenses incurred in bringing the goods to their present location and condition.

Cost is ascertained on weighted average method.

10. Employee Benefits

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

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

11. Taxes on Income

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each balance sheet date the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

12. Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized 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 Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

13. Government Grants

Grants received from the Government authorities with reference to investments under investment subsidy schemes and no repayment is ordinarily expected in respect thereof are treated as capital reserve.

14. Segment

The Company discloses Business segment as the Primary segment. Segments have been identified taking into account the nature of products, the different risk and returns, the organisation structure and internal reporting system. The Companys operation predominantly relates to manufacture of home appliances and fine blanking business. The Company primarily caters to the domestic market and export sales are not significant and accordingly there is no reportable secondary segment.

15. Cash and cash equivalent

Cash and cash equivalents in the cash flow statement comprise cash at bank and on hand and short term investments with an original maturity of three months or less.

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

Find IFSC