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Accounting Policies of Jay Bharat Maruti Ltd. Company

Mar 31, 2015

1. Presentation of Financial Statements :-

The financial statements have been prepared in compliance to the requirements of the Companies Act, 2013 (the Act), applicable Accounting Standards and the requirements of Schedule-III of the Act.

2. Basis of preparation:-

The Financial statements have been prepared under the historical cost convention, in accordance with applicable Accounting Standards and provisions of the Companies Act, 2013 as adopted consistently by the Company except for defined benefit pension/other funds obligations that have been measured at fair value. The carrying value of certain monetary items denominated in foreign currency is translated at the exchange rates applicable on the date of balance sheet.

3. Use of Estimates:-

The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of the revenue and the expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

4. Revenue/Expenditure recognition:--

Sales represent the net invoice value of goods and services provided to third parties after deducting discounts, outgoing sales tax and other duties, and are recognized when all significant risks and rewards/ownership are transferred to the customer. Sale of material by products are included in other operating revenue.

Dividend income is recognized when the Company's right to receive payment is established. Interest income is recognized on accrual basis in the income statement.

Expenditure is accounted for on accrual basis and provision is made for all known losses and liabilities.

5. Fixed Assets:-

The initial cost of Fixed Assets comprise its purchase price, including import duties, net of modvat/cenvet, less accumu- lated depreciation and include directly attributable costs of bringing an asset to working condition and location for its intended use, including borrowing costs relating to the qualified asset over the period upto the date the asset is ready to commence commercial production. Adjustments arising from exchange rate variations relating to long term monetary items attributable to depreciable fixed assets are capitalized.

Machine spares that can be used only in connection with an item of fixed asset and their use is expected to be irregular are capitalized. The replacement of such spares is charged to revenue.

6. Assets in the course of construction:-

Assets in the course of construction are capitalized in the assets under construction account. At the point when an asset is operating at management's intended use, the cost of construction is transferred to appropriate category of fixed assets. Costs associated with the commissioning of an asset are capitalized where the asset is available for use but incapable of operating at normal levels until a period of commissioning has been completed.

7. Intangible assets:-

In accordance with the Accounting Standard (AS) 26 relating to intangible assets, all costs incurred on technical know how/license fee relating to production process are charged to revenue in the year of incurrence. Technical know how/license fee relating to process design/plants/facilities are capitalized at the time of capitalization of the said plant/ facility and amortized over a period of three years.

8. Impairment of Assets:-

Carrying amount of cash generating units/Fixed assets are reviewed for impairment, if events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The excess of recoverable amount over the carrying value of the asset is charged, as an impairment loss to the statement of profit & Loss.

9. Depreciation:- Tangible Assets

Depreciation on fixed assets is provided on straight line method based on useful life of assets as prescribed in Schedule-II to the Companies Act, 2013 except in respect of the following assets, where useful life is determined based on technical Advice.

Particulars Life

Plant & machinery 20 years

Factory Building (Including Tube well) 28-29 Years

Vehicles

Furniture & Fixtures 5 Years Trolleys & Bins *

Dies, Fixtures & Special Purpose Machine *:-

Over the amortization life, taken by the customer i.e. 3-4 years from the date of start of commercial production and in other cases based on life of 8.44 years.

Depreciation is charged on pro-rata basis for assets purchased / sold during the year. Individual assets costing Rs. 5000/- or less are depreciated in full in the year of purchase.Plant & Machinery and other assets the written down value of which at the beginning of the year is Rs. 5000/- or less and Rs. 1000/- or less respectively are depreciated at the rate of 100%.Depreciation on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets is provided as aforesaid over the residual life of the respective assets.Leasehold land is amortized over the period of lease.

Intangible Assets

Computer Software: Technical Know-how Fees 3 years

*Included in plant & machinery.

10. Inventories:-

Inventories are valued at the lower of cost or net realizable value, less any provisions for obsolescence. Cost is determined on the following basis;.

Raw Material is recorded at cost on a first-in, first-out (FIFO) basis;

Stores & spares are recorded at cost on a weighted average cost formula.

Finished goods and work-in-process are valued at raw material cost plus cost of conversion and attributable proportion of manufacturing overhead incurred in bringing inventories to its present location and condition.

By products and scrap are valued at net realizable value.

11. Investment-

Investments are classified into Current and Non Current investments. Current investments are stated at lower of cost or market value. Non Current investments are stated at cost and provision for diminution in value is made only if such decline is other than temporary in the opinion of management.

12. Foreign Exchange Transactions:-

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currencies outstanding at the year end are translated at the exchange rate applicable as of that date. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss except in cases of long term monetary items where these relate to the acquisition of depreciable fixed assets in which case these are adjusted to the carrying cost of such assets.

Exchange difference on forward exchange contracts are recognized in the Statement of Profit and Loss in the year in which the exchange rate changes except in the cases these relate to the depreciable fixed assets in which case these are adjusted to the carrying cost of such assets.

13. Borrowing Cost-

Interest on borrowing is expensed in the statement of profit & loss except where it relates to qualifying asset in which case it is capitalised. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.

Exchange difference arising from short term foreign currency borrowings to the extent that they are regarded as adjustment to interest cost is treated as finance cost and charged to statement of profit and loss except where it relates to qualifying asset in which case it is capitalised. All other borrowing costs are charged to revenue.

14. Employees 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 related service is rendered.

The Company has defined contribution plans for post retirement benefits, namely, Employees Provident Fund Scheme administered through provident fund commissioner and Superannuation Fund administered through Life Insurance Corporation of India and the company's contribution are charged to revenue every year.

ii Company's contribution to state plans namely Employees State Insurance Fund is charged to revenue every year.

The company has defined benefit plans namely Leave encashment / Compensated absence and Gratuity, the liability for which is determined on the basis of an Acturial valuation at the end of the year. Gratuity Trust is administered through Life Insurance Corporation of India.

iii Termination benefits are recognized as an expense immediately.

iv Gain or Loss arising out of actuarial evaluation are recognized immediately in the profit and loss account as income or expense.

15. Claims:-

Claims receivable are accounted for depending on the certainty of receipt and claims payable are accounted for at the time of acceptance.

16. Excise Duty:-

Excise duty is accounted for on the basis of both payments made in respect of goods cleared as also provision made for goods lying in bonded warehouse.

17. Tax Expense:-

Current tax is provided after taking credit for allowance and exemptions using the tax rates and laws that have been enacted or substantially enacted by the Balance Sheet date. In case of matters under appeal due to disallowance or otherwise, provision is made when the said liabilities are accepted by the company.

Deferred tax is provided on all temporary differences at the Balance Sheet date between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax asset arising from temporary differences are recognized to the extent there is virtual certainity of realization of asset in future.

18. Leases:-

Assets acquired under finance lease from 01.04.2001 are capitalized at the lower of their fair value or the present value of the minimum lease payments.

19. Provision and Contingent Liability:-

Show cause notices issued by various government authorities are not considered as obligation, when the demand notices are raised against such show cause notice and are disputed by the company then these are classified as possible obligation.

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 a probable that there will be an outflow of resources that can be reliably estimated, will be required to settle such an obligation . Contingent liabilities are not recognized but are disclosed in notes.

20. Derivative Financial instruments:-

In respect of the Financial derivative contracts the premium / interest paid and profit / loss on settlement is charged to statement of profit & loss. The contracts entered into other than forward contracts are marked to market at year end and the resultant profit / loss is charged to statement of profit & loss except in the cases these relate to the depreciable fixed assets in which case these are adjusted to the carrying cost of such assets.

21. Contingencies & Commitments:-

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Where the potential liabilities have a low probability of crystallizing or are very difficult to quantify reliably, these are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements, although there can be no assurance regarding the final outcome of the legal proceedings, the company does not expect them to have a materially adverse impact on the financial position or profitability.




Mar 31, 2014

1) Presentation of Financial Statements :-

The financial statements have been prepared in compliance to the requirements of the Companies Act 1956, applicable Accounting Standards and the requirements of Part-I & II of Schedule-VI (revised).

2) Basis of preparation:-

The Financial statements have been prepared under the historical cost convention, in accordance with applicable Accounting Standards and provisions of the Companies Act, 1956 as adopted consistently by the Company except for defined benefit pension/other funds obligations that have been measured at fair value. The carrying value of certain monetary items denominated in foreign currency is translated at the exchange rates applicable on the date of balance sheet.

3) Use of Estimates:-

The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of asset and liabilities on the date of the financial statements and the reported amount of the revenue and the expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

4) Revenue/Expenditure recognition:-

Sales represents the net invoice value of goods and services provided to third parties after deducting discounts, outgoing sales tax and other duties, and are recognized when all significant risks and rewards/ownership are transferred to the customer. Sale of material by products are included in other operating revenue.

Dividend income is recognized when the Company''s right to receive payment is established. Interest income is recognized on accrual basis in the income statement.

Expenditure is accounted for on accrual basis and provision is made for all known losses and liabilities.

5) Extra-ordinary Items:-

Extraordinary items are those income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the enterprise and therefore, are not expected to recur frequently or regularly.

6) Exceptional Items:-

Exceptional items are those items of income and expense arising from ordinary activities, are of such size, nature or incidence that requires separate disclosure to explain the performance of the enterprise.

7) Fixed Assets:-

The initial cost of Fixed Assets comprise its purchase price, including import duties, net of modvat/cenvat, less accumulated depreciation and include directly attributable costs of bringing an asset to working condition and location for its intended use, including borrowing costs relating to the qualified asset over the period upto the date the asset is ready to commence commercial production. Adjustments arising from exchange rate variations relating to long term monetary items attributable to depreciable fixed assets are capitalized.

Machine spares that can be used only in connection with an item of fixed asset and their use is expected to be irregular are capitalized. The replacement of such spares is charged to revenue.

8) Assets in the course of construction:-

Assets in the course of construction are capitalized in the assets under construction account. At the point when an asset is operating at management''s intended use, the cost of construction is transferred to appropriate category of fixed assets. Costs associated with the commissioning of an asset are capitalized where the asset is available for use but incapable of operating at normal levels until a period of commissioning has been completed.

9) Intangible assets:-

In accordance with the Accounting Standard (AS) 26 relating to intangible assets, all costs incurred on technical know how/license fee relating to production process are charged to revenue in the year of incurrence. Technical know how/license fee relating to process design/plants/ facilities are capitalized at the time of capitalization of the said plant/ facility and amortized over a period of three years.

10) Impairment of Assets:-

Carrying amount of cash generating units/Fixed assets are reviewed for impairment, if events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The excess of recoverable amount over the carrying value of the asset is charged, as an impairment loss to the statement of profit & Loss.

11) Depreciation:-

Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956 except in the following cases in which depreciation has been provided as per management''s estimates.

Dies, Fixtures & Special Purpose Machine *:-

Over the amortization life, taken by the customer subject to minimum, as prescribed in schedule XIV to the Companies Act 1956 and on other addition on or after 01.04.07 :- 3-5 Years.

"Vehicles

Furniture, Fixtures & Office Equipments V 5 Years

Trolleys & Bins * J

Electronic Data processing System & ] Equipment System V 3 Years

Technical Know-how Fees J

Depreciation is charged on pro-rata basis for assets purchased / sold during the year. Individual assets costing Rs. 5000/- or less are depreciated in full in the year of purchase. Plant & Machinery the written down value of which at the beginning of the year is Rs. 5000/- or less and other assets the written down value of which at beginning of the year is Rs. 1000/- or less are depreciated at the rate of 100%. Depreciation on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets is provided as aforesaid over the residual life of the respective assets. Leasehold Land is amortized over the period of Lease.

*Included in plant & machinery.

12) Inventories:-

Inventories are valued at the lower of cost or net realizable value, less any provisions for obsolescence. Cost is determined on the following basis;

Raw Material is recorded at cost on a first-in, first-out (FIFO) basis;

Stores & spares are recorded at cost on a weighted average cost formula.

Finished goods and work-in-process are valued at raw material cost cost of conversion and attributable proportion of manufacturing

overhead incurred in bringing inventories to its present location and condition.

By products and scrap are valued at net realizable value.

13) Investment- Investments are classified into Current and Non Current investments. Current investments are stated at lower of cost or market value. Non Current investments are stated at cost and provision for diminution in value is made only if such decline is other than temporary in the opinion of management.

14) Foreign Exchange Transactions:-

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currencies outstanding at the year end are translated at the exchange rate applicable as of that date. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss except in cases of long term monetary items where these relate to the acquisition of depreciable fixed assets in which case these are adjusted to the carrying cost of such assets.

Exchange difference on forward exchange contracts are recognized in the Statement of Profit and Loss in the year in which the exchange rate changes except in the cases these relate to the depreciable fixed assets in which case these are adjusted to the carrying cost of such assets.

15) Borrowing Cost:-

Interest on borrowing is expensed in the statement of profit & loss except where it relates to qualifying asset in which case it is capitalised. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.

Exchange difference arising from short term foreign currency borrowings to the extent that they are regarded as adjustment to interest cost is treated as finance cost and charged to statement of profit and loss except where it relates to qualifying asset in which case it is capitalised. All other borrowing costs are charged to revenue.

16) Employees 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 related service is rendered.

The Company has defined contribution plans for post retirements benefits, namely, Employees Provident Fund Scheme administered through provident fund commissioner and Superannuation Fund administered through Life Insurance Corporation of India and the company''s contribution are charged to revenue every year. Company''s contribution to state plans namely Employees State Insurance Fund is charged to revenue every year.

ii The company has defined benefit plans namely Leave encashment / Compensated absence and Gratuity, the liability for which is determined on the basis of an Acturial valuation at the end of the year. Gratuity Trust is administered through Life Insurance Corporation of India.

iii Termination benefits are recognized as an expense immediately.

iv Gain or Loss arising out of actuarial evaluation are recognized immediately in the profit and loss account as income or expense.

17) Claims:-

Claims receivable are accounted for depending on the certainty of receipt and claims payable are accounted for at the time of acceptance.

18) Excise Duty:-

Excise duty is accounted for on the basis of both payments made in respect of goods cleared as also provision made for goods lying in bonded warehouse.

19) Tax Expense:-

Current tax is provided after taking credit for allowance and exemptions using the tax rates and laws that have been enacted or substantially enacted by the Balance Sheet date. In case of matters under appeal due to disallowance or otherwise, provision is made when the said liabilities are accepted by the company.

Deferred tax is provided on all temporary differences at the Balance Sheet date between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax asset arising from temporary differences are recognized to the extent there is virtual certainity of realization of asset in future.

20) Leases:-

Assets acquired under finance lease from 01.04.2001 are capitalized at the lower of their fair value or the present value of the minimum lease payments.

21) Provision and Contingent Liability:-

Show cause notices issued by various government authorities are not considered as obligation, when the demand notices are raised against such show cause notice and are disputed by the company then these are classified as possible obligation.

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 a probable that there will be an outflow of resources that can be reliably estimated, will be required to settle such an obligation. Contingent liabilities are not recognized but are disclosed in notes.

22) Derivative Financial Instruments:-

In respect of the Financial derivative contracts the premium / interest paid and profit / loss on settlement is charged to statement of profit & loss. The contracts entered into other than forward contracts are marked to market at year end and the resultant profit / loss is charged to statement of profit & loss except in the cases these relate to the depreciable fixed assets in which case these are adjusted to the carrying cost of such assets.

23) Contingencies & Commitments:-

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Where the potential liabilities have a low probability of crystallizing or are very difficult to quantify reliably, these are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements, although there can be no assurance regarding the final outcome of the legal proceedings, the company does not expect them to have a materially adverse impact on the financial position or profitability.

Rights, Preferences and restrictions attached to shares

The company has one class of equity shares with a par value of ! 5/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the board of director is subject to the approval of shareholders in the ensuing Annual General Meeting, except in the case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

*Secured by first and exclusive charge on the movable fixed assets purchased/to be purchased including, without limitation, its movable plant and machinery, furniture, fixture, equipment, computer hardware, computer software, machinery spares and tools and accessories and other movables so as to provide an asset cover of 1.5 times the loan amount at market valuation.


Mar 31, 2013

1) Presentation of Financial statements :-

The fnancial statements have been prepared in compliance to the requirements of the Companies Act 1956, applicable Accounting Standards and the requirements of Part-I & II of Schedule-VI (revised).

2) Basis Of Preparation:-

The Financial statements have been prepared under the historical cost convention, in accordance with applicable Accounting Standards and provisions of the Companies Act, 1956 as adopted consistently by the Company except for defned beneft pension/other funds obligations that have been measured at fair value. The carrying value of certain monetary items denominated in foreign currency is translated at the exchange rates applicable on the date of balance sheet.

3) Use Of Estimates:-

The preparation of fnancial statements require estimates and assumptions to be made that affect the reported amount of asset and liabilities on the date of the fnancial statements and the reported amount of the revenue and the expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

4) Revenue/Expenditure Recognition:-

Sales represents the net invoice value of goods and services provided to third parties after deducting discounts, outgoing sales tax and other duties, and are recognised when all signifcant risks and rewards/ownership are transferred to the customer. Sale of material by products are included in other operating revenue.

Dividend income is recognised when the Company''s right to receive payment is established. Interest income is recognised on accrual basis in the income statement.

Expenditure is accounted for on accrual basis and provision is made for all known losses and liabilities.

5) Extra-ordinary Items:-

Extraordinary items are those income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the enterprise and therefore, are not expected to recur frequently or regularly.

6) Exceptional Items:-

Exceptional items are those items of income and expense arising from ordinary activities, are of such size, nature or incidence that requires separate disclosure to explain the performance of the enterprise.

7) Fixed assets:-

The initial cost of Fixed Assets comprise its purchase price, including import duties, net of modvat/cenvet, less accumulated depreciation and include directly attributable costs of bringing an asset to working condition and location for its intended use, including borrowing costs relating to the qualifed asset over the period upto the date the asset is ready to commence commercial production. Adjustments arising from exchange rate variations relating to long term monetary items attributable to depreciable fxed assets are capitalised.

Machine spares that can be used only in connection with an item of fxed asset and their use is expected to be irregular are capitalised. The replacement of such spares is charged to revenue.

8) Assets In The Course Of Construction:-

Assets in the course of construction are capitalised in the assets under construction account. At the point when an asset is operating at management''s intended use, the cost of construction is transferred to appropriate category of fxed assets. Costs associated with the commissioning of an asset are capitalised where the asset is available for use but incapable of operating at normal levels until a period of commissioning has been completed.

9) Intangible assets:-

In accordance with the Accounting Standard (AS) 26 relating to intangible assets, all costs incurred on technical know how/ license fee relating to production process are charged to revenue in the year of incurrence. Technical know how/license fee relating to process design/plants/facilities are capitalised at the time of capitalisation of the said plant/ facility and amortised over a period of three years.

10) Impairment of assets:-

Carrying amount of cash generating units/Fixed assets are reviewed for impairment, if events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The excess of recoverable amount over the carrying value of the asset is charged, as an impairment loss to the statement of proft & Loss.

11) Depreciation:-

Depreciation on fxed assets is provided on straight line method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956 except in the following cases in which depreciation has been provided as per management''s estimates.

Dies, Fixtures & Special Purpose Machine

Over the amortisation life, taken by the customer subject to minimum, as prescribed in schedule XIV to the Companies Act 1956 and on other addition on or after 01.04.07, :- 3-5 Years.

Vehicles

Furniture, Fixtures & Offce Equipments 5 Years

Trolleys & Bins

Electronic Data processing System &

Equipments System: 3 Years

Technical Know-how Fees

Depreciation is charged on pro-rata basis for assets purchased / sold during the year. Individual assets costing Rs.5000/- or less are depreciated in full in the year of purchase. Plant & Machinery the written down value of which at the beginning of the year is Rs.5000/- or less and other assets the written down value of which at beginning of the year is Rs.1000/- or less are depreciated at the rate of 100%. Depreciation on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fxed assets is provided as aforesaid over the residual life of the respective assets. Leasehold Land is amortised over the period of Lease.

*Included in plant & machinery.

12) Inventories:-

Inventories are valued at the lower of cost or net realisable value, less any provisions for obsolescence. Cost is determined on the following basis;.

Raw Material is recorded at cost on a frst-in, frst-out (FIFO) basis;

Finished goods and work-in-process are valued at raw material cost cost of conversion and attributable proportion of manufacturing overhead incurred in bringing inventories to its present location and condition.

By products and scrap are valued at net realisable value.

13) Investment:-

Investments are classifed into Current and Non Current investments. Current investments are stated at lower of cost or market value. Non Current investments are stated at cost and provision for diminution in value is made only if such decline is other than temporary in the opinion of management.

14) Foreign Exchange transactions:-

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currencies outstanding at the year end are translated at the exchange rate applicable as of that date. Non-monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Statement of Proft and Loss except in cases of long term monetary items where these relate to the acquisition of depreciable fxed assets in which case these are adjusted to the carrying cost of such assets.

Exchange difference on forward exchange contracts are recognised in the Statement of Proft and Loss in the year in which the exchange rate changes except in the cases these relate to the depreciable fxed assets in which case these are adjusted to the carrying cost of such assets. Proft or loss arising on cancellation or renewal of forward exchange contracts are recognised as income or expense for the year.

15) Borrowing Cost:-

Interest on borrowing is expensed in the statement of proft & loss except where it relates to qualifying asset in which case it is capitalised. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.

Exchange difference arising from short term foreign currency borrowings to the extent that they are regarded as adjustment to interest cost is treated as fnance cost and charged to statement of proft and loss except where it relates to qualifying asset in which case it is capitalised. All other borrowing costs are charged to revenue.

16) Employees benefts:-

i. Short term employee benefts are recognised as an expense at the undiscounted amount in the proft and loss account of the year in which related service is rendered.

The Company has defned contribution plans for post retirements benefts, namely, Employees Provident Fund Scheme administered through provident fund commissioner and Superannuation Fund administered through Life Insurance Corporation of India and the company''s contribution are charged to revenue every year.

Company''s contribution to state plans namely Employees State Insurance Fund is charged to revenue every year.

ii. The company has defned beneft plans namely Leave encashment / Compensated absence and Gratuity, the liability for which is determined on the basis of an Acturial valuation at the end of the year. Gratuity Trust is administered through Life Insurance Corporation of India.

iii. Termination benefts are recognised as an expense immediately.

iv. Gain or Loss arising out of actuarial evaluation are recognised immediately in the proft and loss account as income or expense.

17) Claims:-

Claims receivable are accounted for depending on the certainty of receipt and claims payable are accounted for at the time of acceptance.

18) Excise duty:-

Excise duty is accounted for on the basis of both payments made in respect of goods cleared as also provision made for goods lying in bonded warehouse.

19) Tax Expense:-

Current tax is provided after taking credit for allowance and exemptions using the tax rates and laws that have been enacted or substantially enacted by the Balance Sheet date. In case of matters under appeal due to disallowance or otherwise, provision is made when the said liabilities are accepted by the company.

Deferred tax is provided on all temporary differences at the Balance Sheet date between the tax basis of assets and liabilities and their carrying amounts for fnancial reporting purposes. Deferred tax asset arising from temporary differences are recognised to the extent there is virtual certainity of realisation of asset in future.

20) Leases:-

Assets acquired under fnance lease from 01.04.2001 are capitalised at the lower of their fair value or the present value of the minimum lease payments.

21) Provision and Contingent Liability:-

Show cause notices issued by various government authorities are not considered as obligation, when the demand notices are raised against such show cause notice and are disputed by the company then these are classifed as possible obligation. Provisions involving 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 outfow of resources that can be reliably estimated, will be required to settle such an obligation. Contingent liabilities are not recognised but are disclosed in notes.

22) Derivative Financial Instruments:-

In respect of the Financial derivative contracts the premium / interest paid and proft / loss on settlement is charged to statement of proft & loss. The contracts entered into other than forward contracts are marked to market at year end and the resultant proft / loss is charged to statement of proft & loss except in the cases these relate to the depreciable fxed assets in which case these are adjusted to the carrying cost of such assets.

23) Contingencies & Commitments:-

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Where the potential liabilities have a low probability of crystallising or are very diffcult to quantify reliably, these are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the fnancial statements, although there can be no assurance regarding the fnal outcome of the legal proceedings, the company does not expect them to have a materially adverse impact on the fnancial position or proftability.


Mar 31, 2011

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Financial statements have been prepared under the historical cost convention, in accordance with applicable Accounting Standards and provisions of the Companies Act, 1956 as adopted consistently by the Company.

2. USE OF ESTIMATES

The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of asset and liabilities on the date of the financial statements and the reported amount of the revenue and the expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

3. RECOGNITION OF INCOME / EXPENDITURE

All income & expenditure having a material bearing on the financial statements is accounted for on an accrual basis and provision is made for all known losses and liabilities.

4. SALES

Sales are recognized on dispatch of goods from the factory/Godown and are net of discounts but exclude sales tax.

5. FIXED ASSETS

Fixed assets are stated at cost, net of modvat / cenvat, less accumulated depreciation. Cost of fixed assets comprises purchase price, duties, levies and any directly attributable cost of bringing the assets to its working condition for its intended use. Borrowing cost relating to the qualified assets for the period up to the date of acquisition or completion is capitalized. Adjustments arising from exchange rate variations relating to borrowing attributable to the fixed assets are capitalized.

Machinery spares that can be used only in connection with an item of fixed asset and their use is expected to be irregular are capitalized. Replacement of such spares is charged to revenue.

Advance paid towards the acquisition of fixed assets, and the cost of assets not ready to put to use before the year end, are disclosed under capital work in progress.

6. INTANGIBLE ASSETS

In accordance with the Accounting Standard (AS) 26 relating to intangible assets, all costs incurred on technical know how/ license fee relating to production process are charged to revenue in the year of incurrence. Technical know how/license fee relating to process design/plants/facilities are capitalized at the time of capitalization of the said plant/ facility and amortized over a period of three years.

7. IMPAIREMENT OF ASSETS

Carrying amount of cash generating units/ assets is reviewed for impairment. Impairment, if any, is recognized where the carrying amount exceeds the recoverable amount being the higher of net realizable price and value in use.

8. DEPRECIATION

Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956 except in the following cases in which depreciation has been provided as per management's estimate.

Dies, Fixtures & Special Purpose Machine* Over the amortization life, taken by the customer subject to minimum, as prescribed in schedule XIV to the companies act 1956 and on other addition on or after 01.4.07, 3 - 5 Years

Vehicles

Furniture, Fixtures & Office Equipments 5 Years

Trolleys & Bins* 5 Years

Electronic Data processing System & Equipments System 3 Years

Technical Know-how Fees 3 Years

Depreciation is charged on pro-rata basis for assets purchased / sold during the year. Individual assets costing Rs. 5000/- or less are depreciated in full, in the year of purchase. Plant & Machinery the written down value of which at the beginning of the year is Rs. 5000/- or less and other assets the written down value of which at beginning of the year is Rs. 1000/- or less are depreciated at the rate of 100%. Depreciation on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets is provided as aforesaid over the residual life of the respective assets. Leasehold Land is amortized over the period of Lease

* Included in plant & machinery

9. INVENTORY

Inventories are valued at lower of cost or net realizable value. Cost of raw material is determined by using first in first out method. However, scrap is valued at net realizable value. Finished goods and work in process include cost of conversion and other cost incurred in bringing the inventory to its present location and condition.

10. INVESTMENT

Investments are classified into current and long term investments. Current investments are stated at lower of cost or market value. Long term investments are stated at cost and provision for diminution in value is made only if such decline is other than temporary in the opinion of management.

11. DIVIDEND

Dividend on investments is accounted for as and when the right to receive is established.

12. FOREIGN EXCHANGE TRANSACTIONS

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the date of the transaction. Monetary items denominated in foreign currencies outstanding at the year end are translated at the exchange rate applicable as of that date. Non monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account except in cases of long term monetary items where these relate to the acquisition of fixed assets in which case these are adjusted to the carrying cost of such assets.

Exchange difference on forward exchange contracts are recognized in the statement of Profit and Loss account in the year in which the exchange rate changes except in the cases these relates to the fixed assets in which case these are adjusted to the carrying cost of such assets. Profit or loss arising on cancellation or renewal of forward exchange contracts are recognized as income or expense for the year.

13. BORROWING COST

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

14. 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 related service is rendered.

ii. The company has defined contribution plans for post retirements benefits, namely, Employee Provident Fund Scheme administered through provident fund commissioner and Superannuation Fund administered through Life Insurance Corporation of India and the company's contribution are charged to revenue every year.

iii. Company's contribution to state plans namely Employees State Insurance Fund is charged to revenue every year.

iv. The company has defined benefit plans namely Leave encashment / Compensated absence and Gratuity, the liability for which is determined on the basis of an Actuarial valuation at the end of the year. Gratuity Trust is administered through Life Insurance Corporation of India.

v. Termination benefits are recognized as an expense immediately.

vi. Gain or Loss arising out of actuarial evaluation are recognized immediately in the profit and loss account as income or expense.

15. CLAIMS

Claims receivable are accounted for depending on the certainty of receipt and claims payable are accounted for at the time of acceptance.

16. EXCISE DUTY

Excise duty is accounted on the basis of both payments made in respect of goods cleared as also provision made for goods lying in bonded warehouse.

17. INCOME TAX

Provision for current income tax is made after taking credit for allowances and exemptions. In case of matters under appeal, due to disallowance or otherwise, provision is made when the said liabilities are accepted by the company.

In accordance with Accounting Standard 22- accounting for Taxes on Income, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and the tax laws that have been enacted or substantially enacted as of the balance sheet date.

Deferred tax assets arising from temporary timing differences are recognized to the extent there is virtual certainty that the assets can be realized in future.

18. LEASE OBLIGATIONS

Assets acquired under finance lease from 01.04.2001 are capitalized at the lower of their fair value or the present value of the minimum lease payments.

19. PROVISION AND CONTINGENT LIABILITY

Show cause notices issued by various government authorities are not considered as obligation. when the demand notice are raised against such show cause notice and are disputed by the company then these are classified as possible obligation.

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 notes.

20. FINANCIAL DERIVATIVE TRANSACTIONS

In respect of the Financial derivative contracts the premium / interest paid and profit / loss on settlement is charged to profit & Loss account. The contracts entered into are marked to market at year end and the resultant profit / loss is charged to profit & loss account.




Mar 31, 2010

1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Financial statements have been prepared under the historical cost convention, in accordance with applicable Accounting Standards and provisions of the Companies Act, 1956 as adopted consistently by the Company.

2 USE OF ESTIMATES

The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of asset and liabilities on the date of the financial statements and the reported amount of the revenue and the expenses during the reporting period . Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

3 RECOGNITION OF INCOME / EXPENDITURE

All income & expenditure having a material bearing on the financial statements is accounted for on an accrual basis and provision is made for all known losses and liabilities.

4 SALES

Sales are recognized on dispatch of goods from the factory/Godown and are net of discounts but exclude sales tax.

5 FIXED ASSETS

Fixed assets are stated at cost, net of modvat / cenvat, less accumulated depreciation. Cost of fixed assets comprises purchase price, duties, levies and any directly attributable cost of bringing the assets to its working condition for its intended use. Borrowing cost relating to the qualified assets for the period up to the date of acquisition or completion is capitalized. Adjustments arising from exchange rate variations relating to borrowing attributable to the fixed assets are capitalized.

Machinery spares that can be used only in connection with an item of fixed asset and their use is expected to be irregular are capitalized. Replacement of such spares is charged to revenue.

Advance paid towards the acquisition of fixed assets, and the cost of assets not ready to put to use before the year end, are disclosed under capital work in progress.

6 INTANGIBLE ASSETS

In accordance with the Accounting Standard (AS) 26 relating to intangible assets, all costs incurred on technical know how/license fee relating to production process are charged to revenue in the year of incurrence. Technical know how/license fee relating to process design/plants/facilities are capitalized at the time of capitalization of the said plant/ facility and amortized over a period of three years.

7 IMPAIREMENT OF ASSETS

Carrying amount of cash generating units/ assets is reviewed for impairment. Impairment, if any, is recognized where the carrying amount exceeds the recoverable amount being the higher of net realizable price and value in use.

8 DEPRECIATION

Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956 except in the following cases in which depreciation has been provided as per managements estimate.

Dies, Fixtures & Special Purpose Machine* Over the amortisation life, taken by the customer subject to minimum, as prescribed in schedule XIV to the companies act 1956 and on other addition on or after 01.4.07, 3 - 5 Years



Vehicles

Furniture, Fixtures & Office Equipments 5 Years

Trolleys & Bins *

Electronic Data processing System &

Equipments System : 3 Years

Technical Know-how Fees : 3 Years

Depreciation is charged on pro-rata basis for assets purchased / sold during the year. Individual assets costing Rs. 5000/- or less are depreciated in full, in the year of purchase. Plant & Machinery the written down value of which at the beginning of the year is Rs.5000/- or less and other assets the written down value of which at beginning of the year is Rs.1000/- or less are depreciated at the rate of 100%. Depreciation on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets is provided as aforesaid over the residual life of the respective assets. Leasehold Land is amortised over the period of Lease.

*Included in plant & machinery

9 INVENTORY

Inventories are valued at lower of cost or net realizable value. Cost of raw material is determined by using first in first out method. However, scrap is valued at net realizable value. Finished goods and work in process include cost of conversion and other cost incurred in bringing the inventory to its present location and condition.

10 INVESTMENT

Investments are classified into current and long term investments. Current investments are stated at lower of cost or market value. Long term investments are stated at cost and provision for diminution in value is made only if such decline is other than temporary in the opinion of management.

11 DIVIDEND

Dividend on investments is accounted for as and when the same is received.

12 FOREIGN EXCHANGE TRANSACTIONS

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the date of the transaction. Monetary items denominated in foreign currencies outstanding at the year end are translated at the exchange rate applicable as of that date. Non monetary items denominated in foreign currency are valued at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account except in cases where these relate to the acquisition of fixed assets in which case these are adjusted to the carrying cost of such assets.

Exchange difference on forward exchange contracts are recognized in the statement of Profit and Loss account in the year in which the exchange rate changes except in the cases these relates to the fixed assets in which case these are adjusted to the carrying cost of such assets. Profit or loss arising on cancellation or renewal of forward exchange contracts are recognized as income or expense for the year.

13 BORROWING COST

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

14 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 related service is rendered.

ii. The company has defined contribution plans for post retirements benefits, namely, Employee Provident Fund Scheme administered through provident fund commissioner and

Superannuation Fund administered through Life Insurance Corporation of India and the companys contribution are charged to revenue every year.

iii. Companys contribution to state plans namely Employees State Insurance Fund is charged to revenue every year.

iv. The company has defined benefit plans namely Leave encashment / Compensated absence and Gratuity, the liability for which is determined on the basis of an Actuarial valuation at the end of the year. Gratuity Trust is administered through Life Insurance Corporation of India.

v. Termination benefits are recognized as an expense immediately.

vi. Gain or Loss arising out of actuarial evaluation are recognized immediately in the profit and loss account as income or expense.

15 CLAIMS

Claims receivable are accounted for depending on the certainty of receipt and claims payable are accounted for at the time of acceptance.

16 EXCISE DUTY

Excise duty is accounted on the basis of both payments made in respect of goods cleared as also provision made for goods lying in bonded warehouse.

17 INCOME TAX

Provision for current income tax is made after taking credit for allowances and exemptions. In case of matters under appeal, due to disallowance or otherwise, provision is made when the said liabilities are accepted by the company.

In accordance with Accounting Standard 22- accounting for Taxes on Income, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and the tax laws that have been enacted or substantially enacted as of the balance sheet date.

Deferred tax assets arising from temporary timing differences are recognized to the extent there is virtual certainty that the assets can be realized in future.

18 LEASE OBLIGATIONS

Assets acquired under finance lease from 01.04.2001 are capitalized at the lower of their fair value or the present value of the minimum lease payments.

19 PROVISION AND CONTINGENT LIABILITY

Show cause notices issued by various government authorities are not considered as obligation. when the demand notice are raised against such show cause notice and are disputed by the company then these are classified as possible obligation.

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 a probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in notes.

20 FINANCIAL DERIVATIVE TRANSACTIONS

In respect of the Financial derivative contracts the premium / interest paid and profit / loss on settlement is charged to profit & Loss account. The contracts entered into are marked to market at year end and the resultant profit / loss is charged to profit & loss account except where these relate to fixed assets in which case it is adjusted to the cost of fixed assets.

 
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